One question I can answer is why hardware is suddenly cool. It always was cool. Physical things are great. They just haven’t been as great a way to start a rapidly growing business as software. But that rule may not be permanent. It’s not even that old; it only dates from about 1990. Maybe the advantage of software will turn out to have been temporary. Hackers love to build hardware, and customers love to buy it. So if the ease of shipping hardware even approached the ease of shipping software, we’d see a lot more hardware startups.
It wouldn’t be the first time something was a bad idea till it wasn’t. And it wouldn’t be the first time investors learned that lesson from founders.
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I’ve shared my perspective before, that in my dad’s age everyone(*) had a wood shop. Wood was cheap, transistors were expensive. Now wood is expensive and transistors are cheap. A PIC board is cheaper than a board of clear pine. And so weekend microprocessor projects displace weekend plywood projects.