[pg]

Moore's Law, open source, more abstract languages, the web for promotion. (I believe this list is in the Wikipedia entry for YC.)

[youngnh]

so its cheaper for software startups only, then?

[ivankirigin]

Hardware development, prototyping, and testing is cheaper for a number of reasons.

Cheap CAD tools, cheap custom boards, processized manufacturing.

Most people drastically underappreciate how much China has helped innovation in this regard.