Why Hardware Founders Win in 2026
You’ve heard it a thousand times, hardware is hard.
It’s the unofficial motto of hardware founders.
But that phrase is no longer a warning, it’s your biggest advantage.
It’s hard not to be jealous sometimes.
You’re stuck waiting on prototypes, spinning another board revision, fighting with your supply chain, and meanwhile you see software companies raising millions, shipping products in weeks, and pushing updates like it’s nothing.
It’s easy to feel like you picked the harder road.
But the same thing that made software easy to build is now making it easy to replace.
Hardware though, AI can’t do it, not the design, not the manufacturing, not the supply chains, not the certifications, not the physics.
If you’re building a physical product right now, you’re sitting inside a deep protective moat.
For the last 15 to 20 years, the startup world has revolved around software, SaaS especially.
The funding, the media attention, the success stories, they’ve been overwhelmingly focused on software.
And honestly, it made sense.
The appeal of software is obvious, you build it once, you ship it, and if something’s wrong, you push an update overnight with no physical inventory, no manufacturing, no tooling costs.
When you’re deep in hardware, dealing with board revisions and waiting weeks on prototypes, managing supply chains, and spending months on certifications, you look at software founders shipping updates overnight and it’s hard not to feel a little envious.
The whole startup ecosystem reflected this too.
The accelerators, the VCs, the content, the communities, almost all of it was built around software startups.
Hardware startups have always had to fight harder for attention and funding, not because anyone was against hardware, but because software just seemed like the obviously easier, faster, more scalable path.
And if you’re being honest, there were probably moments where you wondered if you should have just gone the software route yourself.
You know what nobody in software accounted for? If something is easy to build, there’s nothing protecting it from being replaced.
Programming languages are languages, and what are Large Language Models exceptionally good at?
It’s right in the name, languages.
So it was only a matter of time before AI became incredibly good at writing software.
Now to be fair, this is nuanced.
If you’re already a strong software engineer, AI makes you a superstar because it can 10x your output.
The experienced developers who know how to direct AI, validate its output, and architect systems properly are more productive than ever.
But here’s the problem for SaaS: the people who used to need your product, the non-technical users, they can now vibe code their own solutions.
Maybe not complex enterprise software, but the kind of straightforward tools that make up a huge chunk of the SaaS market? Absolutely.
Someone with no programming experience can describe what they need and have AI build it custom for their exact workflow in a matter of hours.
That’s the squeeze happening in software right now.
At the top, experienced engineers are using AI to do more with less, which means companies need fewer of them.
At the bottom, junior developer roles are disappearing because AI handles the work they used to do.
And in the middle, the customers who used to pay monthly for generic SaaS tools are realizing they can just build exactly what they need themselves.
Why would you pay $50 or $100 a month for a tool built for everyone when you can have AI build one specifically for you, for essentially free?
That’s the question that should terrify every SaaS founder.
But the disruption doesn’t stop at SaaS products being replaceable, because the entire idea of software for humans is on borrowed time.
Right now, every piece of software is designed for humans to interact with, you open an app, click buttons, fill out forms.
The entire industry of user interfaces exists because humans need intuitive visual interfaces.
But, agentic AI is completely changing that.
Instead of YOU going to a website, searching for what you need, comparing options, and clicking through checkout, your AI agent does all of that for you.
You tell it what you want, and it just does it for you.
Think about that for a second, because it means the entire front-end experience that software companies spend millions designing could become unnecessary.
So if AI agents become the primary users of software instead of humans, then user interfaces as we know them become irrelevant.
Agents don’t need pretty buttons or intuitive menus, they need APIs and structured data.
It’s not just SaaS products that are threatened, it’s the entire concept of software designed for human interaction, and that’s multiple massive layers of the software economy all under pressure at the same time.
It’s similar to what’s happening with Google search and written content. Everyone is getting their answers from AI, and fewer and fewer people are searching and reading blog articles these days.
So now instead of writing blogs for human readers, people are writing articles for AI so it then recommends them to its users.
Now here’s why this matters if you’re building a hardware product, because almost none of this applies to you.
And look, I know a big portion of you watching this wish it did.
Plenty of you, even if you’re experienced engineers, would love to be able to just describe a product to AI and have it design the whole thing.
That would be incredible, but we’re nowhere near that point, and AI cannot yet design a PCB.
Sure there are AI-assisted tools out there that are useful, and they can help with certain tasks, answer questions, and offer suggestions.
But they can’t replace the engineering knowledge and judgment required to design a functional board that actually works.
I’ve experienced this firsthand.
I used AI to vibe code a PCB design review tool, and yes, AI built the software side.
But it took me weeks of work, and it’s still not ready to share publicly because I’m still testing and verifying that everything it finds and suggests is actually correct.
The only reason this tool works at all is because I have years of coding and PCB design knowledge to direct the AI, define the rules, and validate the output.
The AI built the application, but it couldn’t have built the expertise inside it, and that’s the difference.
If that tool sounds interesting to you, let me know in the comments.
The reason is fundamental: hardware lives in the physical world.
It has to deal with physics, thermal management, signal integrity, EMI, and mechanical constraints, all at once.
It has to be manufactured in real factories with real tolerances, and it has to pass real certifications.
Hardware isn’t simply another language like software, and you can’t vibe code a circuit board and ship it to customers.
Now eventually, will AI get better at hardware design? Sure.
But even when AI does get good enough to help with the actual design work, that still doesn’t make hardware easy.
It just makes the development phase easier.
You’ve still got manufacturing, supply chain, certification, quality control, and physical distribution, all the challenges that come with a real, tangible product.
Hardware has layers and layers of complexity beyond just the design, and those layers are what create a real moat around your business.
So hardware isn’t truly threatened until technology advances to the point where a consumer can just describe a product they want and have it materialize in their living room.
We’re basically talking Star Trek replicator territory here, and until you’ve got a replicator sitting on your kitchen counter next to your coffee maker, I think hardware founders are in pretty good shape.
This is the time to double down on hardware, not because it’s getting easier, but because the competition from software-first alternatives is getting weaker every day.
And here’s the thing, AI lives in the digital world, but the data it needs comes from the physical world. That means more sensors, more IoT devices, more smart products, all hardware. So AI isn’t just failing to replace hardware, it’s actually creating more demand for it.
While software founders are scrambling to figure out what AI can’t replace, you’re already building it.
So the founders who keep pushing through the hard parts right now, the board revisions, the certifications, the supply chain headaches, those are the ones nobody is going to be able to catch.
Use AI to run your business smarter, but know that the product you’re building is something AI can’t touch.
