5 Tech Start-Ups Making 'Real' Products

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.


Need to replace a knob on your stove or feeling a sudden urge to create your own mini action hero? MakerBot, a Brooklyn-based start-up, sells a special printer that lets you print out three-dimensional objects from molten plastic.

Once assembled -- the printer arrives in pieces in a kit-like format -- users feed in up to two types of plastic and select a digital model that's sent to the printer through a computer. It can create anything that's 5 X 5 X 5 inches.

While 3D printers have been around for several years now, they traditionally cost tens of thousands of dollars. The MakerBot starts at $1,300, namely because it doesn't come preassembled and is constructed with relatively inexpensive off-the-shelf, laser cut parts.

Users can find inspiration by browsing the files at Thingiverse.com, a Web site created by MakerBot to showcase different objects created from the device -- cheese slicers, combs and disposable razor holders.

The goal of MakerBot, according to CEO Bree Pettis, is to bring about the democratization of consumer manufacturing. "The MakerBot is a little box of innovation on your desktop," he said. "It lets you take ideas and make them real. Its great for people who want to design and make anything."

Founded in 2009, the company now has 35 employees and has sold more than 5,000 kits for assembling the MakerBot. The devices can be purchased through the company's Web site.

This month MakerBot celebrates Space Month by by printing rockets, astronauts, UFOs and aliens in 3D.


Boxee, the New York City upstart whose set-top boxes stream online videos to your TV, is attempting to improve its outside apps experience as a way to set itself apart in the crowded Net TV market, where Google ( GOOG) is preparing to open up its Google TV offering to third-party developers.

The company is also working on an iPad app to allow streaming from tablets to televisions or PCs, which Boxee hopes to release by the end of July.

Boxee, founded in 2007, lets users watch films from services like Netflix ( NFLX) and VUDU as well as live content through partnerships with the BBC and Major League Baseball.

Boxee is also plugged into social networking, delivering video recommendations with friends on Facebook and Twitter. A "watch later" function lets you send web videos and shows to your device form any Internet browser.

The Boxee box, a small piece of hardware that plugs into your TV, can be purchased for $199. It's controlled by a simple remote with a QWERTY keyboard on the back.

Users can also build their own Boxee device by downloading free software, installing it onto a computer and controlling it through an iPhone.

Boxee initially began as a software-only company that required users to install its program on a computer. Strong demand from users and a partnership with networking product maker D-Link enabled Boxee to launch its own hardware device last year.

"We've jumped into the hardware world where we've had a crash course in how all the different components work together, how manufacturers work with us and how the pieces of the puzzle come together," said Andrew Kippen, vice president of marketing at Boxee.

Aside from Google and Apple ( AAPL), Boxee also faces competition from start-ups like Roku.

The company, which has sold over 110,000 Boxee boxes since the device's release, has raised more than $26 million in three rounds of funding from high profile investors including Spark Capital, Union Square Ventures, General Catalyst Partners and Softbank NY. It has 35 employees.


GreenGoose is a San Francisco-based start-up designed to turn every day activities and chores into a game. Similar to how users receive Foursquare points and badges for checking into restaurants and bars using the popular mobile app, GreenGoose adds game mechanics and a rewarding system to everything from brushing your teeth to walking your dog.

Here's how it works: GreenGoose produces tiny wireless sensors -- small stickers -- that you attach to different items you interact with every day. The sensors communicate with a base station that tracks specific activities without any input from the user. Players are then awarded lifestyle points for tasks that they complete.

Place a sensor on your dental floss, for example, and it will track often you've flossed per week. Attach one to a water bottle and it'll measure how many glasses of water you've had per day.

The GreenGoose kit, which will be sold this fall on its Web site, is targeted at families and children, said CEO Brian Krejcarek. The company hasn't yet disclosed pricing but said it will be "fairly low," and will include sensors and a base station.

The company will also release a smartphone app in conjunction with its kit, tying lifestyle points to the program.

"Lets say you give your pets a treat ... when you tilt the treat box and lift the lid off, this is something we can measure," said Krejcarek. "Doing this or playing Frisbee with your pet would give you points through the smartphone app."

The company has raised $550,000 in funding from angel investors including Esther Dyson, Bill Warner and Bill Lee. It is currently looking to raise another $500,000.

Warby Parker

Warby Parker produces fashionable prescription eye glasses that cost $95 --a fraction of what eyewear boutiques charge.

To keep prices low, Warby Parker doesn't pay licensing fees or deal with eyewear retailers who mark up the cost of glasses significantly.

Instead, Warby Parker's retro-style frames are manufactured at a plant in China where co-founder Neil Blumenthal leverages his connections -- he was formally director at VisionSpring, a non-profit that trains low income women to sell affordable glasses in their community.

The prescription lens, which are made from polycarbonate plastic, are set in frames at a lab in New York.

As for now, Warby Parker glasses can only be purchased through its Web site, through it has plans to open a brick-and-mortar storefront in New York City sometime this year.

Besides offering lower prices than the competition, Warby Parker will differentiate itself via its customer service. The site features a "virtual try on" feature, where customers can upload a picture of themselves to see what they "look" like wearing a particular pair of glasses. The company also sends up to five pairs of glasses to try on for free with no obligation to buy.

It also rents space or has teamed up with boutiques in New York, San Francisco and Oklahoma City so that you can try on glasses before ordering them online.

Launched last year by four friends from business school, the company has already sold 60,000 pairs of eyeglasses and recently launched a sunglass line. It's also planning a prescription sunglass line later this summer.

The start-up also has a charitable twist -- for every pair of glasses that are purchased through its site, it donates a pair to someone in need through its non-profit partners.

"We want to be a model for how for-profits behave," Blumenthal said.

Warby Parker has raised around $1.5 million in funding from First Round Capital, Lerer Ventuers and SV Angel. It has 40 employees.


Pogoplug, made by San Francisco start-up Cloud Engines, is a cloud-based storage device that lets users remotely access their data like photos, music and videos from anywhere in the world -- it's like having your own personal cloud.

It works like this: purchase a Pogoplug device for $99, connect it to your router and attach your own USB drives filled with data. You can then access your files from any Web browser or mobile device and share files instantly without the need to upload or attach them to e-mail.

Pogoplug also recently came out with a software-only version of its product, which lets users store their music and documents on their own computers but access them from anywhere without the need for additional hardware (essentially turning their Mac or PC into a Pogoplug). The software is free, or you can choose to upgrade to a $29 premium version which lets you stream your content to media players like PlayStation, the Xbox 360 and Internet-enabled TVs.

"Our software product is not in lieu of our hardware," said Pogoplug CEO Dan Putterman. "We think that releasing the software will strengthen hardware sales over time."

Cloud Engines has raised $25 million from investors including Foundry Group, Morgan Stanley and Softbank. Founded in 2007, the company has 50 employees

--Written by Olivia Oran in New York.

>To follow the writer on Twitter, go to http://twitter.com/Ozoran.

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