The Exchanges

Q How important and, and kind of relevant is the, uh, in-store retail, um, portion of your sales, uh, As opposed to the online or the Amazon element in terms of, yeah, I'm always intrigued as kind of the diminishing, uh, effects of retail stores. Are you seeing that in your sales patterns?

A Yeah. So we're, we're a month into selling, um, in physical retail, um, Best Buy is our launch partner. And frankly, like, you know, sales are very strong through that channel. You know, at least living in, in Silicon Valley, you know, it's easy to think that, you know, everyone just presses a button and has packages show up two days later. But if you look at kind of purchasing patterns, um, across the country, you know, physical retail is still a very dominant force. One of the things it does provide that you don't have in an online, um, experience is discover product discovery. There isn't a great online substitute for, you know, walking down the aisles of, you know, a Best Buy and seeing all the new products, especially in the early days of, of us being in the market. It's a great way to Um, have customers, you know, discover our product and ultimately become advocates for era.

AI assessment note: “sales are very strong through that channel”

Q Really interesting that you said about kind of great team, great product, but if the market's not there, it's a tricky uphill battle. I'm intrigued then as to what makes a really good and, uh, appetizing market for an entrepreneur going in. When you were doing your market validity studies, which I'm sure you did as an XVC, uh, what was it that made a great market great?

A Well, so, so there it's, um, what are the gaps in product solutions is, uh, Is usually the, you know, first place to look. And then the second is, you know, what's the, what's the insight that you have that others don't see. And so, you know, when you look at the connectivity market, if you look at all the trends, you know, up until we started Euro, you'd actually seen a declining ASP. So people were spending less and less money on their, on their networks, or there are two factors there. One was upgrade cycles were lengthening, um, and then costs were continuing to drive down. Since we started Eero, what we've seen is actually the amount of money people are spending on their networks is increasing pretty dramatically. And that's because our, our networks are running, you know, the core infrastructure of our home. When we started Eero, it was pretty contrarian to say people are going to be willing to spend 500 dollars to have a great home network. You know, today we're really seeing that there's actually a huge portion of the market that is willing to spend just about anything To make sure they have great connectivity, uh, in every corner of their home.

AI assessment note: “what are the gaps in product solutions... what's the insight that you have”

Q So what then was the founding kind of aha moment for you then with Eero that made you leave the world of venture to, to be an entrepreneur?

A Yeah. Um, to be honest, I have been frustrated with my home network basically, uh, my, my entire life. From growing up, I, uh, helped manage, um, and install, you know, networks in homes and in businesses, and then another thing I did at Stanford was I was a, I was a network admin, so I, I've been frustrated with these product, products for a long time, uh, you know, the connectivity in our homes is, uh, now just as important as our running water and our power, and there, there weren't any products on the market that were able to, uh, you know, provide a great experience, and frankly, when I was at Menlo, I was, uh, I spent a lot of time looking for this, looking for Eero as an investment and couldn't find it. I always wanted to start a company and be even more immersed in technology than I was from a venture standpoint. One of the things I really took away from my experience at Menlo was you can have a great team, you can have great technology, you can have a great product, but if you don't have a great market, you know, you're really not going to have this amplification effect. You know, what I started to see was just how reliant people were on connectivity in their homes, how more and more products, um, were, were beginning to connect to the internet. And, you know, streaming was still kind of in its early trajectory, uh, was nowhere near as dominant as it is today. And so i…

AI assessment note: “looking for Eero as an investment and couldn't find it.”

Q Really interesting that you said about kind of great team, great product, but if the market's not there, it's a tricky uphill battle. I'm intrigued then as to what makes a really good and, uh, appetizing market for an entrepreneur going in. When you were doing your market validity studies, which I'm sure you did as an XVC, uh, what was it that made a great market great?

A Well, so, so there it's, um, what are the gaps in product solutions is, uh, Is usually the, you know, first place to look. And then the second is, you know, what's the, what's the insight that you have that others don't see. And so, you know, when you look at the connectivity market, if you look at all the trends, you know, up until we started Euro, you'd actually seen a declining ASP. So people were spending less and less money on their, on their networks, or there are two factors there. One was upgrade cycles were lengthening, um, and then costs were continuing to drive down. Since we started Eero, what we've seen is actually the amount of money people are spending on their networks is increasing pretty dramatically. And that's because our, our networks are running, you know, the core infrastructure of our home. When we started Eero, it was pretty contrarian to say people are going to be willing to spend 500 dollars to have a great home network. You know, today we're really seeing that there's actually a huge portion of the market that is willing to spend just about anything To make sure they have great connectivity, uh, in every corner of their home.

AI assessment note: “what are the gaps in product solutions... what's the insight that you have”

Q So what then was the founding kind of aha moment for you then with Eero that made you leave the world of venture to, to be an entrepreneur?

A Yeah. Um, to be honest, I have been frustrated with my home network basically, uh, my, my entire life. From growing up, I, uh, helped manage, um, and install, you know, networks in homes and in businesses, and then another thing I did at Stanford was I was a, I was a network admin, so I, I've been frustrated with these product, products for a long time, uh, you know, the connectivity in our homes is, uh, now just as important as our running water and our power, and there, there weren't any products on the market that were able to, uh, you know, provide a great experience, and frankly, when I was at Menlo, I was, uh, I spent a lot of time looking for this, looking for Eero as an investment and couldn't find it. I always wanted to start a company and be even more immersed in technology than I was from a venture standpoint. One of the things I really took away from my experience at Menlo was you can have a great team, you can have great technology, you can have a great product, but if you don't have a great market, you know, you're really not going to have this amplification effect. You know, what I started to see was just how reliant people were on connectivity in their homes, how more and more products, um, were, were beginning to connect to the internet. And, you know, streaming was still kind of in its early trajectory, uh, was nowhere near as dominant as it is today. And so i…

AI assessment note: “looking for Eero as an investment and couldn't find it”

Q You said there about the proportion of your time spent hiring. I hear from a lot of CEOs how, how frustrating they find it that so much is devoted to hiring when they really want to focus on kind of growing their business in the operations side. Do you find that a frustrating element?

A There are times when it, when it can, but there's nothing more rewarding than seeing your team execute and grow. And, you know, there is the flip side of if you're spending a lot of your time focused on hiring great people, Very quickly, you get to see all the great work they do, and, you know, I've been fortunate here to, you know, just see some of the amazing things that, that folks at Eero do on a regular, uh, on a regular basis. You know, I could spend more time writing product specs or working through sales analyses, uh, and I, I enjoy that work, but at the end of the day, you have to keep scaling the company and scaling the organization and hiring great people's, One of the most important things I can do for the business.

AI assessment note: “There are times when it, when it can, but there's nothing more rewarding”

Q kind of sequencing perfectly, scaling perfectly, one thing that's fundamental to all of that is, is the funding and the cash. So talk to me about the fundraising process. We mentioned Nicola Shasta there. I spoke to many of your other investors. How was the fundraising process for you? Uh, you know, you experienced it on the other side of the table with Menlo. How was it being an entrepreneur?

A You know, we've been fortunate enough to have some great investors and, you know, we've raised Four rounds of financing recently raised for Series C. All, all of those processes have gone fairly smoothly. You know, one of the great things from my time at Menlo is that we got to see hundreds of companies come in and present to the full partnership. You really start picking up on, you know, how do you tell a story in a, in a compelling fashion? You know, how do you tailor that message to your audience? And, you know, that's a skill that helps in fundraising, but it also helps in talking to customers, also helps in recruiting. Being on the other side has really helped in, you know, how do you, how do you think about Euro as a company, um, as a product, um, and then also as a investment opportunity?

AI assessment note: “All, all of those processes have gone fairly smoothly.”

Q in the early days when you had the product and no pricing mechanism? What was the thought process around that? Was it the typical kind of engineer with a great product who wants to get it into the hands of everyone at the lowest price? Or as you said, it's, it's a, it's a relatively higher price point at the time. So what was the thought behind the pricing mechanism?

A Yeah. You know, with, with hardware, there's, there's hard costs. It's not like a SaaS product. One thing we've spent a lot of time looking at is what type of margin structure do we need to have to be able to support omni-channel distribution? So that's euro.com, places like Amazon online, and then places like Best Buy and Store. You know, you need to have enough margin to, uh, A, provide great customer support, B, have great marketing, um, and C, continue to invest in R&D. And so, uh, a lot of this has driven, uh, Off of, hey, this is how much each unit costs, and then these are the other things that we need to be able to invest in. So there is a large formulaic, uh, approach to it, but at the end of the day, setting that final price, it is a little bit of an art. You're trying to bring in as many inputs as possible, uh, before you set up your pricing strategy.

AI assessment note: “what type of margin structure do we need to have to be able to support”

Q And in terms of kind of the scaling and the hiring, you're competing against some massive incumbents like Netgear. So how do you look to compete with such entrenched companies first like Netgear while expanding as a startup?

A You know, here I think of entrenched is really not a advantage. Entrenched means you have a way of doing business and you've been operating in that cadence and For many, many years. You know, what's happened in the networking space is the problem statement has changed very dramatically in a very short period of time. You know, it was only a few years ago when our connection speeds were in single digits in terms of megabits per second, and the number of devices connecting to our networks were only a handful. And in a very short period of time, we've gone to connection speeds that are hundreds of megabits a second, You know, homes have dozens of devices connected, and so our, you know, our competitive advantage, again, is we own that whole stack. We're able to react really quickly, and we're also pouring all of our focus into one product instead of a, you know, massive portfolio of undifferentiated products. What that allows us to do is rapidly evolve our software and stay focused on delivering a great customer experience, and, you know, as our distribution grows, as our team grows, You know, we'll be able to continue to build a, just a great business while being nimble enough to address, you know, all the feedback we get, um, from the field.

AI assessment note: “our competitive advantage, again, is we own that whole stack.”

Q in the early days when you had the product and no pricing mechanism? What was the thought process around that? Was it the typical kind of engineer with a great product who wants to get it into the hands of everyone at the lowest price? Or as you said, it's, it's a, it's a relatively higher price point at the time. So what was the thought behind the pricing mechanism?

A Yeah. You know, with, with hardware, there's, there's hard costs. It's not like a SaaS product. One thing we've spent a lot of time looking at is what type of margin structure do we need to have to be able to support omni-channel distribution? So that's euro.com, places like Amazon online, and then places like Best Buy and Store. You know, you need to have enough margin to, uh, A, provide great customer support, B, have great marketing, um, and C, continue to invest in R&D. And so, uh, a lot of this has driven, uh, Off of, hey, this is how much each unit costs, and then these are the other things that we need to be able to invest in. So there is a large formulaic, uh, approach to it, but at the end of the day, setting that final price, it is a little bit of an art. You're trying to bring in as many inputs as possible, uh, before you set up your pricing strategy.

AI assessment note: “what type of margin structure do we need to have to be able to support”

Q You said there about the proportion of your time spent hiring. I hear from a lot of CEOs how, how frustrating they find it that so much is devoted to hiring when they really want to focus on kind of growing their business in the operations side. Do you find that a frustrating element?

A There are times when it, when it can, but there's nothing more rewarding than seeing your team execute and grow. And, you know, there is the flip side of if you're spending a lot of your time focused on hiring great people, Very quickly, you get to see all the great work they do, and, you know, I've been fortunate here to, you know, just see some of the amazing things that, that folks at Eero do on a regular, uh, on a regular basis. You know, I could spend more time writing product specs or working through sales analyses, uh, and I, I enjoy that work, but at the end of the day, you have to keep scaling the company and scaling the organization and hiring great people's, One of the most important things I can do for the business.

AI assessment note: “There are times when it, when it can, but there's nothing more rewarding”

Q And in terms of kind of the scaling and the hiring, you're competing against some massive incumbents like Netgear. So how do you look to compete with such entrenched companies first like Netgear while expanding as a startup?

A You know, here I think of entrenched is really not a advantage. Entrenched means you have a way of doing business and you've been operating in that cadence and For many, many years. You know, what's happened in the networking space is the problem statement has changed very dramatically in a very short period of time. You know, it was only a few years ago when our connection speeds were in single digits in terms of megabits per second, and the number of devices connecting to our networks were only a handful. And in a very short period of time, we've gone to connection speeds that are hundreds of megabits a second, You know, homes have dozens of devices connected, and so our, you know, our competitive advantage, again, is we own that whole stack. We're able to react really quickly, and we're also pouring all of our focus into one product instead of a, you know, massive portfolio of undifferentiated products. What that allows us to do is rapidly evolve our software and stay focused on delivering a great customer experience, and, you know, as our distribution grows, as our team grows, You know, we'll be able to continue to build a, just a great business while being nimble enough to address, you know, all the feedback we get, um, from the field.

AI assessment note: “our competitive advantage, again, is we own that whole stack. We're able to react”

Q Nikhil mentioned that two rounds of funding were obviously pre-launch of the product. Talk to me about that and why, why you chose for, for such heavy funding pre-product. Was it purely a case of manufacturing and distribution setup?

A Well, with hardware, you have a lot of, uh, upfront costs. Whether it's tooling or manufacturing line support, but you also have to build up the team before revenues hit. You need to make sure you have a big enough team to then be able to support all your customers. You almost have to grow one stage ahead of where the business is. That's one of the, you know, critical reasons why we took a decent amount of funding ahead of the product being launched, because we had to go build up a team. We had to build up all the infrastructure to be able to not just ship the product, but then also Support everything once it got in the field.

AI assessment note: “reasons why we took a decent amount of funding ahead of the product being launched”

Q How important and, and kind of relevant is the, uh, in-store retail, um, portion of your sales, uh, As opposed to the online or the Amazon element in terms of, yeah, I'm always intrigued as kind of the diminishing, uh, effects of retail stores. Are you seeing that in your sales patterns?

A Yeah. So we're, we're a month into selling, um, in physical retail, um, Best Buy is our launch partner. And frankly, like, you know, sales are very strong through that channel. You know, at least living in, in Silicon Valley, you know, it's easy to think that, you know, everyone just presses a button and has packages show up two days later. But if you look at kind of purchasing patterns, um, across the country, you know, physical retail is still a very dominant force. One of the things it does provide that you don't have in an online, um, experience is discover product discovery. There isn't a great online substitute for, you know, walking down the aisles of, you know, a Best Buy and seeing all the new products, especially in the early days of, of us being in the market. It's a great way to Um, have customers, you know, discover our product and ultimately become advocates for era.

AI assessment note: “sales are very strong through that channel. You know, at least living in, in Silicon Valley”

Q And then let's finish on the next five years for you with Eero. What's the roadmap ahead?

A You know, if you fundamentally believe that all of these products and experiences, uh, in our homes are going to be either connected or delivered over the internet, then having a incredibly fast, reliable, and performant network is, is critical. And it actually starts going further than that. Really, you can think of the network as becoming the central nervous system of the home. Um, you know, if all of our content's delivered over the internet, if all of our devices are connected to the internet, then, you know, you really have the opportunity here to build the central nervous system, something much more than just a Wi-Fi network. This is all about continuing to build great products and continuing to build a great team that's excited to, you know, really shape, you know, connectivity in the home. Um, over the next five years and beyond.

AI assessment note: “continuing to build great products and continuing to build a great team”