More Gadgets, Please

On hearing this week that Barnes & Noble stock traded up on 140% growth for its e-book reader, the Nook, I had only one thought: more gadgets, please.

If a book retailer can develop a device that sells like hotcakes, the entrepreneurs in Silicon Valley and Seattle surely can too. The fact that Barnes & Noble has succeeded where many in the Valley have never even tried is like getting dunked on at the playground by your 54-year-old uncle.

It’s hard to believe that during the Steve Jobs interregnum, when Silicon Valley first turned away from actual silicon to fund dot-com sensations like Netscape, Amazon and Google, we barely noticed that a former 19th- century Finnish pulp mill was dominating the market for mobile phones.

The only new company to challenge Nokia’s hegemony was Canada’s Research in Motion, which was so far from the world of Silicon Valley that it may as well have delivered its BlackBerries by dogsled. The devices came to be known as CrackBerries for their owners’ slavish devotion, yet no one here thought of developing an alternative until Apple’s iPhone.

Even now, consumers’ appetite for more gadgets is insatiable. Sure, the Kindle looks like it was stolen from a 1964 Epcot Center exhibition. And we all thought its competition with the iPad should have ended like an Aeschylus play, foreordained and tragic. But two years on, both are still on my nightstand. The Kindle’s sales have out-stripped Amazon’s wildest expectations.

So why aren’t there are any gadget startups? For all the tributes to Steve Jobs from online entrepreneurs, you’d think more of them would embrace his signal approach to technology, dominating a market by making both hardware and software. But there has hardly been an explosion of device-driven startups.

In fact, I can think of just one. It is Square, which makes the gizmo shop-keepers attach to their iPhones for running credit cards. Half the reason Square is so exciting is that you can hold its little swiper in your hand. Has any company ever reached a $1-billion valuation faster?

The reason that entrepreneurs don’t follow Square’s lead is mostly because so many are coding on a couch, not soldering stuff in the garage. In an era when anyone can learn PHP in a six-week self-taught course, this trend will continue.

Eventually, we may completely forget how to make hardware. In out-sourcing manufacturing to China and elsewhere, we not only forsake all the working-class jobs that come with making millions of gadgets, but also the industrial craftsmanship to make the first one.

As Redfin has learned about real estate, innovation is occasionally a bolt from the blue but is more often the sum of a thousand little improvements gathered from doing something firsthand, over and over again. Aristotle would say that we are what we repeatedly do, but it’s also true that our art is what we repeatedly do.

To build a better mousetrap, we need engineers to roam the factory floor, thinking about how to make hardware better. That Amazon’s hardware design efforts are based in Seattle gives us a chance to get in this game, building new skills and spinning off new startups.

It also speaks to our earliest impulses as entrepreneurs. Growing up, my favorite restaurant was Wendy’s, which used to line its tables with old-fashioned newspaper ads touting bizarre contraptions that picked your nose or clipped your toenails, sometimes all at once. Munching my burger, I wondered why the world stopped trying to make these wonderful devices. I still do.

Discussion

  • http://twitter.com/AndySack Andy Sack

    Have you seen me dunk?! Yah…that's what I'm talking about :-)

    • http://blog.redfin.com GlennKelman

      Ha ha! TechStars should try to get a gadget entrepreneur…

    • dandila

      you seem an indigent in your stupid denegrated   …black snap!!
          …  why are you laughing like a foolish man …
        you are really a …..nigerian boy !

  • http://www.pacube.com Conan Reidy

    We just bought a company focused on the “internet of things” and as a consequence, we work with a lot of people who make electronic things, many of whom are hardware hackers. Our user community is large enough to represent a kind of global geographic distribution of hardware hackers. Silicon Valley comes in sixth, notably after New York, the home of Square, MakerBot, etc. If I were starting a device company today, Silicon Valley might be the last place I would go, because the hacker talent pool is deeper elsewhere. 

    If you believe in any of the Internet of Things projections (that there will be 50 BILLION devices connected to the Internet  in the next decade), it's likely – and richly ironic – that Silicon Valley may be missing out on this wave of innovation because it has failed to maintain its interest in silicon.

    • http://blog.redfin.com GlennKelman

      I really love the phrase Internet of things Conan. And I think you're right, this is what those blighted second cities like Detroit or Cleveland should be focused on becoming, the silicon Silicon Valley…

  • mcgarty

    What do you mean no gadget startups? Joel and I have been successfully peddling gadgets we make in our basements for several years. 

    Regarding the Nook, I'd like to see the breakdown of the 140% growth number. Is that hardware or content? My guess is that it's skewed to hardware given that everyone I know with a Nook bought it because it's the cheapest Android tablet money can buy after a simple hack http://www.businessinsider.com… 140% growth on a loss leader is still a loss.

    • http://blog.redfin.com GlennKelman

      I almost included a line from Joel challenging me when I described our software developers as engineers… for Joel the term describes people operating in the physical not virtual worlds…

      • Tasiha roberto

        teri maaaa di phuudi COOL hai,,,! 
          ( …means you are an inteelgent guy ..SIR)

    • http://blog.redfin.com GlennKelman

      And I think B&N is being smart when it sells the Nook at a loss…

      • mcgarty

        I think loss leaders are smart too, but I'm worried that people are buying Nooks as cheap tablet computers and not purchasing any B&N content. In which case the loss leader will not lead to any future revenue for B&N.

    • http://twitter.com/mykie242 mykie Gunderson

      I wouldn't count out Amazon in the “tablet wars” quite yet, they've got their own tablet right around the corner.

      …Gadgets are great, but they're nothing without great software.  I think that's where Amazon's upcoming tablet is going to differentiate from the rest of the sorry lot me-too Android tablets.

      • http://blog.redfin.com GlennKelman

        Yeah Mykie, great point. Of course the day I write this post, TechCrunch publishes a big expose on the Amazon Tablet…

        • Tasiha robert

          tu bra panchod ,dlla , hrami , kutta, or phooosiywa hai….

        • Tasiha roberto

          this is actually french ..ihave posted …it means you are quiet relevant and germane in your outlook..! SIR HATS OFF to you …your skills resiprocate with your dilliggence & intellectuallaty ! 
            hats OFF ..!
          regards..
          your truly
          TASIHA ROBERTO 
           CALIFORNIA ,

  • Hibryd

    I'd think that one reason we don't have gadget-based start-ups is that making a product can be a lot more expensive than making software. To make a smartphone app, you need to pay software engineers. To make a smartphone accessory gadget, you need software engineers, hardware engineers, materials experts, manufacturing experts, and then you need to design, engineer, make prototypes, source, and pre-pay manufacturing and assembly for every single part.

    I actually know an electrical engineer who's in the process of founding a startup and making a new tool for woodshops. This product has off-the-shelf parts for the interior electronics, but it's going to cost him almost six figures to make JUST THE MOLDS for all the new plastic interior and exterior parts.Companies that already make gadgets are in the best place to make new gadgets, because they have the expertise and vendors already in place, and they have other sources of revenue in case the new gadget doesn't take off.

    • http://blog.redfin.com GlennKelman

      This is definitely part of the problem. The easy money is in apps.

      • Jalina vajpai

        are you a robber …always trying for extortion !!

  • http://www.housesforsalebuckheadga.com Dan

    I'd like to think that we'd just get to a point where we would just think of something,
    then a software program appears in your mind's eye, Googles it, comes up w/results,
    intuitively asks you what you'd like to do: more info/browse, call, email, facebook, G+, etc.

    A boy can dream.

  • Nisa Sheikh

    This is a very interesting article.

    • robert ferlando

      if you r a girl ..then i'll drink milk from your ..BOOBS  !

  • http://hometheaterspeakerplacement.blogspot.com/ tiffany@home theater

    I like reading your article. With all the gadgets that we have today and a lot still are coming, I wonder what the world will look like years from now. Technology is very modern nowadays so it's not really impossible to have it more modernize in the future.

  • http://www.cashforsmartphones.com/estimator_step1 sell electronics for cash

    Interesting facts aforementioned.