Ronn Kliger @ronnkliger - Tumblr Blog

Uniqarta Update - June 2016

A lot has changed in the nine months since my last update. We have solidified our focus on flexible electronics and put the RFID/consumer product packaging stuff on the shelf for now. I’ve concluded this market it is not the right place for us to be right now but hope to revisit it in the future.

Our work in flexible electronics is being driven by an interest in many sectors for electrical functionality in flexible or curved forms. Examples include flexible displays, wearable electronics, and embedded sensors. The common need across these applications is to incorporate thin, flexible electronic chips onto (or into) flexible substrates. As a result, we are benefiting from both government and commercial partner funding. Below are some specifics.

National Science Foundation SBIR Grants

Last year we received a $150K Phase I grant to optimize the wafer thinning and dicing aspects of our technology. This year, we have applied for a $750K Phase II grant to expand upon this work. We hope to win this award in the next 2-3 months.

NextFlex (Flexible Hybrid Electronics Manufacturing Innovation Institute)

This government-supported consortium of companies and universities has turned out to be extremely valuable for us. We have found that we are the only company focused on ultra-thin chip assembly and as a result, have received numerous requests for support and project partnerships. The most significant of these involves UMass Amherst and E Ink in which we will demonstrate an integrated, flexible display for a wearable health monitor. We are also leading a proposal effort for a project that will implement our technology at the NextFlex Hub for use by members. Our intent is to proliferate our solution broadly via NextFlex for eventual commercial adoption by NextFlex members.

Commercial Partnerships

Aside from the E Ink involvement noted above, we have technology demonstration projects with two commercial partners. Both are global materials companies having a vision of integrating electronics with various materials in flexible or curved forms. One of these projects focuses on demonstrating that our technology can achieve certain performance metrics of importance to the commercial partner. The other focuses on demonstrating that ultra-thin chips can survive being embedded in molded plastic assemblies. In both cases, the objective is to demonstrate technical feasibility and to progress to deeper collaborations leading to commercial adoption.

Our Growing Team

Lastly, I’d like to touch on a few internal items. We have recently hired a PhD grad from North Dakota State bringing our team to four. We’ve also moved into a larger space in Fargo to accommodate our growing team and our need for a larger lab.

That’s it for now. All-in-all, things are going pretty well right. By the way, we are being sponsored by NSF to exhibit at the upcoming Silicon Innovation Forum at SEMICON West (San Francisco, July 12). If any of you find yourself at this show stop by our booth and say hello!

“We Were Morons.”

Those were a speaker’s opening words at a talk I attended several years ago. His startup had just been acquired by Google, but he was referring to himself and his co-founder six years earlier. His point was how incredibly little he and his partner knew about their market, their customers, their product-market fit, their strategy—just about everything—at the beginning.

This speaker’s frank (and eloquent!) self-description stuck with me and resurfaced last week as I reflect on Uniqarta’s past six months. We find ourselves at a very different place than what we envisioned at our founding two-and-a-half years ago. Then, our vision was to use our ultra-thin, flexible electronics technology to embed ultra-thin RFID chips within paper stock. We envisioned this being beneficial in applications such as product packaging, security documents, and other printed media.

I think this is still something we will address in the future. However, the past six months has taken us in a new direction—one focused more tightly on our core technology of assembling ultra-thin, flexible ICs onto flexible substrates. This change has been driven by a deeper understanding of potential markets. I have learned that it is too early for integrated RFID in consumer product packaging, but that there is a strong need for other types of flexible ICs in other applications. In fact, there is a whole emerging technology area called flexible hybrid electronics (FHE) that depends on the ability to integrate ultra-thin, flexible ICs with flexible substrates.

The U.S. government is investing $75 million to drive FHE development as they considered it an important future manufacturing technology. The government has sponsored the founding of NextFlex—a FHE Manufacturing Innovation Institute—and Uniqarta is deeply involved. We are a founding member, I am on NextFlex’s Governing Council, and my co-founder Val Marinov chairs the Device Integration Technical Working Group. NextFlex is making their initial project awards this spring (Uniqarta is getting one as part of a UMass Amherst-led team) and has just announce their second project call.

Through our involvement, we have learned that we are the only company that is focused on the ultra-thin chip assembly problem. That’s a nice place to be! There are certainly others working on wafer thinning and other aspects of the problem, but we are the only company that can offer a complete assembly solution encompassing thinning, dicing, placement, and interconnection. As a result, we have received numerous inquiries from other NextFlex members for support on their projects.

Anyways, back to my original topic, this change of direction is nothing unusual for those experienced with startups. In fact, entrepreneurship educator Steve Blank defines a startup as “a temporary organization used to search for a repeatable and scalable business model.” I’ve emphasized “search” here as that truly represents what startups do and what we have been doing.

I’d like to wrap up here by acknowledging the LONG lapse since my last post. It’s tempting to say that I’ve been too busy to post, but that simply hasn’t been the case. The truth is that I hadn’t been motivated to post. I’m not sure why that is nor what the future may bring but that has been the situation. In any event, Uniqarta is doing well and I’ll provide a complete update in my next post...sooner than seven months from now. I promise!

Kudos for the National Science Foundation!

Last week I was in Washington DC attending a three-day NSF grantees workshop. When I first learned of this mandatory event last summer, I rolled my eyes at the prospect of enduring three days of boring presentations from government bureaucrats. In hindsight, I couldn’t have been more wrong!

In general, I’ve become very impressed with what NSF is doing with their Small Business Innovation Research (SBIR) program. Prior to receiving our grant, I thought all it entailed was getting some government money. While that is very important, the program goes much further. NSF views a core objective of their SBIR program as helping to build successful companies. They have included, with our grant, a variety of resources beyond to help us do that.

To start, they run all their Phase I grantees through a two-month “boot camp” focused on customer discover and business model definition. This is basically a “light” version of Steve Blank’s Lean Launchpad approach to startups that has been adopted by NSF and other government agencies, and taught by many startup incubators and academic institutions. At last week’s workshop all the NSF grantees presented their work and received feedback from experienced, private-sector panelists.

In addition, we’ve been assigned an NSF Program Director with substantial private industry experience and is knowledgeable in our technology area. Right at the program start he told us that his primary goal is to help us win an NSF Phase II grant (up to $750K). We have had multiple discussions with him about our plans and have received valuable advice about creating the best possible Phase II proposal.

NSF has also contracted with third-party companies to provide entrepreneurship training and commercialization assistance to grantees. Our assigned company, Larta Institute, has in turn assigned us an experienced mentor who is helping us develop our NSF Phase II commercialization plan. (In NSF Phase II proposals, applicants’ commercialization plans take on a much greater level of importance than in Phase I proposals.) Larta also provides grantees access to a network of industry contacts for exploring potential partnerships.

All these services are provided to us free of charge as part of our grant. Overall, I found the general attitude and passion of all the NSF personnel last week to be very positive and impressive—not at all what my perceptions have been about federal government employees! I have found our NSF involvement to be a very positive one for Uniqarta and I encourage all startups out there to consider NSF’s SBIR program.

Uniqarta Update - Sept 2015

Apologies for infrequent updates of late. Below is the latest on Uniqarta—lot’s going on!

NSF Grant

The NSF project I had previously written about is under way. I have been pleasantly surprised by the support and resources NSF is providing beyond the grant money. They are providing training and experienced advisors to help develop the commercialization plan we will need for our Phase 2 proposal. (A Phase 2 grant can bring us as much as $750K.) They have also connected us into an industry network where we can explore collaboration and investment with a variety of established companies. I’ll be spending a lot of time on this over the next five months as we push for a February Phase 2 proposal submission.

Flexible Hybrid Electronics Manufacturing Innovation Institute

I had previously written about this institute we are participating in. The U.S. government is providing $75 million dollars over five years for an advanced manufacturing institute that will bridge the gap between applied research and large-scale product manufacturing. Last week the Department of Defense awarded the FlexTech Alliance a $75M/5-year agreement to establish and manage this Institute. Uniqarta has been a core participant on the FlexTech proposal team and will be a member of the Institute. The team is quite large with over 100 companies, universities and other entities but Uniqarta is uniquely positioned with our ultra-thin chip assembly technology. We expect to start participating in this Institute’s projects this fall.

Consumer Product Packaging

We continue to get strong interest to our concept of low-cost, invisible connectivity integrated within product packaging. We are working with a few packaging companies to creating prototypes with which to engage brand owners although I admit this is moving more slowly than I’d like. This seems to be a market that is slow to embrace change and developing it will take longer than I expected. Nevertheless, we have some promising things in the works that I will write about more fully once they get under way.

Licensing

One of the RFID incumbents with whom we have been talking since our start two years ago, has identified a number of market opportunities for ultra-thin, flexible inlays. We are launching a prototyping project that will provide them with ultra-thin NFC inlays with which to sample their customers. If that goes well they will look to license our first-generation technology sometime next year.

Technology Development

We have started work—six months earlier than planned—on our second generation technology development. A key member of my co-founder’s North Dakota State University team became available this summer to work on this. We’ve been able to re-establish the feasibility demonstration that the NDSU team had previosuly accomplished and are moving ahead to establish our own capability outside the university for process optimization and automation.

It is starting to be clear that a lot of our funding is likely to come from sources other than financial institutions. We have had good luck winning government grants and have some promising funding opportunities with a few establish companies (”strategics”). It remains to be seen to what extent we can depend on these funding sources but for now that is where my fundraising efforts are focused. That’s all for now. I’ll push to update this blog more frequently going forward!

NSF Grant

I’m happy to announce that Uniqarta has won a Phase 1 National Science Foundation SBIR grant. This is for a six month project involving the embedding of ICs in paper. Not only is the funding helpful but being selected provides a satisfying validation of our vision.

Market Validation and Ongoing Focus Challenges

Over the past few months the consumer product packaging market has emerged as a promising area for our focus. Several global brand owners have told me about their ongoing problems with inventory theft and out-of-stock conditions and how RFID can solve them. These brand owners have watched the apparel market’s adoption of RFID with interest but have not been able to justify their own adoption due to the high cost of RFID tags and the awkward need to attach one onto the host item. Once these brand owners learned of our ability to integrate RFID functionality within their product packaging at a substantially reduced price point, they became intrigued. One brand owner spoke of our technology being a “no-brainer” and a “game-changer”. He explained that they currently pay 5-6 cents per EAS tag (those tags that set off an alarm if you walk out of the store without paying) without deriving much value. The notion of paying the same or less for integrated RFID functionality is very attractive.

I’ve subsequently spoken to multiple product packaging companies to further validate our solution. These companies buy paper-based materials and manufacture product packaging for brand owners. They try to differentiate with various types of printing, foils, coatings, etc. but struggle to do so. When presented with our technology, these packaging companies have universally expressed strong interest and enthusiasm. They see our offering as a way to add value to the packaging materials they sell brand owners and a way to strongly differentiate their offering. We have quickly moved into prototyping activity with several of these companies.

The market for RFID within consumer product packaging is huge (billions of $) and is one that the RFID incumbents are not generally servicing. They lack the technology to deliver at the price point and with the form factor required and are strongly focused on servicing their core market (apparel tagging) which is growing 25% per year.

So, this looks like a great market for us to focus on—right? Well, yes, but at the same time we are seeing other attractive opportunities. In my previous big-company job, I would simply seek internal funding for our focus market and defer expending resources on anything else. But now I am at a startup and these other opportunities are tied to funding. I feel that I cannot ignore them as the funding they will bring in is needed to help us get to the consumer product packaging market. Fortunately, our core technology is applicable to all these opportunities without much variation or customization. But nonetheless, the question of determining the appropriate amount of focus to maintain at a given point in Uniqarta’s development continues and will be an ongoing challenge as we get more deeply involved in these multiple areas.

Uniqarta Update - April 2015

Things continue to move quickly. Since I last posted we’ve closed a number of seed round investments and are now in good shape to operate this year. We (finally!) closed the technology licensing deal with North Dakota State University (NDSU). This is an exclusive license to the technology that my co-founder’s team developed at NDSU which allows for the low-cost assembly of ultra-thin or ultra-small ICs onto flexible substrates. We also continue to get strong interest from established companies. While these larger companies aren’t generally moving as quickly as I’d like, they offer the potential for technical collaboration, effective market channels, and additional funding. What makes a few of them especially interesting is that their interest extends beyond just RFID to the more general vision we have at Uniqarta of embedding all sorts of electronics into all sorts of materials. Lastly, we’re even a bit optimistic about the government grants we are pursuing. It is early and these are extremely competitive, but we’re finding that there is a strong and growing interest in flexible hybrid electronics (e.g., http://tinyurl.com/pnz7cq7 or http://tinyurl.com/oj8paam) with very few companies focusing on the chip assembly aspect of that technology.

At a personal level, it is gratifying to see our vision of ubiquitous, unobtrusive electronics being shared (and to an extent validated) by these other parties. My focus is now shifting from raising seed money to furthering our technology and business development to the point that we can execute a Series A funding round later this year that allows us to get that NDSU-licensed technology into production.

Uniqarta Update - Feb. 2015

A lot has happened since I last wrote about what's going on with Uniqarta. We've hit a few significant technology milestones, established a variety of new strategic relationships, and have progressed with our fundraising.

Technology Milestones

Last November we implemented our ultra-thin chip assembly process on an industry-standard automated production line. This was done in collaboration with Mühlbauer Group, a German company that supplies much of the RFID industry with inlay manufacturing equipment. For the first time, we demonstrated our process's capability to fabricate ultra-thin RFID inlays in an automated, volume-production fashion rather than one-by-one in our lab. This now sets the stage for establishing a volume production capability for our products.

The second milestone was the fabrication of functional RFID inlays on a paper substrate. Previous to this, we (and pretty much the entire industry), fabricated inlays on a plastic substrate. Making a high-performance, low-cost RFID inlay on paper is surprisingly challenging. Nevertheless, after evaluating a variety of options, we successfully fabricated ultra-thin all-paper inlays which we subsequently sampled to a variety of potential customers.

Strategic Relationships

The increased focus I put into developing new strategic relationships starting last December has been effective. I have reached out to a collection of new paper companies, incumbent RFID inlay/tag manufacturers, and end customers and have seen strong interest universally. These relationships are still at an early stage so it remains to be seen which mature and what form they take. Some may lead to supplier/customer relationships, some may involve technology licensing, some may involve strategic investment, and some will likely just dissolve for one reason or another. At this point I am just exploring the market and developing options that will allow us to better define our business model and go-to-market strategy later this year.

Fund Raising

Everything I've read and been told about the difficulty of raising money is correct! I had planned to close our seed round by now with a raise of $0.5 to $1.0 million. I have raised a portion of this amount but still require more. Several individual investors who I thought would invest have backed out.

I am finding the going tough with institutional investors (angels and VCs) as I am competing with software/mobility/social media startups that are more in fashion, promise a faster financial return, and whose technologies and marketplaces are better understood. There is not too much money being invested in hardware companies let alone ones such as Uniqarta that are developing new manufacturing processes. But I remain optimistic in what we are doing and that between the institutional and strategic investors with whom I am engaged we'll succeed in raising what we need.

We also are pursuing government money. Last November we submitted a National Science Foundation SBIR proposal seeking $150K to be awarded this summer. We are also participating on a team putting together a proposal for a $75 million, five-year award for a Flexible Hybrid Electronics Manufacturing Innovation Institute. This institute will bring together industry, academic, and government parties to establish a complete innovation "ecosystem" addressing flexible hybrid electronics. Uniqarta's ultra-thin chip assembly technology fits directly within the scope of this institute.

Bottom Line

Our technology development continues to run ahead of our business development and fundraising but the gap has narrowed. We are now in a position to provide functional prototypes in volume. This makes our business development efforts more effective and can move us into some customer evaluation projects. Those, in turn, could lead to initial orders. The key now is to get our manufacturing capability established (it will be outsourced initially) and to make sure we have enough money to reach a revenue position.

Too Much Focus?

In bringing new technology to market I have always been a big believer in maintaining a well-defined, sharp focus. This is critical to provide the development team with clear objectives and to maximize the resources applied to the relevant tasks. Yet it begs the question: how do I know that we are focusing on the right thing? If we select the wrong market/application/customer/positioning we could still execute well but fail to achieve our business goals.

One answer, of course, is to continuously monitor and evaluate and to change focus when it becomes evident that the selected one is not going to work. (This is the "pivot" that one frequently hears about with startups.) The problem with this strategy is that it is sequential. The startup charges along one path, changes to another, and another, and so on. This takes time and time is money! Can the startup find the right focus before it runs out of money? Can the startup raise more money without having a focus with demonstrated customer traction?

In most software-based startups this is certainly possible. Software can be modified quickly and cheaply lending itself to rapid market experimentation. But with hardware-based startups this is more difficult. Modifying hardware takes more time and money therefore stressing a startup's finances to a much greater extent. If the hardware startup is a B-to-B business, then add in the slowness of big-company customers and things become very challenging!

So, with Uniqarta I've come to the conclusion that right now I need to compromise my views on focus and broaden our market engagement. This means exploring multiple technology partnerships, multiple market segments, and multiple customer types—all in parallel. This certainly stretches the team in supporting these various engagements, but I believe it will shorten the time to our market entry with adopting customers. It will also strengthen our position by generating multiple options.

The early results are very positive. In December and January I stepped up my outreach to new potential partners and customers and we now have a much fuller and broader pipeline. I am also encountering unexpected linkages and introductions leading to some very interesting opportunities. In many respects, this is the same dynamic I experienced with my personal networking upon leaving Analog Devices (see Done Deal, Nov. 2013). By casting a wider net I am uncovering opportunities that I otherwise wouldn't have,

But this can't go on forever. Our small team can't support an infinite number of customers and market segments. At the right time, we'll need to narrow our focus back down. It's a matter of balance. The trick will be to determine the right level of focus at any given time as well as the selection of where that focus should be.

Big Versus Small Companies

One of the reasons I left my previous job was out of frustration with the slow pace of decision-making and action. At my previous company, a Fortune 500 semiconductor manufacturer, everything took a long time to both decide and impliment. I knew that at a startup, the pace would be faster and things would get done faster. What I didn't quite appreciate to its fullest is what it would be like dealing with large companies from the outside.

My startup's ability to make fast decisions and put them into action promptly has been refreshing and satisfying. But what I have also come to learn are the downsides of being a startup—getting other (larger) companies to pay attention to you and to act at anywhere near the pace of a startup!

At my previous company I had no trouble getting meetings with potential customers, technology partners, or suppliers. Between the company's global sales network and its strong brand, when I wanted to reach the right person I almost always could.

That is not the case with my startup (and virtually all startups I would say). I've found that making contact with the right people at the right companies is a major challenge in and of itself. To start, just identifying the right individual at a company I am targeting can be difficult. I lack the pre-existing relationships that a Fortune 500 company's sales force has. I also lack the credibility and brand name of a large company. As a result, I have a much higher barrier in getting people's attention and stimulating their interest as a startup.

By the way, these comments do not just apply to potential customers. They also equally apply to potential suppliers and partners. Even when we are looking to purchase something, we often encounter difficulties getting attention. The near-term business we bring a supplier is minimal and the promise of future high volume is often viewed skeptically. If we are seeking something non-standard, as is sometimes the case, the resistance can be quite high.

Even after succeeding in gaining interest and attention there still remains the dynamic of slow decision-making and action from large companies. They simply have more complex organizations and a broader set of priorities than startups. They also lack the urgency that a startup's ongoing cash-burn creates in terms of attaining accomplishments within fixed time windows.

This problem is prevalent at the moment for Uniqarta. We have received strong interest over the past few months from multiple large potential customers. But the pace of follow-through has been slow. Open questions remain at each of these companies as to exactly if/how/where/when they should engage with us let alone putting such decision into action. This, in turn, creates uncertainty for us as we are not getting customer feedback fast enough to support our strategic decision-making and market validation efforts.

So, what can we do about this? In many respects, these issues are interrelated and are centered around my startup's credibility. If I can solve a big company's problem and communicate this credibly I'll get attention. With a big company "in the fold" I become more credible to suppliers. Yes, steps such as developing and harvesting my network or executing an effective PR campaign can help get me connected with the right people. But at the end of the day, it truly is a question as to how compelling my company's solution is and how credible I can be in communicating it.

We therefore need to continue charging ahead with our technology development—even if we don't yet know precisely where we're going to focus with it initially. The more fully developed the technology is, and the closer I am to being able to put a solution in a customers hand (even a prototype), the more credible our story is. This is true even if our solution is not a precise match with a given customer's needs.

That still leaves me with the dilemma of big companies' slow action—even after I've caught their attention. I don't know that this can ever be fully mitigated but I don't want to paint all big companies with the same brush. Some are faster than others and this needs to be a factor in my customer selection process. I also believe that the more compelling our solution is the higher a priority a big company will put on it and consequently move more quickly. And finally, it is essential that I reach higher up in target companies' hierarchy where I can more effectively influence prioritization and resource allocation.

None of this is easy. But finding ways to work with large companies and mitigate their slow pace is essential. Any notion, when I left my previous job, that I was abandoning big-company frustrations were false. It's just that I am now experiencing them from the outside rather than from the inside!

Narrowing the Market/Technology Gap

In my last post I wrote about how Uniqarta's technology development was ahead of our market development. By this I meant that we have demonstrated our technology with functional prototypes, established a vision of where we want to take our technology, and defined the required steps to get there. This could not be said, to the same extent, on the market development side relative to market focus, customer validation, and product definition.

In the past month that gap has narrowed. We have focused our market exploration on the logistics/inventory management segment I wrote about last time. We have engaged with three well-establish companies in this segment who see value in our technology and are working to define, validate, and select specific application areas in which to focus. A key question ahead of us is the extent to which the targeted application areas (and the required solutions) across these three companies align. We may end up having to focus on a subset of these companies if their needs and interests are dissimilar.

It remains to be seen where, exactly, within the logistics/inventory management area we decide to focus. This is a broad area encompassing diverse applications such as retail items, healthcare, factory automation, and others. These have similar technology needs but the specific product we provide and how we position it could likely vary.

Changing topics, I spent a lot of time in October on our fundraising efforts. I've received sufficient investor feedback to determine that I'll end up somewhere in the middle of my targeted $0.5 to $1.0 million range. This should be sufficient for Uniqarta to meet its 2015 goals although having a bit of a larger buffer would certainly be nice! I''ll be closing most of this round in November and December and then look to complete it with a few remaining investors in January.

A One Year Anniversary

This past month saw the one year anniversary of when my co-founder Val Marinov sent me an email seeking a business partner. I thought it appropriate, therefore, to provide an update and some reflection on how things are going.

Fundraising

I am about six weeks into my fundraising activities and have a better sense of how our story is being received. In general, investors feel comfortable with the strength of our team and our technology. They also are pleased that we have a paper manufacturing partner who shares our vision and is collaborating on technical and market development. A few investors have noted that our technical development is ahead of our market development pointing out our current lack of market focus and customer development. Some investors are comfortable with this at a seed round and focus more on our description of available markets, their problems, and our solution. Other investors are not and have noted that it is too early for them to invest but are interested to talk in the future once we have progressed further. Overall, I think I have generated enough interest to raise the $0.5-$1.0 million I am seeking.

Technology Development

Several months ago we changed our strategy in terms of what technology we are going to bring to market initially. The company was founded on the foundation of the laser-enabled chip assembly process that my co-founder had invented. This technology remains at the core of our vision but we have developed an alternate approach that will allow us to get to market more quickly and with less investment. We have therefore focused on this alternate approach and have established the laser-based process as our second generation solution. Over the past four months we have demonstrated proof-of-concept of the alternate approach, fabricated prototypes, and filed a patent application on it. We are now in the process of setting up a fully-outsourced manufacturing flow that will allow us to use this process to manufacture ultra-thin RFID inlays in moderate volume.

We also have made good progress on the paper embedding process in collaborating with our paper manufacturing partner. While we have previously shown that we've been able to embed inlays in paper one at a time by hand, we need to establish an automated, high volume capability to do so. Our paper partner has allocated engineering resources and time on their paper machine to run trials evaluating various embedding methods and materials.

Market Development

We have been exploring three market segment categories. The first, logistics/inventory management, is a large, existing RFID segment that is experiencing rapid growth driven by retailers' adoption in apparel and shoes. These product categories present tremendous inventory complexity for retailers with their various sizes, colors, and seasonal changes. RFID technology allows retailers to improve their inventory accuracy, reduce stock-outs, and consequently increase sales. Uniqarta's technology can drive adoption of RFID into a broader range of logistics/inventory management applications by embedding the RFID electronics directly within a product's packaging rather than requiring a tag to be added on.

The second segment we are exploring consists of security and safety applications. These are applications where there is a need to prevent fraud or improve product safety. Existing examples of RFID adoption in this space include passports and certain types of driver's licenses. Future examples include pharmaceuticals or even certain food products. Uniqarta's technology can make RFID available in such applications at a lower cost, more adoptable form factor, and higher degree of security than other RFID implementations.

The third segment consists of interactive print applications. These are applications in which printed materials such as business cards, advertisement posters, etc. are embedded with an NFC (Near Field Communication) chip that can be read by a smart phone. This adds an interactive digital dimension to printed items to enhance customer experiences, increase advertising effectiveness, etc. Uniqarta's technology is well-suited for this as the NFC capability can be embedded within printed materials with no impact on thickness, flexibility, or print quality.

Each of the above market segments have positive and negative attributes in terms of being Uniqarta's first market. We have been engaged with potential customers in all three segments to learn more about their needs, their existing solutions, and the value that our technology can deliver. This process will continue for the next 3-6 months as we establish a capability to deliver evaluation products to potential customers and narrow down our market focus.

Bottom Line

As I look back over the past year I have mixed thoughts. On one hand, I can't help but wonder where the year has gone and how at the start of the year I had expected to be much further along than we actually are! But on the other hand, I have this year's experience under my belt and now realize how naive my initial expectations were. In actuality, while there certainly were things we could have done better (and faster), we have accomplished a tremendous amount. We have demonstrated proofs-of-concept on both a new chip assembly technology and a paper-embedding technology, filed patent applications addressing each, secured a valuable paper manufacturing partner, established a small engineering team and facility, and stimulated interest from a number of potential customers and investors.

Our second year will be critical as we raise our seed round. We'll need to select and develop our initial market, start shipping product, and demonstrate market traction to justify further investment. I can't wait to see how this next year unfolds!

Being Lucky

Do you know certain people who seem to consistently have "good luck"? Or others than seem to be consistently plagued with misfortune? I think we all have people in our lives that fit one or both of these categories.

I've often reflected on the role that luck has had on my career. For example, my present position as Uniqarta CEO was the result of stumbling across a website where my present co-founder was seeking a partner. It also was the result of a previous (less attractive) startup position not working out. (See my Founder/CEO Conflict post of June 2013).

I could cite many other examples from my career (and personal life) of positive outcomes being the apparent result of good luck/happenstance/coincidence—pick your term. So what's going on here? Have I been somehow blessed with better fortune than others? Or, is there some other dynamic at play? I've never been able to settle this question to my satisfaction until coming across this article by Richard Wiseman, a professor of psychology who has studied and written about "the principles of good and bad luck".

The key paragraph from the article is as follows:

My research revealed that lucky people generate good fortune via four basic principles. They are skilled at creating and noticing chance opportunities, make lucky decisions by listening to their intuition, create self-fulfilling prophesies via positive expectations, and adopt a resilient attitude that transforms bad luck into good.

This makes a lot of sense to me as I believe that over the course of one's life we generally have the same level of good and bad "luck". The difference is what each of us does with the presented opportunities and how each of us deals with positive or negative outcomes.

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Fundraising update: It took most of the past three weeks to identify interested investors and schedule meetings with them. The first of these meetings will take place this coming Monday and extend through mid-September. At that point I should have a good set of feedback to help me assess our story, make adjustments, and continue on. I am still sorting through various options in terms of the type of investor to seek, the amount of funds to raise, and the timing of this next round. I'm hopeful that after these initial discussions I'll be able to focus in on one particular type of investor.

Time to Raise Money

Things have been moving along pretty well. We've opened a Fargo office where our development team is based. We've got a paper partner with whom we are developing IC/paper integration processes. We've identified our initial market and have a lead customer in place. And we've established a timeline that gets our first product on the market by mid-2015. All that's missing is the money to make this happen!

I've spent the good part of the last few months preparing to talk to investors. This has involved the creation of a two-page executive summary and a 15-20 slide presentation. Each of these documents went through about ten iterations with my team and advisers before I had something that I felt was ready to share.

I'm not yet certain what types of investors I am seeking. I've encountered two schools of thought. One is that I should raise as much money as I can as early as I can and the other is that I should only raise as much as I need for the particular stage my company is at. The first approach would imply I talk to venture capitalists while the second would imply wealthy individuals and angel investors.

To start, I've selected just a few investors of each type to see how my story is received and learn more what these different funding strategies might look like. By September things should hopefully be more clear and I can then focus in on a particular strategy and investor type.

Entrepreneurs Who Left Big Corporate Jobs

Here's an appropriate link for this weekend and for this blog: Declaration of Independence: 8 Entrepreneurs Who Left Big Corporate Jobs for Startups

A few quotes that resonated with me:

“Don’t just base the decision on financial [impact]. As I have discovered, the flexibility, learning opportunities, and value of building your own [business] can have a far bigger impact on your life.” — Jasper Vallance (ex-Google)

“The hard-earned comforts of a good job can taste like sweet fruit found at the summit of a long career climb. Then one day you look around and realize you’ve grown fat and you’re stuck on a plateau, not a peak. You miss feeling hungry.” — Dan Yoo (ex-LinkedIn)

“And now I feel like you’re on your own in this big, bad world and you have a lot less appeal because [you] don’t have the power of Google. And yet, I’ve never felt more accomplished because the mistakes you make are yours and the victories you have are yours, too.” — Anastasia Leng (ex-Google)

Happy Independence Day! Ronn

The Cisco Internet of Things Grand Challenge

I have just entered Uniqarta in Cisco's competition focused on the Internet of things. In Cisco’s words: “This global open competition aims to recognize, promote and reward innovators, entrepreneurs and early-stage startup businesses that can help us transform the industry by connecting the unconnected.”

The competition involves three rounds with the last taking place in September/October involving six finalists. Making the finals would bring Uniqarta some good publicity, access to Cisco expertise, and a crack at the $250K prize money.

You can view our entry here. It also provides a preview of how I intend to position the company to investors. If you are extra motivated go ahead and vote for our entry by clicking the thumbs-up "like it" button at the top right. (You'll need to register first.) Entries receiving large numbers of votes will get more attention and the entry with the most votes gets an automatic entry into the semi-finals. Spread the word!

Getting Real

A lot has happened in the month since I last updated this blog. Some has been good and some has not. Some has been expected and some has not. But that is normal for a startup, actually normal for most any business now that I think about it. But what I'd like to focus on here is the fact that this is starting to feel a like a real company—yes, an extremely small company, but a company nonetheless. This is no longer just a couple guys working out of their basements.

We now have two full-time employees and are opening a Fargo office June 1st. That means we now have an ongoing monthly burn in terms of payroll, rent, etc. and a point down the road when we'll run out of cash. That ratchets up the pressure to raise more money which in turn places hard deadlines on achieving certain milestones. I knew this would be the case going in but to actually now be in this situation feels quite different.

Not that I'm overly stressed about this—at least not yet. We have a comfortable cushion and our milestones are reasonable. What I don't yet know is how investors will react to our story. I think we have a compelling one but until I actually start engaging with investors, I don't know precisely how they'll respond.

There is also the matter of determining what kind of investor to seek. We've had early, informal interest from a range of investor types—VCs, wealthy individuals, and strategics. A lot of my time in the second half of this year will be spent talking to potential investors, figuring out what type we want, and (hopefully) raising our next round.

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Ronn Kliger