How we’re re-defining the “Hardware Startup” at BSG

If I asked you to define what a hardware startup is, you might likely say it’s a company making some sort of gadget that has electronics. If you live in the San Francisco Bay Area the definition of a hardware startup would most likely be a company making an IoT or wearable tech product.

The popularity of the term “hardware startup” has been growing because of the hardware startup revolution.  Hardware startups are popping up all over the place, but this revolution is not just about consumer electronics, gadgets or IoT products – there is a revolution going on with other physical products such as clothing, phone accessories, and non-durable goods.

Why are we re-defining the Hardware Startup?

At Berkeley Sourcing Group we wanted to re-define what a “hardware startup” is because it’s much more than a company making an electronics product. That’s why we now define hardware startups as, “A startup whose aim is to take a physical product to mass distribution.”  A physical product can be anything made with electronics, metals, wood, plastics and textiles. It doesn’t have to fall in this narrow category of just electronics products anymore.


The primary reason is a typical hardware startup you hear about will often succeed or fail for the same reasons as a non-electronics based product such as a back-pack. The key distinction is that all physical products must be manufactured. Manufacturing then drives the critical business realities the startup will face including:

  • Crowdfunding
  • Institutional Funding
  • Intellectual Property
  • Minimum orders
  • Quality Control
  • Lead Times
  • Fixed Costs
  • Cash Flow Management
  • Shipping
  • Retail

The fact is you can now make anything, and it’s easier to bring a physical product to market. In the past it wasn’t feasible for small business & hardware startups to compete with big companies in the physical product space because they didn’t have the resources.

The main takeaway is the tools and technologies that are fueling the hardware startup revolution in IoT , smart home and wearables are applicable to the broader landscape of any physical product being made. Spread the awareness about this new paradigm shift in what a hardware startup is and lets us all build the future of hardware together.

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