Digital vs. analog probably isn't the issue - how well your device solves the user's problem is what people care about. Start with the problem your device should solve first.
This is a good thought process for software, where the marginal cost per user is near zero.
Unit costs matter in hardware though, so first thoughts should tend more toward markets and demographics -- "what problem should I solve... for how much?"
A new Ferrari (or a new Prius) would solve my getting-places problem better than the POS I drive now. I could buy a new Tesla Roadster, which would be better than either one, but that's even less affordable.
Of course, since a hardware startup requires some hefty NRI that you'll probably have to borrow from someone else, you might want to start by polishing up your resume.
