NEW YORK ( TheStreet) -- It's a good time to be a hardware start-up.
While the majority of young tech firms gaining traction and buzz today are digitally-oriented -- the Facebooks and Zyngas that are churning out online, social media services rather than tangible products -- venture investors note that improved technology is making manufacturing more efficient than ever before, enabling a new wave of start-ups to emerge that's producing physical goods.
"The democratization of manufacturing is happening," said Bryan Birsic, senior associate at Village Ventures, a seed and early-stage venture firm. "It's easier to customize things and to try a product with beta testing before investing in all the capital required."
Also boding well for hardware start-ups is the industry's bigger picture, which reflects a positive economic trend: manufacturing activity in the U.S. increased in June, as companies start to become more comfortable investing in expensive equipment.Inventory tracking has improved, as have innovations on the logistics side, making it simpler for companies producing tangible items to thrive, said Charlie O'Donnell, a principal at First Round Capital, which has invested in jewelry start-up chloe + isabel. Of course, starting up a hardware firm is far from easy. It takes millions of dollars in funding to build out the infrastructure, and for some, the cost of developing a physical device becomes too much to bear. Take Kno, an educational firm in Santa Clara, Calif. that's trying to replace the textbook with a tablet aimed at students. It raised more than $55 million in funding before scrapping its hardware business to focus excusively on software. "When you're creating software you don't have to worry about if the device will boot up or about the battery or the touchscreen," said Jeremy Toeman, chief product officer for Dijit, a start-up which turns your smartphone into a universal remote control. "But if you're building your own product, you have to worry about a range of things from finding a factory to shipping, logistics, warehousing and distribution." As the economy keeps improving and the cost of manufacturing continues to decline, expect more companies to get into the space, said Birsic. Read on for five innovative start-ups making and selling physical products, from 3D printers to eyeglasses.
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