Thesis

IoT devices are vulnerable to attacks, and we wanted to create a small hardware device that  connects the IoT device to the control center, resulting in a secure network between device and control center so all communications go through it and are encrypted. 

We know how to build tech well and fast so we got to a PoC and tried to find a design partner, but were unsuccessful. 

Validation

There were products on the market that created a personal secure gateway (Tosibox), so we saw that there’s a market.  

Why the idea didn’t progress

We couldn’t find design partners. We worked with a big healthcare company and had a few meetings where they were interested, so we got someone to design the hardware and the bill of materials. The design partner said that if we could get it done for $15 per device they would be interested. By the third meeting, where he CTO was present, they said ‘great, but we’re interested if you can do it for $7.” It was super disappointing since we spent a year on the process, in parallel to our jobs, but still. 

Insights

1. First-time founders doing hardware is nearly impossible.

2. More broadly, building hardware is hard. You design something and send it to be built in China, so the cost of every mistake is high (in time and money). As a result, people are less excited to get involved (both investors and design partners). 

3. As a first time entrepreneur you underestimate the importance of the story. Our feeling was ‘we have a PoC, it works, come buy it.’ But when you want to raise money, the tech is only 25% – the story is critical, especially for a technical founder for whom that isn’t intuitive. It’s a very emotional world and you need to have the investor connect to the idea. It’s not enough to say: here is a problem and here is the solution. 

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