Q&A with Erik Katz: On the Bay Area Hardware Startup Scene and Founding Circuit Launch

May 15, 2018 | 18:35
Q&A with Erik Katz: On the Bay Area Hardware Startup Scene and Founding Circuit Launch
Q&A with Erik Katz: On the Bay Area Hardware Startup Scene and Founding Circuit Launch
The electronics hardware startup scene is exploding in the Bay Area. Circuit Launch offers office, lab, and meeting spaces to hardware-focused startups seeking affordable workspaces and a network of engineers, suppliers, and hardware-friendly investors.

C. J.: Tell us a bit about your background, and particularly your interest in hardware engineering. 
 
Erik: Well, professionally I had been an IT integrator for over a decade. I was that kid that played with personal computers, and then I became the kid who fixed computers, and then I created an IT integration firm for small businesses. And so, I played with hardware more on the computer side. But somewhere along the line, I stumbled into the maker movement. I became a member of the first TechShop because I was doing a motorized bike project called Cali Cruzers. After a while, I ended up actually taking a job at TechShop’s San Francisco location, and I developed the corporate team-building events. And so that was how I got into the maker movement. I committed myself to this movement and anything to help advance it forward. I've helped makers with a nonprofit called Maker Mart, which gave makers access to cheap retail places to sell their wares. I've also done large-scale events. I was the founder of HardwareCon, which was the first conference dedicated to helping hardware startups. And now I’ve developed Circuit Launch, which is the first coworking space dedicated for electronic hardware startups here in the Bay Area.
 
C. J.: Tell us about Circuit Launch and your business model.

Erik: We talk about ourselves as a coworking space versus an incubator or accelerator. We're not one of those. There are a lot of great incubators, but what we do is help companies. We're a place for companies to go to grow. One of the things that I saw is that real estate is hostile to startups, and that's one of the big problems that we're solving. We offer maximum flexible space.
 
An electronics workbench at Circuit Launch in Oakland, CA
We offer everything from open desk all the way to offices for 10 to 15 people. We don't take equity in companies. That's why we're not an accelerator. We don't have an investment model. We're primarily a rent-based model offering high-quality affordable spaces. We also have partnerships and sponsorships as part of our business model with big companies who want to connect with startups.
 
Silicon Valley Robotics operates out of the Circuit launch facility
C. J.: Many people associate the Bay Area with software companies and social media giants. Tell us a bit about the electronic hardware company scene.
 
Erik: Silicon Valley is a software town. There's no doubt about that. Silicon Valley is the largest tech mecca in the world. And hardware just has absolutely anemic funding compared to software. However, we have a very vibrant hardware startup scene here in the Bay Area. It's probably the largest in the US. I saw a graph that Bolt produced that showed hardware investment by region, and the San Francisco Bay Area was an order of magnitude greater than others. If you take all other regions – Boston, LA, Seattle, Boulder, and a few of the others — and add them together, the Bay Area still has twice as much investment for hardware startups. It is the largest ecosystem here. I think the only larger one would be Shenzen, and that's natural because it is the manufacturing capital, so they're very comfortable with hardware. I will tell you that more new hardware startups come from software founders or other founders. There's a natural fascination with hardware, so those worlds collide. I think we're seeing more and more mainstream VCs that traditionally only invested in software and social media actually invest in hardware. They just don't understand it as well. It's a much higher risk in their mind, but as we see more successful hardware companies, we're going to see more investment in that area.
 
C. J.: What's next for Circuit Launch? Another location? More lab equipment?
 
Erik: We are looking for expansion down the road in other areas — maybe a South Bay location or a city such as Seattle or Boulder — to help electronic hardware startups as the industry evolves. I'm very excited. I feel like we're at the tip of the iceberg in terms of the next manufacturing revolution, and the hardware startup scene is only going to grow. There can be only so many social media companies and search engines. Those areas have been well-defined. One of the great frontiers is now the smart hardware that we're embarking on.

Note: The complete version of this article will appear in Elektor Business Edition issue 3 in June 2018.
 
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