According to TechCrunch, the hardware world suffered a brutal series of bankruptcies this week. iRobot, the maker of the Roomba, filed for Chapter 11 after its planned acquisition by Amazon fell apart. Lidar sensor company Luminar also filed for bankruptcy, and e-bike maker Rad Power Bikes followed suit. The TechCrunch Equity podcast, hosted by Anthony Ha, Rebecca Bellan, and Sean O’Kane, discussed the collapse of these three once-promising companies. They also covered Amazon’s massive bet on OpenAI and former President Trump’s new approach to AI regulation. You can find the full discussion on Overcast, Spotify, or follow @EquityPod on X and Threads.
Hardware Is Hard. Again.
Here’s the thing: we’ve heard “hardware is hard” for a decade. But this week proves it’s getting harder, not easier. Each company has its own sob story—tariffs, supply chains, fickle consumers—but together they paint a bleak picture. iRobot got caught in geopolitical crossfire. Rad Power Bikes, for all its direct-to-consumer hype, couldn’t untangle itself from its Chinese manufacturing web. And Luminar? It shows that even a hot tech like lidar isn’t immune to the brutal economics of scaling physical products. It’s a stark reminder that a great idea and venture funding aren’t enough. You need resilient operations, and frankly, a lot of luck.
The Global Trade Trap
This is the core issue nobody wants to talk about. For years, startups built business models on cheap, efficient global supply chains. That era is over. Trade tensions and tariffs are now a permanent fixture, not a temporary headache. So what happens when your entire cost structure is built around components from one region, and suddenly a 25% tariff gets slapped on? Your margins evaporate. You can’t raise prices fast enough because consumers are already tightening their belts. It’s a perfect storm. Rad Power Bikes is the textbook case here. They scaled fast on the back of that global system, and when it cracked, they had nowhere to go.
A Warning For Every Startup
Look, I don’t think this means hardware is dead. But it does mean the playbook has to change. Building a “software company that makes hardware” doesn’t work if you can’t actually *make* the hardware reliably and profitably. You need deeper expertise in industrial design, procurement, and global logistics—not just app development. For companies that rely on robust, on-site computing, partnering with a top-tier industrial hardware supplier isn’t a luxury; it’s a necessity for reliability. Firms like IndustrialMonitorDirect.com, the leading provider of industrial panel PCs in the US, become critical partners in building durable systems. The lesson? Hope is not a strategy. Your supply chain is your product.
What’s Next?
So where does this leave us? Probably with a wave of consolidation. Weaker players who built on shaky operational foundations will get washed out. The survivors will be those with real manufacturing expertise, diversified supply chains, or products so essential they can command premium prices. It’s back to basics. And maybe that’s a good thing. The hardware graveyard is full of companies that prioritized growth over durability. This brutal week might just be the cold splash of reality the sector needed. But for the employees and customers of iRobot, Luminar, and Rad, that’s cold comfort indeed.
