I love attending events like last week's Denver Startup Week, Boulder Startup Week, BLUR conference, and various entrepreneurial meetups around the country. Spending time with this collection of interesting people who are passionate about what they do is probably the best way to learn something, be inspired, and enjoy an evening. While I've been going to them for years, 2013 has shown something unique: an affinity for hardware startups.
What is going on? It isn't like the well of strong software and web tech companies that have lots of promise is drying up. To start, one should understand the difficulties that have traditionally faced hardware startups. The ability to quickly prototype, test, and change hardware is certainly more expensive and time consuming than recompiling code due to an Office Space style 'Monday Mistake', “Oops, I shorted an inner-layer trace; better order a new set of boards. See you in a couple weeks!” Worse than the actual mistake is the constant risk of such an error at each revision release. Then with the working protos up and running, there are either too few that are working at any given time, or so many that it is impossible to track hardware changes across all units. Once all development is completed, the idea of scaling hardware is daunting. Software can grow to 1 million users quickly, while building a million units is no small task with serious risks:
Given all of the challenges above, why the migration from hardware aversion to hardware appreciation, especially among sources of capital such as VC firms? First, the feedback loop is getting shorter and shorter. Falling prices of decent rapid prototyping tools like 3D printing, PCB fab and assembly, and the rise of hardware development boards like those sold by chip manufacturers, adafruit, and sparkfun a startup can get a prototype working at very little cost. Early prototypes can be designed for hackability, making hardware revisions a simple use of common tools such as wire, soldering irons, a drills, and a hobby knife. Further speeding hardware development is the significant growth in digital hardware such as microcontrollers and FPGAs. As digital chips swallow up more hardware functions, the development is shifted to into the realm of being able to change a design with a firmware update. Finally, the uncertainty of market demand when preparing for manufacturing can be mitigated with preorders enabled by crowdfunding. Fast following customers will still have to wait for the second production run, but manufacturing planning for early adopters gain the benefit of matching supply to demand on the first run. 
For all of the midnight engineers that have been tinkering for years waiting for the business environment to become friendly: now is the time! Get a prototype built up that can wow an audience and join me at events such as local startup events, Maker Faires, and entreprenurial meetups. Talk to people in order to see if your idea has any legs. The capital is out there now for teams that have the idea and the ability to take it seriously, so get to it!
