The Hardware Renaissance
As I understood it, from having worked at a (successful) startup that sold hardware, the big problem with hardware isn't that it's hard to make. Rather, the two big problems are margin and, worse for a startup, inventory costs. Airbnb can add 1,000 new customers with no infrastructure changes, but for a hardware startup to take on 1,000 new customers, someone will have to finance the inventory, and someone will need to predict the amount of widgets to stock in that inventory, and that gets very expensive quickly.<p>I don't know how much the inventory issue is mitigated by the fact that YC companies with working offerings seem to be immediately able to conjure up 500k-1MM in funding.<p>Also, YC's major successes haven't been hardware companies, have they? The last essay I read before this one suggested --- in agreement with the conventional wisdom of VC's --- that a company needs to be Dropbox-successful to move the needle for YC. Not that YC isn't, I'm sure, thrilled to have hardware product companies with traction in their portfolio.<p>Let me just add a banal point: YC's business strategy is, obviously, "throw everything we can at the wall and see what sticks". If you're considering your first company, that's probably not <i>your</i> best strategy. Even putting aside the big-ticket problems like inventory and margin, there are a lot of other things that suck about hardware: lead times, managing supply chain, QA and managing defects, field recalls, shipping. These problems are so big that major hardware companies have people who don't just have one of those tasks as full-time jobs, but are also famous for being able to deal with them.