Here's one you've heard before - hardware is hard. You've got to design it, prototype it, verify it, manufacture it, and distribute it. Building a great hardware product will have you hustling (and pulling your hair out) in a way software will never quite manage to achieve. And at the end of all that strife - what do you get? Well, the satisfaction of having created an awesome, physical piece of technology, no doubt. But along with that, you probably want a paycheck.

How do you make money doing hardware? Ben Einstein over at Bolt breaks that down for us in a recent post:

Now, this is a great writeup - go read it. But to keep things moving, I'll offer a quick summary. Traditionally, you make money as a hardware business by selling your gadget for a chunk of change more than it cost you to make it. You pocket that difference - maybe 30% of your product's cost. And while this works, it's a slow and risky way to scale a big business. Compare this to software (specifically SaaS), where the cost of goods is rock bottom, and profit margins are sky-high. Bummer for hardware, right? Maybe not. Ben describes how modern hardware outfits can achieve software-like revenues by bundling a hardware product enabler with a software-like service. Keurig sells you a machine (low margins) to get you going, while selling you lots of Keurig cups (K-cups) over the years (high volumes and high margins). Ben goes into a lot more detail on how to execute this business model the right way, but you get the idea.