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Portland Business Journal: It’s not all about software, PSU gives hardware some love
Author: Malia Spencer
Posted: March 19, 2014

Read the original article in the Portland Business Journal here.

When it comes to buzz-worthy startup trends, hardware is the new software. However, entrepreneurs in this space face a whole set of business challenges that the software-centric accelerator ecosystem may be unprepared for.

These challenges come from making physical products. Unlike software that can be pushed to market quickly and with little overhead, hardware takes design, manufacturing, supply chain and distribution. Due to the unique needs of such startups Portland State University Business Accelerator is teaming up with Corvallis contract manufacturing firm RelianceCM to create a hardware cluster within the accelerator.

“This stems from us not just looking back at what we achieved but the need to look forward and see the next opportunity,” said Angela Jackson, director of the PSU accelerator. “We would be remiss to ignore the wearables and connected devices opportunity.”

The partnership was announced Monday night during the accelerator’s 10 year anniversary celebration.

To date, the PSU accelerator has incubated 124 companies, seen one IPO (Jive Software) and several acquisitions. Typically there are between 28 and 30 companies at the facility. Companies fall into three broad categories: technology, clean tech and bioscience.

Hardware firms have gone through the accelerator before this partnership, but now there will be specific expertise for them, Jackson said.

Reliance will have a presence at the accelerator as an “industry partner in residence” offering insight into engineering, manufacturing and supply chain, said David Schroeder, who heads up business development at RelianceCM.

“There are a lot of companies that can build a prototype, but scalable manufacturing is much more complex,” he said, noting that many entrepreneurs just don't know what goes into designing a product for manufacturing.

Reliance is also bringing in its own resources such as an Indiegogo Partner Page and relationships with Palo Alto Software and Rigado, an Oregon engineering firm.

Reliance has always worked with small firms on new products, Schroeder said, “we just weren’t calling them hardware startups.”

With this partnership the accelerator will also house the PDX Hardware Startup Meetup. Schroeder created the meetup group last summer as a way for hardware enthusiasts to share their projects and learn from each other. So far, it has 75 members.

Currently, about five companies in the accelerator have a hardware aspect, Jackson said. She expects that number to at least double in the next 12 to 18 months.

“The magic numbers are achievable now in terms of the cost of the hardware, compute power and computing size,” she said describing why hardware startups are gaining in popularity. “It’s a new world that is possible.”