Hardware By the Numbers: O'Reilly Solid Keynote


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These are the slides for my Hardware by the Numbers Keynote at O'Reilly Solid. They create a narrative about the hardware startup ecosystem using quantitative data wherever possible.

BEST VIEWED HERE: https://presentate.com/noupside/talks/hardware-trends-hardware-by-the-numbers, on Presentate, which has my speaker notes alongside the content, and contains all sources and citations.

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  • Nearshoring is gaining in popularity as manufacturing wages in China continue to rise. Although no official Chinese wage data has been released since 2009, in several industries it is now cheaper to hire workers in Mexico. US companies are moving manufacturing to Mexico, across the spectrum - both large automakers, and in startups such as 3D Robotics.

    Besides wages, considerations include costs of shipping a 40-foot container, the exchange rate, time differences, language barriers, and the challenges of managing a far-flung supply chain.

  • Reshoring is largely made possible by robots. This is a trend within a trend. Industrial robots are getting increasingly powerful, and dropping in price. They are changing the face of labor around the world.

    Robot density is the ratio of robots to human workers. Countries with high density have 27-40 robots per 100,000 employees. China currently has 2. That is expected to change. Chinese manufacturing is becoming automated as well. This is driving demand for more robots.

  • Historically, prices are in the $100k range.
  • But that’s changing. Smarter robots are changing the way things are made, and reshaping the global economy.

    The new robots of today are safer, play well with humans, and can be trained to perform many different tasks.
  • Getting into dollars here…
  • Crowdfunding gives potential founders the opportunity to raise a bit of money without having to go to angels and venture capitalists. It’s most often used to finance the first run of a product and allow entrepreneurs to field-test their ideas. It’s been an invaluable addition to the funding ecosystem for hardware.

    On Kickstarter, we see hardware, tech, and product design categories progressively gaining strength. Number of projects are up. Dollars are up. And both are increasing as a percentage of proects and funds on Kickstarter.
  • And VCs are getting in the game. This chart shows the prevalence of early-stage venture deals, Series A and below. It does include medical devices. And what we’re seeing here is the number of early-stage funding events increasing every year
  • Hardware startups raise more in the early days.
  • But follow-ons are hard to come by. The mean success rate across all sectors is 19.8%. On average, only 10% of hardware startups raise a second round.
  • Looking at total dollars across all stages, it’s clear that now is a great time to be a hardware startup raising money.
  • These are the general sectors that entrepreneurs are starting companies in.
  • Venture capital deals are being done in most of these sectors. Drones is a subset of robotics, but it’s attracting an increasing amount of interest so I broke it out here. In 2013, VC dollars flowing into drones hit $79 million.

  • Investments are likely to continue, as the hardware sector has seen a number of high-profile and lucrative exits. Robotics alone: in 2013 Google purchased 7 robotics companies
  • Of course, it’s not just robotics. Virtual reality, 3D printing, and connected devices all had significant exits.
  • Make no mistake about it: hardware is still hard.
  • But the trends we’re seeing in the startup ecosystem - protoyping, manufacturing, fundraising – they all indicate that it’s getting progressively easier to get from that idea on a napkin to a space on the shelf.
  • Marc Andreessen once said, “Six decades into the computer revolution, four decades since the invention of the microprocessor, and two decades into the rise of the modern Internet, all of the technology required to transform industries through software finally works and can be widely delivered at global scale.”

    And while it may yet be early to make the same claim about hardware, the hardware revolution is happening. Which means that we’re in for some truly exciting developments, as today’s creators leverage the power of software and the promise of hardware, and bring new and compelling connected devices into the world.

    Thank you.
  • Hardware By the Numbers: O'Reilly Solid Keynote

    1. 1. HARDWARE TRENDS Renee DiResta @noUpside Hardware By The Numbers
    2. 2. Hardware Is Hard
    3. 3. Hardware was hard… …because it was lonely
    4. 4. Hackerspaces From Do It Yourself to Do It With Others
    5. 5. Hacking Hardware Everywhere 106 Countries represented 1531 Worldwide hackerspaces 534 Hackerspaces in the US
    6. 6. Hacking Hardware Everywhere
    7. 7. Maker Faires
    8. 8. Community Growth
    9. 9. Specialized Accelerators
    10. 10. The Support Ecosystem
    11. 11. Hardware was hard… …because prototyping was difficult
    12. 12. 3D Printers: units sold under $100,000
    13. 13. Enterprise-quality printers will cost less than $2000 by 2016
    14. 14. MakiBox $200 A6 LT kit Printrbot $349 Simple kit Buccaneer $397 on Kickstarter
    15. 15. End-User Spend on 3DP
    16. 16. Prototyping: Functional
    17. 17. Octopart Microcontroller Price Index
    18. 18. Economies of Scale
    19. 19. Hardware was hard… …because China is far
    20. 20. Increased Access
    21. 21. Offshoring Reshoring Nearshoring
    22. 22. China PMI data
    23. 23. Mexico vs China Wages
    24. 24. Botsourcing Industrial robots per 100k employees Germany South Korea United States Japan Average China
    25. 25. Typical industrial robot $100k Base price $200k+ Programming cost
    26. 26. Base price UR5 $34k UBR-I $50k Baxter $25k
    27. 27. Hardware was hard… …because investors were scared
    28. 28. 2011 Kickstarter 0.46% of all projects were hardware 120 Hardware projects on Kickstarter 649 Product Design projects 26k Total projects on Kickstarter $2.5M Hardware project dollars raised 2.43% of money raised on Kickstarter
    29. 29. 2012 Kickstarter 0.58% of all projects were hardware 239 Hardware projects on Kickstarter 1373 Product Design projects 41.4k Total projects on Kickstarter $9.7M Hardware project dollars raised 3.02% of money raised on Kickstarter
    30. 30. 2013 Kickstarter 1.7% of all projects were hardware 784 Hardware projects on Kickstarter 2453 Product Design projects 46k Total projects on Kickstarter $46.6M Hardware project dollars raised 9.94% of money raised on Kickstarter
    31. 31. Early-Stage Venture Capital
    32. 32. Hardware Companies Raise More
    33. 33. But follow-ons are tough…
    34. 34. Today, VCs<3 HW $442M Into hardware startups in 2012 $848M In hardware Investments in 2013
    35. 35. Hardware Companies Founded Designed Products Connected Devices / IoT Wearables Robotics
    36. 36. Hardware investment by sector
    37. 37. Acquisitions
    38. 38. ….more acquisitions
    39. 39. Connected Devices
    40. 40. Or a toaster
    41. 41. Or a cow
    42. 42. M2M vs H2H Data Transfer Patterns • Orders of magnitude more nodes • Upload-Biased Traffic • Low bandwidth • Low power • Real time
    43. 43. In 2008, the number of devices connected to the internet surpassed the number of people on earth
    44. 44. Connect All The Things 20202012 50B8.7B 2013 10B … 2008 >
    45. 45. People are paying attention Google Trends data for “Internet of Things”
    46. 46. People are paying $$ $25B 201820132012 $71B$33B …
    47. 47. Wearables
    48. 48. Projected Growth of Wearables
    49. 49. Hardware is still hard… …but the future is bright
    50. 50. Software is eating the world… Hardware gives it teeth