Emerging hardtech field offers opportunities
If you’ve paid attention to business and technology news over the past two or three years, you’ve probably heard about hardtech—even if you’re not quite sure what it is.
Broadly speaking, hardtech refers to the marriage between physical objects and software to create products for a particular industry. If that sounds something like the Internet of Things, or IoT, it’s because IoT is a specialized form of hardtech—one that focuses on collecting and analyzing data from internet-enabled physical objects.
Indiana’s business, academic and economic development leaders see the broader category of hardtech as a huge opportunity for the state.
Among the efforts to capitalize on that opportunity is a new coalition of public and private entities called Hardtech Indiana, which held its first official public event in March in Indianapolis.
The group includes the Indiana Economic Development Corp.; venture investors Elevate Ventures, HG Ventures and Indiana University Ventures; and 16 Tech. It also involves organizations that exist to promote particular industries statewide: AgriNovus Indiana (agbioscience), Conexus Indiana (advanced manufacturing and logistics) and TechPoint (technology).
The group aims to support entrepreneurs by connecting them with the investors, expertise and support that can help them launch startups in hardtech—a field that, for a variety of reasons, poses unique challenges.
“You just need all those voices at the table, or those resources at the table, to impact hardtech—just because those companies are demanding in the sense that they need funding, and space to prototype, and access to mentors, access to customers,” said Ryan Henderson, director of innovation and digital transformation at Conexus.
A software startup mostly needs people. But a hardtech startup also needs a place to design, prototype and manufacture its products—and a workforce that can produce both computer code and physical objects.
“The entrepreneurship journey, but also hardtech specifically, it is hard,” said Nida Ansari, a Hardtech Indiana steering committee member and a principal at HG Ventures, the venture investment arm of Indianapolis-based The Heritage Group. “That investment doesn’t go as far as it might for a software startup. There’s a lot to unlock in terms of, it takes longer to pilot anything, it takes longer to pivot, takes longer to scale.”
Building a network
HG Ventures has its own annual accelerator program for hardtech startups, Ansari said, and there are other accelerator programs, maker spaces and resources around Indiana—but hardtech entrepreneurs might not know about them or even know where to look for them.
Through hosting its own events, participating in other community events, reaching out via social media or through good old-fashioned person-to-person networking, Hardtech Indiana aims to get hardtech entrepreneurs connected to those resources.
The idea is that various hardtech-related groups will make a concerted effort to work together and to collectively reach out to entrepreneurs, creating a “network of networks” that can bolster the entire hardtech ecosystem, said Julie Heath, the IEDC’s vice president of entrepreneurial ecosystems.
And the big-picture hope is that, once those entrepreneurs get plugged into this ecosystem, they’ll remain here.
“If there’s a Hardtech Indiana landing pad, kind of a concierge service for the niche, then the idea generators will stay,” said Mark Gramelspacher, a Hardtech Indiana steering committee member. Gramelspacher is also an entrepreneur-in-residence at Elevate Ventures and serves as executive director of the Smart and Advanced Manufacturing Fund.
“In my observation, if you can keep a startup in the community past their seventh employee, and they get product/market fit, and they’ve got a good customer base, and they’ve got paying customers, they’re going to stay for a long, long time,” he said.
Last month’s Hardtech Indiana launch event, held at 16 Tech, drew more than 140 people, including entrepreneurs, students and industry partners. The event included two panel discussions: one on innovation spaces and accelerator programs, and another on venture capital and grant-funding opportunities.
At this point, Hardtech Indiana doesn’t have firm plans for more events of its own, but it does intend to have a presence at other community events, including Rally, a new Elevate Ventures event in August that aims to draw 5,000 people from both within and outside of Indiana.
Another new effort to reach hardtech entrepreneurs involves a partnership between MatchBOX Coworking Studio in Lafayette and the Indiana IoT Lab in Fishers.
The two are teaming up to offer a 12-week product accelerator program for hardtech entrepreneurs. During the first six weeks, participants will learn the basics of building their business. The second six weeks will focus on designing and creating a product prototype. Participants also will get a chance to pitch their business to potential mentors, partners and investors at the conclusion of the program.
The program is actively recruiting its first cohort of entrepreneurs and hopes to launch within several weeks.
“We’re pretty excited about it,” said Jason Tennenhouse, MatchBOX’s executive director.
Why has hardtech become such a hot topic in Indiana? Observers offer numerous reasons.
Shreyas Sen, an associate professor of engineering at Purdue University, said Purdue has been deliberate over the past decade or so in attracting hardtech talent and helping entrepreneurs launch startups. Within the last two or three years, Sen said, those investments have started to pay off. “I think an ecosystem is developing here.”
Sen joined Purdue in 2016 from a research job at Intel Labs in Oregon. He’s also the founder and chief technology officer of a Purdue-affiliated hardtech startup called Ixana.
Ixana, which is based in West Lafayette and now has 21 employees, has developed a wireless technology that is an alternative to technologies like Wi-Fi and Bluetooth. It uses the body’s conductivity to generate what Sen described as “your own personal aura,” or a tiny field around the body that can transmit data more securely and uses a fraction of the energy that Wi-Fi or Bluetooth requires.
Purdue President Mung Chiang also has spoken publicly about the school’s vision for a hardtech corridor along Interstate 65 in the 63 miles between Purdue’s West Lafayette campus and downtown Indianapolis.
The corridor also would include the planned LEAP Lebanon Innovation and Research District, an 11,000-acre high-tech innovation park in Boone County. Eli Lilly and Co. plans to build a $3.7 billion manufacturing campus there.
Full development of that corridor might take 10 to 20 years, Chiang said, but he predicted that it will happen.
“People all realize that the power of computing—including AI and data science and robotics, automation—are transforming many industries, not just the traditional industry of the internet,” Chiang said. People “understand that trend is coming, and we all want to get ahead of the curve.”
Indiana’s traditional strength in manufacturing—and the passage of the federal Creating Helpful Incentives to Produce Semiconductors for America, or CHIPS Act—also are spurring interest in hardtech. Among several semiconductor-related investments announced for Indiana last year, Minnesota-based SkyWater Technology said it plans to build a $1.8 billion semiconductor research, development and production facility in West Lafayette.
In 20 years, Sen predicted, hardtech will become ubiquitous, even in what we now think of as basic household objects.
“Your chair will have a chip inside it. Your coffee mug will have a chip inside it,” Sen said. “Everything is becoming smart.”
Grant Chapman, co-founder and CEO at Indianapolis-based Glassboard, a product development firm that specializes in hardtech, said one reason hardtech is catching on is that it’s more “sticky” than software, meaning it’s not as easily disrupted by competitors.
For example, Chapman said, the early social-media site MySpace quickly fell out of favor in the late 2000s after competitor Facebook came along. In contrast, people who purchase an Apple product often stay loyal to the brand for years. “Once the user’s physically bought your goods, they’re invested in your ecosystem.”
The pandemic also played a role in accelerating the era of hardtech, Chapman said. From smart thermostats to webcams to smart litterboxes for pets, he said, “people spent more time at home and wanted to make that experience better.”•