"hardware start-ups" entries

Five things to consider before offering new technology as a cloud service

Entrepreneurs must apply the same decision-making processes used when starting any infrastructure company.

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Attend Shahin Farshchi’s free webcast “5 Tools for Building Value Into Your Hardware Startups,” being held May 19 at 10 a.m. PT.

There are many compelling reasons to package new technology as a cloud service. Connected devices come in many forms: dongles, phones, tablets, televisions, cars, and even buildings. Intel is offering “connected buttons,” and others are introducing connected jewelry and accessories. Internet connectivity is also available through many channels: satellite, cellular, WiFi, bluetooth, and hybrid meshes. The plethora of powerful, beautiful connected devices, coupled with ubiquitous connectivity, creates an incredible channel for delivering novel services.

Hotmail, Salesforce, Workday, and many other software-as-a-service companies have fared well by offering their applications directly through Internet browsers. DropBox and Box, while creating tremendous media attention, have yet to prove they can offer storage services profitably on the cloud. Amazon doesn’t disclose the economics of its Amazon Web Services business in detail, though one would expect the opposite to be true if it were a lucrative business. ASICMiner and KNCMiner are leveraging their proprietary hashing chips to offer bitcoin mining as a service. Nervana is leveraging its proprietary chips as a service for deep learning. As more entrepreneurs attempt to harness the cloud as a powerful distribution channel for their novel technologies, here are a few factors to consider. Read more…

Fixing what’s wrong with hardware startups

Five pointers to increase the odds of engineering a great hardware startup.

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Attend Shahin Farshchi’s free webcast “5 Tools for Building Value Into Your Hardware Startups,” being held May 19 at 10 a.m. PT.

It is an amazing time to be a hardware entrepreneur: Companies like Arduino and ElectricImp are abstracting away tedious device and back-end development; Shapeways (disclaimer: my firm Lux Capital is an investor) and Advanced Circuits are turning around beautiful prototypes in days; while AngelList and IndieGogo are democratizing access to sophisticated investors, which in turn facilitate access to money, partners, and amazing talent.

In their rush to introduce the next Jawbone, Beats, Nest, FuelBand, GoPro, and Dropcam, many fledgling hardware startups — and their investors — seem to be simply rolling the dice. Rather than truly understanding the dynamics of their prospective markets, they are producing marketing videos that could otherwise pass for Super Bowl ads. Rather than understanding their competitive landscape, they are producing designs and out-of-box experiences that would make Steve Jobs proud. Many aspire to achieve Oculus’ visibility, and the acquisition offer that ensued. This puts incumbent consumer electronics companies in an enviable position: free market research and product experiments with an option to acquire any breakaway company. Although there is always an element of luck in every startup, here are a few pointers to increase the odds of success. Read more…