Hardware is hard
The expression, attributed to Marc Andreessen, establishes, both in terms of effort and intrinsic risk, that hardware is not the same as software. The inherent challenges in its physical design, creating a prototype, choosing and securing supplies of material, manufacturing processes, distribution and logistics, successive versions based on user feedback, etc, all make hardware a significantly more complex process than creating products based solely on encoding, although that in itself doesn’t mean that software is simple.
A few recent articles, such as this one published yesterday in TechCrunch, or this one in Spanish daily El Mundo a few days ago, in which I am briefly quoted, all emphasize the lowering of entry barriers that seem to encouraging a wide range of activities focused on hardware. That said, as a lecturer at the IE Business School in Madrid, which is without doubt among global leaders in emphasizing the importance of entrepreneurship, I must confess that my pupils’ seeming preference for software projects has had me worried for some time, to the point that it is now one of the main topics of my conversations with the institution’s management. The real economy is made up of atoms, not just bits, and any misalignment between this real economy and the combined projects that my pupils propose worries me.
Marc Andreessen was not wrong. Hardware is hard. But a series of recent developments means that this hardness is gradually softening. The first factor is clearly the lowering of entry barriers that being able to design and create relatively cheap and simple prototypes means. The microelectronics developed around initiatives such as Arduino and Raspberry Pi (which today has unveiled its new Raspberry Pi B+) mean that it is possible to put a computer or programmable circuit board anywhere and with a small budget, at the same time as low-cost 3D printers make it possible to design and create custom-made pieces for specific projects, and whose data files can be used for later industrial production.
Spare manufacturing capacity, boosted by platforms such as Alibaba.com, offer a future where manufacturing will be as simple as sending a data file and asking for a few quotes, in the same way as we might have a new kitchen or bathroom fitted. Keep watching Alibaba.com, which is not only going to save Yahoo!, but will possibly be one of the most valuable properties on the entire internet, and will surely be featured on The Economist’s cover as one of the main players on the internet.
What has been missing from the equation until now is financing. In this sense, platforms such as Kickstarter or Indiegogo can provide the kind of funding that many hardware companies require: no shareholders, just pre-buyers, to compromise ownership, instead contributing to make projects reality by participating in part of the risk inherent in putting something into practice.
These are all factors that contribute to making hardware a little less hard. It is only a matter of time before the usual suspects learn to manage these resources to connect with users. The fact that Martín Varsavsky, who is not exactly short on cash, should use Kickstarter to validate the launch of his latest app and to generate some noise in the media even before it is launched, shows how sensible these kinds of strategy are. The online world is becoming increasingly like the world beyond, and with all that brings with it.
(En español, aquí)
