What happened to "real world" startups?

I see proof these problems every day. There are definitely a lot of non-tech guys out there who have great ideas but no way to execute. When friends and family learn that I'm running my own business the conversation almost always turns into "I had an idea once for X..." Its really amazing to learn about the "problems" they see and their idea to solve them. Most of the time its for something I haven't been exposed to at all.

Perhaps its a result of the "scratch your own itch" advice many give to developers looking for a great idea. There are a lot of problems out there but it takes a lot of time and knowledge to find something worthwhile that is outside your normal realm of experiences.

I'm not sure I have an answer for your question at the end. I definitely think those startups are out there. But, I imagine they're focusing on the actual business, product and customers rather than trying to grab the attention of bloggers and online communities such as HN.

Real world problems need real world solutions with real world money.

Designing a physical product, which can be manufacturer and has a healthy margin for a business to survive will take some invest money. There had been exceptions, but usually you will need a couple hundred thousand dollar to get there and at the same time yo need protect your product with IP.

Once you reached that point you are in a symmetric market, where a product gets exchanges for cost plus profit. It will always be a more linear curve on profit. On the other side software and internet companies in high demand have this hockey stick potential, which makes it so attractive to investors.

So hardware is hard, because it has just a much higher barrier to entry and at the same time it offers less sexy chart types. The number of hardware companies are far less compared to a person with a computer and internet who could be a software or internet company.