Sam Altman: Why Hardware Could Yield the Next $10B Startups • Hacker News Board

Re: Sam Altman: Why Hardware Could Yield the Next $10B Startups

#61

Post by vasilipupkin » Wed, Mar 25, 2015, 8:58 PM UTC

koops wrote: post #4

$10B? That's awfully large, and closing the door on a lot of ideas. What if you just want to solve an important problem by selling a product profitably and don't want to grow to enormous size? I guess you look somewhere other than Y Combinator to get started.

it doesn't really close the door on most ideas in the sense that everybody realizes that the likelihood of being a $10B is quite small. But if it is literally zero, then this company may not be the right fit for YC. I would say if you think the likelihood of your company being worth $10b is zero, you should carefully think about why you think you need venture money in the first place.

Re: Sam Altman: Why Hardware Could Yield the Next $10B Startups

#62

Post by Spearchucker » Wed, Mar 25, 2015, 8:59 PM UTC

Not trivializing the article, or it's point. Interesting though is that the subject (hardware) reminded me of an app I wrote that lets me quickly model system availability on my phone. My astonishment at the time was that such a simple modeling tool isn't available in any app store (maybe today, couldn't find anything a year or so ago).

There are sooo many tools, let alone basic productivity apps that just don't exist yet. And here we are, breathless and panting, moving onto the next big thing - hardware, biotech... Hey its all good stuff. Except for the part where I can't create a simple DB-like table on my phone and have that sync (securely!) with my other devices - without making me create a Dropbox account, or wanting to up-sell me in the app, or get all social on me. Basic, simple and honest apps. Like the Code Vault app I had on my Nokia Communicator in 2001.

Re: Sam Altman: Why Hardware Could Yield the Next $10B Startups

#63

Post by Spooky23 » Wed, Mar 25, 2015, 8:59 PM UTC

TeMPOraL wrote: post #30

leoedin wrote: post #8

The reason that a larger number of hardware startups have recently appeared is quite simple - these are mostly actually software companies. Modern hardware that a startup might produce - IoT stuff, small computers etc - are essentially bare-minimum hardware wrappers around black-box chips. The complexity of developing hardware is driven by the number of discrete components used. Every additional resistor is a resisto…

Moreover, if you look closely at many so-called "hardware companies" (especially IoT ones), you can see that they actually stick a SoC into a nice packaging and build an app and a cloud platform for that, even when it makes no sense whatsoever . Why? Because that's how they get the money. On the cloud it's easier to keep monetizing your customers, and more importantly, you can literally just point out that you have "…

It's a shame, because the monetization on platform apps will drown out potentially useful systems that are local in scope.

Why do I need lighting controls dependent on a cloud service?

Re: Sam Altman: Why Hardware Could Yield the Next $10B Startups

#64

Post by Spooky23 » Wed, Mar 25, 2015, 9:03 PM UTC

exelius wrote: post #56

clarky07 wrote: post #54

Earlier quoted context omitted.

This comes off as the famous (apocryphal) patent quote from around 1900. "Everything that can be invented has been invented" I think a lot of people (myself included) think there are lots of potential benefits to a smart house. I don't think we're there yet. Most of what exists now isn't very user friendly, and most don't have easy setups so the things that are out now are unlikely to have huge hockey stick growth. H…

It's not that there are no benefits, but there's not a driving need that these products you describe solve that makes up for the additional cost and complexity that implementing them provides. What's the value proposition? If it's "just cool", then there probably isn't one. 1) There are real benefits with Nest since it can reduce energy consumption. Also, Nest isn't really a whole lot more expensive than other thermo…

The other thing about #5 is that you can use a $15 motion switch and skip all of the drama of networking, etc.

Re: Sam Altman: Why Hardware Could Yield the Next $10B Startups

#65

Post by Fradow » Wed, Mar 25, 2015, 9:16 PM UTC

clarky07 wrote: post #54

exelius wrote: post #47

Earlier quoted context omitted.

A/C is one of the few use cases where there is a need that was addressed. A/C accounts for the vast majority of energy usage in most homes, so optimizing it can provide real cost reduction. It's also really easy to install since there was already a single control point for the A/C in the form of a thermostat. Just look at Nest Protect if you want an example of an IoT product without a customer need; they add cost and…

This comes off as the famous (apocryphal) patent quote from around 1900. "Everything that can be invented has been invented" I think a lot of people (myself included) think there are lots of potential benefits to a smart house. I don't think we're there yet. Most of what exists now isn't very user friendly, and most don't have easy setups so the things that are out now are unlikely to have huge hockey stick growth. H…

Everything you described already exist, and is available to mass market.

The fact that you don't have any (and anyone I know of either, to be fair, apart from lights in a few places), speaks a lot about how much the market is ready for this.

Re: Sam Altman: Why Hardware Could Yield the Next $10B Startups

#66

Post by knz » Wed, Mar 25, 2015, 9:16 PM UTC

exelius wrote: post #56

clarky07 wrote: post #54

Earlier quoted context omitted.

This comes off as the famous (apocryphal) patent quote from around 1900. "Everything that can be invented has been invented" I think a lot of people (myself included) think there are lots of potential benefits to a smart house. I don't think we're there yet. Most of what exists now isn't very user friendly, and most don't have easy setups so the things that are out now are unlikely to have huge hockey stick growth. H…

It's not that there are no benefits, but there's not a driving need that these products you describe solve that makes up for the additional cost and complexity that implementing them provides. What's the value proposition? If it's "just cool", then there probably isn't one. 1) There are real benefits with Nest since it can reduce energy consumption. Also, Nest isn't really a whole lot more expensive than other thermo…

Re automated lights and the garage door. I have a SmartThings hub and a number of associated motion sensors and z-wave power outlets. I also have young kids so am often up at odd hours. Being able to automate turning on and off certain lights based upon motion is fantastic when you are stumbling around a house half asleep. I've also got my garage door hooked up to it and love being able to let someone in if I am not home or not having to take keys if I go out for a bike ride or walk. Yes there is a cost and configuration can be a hassle, but there is benefit beyond being "cool". My next project is connecting OpenSprinkler to the external z-wave motion sensors to deal with deer raiding a vegetable garden and kids trying to get into a hot tub....

Re: Sam Altman: Why Hardware Could Yield the Next $10B Startups

#67

Post by TeMPOraL » Wed, Mar 25, 2015, 9:44 PM UTC

Spooky23 wrote: post #63

TeMPOraL wrote: post #30

Earlier quoted context omitted.

Moreover, if you look closely at many so-called "hardware companies" (especially IoT ones), you can see that they actually stick a SoC into a nice packaging and build an app and a cloud platform for that, even when it makes no sense whatsoever . Why? Because that's how they get the money. On the cloud it's easier to keep monetizing your customers, and more importantly, you can literally just point out that you have "…

It's a shame, because the monetization on platform apps will drown out potentially useful systems that are local in scope. Why do I need lighting controls dependent on a cloud service?

That's exactly my issue with this situation. Cloud computing has a lot of uses, but there are also things that don't need it, and yet it is being forced on them, because this is a hot business model.

Re: Sam Altman: Why Hardware Could Yield the Next $10B Startups

#68

Post by bsder » Wed, Mar 25, 2015, 9:48 PM UTC

Not until software lottery tickets quit returning 10x+.

Who, in their right mind, would invest in hardware? NRE kills--especially in mechanical engineering which actually seems to be regressing. Machining companies now charge a fortune for things which my grandfather used to do by hand in his garage in about an hour. Not to mention how long it takes to get an injection mold (14 weeks is not uncommon).

For the price of a couple injection molds, I can flog a gaggle of stupid 20-somethings living in squalor for about a year. No contest as to which has a better probability of cashing out.

In addition, who is going to buy out a hardware startup? Hardware really doesn't fit the Yahooglezoft strategy, so now your exits are very limited. Even worse, hardware acquirers tend to be rational about things like costs and profit.

Finally, everybody who does hardware tries to create the cloud back end and then get anybody else to do the hardware while they extract the rent.

So, longer timelines to cash out with higher risk. Yeah, don't think so.

Now, the upside is that if you do manage to get a product out, you have an actual barrier to entry. 2 guys and a dog in the Ukraine can't just clone you.

While I love the manufacturing incubators, they don't solve the fundamental problem of not knowing how to run machines. The existence of a CNC machine or a TIG welder doesn't magically make you a machinist or a welder. Being able to run a CNC machine doesn't mean you know how to make an injection mold.

Most people fail horribly simply at making a PCB board, and those are totally straightforward.

Read Andrew "bunnie" Huang's blog for a taste of all the little sh*t that can go wrong in manufacturing: http://www.bunniestudios.com/

Re: Sam Altman: Why Hardware Could Yield the Next $10B Startups

#69

Post by justicezyx » Wed, Mar 25, 2015, 9:55 PM UTC

exelius wrote: post #47

thinkmassive wrote: post #46

Earlier quoted context omitted.

Nest was acquired for $3.2 billion. The thermostat measures home activity and controls your HVAC. The reason it's highly valued is because of the aggregate of data from all thermostats, which they use to optimize the environment for each customer. Nest is the beginning of home automation for the masses, a market easily greater than $10B.

A/C is one of the few use cases where there is a need that was addressed. A/C accounts for the vast majority of energy usage in most homes, so optimizing it can provide real cost reduction. It's also really easy to install since there was already a single control point for the A/C in the form of a thermostat. Just look at Nest Protect if you want an example of an IoT product without a customer need; they add cost and…

The typical xxx is one of the few yyy reasoning... Startups are unicorns, dont pretend there is a ruling theory...

Re: Sam Altman: Why Hardware Could Yield the Next $10B Startups

#70

Post by mcmancini » Wed, Mar 25, 2015, 9:57 PM UTC

jkestner wrote: post #26

rebootthesystem wrote: post #14

Earlier quoted context omitted.

> The complexity of developing hardware is driven by the number of discrete components used Sorry, that's not even close to being true. Interesting how on HN "hardware" seems to mean "a board with chips". You know, like a Raspberri Pi. That is one type of hardware but not, I dare say, where the $10B (and maybe even $10M) startups would exist. We are developing two hardware products right now. One is an innovative fir…

Packaging is best thought of as another hardware product itself. Form and function have to be design-gineered, and materials and parts and assembly have to be corralled into a schedule and budget. The idea that software is eating hardware, while true on some level for some class of products, is also what leads to lots of startups with solid software backgrounds offering a beautifully designed product that suffers fro…

Packaging is hard. I'd like to additionally nominate cables (as in wire harnesses) and strain reliefs to the list of things that make my life miserable.