Hardware startups Silicon Valley

Most gadgets have buttons, but for Shortcut Labs, the gadget is the button. The company’s forthcoming product, Flic1, is a single, clip-on button that uses Bluetooth to activate a preset function in a mobile device. As Shortcut’s founders imagine it, it could be used as anything from a camera remote to a fridge magnet you push to launch your food-shopping app.

It’s the kind of idea that has launched a thousand Kickstarter campaigns. And indeed, thanks to crowdfunding—and also thanks to prototyping innovations like 3D printing—Silicon Valley has become inundated with hardware startups, ambitious young companies that are building tangible gadgets the way a previous generation built web pages. But it’s easy for these companies to get in over their heads, because hardware is fundamentally different than software. Web pages, after all can be updated and fixed on the fly—there’s no harm in releasing an imperfect product, because it can be adjusted at any point—but with hardware, mistakes get locked in the moment the production line starts rolling. By the time you find a flaw, you’ve already blown your entire investment.

That’s why, instead of going it alone, Shortcut, based in Stockholm and San Francisco, has joined with Highway1, a new incubator focused entirely on hardware startups and the unique pitfalls confronting them. A subsidiary of PCH, which has been connecting major tech companies like Apple with Chinese factories for the past 18 years, Highway1 is now hoping to extend PCH’s institutional wisdom to startups—offering them what in essence is a portal to a massive manufacturing infrastructure in China, where PCH employs 2, 800 people directly and tens of thousands more on contract, handling manufacturing and packaging and distribution in scores of dedicated facilities in Shenzhen and elsewhere. “Every day you hear there’s a renaissance in hardware, ” says Liam Casey, PCH’s CEO and founder. “So you think, Hardware’s easy! Well, no. There’s a renaissance in prototyping. But manufacturing is still hard.” He hopes that with his help, the Valley’s hardware startups will be able to turn their promising prototypes into actual businesses instead of failed Kickstarters.

A New Kind of Platform

In the web world, incubators like Y Combinator have eliminated some of the guesswork from entrepreneurship, creating a system that sucks in smart founders and reliably spits out them out with fledgling companies and viable products. Now PCH, through its burgeoning mini-empire in Potrero Hill, is trying to do the same for hardware, offering everything a founder needs to move from idea to finished product, all of it orchestrated by people who have done it for years. Unlike a traditional incubator, PCH isn’t in it just for the equity (although it does take a small stake in each company). It’s betting that when these small companies blow up, they’ll keep using its services rather than laboring to find factories on their own. Making hardware will never be easy, but PCH hopes to make it just easy enough to nurture a new generation of multibillion-dollar businesses.