New Startup Incubators Focus on Hardware Engineering

Here in Silicon Valley, we’ve gotten used to the idea that it doesn’t take a big investment—or even a garage—to start a software company anymore. A couple of friends can write an iPhone app in a matter of weeks or months and, potentially, take the world by storm. Or they can build a web company by renting a little server space in the cloud.

This ability to start a company without a lot of capital has led to a boom in software startups. It’s also led to a boom in incubators, like Y Combinator and Plug and Play, to mention just a few. Incubators bring in nascent companies for four to six months or so, give them a space to do their development, and introduce them to marketing and business folks before booting them out of the nest into the commercial world.

While the established incubators do hatch the occasional hardware startup, for the most part, the companies that have flocked to them are building low-overhead apps- or web-based businesses. Hardware engineers looking to do a startup haven’t had quite the same kind of support as software folks. They’ve been, it seems, lonely.

Until this week. Wednesday, at Xerox’s Palo Alto Research Center (PARC), a group of these hardware “Makers,” that is, hobbyists who make technology—electronics, 3D printers, digital fabrication tools—came together to hear from a series of speakers how makers can become entrepreneurs and build real businesses.  In a day and a half "Hardware Innovation Workshop," organized by Make Magazine, they found each other; and, perhaps more important, they agreed that they are a movement.

Again and again, whether from the stage or from the audience, attendees referred to the kind of energy that was palpable in the room. Said one attendee, “Everyone feels that there is a revolution starting to happen, a wave starting to break.” The only disagreement came when the Silicon Valley veterans asked themselves the last time they’d seen this kind of wave before…was it in the late 70s, when the HomeBrew Computer folks unleashed personal computing on the world, building shooting stars like Atari and Commodore, as well as companies like Apple that are still growing today? Or was it in the mid 90s, when open source software came into its own, and spawned a wave of businesses built on its foundations? Or was it the early 2000s, and the birth of Web 2.0? 

Whatever the historical precedent, it’s all good for the hardware engineering community.  And, as a sign that venture capitalists and others who fund and help build businesses are taking the trend seriously, the hardware makers are getting their own incubators, one on each coast.

Earlier this year, Jeremy Conrad and Helen Zelman started Lemnos Labs in San Francisco, an all-hardware incubator about to graduate its first class. Out East, Ben Einstein’s Bolt will welcome its first class in the fall. Lemnos Labs and Bolt have slightly different business models; Lemnos Labs makes equity investments in their companies, Bolt is more focused on licensing. They’re both supported by investors; Einstein pointed out that half his investment is from local angel investors, about 80 percent of whom are “guys with mechanical engineering degrees who wound up doing software their entire lives” and want to reestablish a connection to hardware.

Neither incubator is having any trouble finding entrepreneurial eggs to hatch. One reason, besides the access incubators give their companies to mentors, investors, manufacturers, and other help, Conrad says, is “you can’t start a hardware company at Starbucks,” rather, you need space to set up equipment and leave it.

Bolt just opened up its website a few days ago, and applicants have already flocked to it. Lemnos Labs has about 100 applications for its next class; its first class of four includes companies developing an industrial robot that makes hamburgers, an electric guitar with built in speaker and amp, a low speed electric vehicle for corporate campuses and universities, and a connected coffee machine with sophisticated brew controls. Of course, these aren’t necessarily devices that are going to change the world. And Zelman admits that quite a few of the hundred applications the lab is currently evaluating involve robotic toys.

But, pointed out Tim O’Reilly, founder of O’Reilly Media, back in the early days of the personal computer revolution, “most entrepreneurs failed. And that’s okay, because amazing things got built, and a lot of people have to try to make a revolution.”

Follow me on Twitter @TeklaPerry.

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