Entrepreneurs Find Gold in Gadget Startups

James Park and his partner Eric Friedman stood out like a couple of sore thumbs.

They were in the middle of a crowd of other entrepreneurs at TechCrunch50, a small conference for startups, held in San Francisco last September.

But unlike most of their peers, the duo weren't touting a web-based mashup, a new advertising platform or a collection of 3-D avatars for customer service. They sought attention for their hardware company, which was building a fitness gadget called Fitbit that would be part pedometer, part wellness tracker.

"We have three full-time employees and everything else is outsourced," says Park. "But we have a great idea and we have a flexible work force, and we want to build the next big thing in the gadgets business."

Consumer electronics startups are the new frontier for enterprising entrepreneurs. Once thought to be an expensive business skewed in favor of large companies with nearly unlimited access to capital, giant manufacturing facilities and armies of engineers, the business is attracting entrepreneurs who think small and move quickly. And they're changing the consumer electronics landscape: the Chumby, LiveScribe Pulse Pen, Roku media player and Pure Digital's Flip camcorder all owe their existence to scrappy, independents, not big corporate R&D departments. In some cases, these gadget startups have led to multimillion-dollar paydays for their founders.

Fueling this change is the explosion of the PC and cellphone industries, which have created an ecosystem of boutique industrial designers, contract manufacturing shops and online retailers that support this new generation of guerrilla hardware entrepreneurs.

Amazing that two people that don't know anything about hardware design can launch a gadget company with little capital required. Read the article to see how they did it.

via Wired