Hardware Companies Win VC Appeal, Too

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Hailey Lynne McKeefry
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Re: I would have thought
Hailey Lynne McKeefry   4/16/2014 7:54:55 PM
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Perhaps the openness to investing in software is the awareness that future will put more devices into more hands than ever before. Even a small profit can add up if you sell millions of something.

Rich Krajewski
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I would have thought
Rich Krajewski   4/16/2014 1:28:04 PM
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"Though long considered riskier than software investments -- mostly because of the costs associated with prototyping, supply chain and inventory management, and mass manufacturing scaling...."

I would have thought hardware was more risky because hardware tends to become commoditized fairly rapidly (except perhaps for medical electronics, because of the high barriers to entry, among other reasons). It's like going into the fruit or vegetable business. Survival tends to become a matter of lowest cost production, no?, unless there is some kind of long-term protection against competition--but even patents don't guarantee success.

I wonder what the VC's think the competitive advantages are that they want to invest in them. Of course, they're planning to cash out before commoditization occurs, so the advantages only have to be short-term.



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