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.
What's critical for markets to understand is that every single one of the two dozen or so hardware-oriented entrepreneurs, educators and backers I have spoken with over the past three months agree that though their space is growing, hardware still presents unique challenges. WMT) economics of low-cost products made en masse using tools like high-output plastic molds," Ted Ullrich, founding partner at Tomorrow Lab, the New York intelligent product design shop, explained to me over a burger several weeks ago. He says that molds such as these can cost upward of $75,000 to make -- per product. So unless a startup knows it can sell tens of thousands of something, taking advantage of those economies of scale can be very challenging. "That manufacturing reality is not going to change no matter what cool 3-D printer you use," Ullrich said. All of which puts a premium on operations that can master the basic blocking and tackling of solving the real-world problems of getting a well-designed, real product really made. "This is an exciting time to be getting into hardware," summed up the Zahn Center's Elhawary. "But hardware is still hard."