NEWCASTLE-UPON-TYNE, England A couple of years ago I did some blogging for EE Times billed as the Student Entrepreneur. At the time I was finishing up my PhD in Resilient Electronics and Energy Harvesting at Newcastle University but then things got busy as I had to focus on writing up my thesis and then finding some gainful employment.
Clearly I was already fascinated by entrepreneurship so you will not be surprised to hear that I made the decision to jump straight into starting my own company. The area I wanted to tackle was central heating. It may not be a sexy market but, as the Nest guys are now showing, it is one in desperate need of an overhaul. For those not in the know Nest is the thermostat company founded by Tony Fadell, the designer of the hardware for the Apple iPod.
I don't have Fadell's pedigree but two years into my journey my business partner and I have taken on nearly £500,000 of investment (about $780,000) for our product, the Radfan. We launched in March of this year, selling out our first production run in less than a week.
I won't impose the details of our product on you although it is cool as the purpose of resuming my blogging is to try and set down and share a little of what I have learnt, a bit of what I now believe to be true and to hear the opinions of others.
Barker was a black and white engineer.
At the start I was a fairly black-and-white kind of engineer. I believed everything could be boiled down a simple yes/no answer. I believed that technical correctness was most important and everything else should fall in behind. I believed that the idea was all that mattered. With a great idea, the laws of physics and some evidence to back it up, raising investment would be simple and straightforward!
As you can imagine, over the last two years I've received quite a few lessons, jolts to the system and wake up calls! Many of them, fortunately, very early on, but others pop up and put me back in my place on a semi-regular basis.
I now understand that technical decisions have to be made in the context of the market and that the market is a human-modulated affair, which can introduce some irrationality into the system. I've also learnt that a brand is much more than a logo, and that execution trumps idea, especially in a general economy as bad as this one. We've U-turned and pivoted when needed but I have also learnt that sometimes you just need to go with your gut and "stick to your guns." An entrepreneur needs a stubborn streak!
The pressures facing us at the moment are unprecedented so I'm told! It seems we are living out the Chinese curse or opportunity of living in interesting times. With old industries stalling and new ones taking off at the speed of light, one thing that is certain is that electronics will remain at the forefront of these changes and that all organizations, small or large, should make the most of this.
In this blog column I aim to bring forward startup insights and ideas. Feel free to shoot arrows at them politely and add comments. Simon Barker is chief technology officer of Radfan, based in Newcastle-upon-Tyne, England.
Brand is the most important thing I think. You can have all the IP in the world but ultimately brand is what people buy into - not the shallow surface design/logo but the deep brand that drives customer service, quality, route to markets etc
While I agree that the technically best solution is a vey complex one there is an entrenched market, desperate for better central heating, who simply can't afford the "ideal" solution.
There are many markets which need a ground up overhaul but given the cost and time involved in doing that it simply won't happen.
It's all about developing ideas and products within the existing frame work.
Actally, tecnology should definitely be able to solve the problem as described, but the solution will not be as simple as one would wish. Doing it right will take more than that $14.95 fan add-on thing.
A really great marketing plan will sell even the poorest quality of junk, at least for a while. The big driver is perceived need of a product, which has nothing to do with any other aspect of it. Of coure, a really good product with a great marketing scheme has a much better chance of being a long term success, at least until the copycats get hold of it. That is where the brand comes into play, which is also as much a challenge as marketing, or maybe even more, because somehow quality, real or just perceived, gets into the mix. And they probably don't teach much about any of this in engineering school.
The success of a company relies on 3 things - great product ideas, exceptional marketing and streamline production.
For a short time, you have already understood the idea, putting out your perspective in words, sharing your adventure. I am looking forward to reading more of your experience.
I completely agree, something that takes a while to get your head around is that the best product won't sell without good marketing/sales people. Soft skills are just as, if not more, important that the hardcore technical skills
Very true, the manufacturing aspect of Radfan is really interesting and has lots of challenges with it that you don't consider on the suface before starting out. Central heating is indeed a mess and I think in the next few years there will be a lot of new companies and innovation in the sector.
Pricing is very tricky - I think the biggest difficulty is remembering that the perceived value of your product (and therefore how much someone will pay) is unrelated to what the product costs you, there is no simple 1.5x multiple.