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Why is HardTech so Effing Hard?
Are you prepared to build a factory? Few people are.
Take a glance at the 1000+ unicorns listed on Wikipedia.
What industries are they in?
The vast majority are SaaS, fintech, e-commerce, AI/ML, edtech, or cybersecurity. Software, software, and more software.
Then there are a bunch more in food delivery and health platforms. In other words, more software.
And then comes all the gaming companies and crypto/blockchain/NFT startups—yet more software.
Outside of software, the only unicorns building actual physical products were 2 in space, 1 in batteries, 2 in biotech, 1 in nanotech, 4 in robotics, and 4 in semiconductors. I’m sure I missed a few, but not many.
That means less than 2% of successful startups actually build things, and most of those are electronics that are easy to outsource.
Where are all the startups in climatetech, chemicals, and better materials?
Where are the new batteries, green hydrogen, sustainable materials, plastics recycling, and efficient solar panels?
Where are all the carbon sequestration startups, locking CO2 in the atmosphere into useful products? Where are all the startups making steel and concrete without coal, plastics without oil, and sunscreens that are safe to use? Where are the next generation of Apples, Intels, Hewlett-Packards — the companies that built Silicon Valley?
They’re not on the list of unicorns.
Do they not exist?
I know for a fact they exist. I see dozens of hardtech startups every week. I invest in them, I mentor them, I attend their conferences and participate in their Slack boards. I’ve even built two successful electronics startups myself.
They exist. But none have become unicorns. They’re not valued highly. Very few survive.
What’s the Problem with HardTech?
If there’s one overriding reason why almost no hardtech startups have become unicorns, it’s this: building a hardtech startup is really effing hard.
