The Exchanges

Q All right. Very cool. So you started off, uh, in sales at Groupon, and now you're doing something that sounds very technical. Walk me through that. How'd that happen?

A Sure. So actually my background, if you go back even further, starts at McKinsey. So I used to be a management consultant. And while I was there, actually, even in college, I sort of realized too late. I should have been an engineer, um, and, uh, decided that I would sort of Over time, make my way diagonally towards the technical side of the world. So, um, you know, I started at McKinsey, I was doing operations work, a lot of supply chain work. So that's where I got to know engineering in particular, how products get designed and made. Um, and then, uh, while I was getting my MBA, I did an internship at Groupon working in sales operations. And so I ended up with this nice mix, I think of, um, sort of technical competence, particularly on the hardware side. And business competence in particular in sales and marketing. And then when I started the company, I just taught myself how to do all the things I didn't yet know how to do. So I did a lot of front end engineering early days. I actually continue to do some of our front end engineering, um, just to kind of teach myself. And I learned everything there on YouTube and GitHub and things like that.

AI assessment note: “make my way diagonally towards the technical side of the world.”

Q Yeah. That's interesting. Um, talk to us a little bit more about the history. What year did you launch the company in?

A We started in 2012. Um, and we were, we're definitely the result of a pivot. So when we first launched, we weren't doing a platform like we do today. We were doing a connected lighting product and we were also under a different name called spark. Um, so we launched a product on Kickstarter called the spark socket and it was a connected lighting product, kind of like Phillips hue life X kinds of products. Um, that Kickstarter campaign was unsuccessful. We had a 250,000 dollar goal. We raised 125,000, but Kickstarter is all or nothing. So that means we raised zero and that product never came to be. Now that was frustrating at the time. Um, it turned out to be a huge benefit because we were released from the obligation of making that product that really didn't have a strong enough market. And, but we learned a lot along the way, and so we saw this opportunity where the technology we'd built for our own product was clearly relevant to a lot of other entrepreneurs and engineers who were trying to do the same thing. So we basically ripped the guts out of our product and, uh, refactored it to make it An easy development path for engineers building IOT products, and then we relaunched it as with a second Kickstarter campaign in 2013, and that was for a development kit, like a Wi-Fi development kit, Arduino-y kind of thing called the Spark Core, um, and that launched in May 2013 with a …

AI assessment note: “We started in 2012.”

Q to the idea of solve a problem for yourself first. And then what Zach has done is just been super smart about pivoting and reading the market. Now, Zach talking about reading the market, you have experienced successful and unsuccessful Kickstarter. Is it truly just luck and chance? I mean, or did you do things different marketing wise to drive and hit that 600,000 dollar target in the seconds campaign?

A So that's a really good question. And that's something that we were, we thought was really important to figure out when we did our Kickstarter campaign in the first place. I look at a Kickstarter campaign or really any crowdfunding campaign as an experiment. And so what we wanted to do is make sure that we really nailed the marketing of our first launch so that if it was unsuccessful, we couldn't blame it on poor marketing. And we did that. We actually did a great job with marketing. We got tons of coverage. We were in wired, we were in fast company. And despite that, we didn't hit our goal. So we came out really confident that it was actually pure product market fit, that this just wasn't a good product. We surveyed our customers and we realized the big problem was that it was too expensive. I think it was 60 bucks per light bulb that you'd connect. And 60 bucks is a reasonable amount to pay for a connected experience, but Not when you actually need to connect a whole bunch of light bulbs. So very quickly it turns into thousands of dollars. The average house has like 50 light bulbs in it. So, um, so people said, yeah, it's too expensive and it's interesting and cool, but it's just not worth the money. Um, and so looking back on it, I think it was a successful experiment in that we tried something. We didn't spend a ton of money to get there. I think we probably spent like 15 g…

AI assessment note: “we came out really confident that it was actually pure product market fit”

Q This is gonna, don't be offended by this, but how do you make sure people, you know, people in China are not, you know, in bed with the Chinese government and actually have somehow compromised particle.io?

A Well, one part is we're not, uh, um, you know, we're not a big enough target yet. So these are a lot of problems that we will definitely want to solve over the long term. In the short term, we will make sure that we trust these people. So we actually did a program, an accelerator program called Hacks that's in Shenzhen. So we lived in Shenzhen for four months. So our manufacturing relationships came from people that we got to know very well. Um, Will, who is the person on our team who runs our supply chain, he spent the following year in China, um, working very closely with our manufacturing partners. He personally hired all of the people that we have there working full time. So as a result, we have a very deep trusting relationship with the people that we work with over there. And I've seen a lot of other startups get into, uh, cases where not that there's government intervention, but that they're, that they are working with untrustworthy parties. So people who will, um, hold their, You know, their intellectual property hostage. Um, yeah, or inventory, you know, and say, like, you got to pay us and, and, uh, you know, they'll raise their prices and say, you got to pay us more, and we're holding on to your inventory until you, until, you know, I've seen that happen. And we've been, by, by working to make sure we work with people we trust, we've been able to avoid those problems…

AI assessment note: “we have a very deep trusting relationship with the people that we work with over there.”

Q And so, uh, just to make this and really bring this down to earth for Keurig, what's the, what, what's in a Keurig coffee maker and does it cost five or 10 bucks specifically, you know, tied to your hardware model?

A Yeah. So for, for a company like Keurig, what they actually, um, did was not design a new coffee maker that's connected, but something that plugs into the back of the coffee maker and they, um, use it for, um, Uh, consumer testing. Um, so you sign up, it's like a Nielsen reporting kind of thing. Um, so you sort of volunteer to participate in this program, you get free coffee, and then they send you a thing that connects your brewer to the internet so they can understand how people actually consume coffee, which they didn't really know before. Um, and so that was, you know, something in the, uh, somewhere in the range of five to 10. I don't actually know the number. Okay.

AI assessment note: “was, you know, something in the, uh, somewhere in the range of five to 10.”

Q Zach, my audience will know Keurig. Can, when you tell this story, can you actually just specifically use the Keurig story?

A Yeah, absolutely. Um, so, so our company helps Our company helps manufacturers who make physical products, connect those products to the internet. And that ranges from companies who make consumer appliances like Keurig's coffee makers to industrial manufacturers who make their irrigation systems or industrial equipment used in manufacturing facilities. Um, and we help them connect those products to the internet. What that means is we give them a cloud platform. Those devices can connect to, we give them the physical hardware that'll actually go into the device. So like a wifi module or a cellular modem. We get, if it's cellular, we give them SIM cards and data plans, and then we do the whole communication stack in between the physical device and the, and the web. So that is sort of everything you need to build and deploy an IoT product.

AI assessment note: “ranges from companies who make consumer appliances like Keurig's coffee makers”