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#DigitalSkeptic: No to Software and Apps -- It's Hardware That's Hot

HAMILTON HEIGHTS, N.Y. ( TheStreet) -- Bone-weary Information Age investors may finally have a reason to grab the A Train to upper Harlem: A new generation of entrepreneurs here are fed up with software and apps.

Now it's hardware that's hot.

"In the last, say, two years there has been what's called app fatigue," Nayeem Hussain told me in a basement hardware incubator called the Zahn Center for Entrepreneurship at The City College of New York.

Hussain is co-founder of Keen Home, a New York intelligent heating and air conditioning vent startup. And he and partner Ryan Fant are laying odds that the market for apps running on PCs, smartphones and tablets has bottomed out and that bringing new value to real things is where the real action is.

"When you're making hardware, the beauty of it is that you have a tangible product and you can provide this product to the consumer," he said. If there is ample demand, "The value proposition speaks for itself."

Sure enough, at least based on the past three months of dozens of conversations with those in this emerging product space, Keen Home is part of a dynamic new family of hardware startups and incubators racing to develop a generation of real consumer goods.

"A year or so ago I spoke with VCs looking for funding to start a hardware incubator," said Haytham Elhawary, executive director here at the Zahn Center. Back then, potential backers could not have dismissed him fast enough. But today hardware successes such as the Nike+ FuelBand have made major investments in hardware almost commonplace.

"The clear sentiment is: Hardware is back," he said.

Forget big data. It's big reality that shines
If investors have the courage and imagination to look, the signs that the real world has real luster are everywhere. No less than New York-based FirstMark Capital, the group behind such pure-play Digital Age hits as Pinterest, Shopify and SecondMarket, recently fired up their own hardware event series in the city called Hardwired NYC.

And several hardware-focused entrepreneurs I spoke with around the country confirm there is unprecedented venture capitalist interest in their hardware startups -- even for relatively obscure ideas.
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