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Partnering, Prototyping and Skipping Kickstarter: A Q&A With August Smart Lock
You may not know Yves Behar, but I guarantee you've used something he designed in the last 12 months. His firm, Fuse Project, has done electronics for GE, recycling containers for Coke, medicine bottles for Tylenol and speakers for Jawbone.
Instead, August's system uses Bluetooth to sync with your phone, and a mobile app lets the lock's owner draw up a list of people whose phones count as keys. Those virtual keys can be good for a day, a month, a lifetime, or just the length of your birthday party.
The lock is a small piece of a larger trend in automating the home, and part of a push by technologists to create an "Internet of things." That is, dumb objects like doors can be made to sense and communicate, and this simple extension of technology actually creates an information system out of the formerly inert physical world.
While this may seem like a visit to Tomorrowland, it's really just a tool with a basic purpose: greater control. An August Smart Lock, for example, can tell you who entered your house while you were away, and how long they stayed. When that person no longer needs a "key," they're simply removed from the lock's list. No tracking people down, no copied keys floating around.
And that, in fact, was what inspired Johnson to develop the lock. The serial entrepreneur had lent his keys to a housekeeper, only to discover that they were passed to the cleaner’s family. Keys may have a life independent from us, but smart locks, at least, will listen when they’re spoken to.
While the August team has been working on the lock for about two years, it was Jason and Yves's moment in the spotlight in May, when they launched at D, that proved a turning point.
AllThingsD
"When we learned we were launching at AllThingsD, we realized we had to become a much more mature company much faster," said Joe Aranda, a founding team member focused on August's operations, who agreed to do a Q&A with us. "We found out about three weeks beforehand that we'd be doing an onstage demo. That was completely nerve-wracking, because you're just a couple feet away from some of the most influential people in tech: Aaron Levie, Elon Musk..."
When you launch at D, he said, you're embargoed until the day you present, meaning you can't release any product news to other media or the public. "We were completely stealth before that. No one had heard of the brand."
After a media blitz, the company received more than 30,000 pre-orders for a product set to ship in the first quarter of 2014. August processes those orders with Airbrite.
Prototyping
"For an early-stage hardware company, it's all about defining what you're not going to do," Aranda said. "You're working on a short schedule with limited resources. So we reached out to Airbrite because we knew it had the feature set we wanted. We just thought 'Let's not waste time, because we've got so many other things to work on.' "
"The biggest difference between early-stage hardware and software companies is that with hardware, you're looking at a significantly longer turnaround time for prototyping," he said, explaining the tight time constraints. "A lot more thought and planning need to go into sourcing materials and making sure everything is tight. It takes months, whereas with software, putting out a new version takes days."
Not every prototype can be manufactured smoothly, he said. So hardware startups need to design for an efficient manufacturing process. Some metals might be easy to source for prototypes, for example, but become quickly unsustainable when producing a minimum order of 30,000 locks.
Skipping Kickstarter
A long list of angel investors -- Jay Adelson, Matt Mullenweg, Rick Marini, Zack Bogue, Matt Ocko, Aileen Lee, Mike Marquez, David Spector, Jeff Clavier, Tony Conrad and Nicholas Negroponte -- contributed to August's $2 million seed round. Those funds allowed the lockmaker to bypass crowd-funding altogether. While Aranda is a Kickstarter fan, he says managing expectations during and after crowd-funding can be difficult.
"The customer experience is a big gamble. Ship dates can get pushed significantly. And when you're the fund-raiser, Kickstarter supporters are with you every dirty step of the way," Aranda said. "There are companies that need Kickstarter to show market validation. We weren't one of them. Kickstarter is a great resource, but it's not for every company."
Partners
Asked if he had advice for hardware startups poised to take the same path, Aranda highlighted the importance of swallowing your pride and asking for help from experienced firms.
"Align yourself with partners who've done it before," he said. "Our fulfillment house, Rush Order, has been great. The mechanical engineering firm we work with, Surface Ink, has pointed us toward good manufacturers, and been there for product advice."
Click here to learn about Airbrite, an order-processing API for developers. We also make Celery, an easy way for startups to take pre-orders.
