October 6th, 2013

The Long Tail of Hardware

I often think about that Forbes piece “Why Best Buy is Going out of Business…Gradually” that was published nearly two years ago. You probably read it too; as of today it has around 3 million views. The emotion that author Larry Downes generated with that prescient article was overwhelming — like a collective “we can do better” echoing through the internet.

Two years later, and Downes is more right than ever. Through Grand St. I’ve had a front-row seat to the emerging hardware movement, and the big realization I’ve come to is that it’s not just Best Buy that’s going to fade away, it’s our entire notion of “Consumer Electronics”. It will be gradual, but there are already signals that indicate a shift is happening.

It’s a tailwind that’s supporting a growing long-tail of hardware and a new kind of creator.

As to what’s causing it, here are a few thoughts:

1. Hardware as an outlet for creativity
There have always been people that have used electronics as out outlet for creativity — people who made custom modifications and took devices apart just for fun. With the rise of open-source hardware, channeling that creativity has become easier and much more structured. Not limited to the devices already available, now you can invent new devices from scratch depending on your whims. It’s also significantly cheaper as well.

2. The notion of “core devices” is disappearing
For the foreseeable future everyone will likely have a smartphone and a laptop, but the number of miscellaneous ancillary products that people are buying is growing like crazy. There’s a flood of these creative devices that are invading our lives and our homes and even the most traditional products are becoming pieces of technology.

3. People starting hardware companies
My friend Adam is making an awesome new bluetooth speaker called the “Bongo”. It looks amazing and I can’t wait to get mine. He is an example of the new kind of hardware creator – someone with a great idea but not necessarily decades of experience.

4. Rush of money
In the past two years, money going to crowdfunded hardware projects has spiked 10x **per year**. Investors are starting to get in the game in a very real way, but the real money is coming from consumers hungry to buy.

5. The role of the smartphone
The ubiquity of smartphones is contributing in a big way to long-tail hardware. By leveraging thriving platforms (Android, iOS), hardware producers don’t have to start from scratch when building software for their devices.

What this means for the future of CE as we know it now is pretty interesting…it’s simply no longer a commodity game that revolves around price, further complicating Best Buy’s future. As costs come down further, and more creators enter the market, we should see a whole range of hyper-customized devices that address all kinds of niche and mainstream markets.

At Grand St. we see awesome new devices every single day, and they are only getting better.

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  • Lost potential buyer

    Being obsessively prompted to sign-up is annoying and off-putting. Being required to sign-up just to see prices is a deal breaker. Great idea, repellent implementation.

  • Kevin Davis

    If only there was a crowdfunded Geek Squad… *cough* geekatoo.com *cough* ;)

  • Kevin Davis

    If only there was a crowdfunded Geek Squad… *cough* geekatoo.com *cough* ;)