Jason Lim – Forbes
The boom of hardware startups has triggered a new crop of hardware accelerators around the world. Such accelerators are emerging to meet the unique demands of hardware startups that general ones can’t. Hardware companies face a very different set of problems from software companies, especially related to manufacturing and fulfilment. This means building a hardware company is a much more involved process than pure software or Internet related models.
While the lean startup methodology can still speed up the time it takes to go-to-market for hardware startups, there are many steps that are still unavoidable. That’s why beyond investing money, office space, mentorship and networks like traditional accelerators; hardware accelerators also offer the shiny equipment and machinery to bring the hardware devices to life and the deep industry knowledge to put them in the hands of end customers. Especially for startups that plan to produce mass quantities, several accelerators provide guidance about dealing with Chinese suppliers and manufacturers, something most know nothing about.
According to CrunchBase, there are more than 150 accelerators worldwide. The Global Accelerator Network (GAN), an organization, which standardizes accelerator programs, is made up of 50 programs across 6 continents. Today, there are around 6 hardware specific accelerators such as HAXLR8R and Highway 1.
Experts in the hardware space have also seized business opportunity by creating valuable hands on services. Bolt based in Boston, is a seed fund that offers a high-end prototyping shop, support from a full-time engineering and design staff and assistance with manufacturing and commercialization. Dragon Innovation based in Massachusetts, provides certification for design reviews and cost estimation as well as advice for factory selection and project management.
The rise of hardware accelerators and investment funds can be attributed to several factors:
1. The Internet of Things movement
British technology pioneer, Kevin Ashton, coined the term “Internet of Things” in 1999 based on his research of RFID. Early attempts to commercialize IoT came in the form of LG’s Internet fridge, that could sense when to refill certain products like milk and the cute weather forecasting, email reading toy rabbit, Karotz.
The way we live is being rapidly transformed through this new technology that combines sensors with data, giving us actionable insights. For example, new products like Spire and Melon are being created to enhance our state of mind and SCiO is a device than can tell us if food or medicine is unsafe, simply by pointing it at them.
McKinsey estimates the IoT market to be worth up to US$33 trillion in 2025.
2. The normalization of crowd-funding
Before crowd-funding sites like Kickstarter and IndieGoGo, it was very challenging to raise capital for hardware startups. Just on Kickstarter alone, US$1.2 billion has been pledged and there has more than…