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In today's tech landscape, an interesting pattern is emerging: hardware has scaled and evolved rapidly, but the software interfaces that control this hardware often lag behind. This gap between advanced hardware capabilities and subpar software experiences creates fertile ground for entrepreneurs who can bridge this divide.
We're seeing this pattern across multiple industries. Consider drones, for example. Companies like DJI have created their own integrated ecosystems (similar to Apple's approach), but for many other drone manufacturers, the hardware may be excellent while the interfaces remain clunky and difficult to use.
The same issue appears with digital screens, which have dramatically dropped in cost and are now ubiquitous in restaurants, lift lobbies, and outdoor advertising spaces. Yet the software to manage these screens is often frustratingly inadequate, making simple tasks like updating content unnecessarily complex.
This disconnect creates friction for users who have grown accustomed to seamless digital experiences in other aspects of their lives. When you give users a clunky software interface paired with great hardware, they often don't know what to do with it.
This hardware-software gap presents at least three distinct categories of opportunity:
These are devices that have achieved widespread adoption but suffer from poor user interfaces. Digital screens in advertising and restaurant menus are perfect examples—they're everywhere, but updating content is often a nightmare.
Another example is parking boom barriers. These physical barriers existed for years, but the software controlling them was so unreliable that the hardware itself never gained widespread popularity. Companies like Park Plus identified this opportunity and built better software interfaces, making the hardware more reliable and useful.
Some hardware devices exist but haven't achieved widespread adoption because the user experience is too technical or industrial rather than consumer-friendly.
Abbott's Continuous Glucose Monitoring (CGM) patches are a perfect example. These devices existed since 2014-2015 but weren't popular because they required a special device to read the data. Companies like UltraHuman made them NFC-compatible and created apps that transferred data to mobile phones, dramatically increasing their popularity in India.
The third category involves entirely new hardware devices that are becoming possible due to advances in software, particularly AI.
We're seeing this with various wearables like smart rings and pendants that can continuously record and transcribe conversations, creating a "second brain" for users. These devices never existed before, and they're only becoming viable now because of advances in AI and software capabilities.
For entrepreneurs looking to capitalize on this trend, there are several approaches to consider:
The most successful companies in this space aren't just creating better interfaces—they're solving deeper user problems. UltraHuman didn't just make CGM data accessible on phones; they added diet tracking to help users understand what foods triggered insulin spikes, creating much more value.
Similarly, Peloton didn't just create another exercise bike with a screen; they solved the motivation problem for home workouts by adding engaging content and community features.
When working with existing hardware that has scaled, the path to adoption is often easier because users already have the hardware and are familiar with its basic functions. They're simply frustrated by the poor software experience.
When creating entirely new hardware categories, you face the additional challenge of changing user habits. As one of our team members noted: "I've not been wearing a locket all this while. Now suddenly you'll ask me to use lockets. I need to figure out a budget for it, but also, will I look weird? What will people think about it? Is it cool enough, or will I look very creepy?"
Many startups prefer to enter spaces where they can create a new category rather than fighting for market share in an established one. Finding hardware with poor software often presents this kind of opportunity—a chance to create a new approach that nobody else has considered.
However, it's important to remember that competition will eventually emerge in any valuable space. The key is not just to be first but to build a product that users truly love.
As we look ahead, we're seeing a world where more and more devices are becoming connected and software-enabled. From cars to home appliances, the trend is clear: hardware is becoming smarter and more integrated with our digital lives.
This trend is accelerating with the rise of AI, which is making it possible to create more intuitive, responsive interfaces that adapt to user needs rather than forcing users to adapt to rigid software designs.
For entrepreneurs who can identify hardware with untapped potential and create software that unlocks that potential, the opportunities are enormous. By focusing on solving real user problems rather than just creating prettier interfaces, these entrepreneurs can build businesses that transform how we interact with the physical world around us.
