True for web software - but that's never been true for hardware. Hardware always starts expensive for early adopters and gets radically cheaper as adoption scales up. The cheapest Apple 2 was over $5,000 (in inflation-adjusted dollars) at its release, the IBM 5150 debuted four years later at a more competitive $4,000, and the monitor was separate in both releases.

Besides hardware, lots of the other current startups are offline services, that are taking something formerly for the super-rich and making it accessible to the upper-middle class (eg: a private driver, a personal chef, custom-tailored clothing, custom paintings). They may not be within budget for everyone but they are still following the trend of doing more with less.

From at least the late 90s to recently you were consistently getting more for less with hardware. Things were expensive as they came out, but then got cheaper than the previous alternative. The market moved from a school having a couple of slow computers to everyone having multiple supercomputers. Not only did they become faster but you could do more things with them. These days many things seem to be getting slightly better, but more premium and almost less capable. Upgrading a couple of year old smart phone or computer today isn't exactly a mind blowing experience.

"[...] formerly for the super-rich and making it accessible to the upper-middle class (eg: a private driver, a personal chef, custom-tailored clothing, custom paintings)"

Don't really buy it. Before it was only for the rich it was for everyone. You go to rural places that's how it works. The latest incarnation of modern society is, for better or worse, based on people having their own car, camera, kitchen and being able to buy the latest fashions.

>The market moved from a school having a couple of slow computers to everyone having multiple supercomputers.

This is exactly what he says here:

>Hardware always starts expensive for early adopters and gets radically cheaper as adoption scales up.

Not really, I'm emphasizing that not only did things get cheaper but the market also moved. Things went from having different capabilities to were a netbook could essentially do the same things as a server farm or a workstation. Electronics hardware "always" existed in the form of game consoles, just not as personal computers. With many of these new things the premium segment is the market. Something custom is never going to be cheaper than the alternative. Once you've established a brand and market share you're probably even going to want to up the price.

What came to mind when I saw the list was what is might say about the founders that YC is selecting.

You could easily conclude from this list that it's rich peoples kids creating solutions to imaginary problems - "Oh, how could my poor feet possibly survive the arduous journey from my front door to the uber in an off the shelf pair of shoes? I need a tailor!".

I think we should give them the benefit of the doubt though since these companies are presumably a small subset of those they've invested in.

A more charitable explanation might be that since these companies are in SV then it makes sense for them to start out selling stuff to affluent customers who are not overly price sensitive.

As someone who has perpetual trouble finding well fitting dress shirts off the shelf - the MTailor thing seems interesting. You do raise something valid - I suspect they're selling affluent customers, because they're easier to reach, and are willing to try something novel.

You can just buy a shirt and get it tailored by someone who can actually see you and try pinning it in different places.

If you have a sewing machine it takes less than 15 minutes to tailor a shirt down (just put it on inside-out, pin, and sew).

Made-to-measure mail-order dress shirts are an idea from the 1990s AFAIK. A while back I collected some promotional offers from in-flight magazines and online and ordered a big stockpile of white made-to-measure dress shirts. With the promotional pricing it came out to less than $20 a shirt.

As with any menswear business, the main problem is customer education. Men in the US dress like slobs, do not care that they dress like slobs, and do not want to spend money on clothes (85% of apparel revenue comes from womenswear).

The issue in my case is not the trunk. I'm a 'gentleman of size' (6'3 300 lbs) which means to find something that fits my neck, I have to buy a shirt large enough to accommodate another large person inside of it with me. I also, do not have a sewing machine, nor do I have a good place to work, or time to do it. I've had trouble finding a place locally that will do bespoke clothing.

I would rather not dress like a slob, but barring me finding a place to make me something that actually fits (for a good price).. everything I buy will fit somewhat awkwardly, and make me look as if I'm wearing several flower sacks sewn together or somewhat awkwardly in fit in other ways.

Some libraries have sewing machines. Your task sounds simple enough to DIY using GP's method on a shirt large enough to fit two.

http://www.mv-voice.com/news/2014/09/02/a-stitch-in-time-at-...

https://www.google.com/amp/s/sacbee.relaymedia.com/amp/news/...

http://sandiego.communityguides.com/content_mobile.php?pid=4...

You can get a demo shirt from ModernTailor for $20 and then as many perfectly tailored shirts for under $100 as you want. As the earlier commenter said, these companies have been around for years.

Keep in mind this list is about gifts, and so naturally the companies on it won't do run-of-the-mill stuff.

This is true in one way of looking at it, but the other way of looking at it is that these are companies offering products that were always out of the price range of the average person, but they've managed to drive the price down. For instance, handmade leather shoes are between $300-$500 for the entry level, but Markhor is selling them for $120. Yeah, maybe your average person can't spend $120 on a pair of shoes, but that's still significantly opening up the market in a way which wasn't possible before.

That's the nature of capitalism. Identify a market for goods people want, and as demand goes up, figure out a way to supply it at a price people can afford. As these types of ideas iterate, the cost will continue to go down and new things will become available at the top of the price ladder.

Well... one set of the Markhors are $120. Most of them seem to be $250 and up.

And, despite being handmade, are not available in my size.

Yep, handmade probably does not mean "custom" or "bespoke" in this case, which means limiting the options presumably allows them to take advantage of economies of scale to lower the price compared to other options for handmade shoes.

I've never used the product from Markhors, it was just one example I was using for my point previously. I'm more the type of guy that either wears cheap sneakers or actual bespoke shoes, not much in-between.

Markhor doesn't appear to be doing anything new or special. You can get similar shoes for less from makers like Meermin. They're not a venture funded startup though.

That is trickle-down consumerism.

But it's been done successfully many times -- sugar, tea, coffee, liquor, automobiles, air travel, and computers, for example; likewise ownership of clothing in quantity. No reason it can't work again.

Your point is true, but it's also likely that the model for a lot of these companies is to start with premium so they can focus on a profitable model and get the supply chain and execution worked out while there is still wiggle room, and then move down market. This is what Uber and Tesla did, and I wouldn't be surprised if that is the most fashionable approach these days.

There are probably plenty of exceptions, as well, like Dollar Shave Club.

I seriously hope that happens with Acre. They could be amazing.

I agree, I hope Acre does well. I wouldn't say they are in a crowded market - but they are in a market where existing offerings (prefab or predesigned green homes marketed regionally/nationally) have struggled to make the numbers work.

There are savings associated with producing a uniform building package with standard modifications, but there are also new costs associated with that kind of work - namely, those associated with the fact that the ideal customer is thinly spread geographically (due to interest and budget). This generally leads to higher costs for local work, even if that only includes finishes (the standard business plan for most prefab green home companies).

That kind of business structure has been perfected by market builders, but market builders do a volume of business that is tough to match, and usually within a small geographic area (ie - a subdivision). This allows them to drive down local contracting costs better than one-off projects.

Currently Acre is looking for builders in four markets according to their 'work-with-us' page. They are also looking for an architectural project manager as opposed to a construction project manager, which probably indicates their chosen role in project delivery. Outsourcing all construction activity is a good way to reduce risk, but not a good way to reduce costs.

I work for custom home builders, and I've done work with a company that has a marketing plan/delivery plan similar to Acre albeit on the East Coast.

Prefab is a struggle and why we specifically avoided it. For us it makes much more sense to focus on product and supply chain and partner with local builders to execute in the various markets.

Our system is built for speed and that is where we derive savings. Between our wall/roof system, MEP systems, and delivery method we can slash construction time 60%.

Happy to continue conversation on your experience.

Went to check them out. Their houses are beautiful, but they truly are targeting the high end—double the price of a mid-tier-fixtures McMansion-build-quality house of similar size, at least around here. I'm also not sure how I'd get one of them built anywhere near the city here without buying a house in a no-HOA, low-home-value neighborhood and demolishing the house already on it, which'd be throwing away a ton of money on both the demo and putting such an expensive house in such a crap neighborhood. You could build one out in the country, but so much for being green (assuming you have a commute to the city).

Be nice if they could mainstream this style, but looks like they've got a ways to go.

Hey, this is Andrew (Acre Founder). Thanks for the comments.

Price is entirely depended on location, in Kansas City (our original hometown), our homes are in the upper most price tier. In the Bay Area we are at or below market rate for typical homes and significantly under for anything comparable in quality and efficiency.

In Austin and Portland (our other two focus markets for 2017) we are about at parity and a good fit for the sustainable cultures.

But alas, we are not currently a fit everywhere and for every home buyer. It's part of our vision, but just like Tesla, we have to focus on a higher end product before we can create the every-mans product.

Regarding commute, we have an option to easily and affordably add capacity to allow for 6,000 miles of EV charging with ability to go beyond. Tis the future.

Keep posted next year for our tech that stretches beyond our own walls.

Oh, right, I knew you guys looked familiar! KC as well. You've observed the same thing about this market, then—tons of very inexpensive (and usually also cheap) houses. I think it'll be easier to justify this kind of spending if/when the market proves you can recoup the added cost on resale. That's what kept us from considering some of the pricier but more eco-friendly options when we bought a new house recently.

Yeah, KC and much of the middle of the country, there is very little fat in pricing and slow growth. Our first home built in KC was for $145K. Same general concept and performance, but a much more simple/affordable material and finish package. Slim margins for a fledgling company!

We'll work at the higher end for a bit, which can accelerate our growth and allow us to make some leaps with our product and tech.

We'll then be able to come down market and offer home that are much more accessible and honestly have much more positive impact on families and the environment.

I would question someone's actual motives if they demolished a house so they could build a new one in name of sustainability. How much time would it take to recuperate that full rebuild vs. just retrofitting the already existing house?

Embodied energy is certainly worth considering, but major retrofits of homes built in the 60's or earlier are hugely inefficient and result in a home that looks better, but performs no better energy wise. You CANNOT retrofit to Zero Energy with out significant cash outlays or at all.

Putting a new carb and a dash mat on a 70's Oldsmobile will not justify the embodied energy argument. Melt that sucker down and build a Tesla that lasts 3x longer, can be powered by the sun and is better for you in the meantime.

Our homes are also much healthier for the owners, with proper ventilation, filtering, and low/no voc materials.

Maybe I'm wrong, but my assumption is the difference between "standard home" and "standard home with solar + other easy wins" (such as tearing out your lawn in SoCal, where I live) is overall "better" than going from those easy wins to a Zero Energy home. I would guess it's also location dependent though.

Under that assumption, I would have a hard time justifying tearing down an existing home to build a Zero Energy home, as opposed to just implementing those easy efficiency wins and investing the money saved in other environmentally friendly pursuits - perhaps even helping a friend to finance similar changes to their home. Or, letting someone else buy the already built home and build somewhere I don't have to tear down an existing structure.

Of course not everyone would think this way, and people are free to do what they wish with their money, but it's how I weigh the options.

Certainly in the short run those are more cost effective and less intensive options, but homes built 50 years ago do have a very short lifespan remaining and will consume gobs of energy every day until they are plowed under. Zero Energy refits are cost prohibitive, so at best, you'll have a band aid. Ultimately, It's a sunk cost fallacy.

We're not the solution to the entire problem, but I entirely confident that we are a fantastic value for our customers and the most efficient home available at this price/performance.

When the cost balance makes the new house cheaper than a retrofit.

Thanks! We're toiling away to that end. Here's our home guide to see more detail of what's inside.

http://bit.ly/acrecatalog

To your point, Airbnb bucks the trend you identified by making travel more affordable and accessible. It's also far and away the most successful company listed.

More accessible, maybe (unless you're black [0])

More affordable, no. In my recent travels to NYC and SF, I was always able to get a hotel room via HotelTonight or Hotwire cheaper than an AirBnB unit. I know its not always an apples-to-apples comparison but even for just a private room (not an entire home), an AirBnB in SF is $100+/night.[1]

All that to say, I think you're wrong.

[0] https://medium.com/stay-woke/i-read-about-this-phenomenon-of...

[1] I randomly checked Dec 18-20 in SF. Hotwire has a 4-star room for $91/night. Most AirBnB private rooms are the same or higher.

When you have a large group (like 6+ people) renting a house outright via airbnb is usually better. It also lets you hang out together in a living room. Also you have more location flexibility.

Private room airbnb is probably not the best deal.

If you're renting a large place, I would highly suggest shopping on AirBnB then trying to find the contact information of the owner and hitting them up directly. Large places usually have their own websites and you can save a ton of money since the fee AirBnB charges is a percentage of the total cost (although AirBnB reduces risk).

I agree that in some markets the airbnb prices are close cheap hotels. From my experience, I used to use Airbnb in Paris (France) and for the past 2 years, I ended up in an hotel, since it was cheaper. Now, hotels pricing is way more flexible when it comes to react to low demand. Airbnb hosts, do not adjust as well or as quickly to the seasonal (even week day vs. weekend) nature of hospitality. Airbnb is not always the cheaper option vs. hotels.

airbnb is a much, much more economical option while traveling over hotels when booking in advance for a couple. it was even cheaper than a private room in a hostels in berlin.

source: traveling for 1.5 years using airbnb, hotels, hostels.

I travel a lot (including in SF and NYC) and you're objectively wrong. I prefer hotels to AirBnB, but still almost always go with AirBnB because it's significantly cheaper.

For your suggested dates of Dec 18-20 I found literally dozens of AirBnBs for <$80/night. [0] All I can conclude is that you're straight up lying. It's trivially easier to find AirBnBs which are cheaper than hotels.

[0] https://www.airbnb.com/s/San-Francisco--CA--United-States?gu...

Yeah, I have so much incentive to straight up lie. The average for the link you have is $108/night. That's above several hotels in my search. Also, most of these AirBnB listings only allow 1 person. Every hotel room will support 2 people and most will allow 4 (if you can get 2 beds).

Take that for what its worth. If I'm objectively wrong or a liar to you, cool.

You're comparing the average to the minimum. That's deceptive and unfair.

The average hotel room in SF costs hundreds of dollars a night. [0] So the average hotel is much more expensive than the average AirBnB.

Likewise, I showed countless examples of AirBnBs which have a lower price than the cheapest hotel you could find.

If both the average and the minimum for AirBnB is much lower than for hotels, we can safely conclude that AirBnB is substantially cheaper.

As a frequent traveler, I know that to be a fact. I would love if hotels were cheaper than AirBnB (I prefer them), but it's objectively not true.

[0] http://www.bizjournals.com/sanfrancisco/morning_call/2015/07...

"Amazon and Netflix broke down even the movie industry and ended the $70 per tape movie sale price."

Is that a typo? When were movies ever $70?

In the 80s and early-to-mid 90s, most movies weren't offered for sale to consumers. Big blockbuster movies sometimes were, but those were the exception. Places like Blockbuster or your corner video rental store bought VHS movies for around $70/ea and then rented them to consumers for $3 or so. That changed somewhere around the late 90s, when people began buying movies on VHS and DVD, and the price dropped significantly.

Source: I worked for a small video store in the early 90s.

>Places like Blockbuster or your corner video rental store bought VHS movies for around $70/ea //

Isn't that just rental prices vs consumer prices. It's a tort to by the consumer copy and rent it out so large companies could never get away with that instead they bought a more expensive copy that is basically the tape with license to rent it??

Turns out it's more complicated than that: https://entertainment-industry.knoji.com/the-history-of-the-... & http://boards.straightdope.com/sdmb/showthread.php?t=692441.

Would be interested in similar info with global comparison, eg how was the situation different in UK, Germany, etc..

I remember movies selling for over US$100 when VHS first hit the streets.

The only "typo" is crediting Amazon and Netflix with the price reductions: movies were commonly $20 long before those two showed up. No, what killed the $100 movie were people going "$100 to own _Weekend at Bernie's_? Oh, hell no!" Remember, we lived quite fulfilled lives before we were allowed to "own" our own copies of movies, we weren't missing anything.

Oh, and rental stores that popped up shortly after. From my POV at the time, owning the VHS tape was reserved for the rental stores who would profit from it and the overly-privileged. The rest of us just rented at $10 a pop. Want to see it again? Go rent it again.

EDIT: somewhat related to pricing: would have to look it up to be sure, but I recall blank VHS tapes going for >$20 when they first came out.

Yes, but the other part of the sentence is all wrong, the gradual shift from this pricing model to more like $20 a tape happened from the mid 80s to early 90s.

Not a typo, but misleading. Very few people bought tapes when they were $70-$100. The only purchasers were video stores. There wasn't a slow glide, it went from very high down to $20 quickly, a few years after VHS killed Beta.

This is probably an unpopular opinion, but I would call very few of these "tech companies".

None of the problems that most of these companies are solving are tech problems. Their secret sauce is not the tech, but the examples you gave the secret sauce WAS the tech.

Chef Roy Choi addressed a similar issue in food, namely that they were all fixated on "feeding the rich": http://www.eater.com/2016/9/23/12981936/locol-watts-roy-choi.... I do wonder what YC startups could bring to say, people struggling in the Rust Belt of the US. FarmLogs is one awesome example but I'm sure there are other opportunities. I don't work in tech, but it does seem the community is self-obsessed and that is stunting its reach.

Definitely a lot of startups target high end, but they end up competing in high end by being cheaper than the other high end alternatives. High end is just a better market to attack first since high end users are more liberal with their spending, and more likely to pay a premium for something new.

Uber is an example of something that started in the high end (black cars only).

Airbnb, Instapainting.com (disclaimer: my company) are examples of companies that broke into mid-market products by using technology to reduce costs and compete with significantly lower pricing.

"NetFlix initially offered a seven-day DVD rental for $4, plus $2 shipping" [1] This is more than it costs to rent from a local video store. Especially on discount days.

Its much easier to start at a higher price point and lower volume with a small team. Hotmail and Wikipedia are businesses that scale much better because they don't handle physical goods.

[1] http://www.fundinguniverse.com/company-histories/netflix-inc...

Oh course, the products in Gift Guides aren't meant to be the ones that most people can afford. No one wants to look at a gift guide of moderately priced mid-level gear. Gift guides give people something to aspire to. And I think a lot of people do look at the items and then go order a cheaper version on amazon later.

Peter Thiel recommends creating monopolies in Zero to One. That's basically what YC companies are doing.

Its for the trendy pretentious crowd and many who came up with a different viewpoint or even from another income level don't understand the desire behind some of these purchases. This is no different than the Macbook Starbuck crowd.

If anything I use it as a list of things I am best without. Karma be damned but I just LOL at that page