One advantage of Y Combinator's early, broad focus is that we see trends before most other people. And one of the most conspicuous trends in the last batch was the large number of hardware startups. Out of 84 companies, 7 were making hardware. On the whole they've done better than the companies that weren't.
They've faced resistance from investors of course. Investors have a deep-seated bias against hardware. But investors' opinions are a trailing indicator. The best founders are better at seeing the future than the best investors, because the best founders are making it.
From personal experience, hardware startups are definitely undergoing a well-deserved renaissance.
Investors are, indeed, somewhat apprehensive. Most tend to default to recommendations of Kickstart-ing a project, rather than pursuing venture capital. But, steadily over the past few months, there's been a marked transition in the typical investor's mindset.
Cautious intrigue has replaced caustic uncertainty and, as a result, there are some truly phenomenal hardware projects being undertaken all over the world. As we've seen in the software industry, startups — and the disruption they encourage — have a keen propensity for upsetting established norms and creating phenomenal new levels of competition.
For the hardware industry — a space so often characterized by monopolizing giants — I couldn't be happier that the tide is turning.