Hardware

For the past week, I’ve been asked at least once a day (yesterday I was asked several times, with an R0 of 3) about what I think the coronavirus’ impact will be on the global supply chain. I have a perspective that it’s too early to really know but there are starting to be guidelines about how to think about it, especially as Chinese new year + a week has passed (and we are almost at +2 weeks). Theoretically, factories in China are opening next week, but until they open, they aren’t open … ...

If the majority of your understanding of how tariffs work is from Twitter, CNN, or Fox News, I encourage you to go read Trump’s China Tariffs Hit America’s Poor and Working Class the Hardest . And, if you think China is paying the U.S. directly for the tariffs, well, no … We have a lot of hardware companies in our portfolio so I’ve been living in the world of “what to do about tariffs” for several quarters. My fantasy at the beginning was “ignore and hope they go away.” This quickly evolved through “are there any ways around this” to land at “deal with the reality of increased cost, research, and compliance.” ...

For starters, let’s look at some Golden Retriever puppies instead. I watched most of the Apple announcement last week (I was on vacation and hanging out waiting for Amy, so I just plopped down on the floor and watched Special Events on the Apple TV channel.) I fell asleep for a few minutes part way through it. I turned it off about halfway through the iPhone X announcement. I’ve been an Apple user for many years now. Every few years, I switch to an Android phone for a month (whatever the newest model is) but always end up going back to my iPhone. Whenever each new iPhone model has come out (for at least the past five years) there’s been a mad rush among my partners to make sure all of us have a new phone the day they ship. I even sported a rose gold one during one upgrade cycle just because I could. ...

I’m seeing an endless stream of hardware-related companies these days. In our world, we are focused on software wrapped in plastic , a line I think I first used some time in 2012. If you understand our themes, it fits squarely within human computer interaction for us. There was a point in time – probably less than six years ago – where very few VC firms would even consider an investment in a hardware related company that was aimed at consumers. Every financing for every company we’ve invested in this area has been extremely difficult. We were not the first, nor are we the only, but in 2010 it was a very large, very dusty, and very dry desert landscape. ...

Over the past few decades, the most compelling engineers and entrepreneurs I’ve met have tended to be working on problems that can be solved with software. Software has some great advantages but it comes with a few big drawbacks, namely it’s tied to a few standard types of input, although we are trying to impact that with some of our investments in our HCI theme . Along with the rest of the tech ecosystem, I’m starting to see more and more entrepreneurs with a piece of hardware in their development plan. These are not your parents’ hardware products. Instead, they are software companies that happen to have a physical component in their stack – something I call software wrapped in plastic . ...