YC announced plans to better support hardware startups last year. It built a prototyping lab, formed partnerships with manufacturers, hired Iseman to lead the effort and subsequently packed its winter and summer 2016 cohorts full of hardware startups.
His departure, and the fact that they're not replacing him with another similarly focused partner, doesn't mean YC is pulling back from its ambitions, the incubator's president said in a phone interview. "Luke set up a giant amount of deals for hardware and other special services for hardware companies so at this point all that stuff's in place," Sam Altman said. "We'll fund more hardware companies this batch than we've funded before."
Still, hardware is, well, hard. Silicon Valley has produced a raft of world-changing software startups, from Airbnb (a YC veteran) to Facebook. But it's a whole lot easier to beta-test an app than to prototype and then manufacture a gadget with a bunch of moving parts. Then you have to market the thing to the masses, who are already enamored of their Apple and Samsung products. Exhibits A and B: Fitbit, the fitness tracking company, and GoPro, maker of rugged little cameras. This week, both cut their sales forecasts for the crucial holiday quarter and watched their shares plunge.
Yes, investors are pouring a lot more money into hardware startups these days—$1.7 billion in the first half of 2016 compared with about $500 million in the same period in 2014, according to hardware-focused incubator Bolt. But that's a fraction of the $28 billion of venture capital invested across the industry in the same period according to the National Venture Capital Association.
YC wanted to remove some of the uncertainty from the process by providing hardware startups with prototyping tools, design help and access to international distributors, getting traditionalbarriers out of the way and letting hardware companies grow in a fashion closer to their software cousins, Altman said.
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