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Episode 6 – John Stanfield from Local Motion

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Welcome to the sixth episode of Into The Forge. This podcast, produced by Lemnos Labs, interviews Makers who are leading the hardware renaissance. In each episode we go behind-the-scenes with a hardware entrepreneur to learn how they came to be a hardware founder, their motivations, goals, tools of the trade, words of wisdom for other aspiring hardware founders, and of course, what they are building.

Episode 6′s guest is John Stanfield, founder and CEO of Local Motion, who is developing car-sharing technologies for fleets.

If you have questions or comments about this podcast, send email to podcast@lemnoslabs.com.

Eric Klein – Twitter : @lemnoslabs, email : eric@lemnoslabs.com
John Stanfield – Twitter : @getlocalmotion, email : john@getlocalmotion.com

To subscribe to this podcast in iTunes, click here

Guest Post : 6 months with Lemnos

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This is a guest post from Shireen Yates, the CEO of 6SensorLabs

I’m trying to hear my co-founder, Scott, walk me through our detailed product development roadmap but it is hard not be distracted: in the background someone is flying a mini drone in the middle of the Lemnos warehouse, across the room a team is assembling dozens of units for field testing, a neighboring team fills a whiteboard with complex equations. Welcome to Lemnos Labs – the home of 6SensorLabs for the last 6 months, which have flown by faster than any drone I’ve seen.

What happens at Lemnos? You get inspired. You get real. You get it done.

You get inspired. We walked through the doors of Lemnos with an idea to enable people to trust their food by developing a portable food sensor, starting with the rapid detection of gluten to support the estimated 30 million people in the US with gluten intolerance. We had a proof of concept that worked – you could take a piece of food and place it in a disposable capsule to see if gluten was present. We were inspired to do something big but Lemnos inspired us to go huge. And we see the path to huge by visiting Lemnos companies like Airware, Nanosatisfi, Momentum and Sproutling who have graduated from the nurturing confines of Lemnos to founding new offices, growing teams and building products that will change our world.

I am inspired by the stream of experience that pours through Lemnos in the form of mentors, who have spent hours with me discussing topics ranging from marketing strategy to manufacturing. The person providing my team advice on marketing strategy ran one of the most prolific brands in American kitchens: Pillsbury. That’s one small example of dozens of similar encounters. We are soaking it up like a gluten-free sponge cake.

You get real. When you start something that doesn’t exist life’s normal highs and lows are amplified. The delta between the extreme high and extreme low can feel like a terrifying free fall towards rock bottom or a rocket ship launch towards glory, depending on the swing of the week/day/hour. The importance of picking the right co-founder to survive those swings is key – I’m so thankful for Scott. I also have the Lemnos family. I have regular meet-ups with an amazing and experienced CEO of another portfolio company, and it’s an opportunity to be frank and ask for advice from someone who has gone through this before and who is completely kicking ass.

Once a month the CEOs of Lemnos companies gather to share what’s working, what’s challenging and how we can help each other. Insights from these meetings have significantly changed how I approach 6Sensor’s culture, hiring strategy and fundraising strategy. These gatherings also illuminate the simple fact that everyone goes through a free fall from time to time – that’s just real.

You get it done. A day at Lemnos feels like a week. In the last 6 months at Lemnos, we have done lots of planning and developing: gathered primary consumer feedback on preliminary product designs, published a robust product requirements document shared with our development partners, crafted the beginning of a brand identity, developed sensing technology that is 10X faster than existing methods for gluten detection, raised seed funding and doubled our team. With the infrastructure in place, we are pushing to build the next iteration of our product by June of this year. When the team needs a little boost of inspiration we simply absorb the current scene of the warehouse. When we need an extra boost of inspiration, we turn to Revolve Robotics and Bia, watching the teams ship hundreds of product a week to customers. We get inspired, we get real and we get it done.

Shireen Yates
CEO, 6SensorLabs

Into the Forge – Episode 5 – Interview with Cheryl Kellond from Bia

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Welcome to the fifth episode of Into The Forge. This podcast, produced by Lemnos Labs, interviews Makers who are leading the hardware renaissance. In each episode we go behind-the-scenes with a hardware entrepreneur to learn how they came to be a hardware founder, their motivations, goals, tools of the trade, words of wisdom for other aspiring hardware founders, and of course, what they are building.

Episode 5′s guest is Cheryl Kellond, founder and CEO of Bia, who is creating an iconic sports brand for women. Their first product is the Bia Sport watch.

If you have questions or comments about this podcast, send email to podcast@lemnoslabs.com.

Eric Klein – Twitter : @lemnoslabs, email : eric@lemnoslabs.com
Cheryl Kellond – Twitter : @XXfounder, email : c2k@bia-sport.com

To subscribe to this podcast in iTunes, click here

Lemnos Labs Announces New $20 Million Fund!

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Today we’re thrilled to announce our new $20 million fund. Over two years ago when we started Lemnos, we encountered many people who were skeptical that hardware startups were viable in the digital age of venture capital. In 2014 there have been over $5 billion in acquisitions for hardware companies so far [by Google and Facebook no less] and there are rumors that both Jawbone and GoPro will IPO later this year. I think we can now confidently say that they were wrong.

It is really our founders that deserve thanks. It was because of their big ideas that we were able to raise our new fund, largely by the success they have achieved to date. It’s still early for metrics, but our first portfolio has raised over $35M as a group (including three A rounds) and we expect this number to double by the summer.

The way that we invest is still the same ($100k for 10% is typical), but we’re now able to tackle more ambitious hardware ideas with a larger initial check ($250k) and reserve capital for later rounds.  What we’ve found is that some companies, especially high tech ones, may need more money to hit their first milestone.

Our focus will continue to be on quality over quantity. We make sure that we have enough partner bandwidth (and enough space in the warehouse) to ensure success at the earliest stage of hardware. To this end we will invest in 8-12 companies a year and spend 6-15 months with them.  Our definition of hardware remains broad — anything that involves moving atoms or electrons — but we’re specifically focused on aerospace, robotics, transportation, agriculture and IoT (both consumer and B2B).

Although it’s exciting to see the huge uptick of hardware startups, it’s still not for the faint of heart.  It still takes an experienced multi-disciplinary team with knowledge of mechanical engineering, electrical engineering, firmware, software, manufacturing, logistics, marketing, fundraising…and that’s just the tip of the iceberg.  But we’re here to make it a little less hard.

We’re hiring!

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If you want to learn and contribute to the hardware startup renaissance, have we got a role for you! Inspired by one of our partner’s first job in major league baseball, we describe this role as “the utility player”; the team member who plays a different position every day and whose contributions are critical to our success. This role has tasks varying from the mundane to ones requiring huge creative thought.

We’re looking for someone who has a diligent work ethic, excellent critical thinking skills, and the burning desire to help startups create world-changing hardware. Lemnos Labs is the early stage hardware fund bringing Silicon back to the Valley, and you’ll be at ground zero of the renaissance.

Responsibilities

· Marketing and Outreach

Our warehouse is a hub in the San Francisco hardware startup scene. Whether it’s a meet-up group needing space, a Lemnos conference deep-diving into technology, or a co-sponsored event with our strategic and venture partners, you’ll be integral in organizing and executing these soirees. You’ll get to know everyone working on hardware startups, giving you insights and connections few others have.

We maintain an active presence on the inter-webs, and we’re looking for someone who enjoys connecting with our followers via email, Twitter, Facebook, AngelList, podcasts, etc. You’ll be part of our digital voice.

· Office Manager

Making sure our office, the Forge, is in top form for our startups, visitors, and partners is a critical part of this role. The startups themselves help keep the Forge in good condition, but you are ultimately responsible for the quality of our working environment.

· Partner Assistance

The three Lemnos Labs partners are fairly self-sufficient, but we could definitely use help with scheduling meetings, filtering common digital inboxes, ordering items, and greeting our guests. You’ll also assist with our mentor program.

· Special Projects

While our utility player has plenty of important tasks, we know this person is motivated and ready to learn. As you ramp up, there will be opportunities to execute research under partner tutelage, be the representative for Lemnos at industry events, and other top secret things.

Qualifications

Our ideal candidate is well-educated, motivated to learn, and has a infectious positive attitude. We’re ideally looking for a college graduate with a degree in marketing or engineering who wants to learn the inner workings of an early stage hardware fund. You have excellent communication skills, both written and verbal. A demonstrated ability to organize great events is a big plus.

This full time role is open today and based at our office in San Francisco’s Dogpatch neighborhood. Lemnos Labs has a market competitive compensation package including benefits. If you are interested in applying, please send your resume and cover letter to jobs@lemnoslabs.com.

Why hardware is hard

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One of the most over-used phrases I hear is “hardware is hard”. Never a truer statement said, but I believe many who say it don’t really understand why. To most it is seemingly obvious because hardware involves physical parts? Sure, but I think a slightly more concrete but compact reason lies in first ten hires at a software startup versus a hardware startup.

The first ten employees of a software startup are more than likely to be clones of the founders. This statement isn’t judgmental, it’s just likely that they too are software engineers. This startups’s solution is a complex software stack including user facing experiences on mobile and the web, a complete back-end infrastructure including business logic and analytics, and possibly desktop user experiences. No small feat, but one with largely a singular technical discipline at its core. Hiring, while challenging, is a matter of finding more folks with the skillset(s) of the founding team.

The hardware startup almost always has to accomplish everything I just described PLUS hardware. The first ten hires have to include experienced engineers across mechanical engineering (ME), electrical engineering (EE), firmware, and production/logistics. These hardware hires must have expertise and experience, but the path to experience in hardware comes from actually doing it at a commercial scale. The discipline of building hardware at scale is not something you can easily learn at school, even at university. While the path (e.g. tools, knowledge base, peer community) to become a good software developer is readily available to all in this Internet age, this is not true yet for hardware development. The hardware startup not only has to recruit a more diverse set of initial employees, but also recruit from a much smaller available pool of experienced hardware engineers.

The first ten employees of a hardware startup staffed for success are a highly diverse group whose average industry experience and expertise is quite high. These hardware, software, and production engineers must be quite proficient in their functional roles, but also have to mesh together to create and manufacture a complex system integrating hardware, user facing experiences, software, and a complete back-end infrastructure. Role diversity, experience requirements, and the need to highly integrate this new team is (part of) what makes “hardware hard.”

Would I use the excuse that “hardware is hard” to shy away from building a solution that incorporates hardware? Hell no. But I would strive to better understand the unique challenges facing hardware startups and compensate early for them. Which just happens to be an integral part of the Lemnos Labs mission statement!

-eric

Local manufacturing – why it makes sense

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I recently attended a Make summit where one of the most discussed topics was the challenge of going from zero to less than five thousand units of production. Many ODMs (Original Design Manufacturers) prefer startups who can commit to larger production volumes (thousands of units minimum, preferably more in both quantity and frequency), but what do you do as a startup that is still building demand or who has a product that will be a consistent but lower volume seller? There are ODMs, partners, and options for this all-to-common scenario, but the summit attendees all agreed that these are under-documented and/or under-developed. I’ve offered to unite partners, thought leaders, and entrepreneurs in the “Zero to 5000″ challenge during 2014 to help document and improve solutions for hardware startups as they ramp up production of their products. Feel free to reach out to me if you’d like more information on this effort.

and congrats to the Revolve team for shipping Kubi. It’s been a game changer for my frequent videoconferencing!

-eric

This is a guest post from Ilya Polyakov, co-founder of Revolve Robotics, makers of Kubi.

Having come out of the bottomless, dark cave that is Design For Manufacturing (DFM) we are finally going through the exciting process of production ramp on the Kubi. The part that makes this even more exciting for us and should for hardware in general is that we are doing this right here in our office at Lemnos Labs. That’s right, not Shenzhen, not Guadalajara but here in the South of Market neighborhood of San Francisco.  This decision was not made lightly and time will tell how this ultimately works. Revolve Robotics is a lean mean innovation machine, with an emphasis on lean. Typically, mass production of hardware is about as un-lean as it gets! There are two main reasons we decided to stay here and handle our production in-house.

assemblyThe first reason is scale. When we were putting together the Kubi development plan, we certainly talked to several Chinese contract manufacturers. Our product is well suited for the exact type of high volume manufacturing typically done in China.  One issue kept hitting us over and over – a big line item on any quote was the Minimum Order Quantity (MOQ). This is the magic word every manufacturer wants to hear as it guarantees revenue and drives their entire business model. Large MOQs along with a prior product reputation can even warrant the manufacturer paying for the tooling and other development expenses up front. Depending on the product, MOQ can be as low as 1K or over 10K units. A typical MOQ we came across was 5K units, with us paying for tooling out of pocket. This leads to a pretty dicey go-to-market process.

Classically, a hardware company with a consumer product puts down enough cash to fund development through that first production run. They show prototypes or better yet first article units to retailers and distributors who hopefully order everything that will be produced. The retailer will usually want to hit a hard delivery date like Back to School or Christmas (meeting hard deadlines with an overseas production ramp is a whole other set of pleasures I will get into another time). Because its a new product, the retailer typically takes the stock on consignment – ie you own the inventory on their shelf until it sells, if it doesn’t, you get your product back, sometimes with penalty fees that amount to having rented that shelf space – its all on you!  So, essentially you roll the dice, hoping the thousands of units you already paid to develop and build get to the store shelves on time and sell, only then do you see any returns on your investment. Oh, and you cannot rely on the store to market your product, therefore you also have to invest in marketing to move those units off the shelf . And that’s assuming you know how to market your product. One model that breaks this cycle to some extent, and not always, is of course crowdfunding and pre-sales. With crowdfunding you have to set your goals to be reasonable for the campaign (a science of its own) but also so that the number of units pre-sold reaches the China MOQ threshold. Most of the time the reasonable goal for the campaign is lower than the MOQ, that goal has to be multiplied several times to reach that magic number. Many companies that reach their goal end up having to pre-sell additional units or take a risk and buy them outright with the hope they will be able to sell them later.

partsOur presales amounted to several hundred units, not the thousands we need to turn on a contract manufacturer. We sought a path to go to market in a controllable, civilized matter.  We changed our marketing strategy to pursue enterprise applications where customers recognize the value of the product and are willing to pay a premium. The new higher price point allowed us to produce almost all our components in the US and handle assembly in house. We are able to commit to much smaller runs and can essentially build units on demand. We are able to hone our marketing message by talking to our customers and respond as opposed to dealing with a flood of Amazon reviews from an un educated customer. We are also able talk to future retailers with a working product in hand and with customer testimonials.

We invested in soft tooling at a US based injection molder that can produce tens of thousands of parts. We have the production and quality control process developed and most importantly owned by us. The supply chain is controlled by us. Currently we are producing about 25 units per day and as soon as that needs to increase past 1000 units per month we can outsource assembly to any number of local assembly houses – remember, we own the supply chain and the process. We also own the design and can bring it overseas when ready, still producing while that ramp happens.

parts2

The second big reason we went with local production is speed. In the lean startup model, the emphasis is on releasing early, putting in the minimal amount of effort to test a minimum viable product concept and iterate through updates. This works well with software where once its designed one simply needs to upload it to the app store. Hardware needs to be manufactured and going from design to production can be a long and painful process. An optimistic production cycle in China is around 6 months, this is once the product design is fully locked in and nothing extraordinary happens (I once had a product get delayed for weeks because of the tsunami in Japan!). That is just too long for us. Our molder in the mid west was able to turn around tooling and get us first article parts in 3 weeks. We had our first unit assembled and working a week later. All in all, it took us 3 months from tooling kick off to shipping first units to customers. One of the simplest pleasures of not working across 12 time zones is the turnaround in decisions. You cannot have the whole team on the ground in China so all decisions have to go over email or phone calls where one of the parties is up at 2am.  It usually takes 24hrs to resolve an issue whereas I could be on the phone with our molder during normal waking hours and solve a problem in 5 minutes.  Quality control is simpler since all units get tested by us. Iterating process and hardware changes was instant. For example, having the firmware team a few tables over from the assembly area made debugging our QC firmware a relative breeze.  Our production jigs went though 3 iterations in one week thanks to the laser cutter at TechShop just a few blocks away.

Episode 4 – Interview with Art from Pantry Labs

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To subscribe to this podcast in iTunes, click here

Welcome to the fourth episode of Into The Forge. This podcast, produced by Lemnos Labs, interviews Makers who are leading the hardware renaissance. In each episode we go behind-the-scenes with a hardware entrepreneur to learn how they came to be a hardware founder, their motivations, goals, tools of the trade, words of wisdom for other aspiring hardware founders, and of course, what they are building.

Episode 4′s guest is is Art Tkachenko, founder and CEO of Pantry Labs, who provide a turnkey solution for food producers to start selling their food unattended in places like hospitals, airports, gyms and offices.

Contact Information

If you have questions or comments about this podcast, send email to podcast@lemnoslabs.com.

Eric Klein – Twitter : @lemnoslabs, email : eric@lemnoslabs.com
Art Tkachenko – Twitter : @artemtk, email : art@pantrylabs.com

Into the Forge, Episode 3

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To subscribe to this podcast in iTunes, click here

Welcome to the third episode of Into The Forge. This podcast, produced by Lemnos Labs, interviews Makers who are leading the hardware renaissance. In each episode we go behind-the-scenes with a hardware entrepreneur to learn how they came to be a hardware founder, their motivations, goals, tools of the trade, words of wisdom for other aspiring hardware founders, and of course, what they are building.

Episode 03′s guest is Peter Platzer, founder and CEO of Nanosatisfi. NanoSatisfi offers convenient, affordable, on-demand access to satellites.

Contact Information

If you have questions or comments about this podcast, send email to podcast@lemnoslabs.com.

Eric Klein – Twitter : @lemnoslabs, email : eric@lemnoslabs.com
Peter Platzer – Twitter : @ NanoSatisfi, email : peter@nanosatisfi.com

Why We Don’t Do Classes

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When we started Lemnos we created a program with a five month program for hardware startups to enter and exit the Forge. This was loosely based on my experience with the Small Business Innovation Research (SBIR) Program when I was in the Air Force. With the SBIR program companies were awarded a six month, $100,000 grant.

Three months into our first class we realized that this wasn’t working. What we learned was that different types of hardware companies take different amounts of time. At that time our portfolio included everything from a new type of electric guitar to a robot that could make hamburgers. We knew there was probably a minimum amount of time any hardware startup would take to make significant progress towards shipping their product, but we learned that the actual time varied widely and that it was critical for the company to have the time to properly mature.

Now, we invest year round and we house companies in our warehouse for as long as it takes them to reach their next funding milestone. We’ve found this range to be anywhere from 5 to 14 months. We’ll get into these funding milestones in another post, but so far this model is working.

Nanosatisfi is a great example of how different hardware takes different amounts of time. While they were with us they were building space grade flight hardware. As part of this they needed to set up a full test rig that could simulate the vacuum of space as well as the temperature cycles the satellite would go through.

We helped them source a thermal vacuum chamber for 50x less than the list price and then we worked with them to build and execute a test plan. All of that happened after they finished the design and build of the satellite. This took longer than five months, as it should. They then raised a seed round and quickly grew, when they hit 9 people they found their own warehouse. Clearly kicking them out before they hit the technical milestone they needed to raise would have been a mistake.

Another trend we see is that Lemnos can have a huge impact on a company right after they have raised their seed round. Startups raise seed rounds on ambitious plans and schedules and their investors expect them to immediately begin to execute. Now that there are specific milestones and budgets we find that our design, schedule, and business reviews can really help thread the needle in the post-seed phase. Also now that the companies are in full hiring mode we can help to screen candidates.

Sproutling is our baby tech company. When we invested in them last December it was just Chris and Matt and a duct tape prototype. Over the next 8 months we worked with them to do everything from helping to pick an industrial design firm to helping build the deck for their seed raise. In August they closed a $2.6 million round from First Round Capital, Forerunner, First Mark, and Accelerator Ventures. Since then they’ve been on a hiring tear (check out their jobs page here). We have been very involved by helping to vet and pick a contract manufacturer and build out their project plan. Once again it would have been a mistake to simply end the relationship the day they raised a seed round.

In the end we find that hardware companies require rigor and engineering process to be successful. Across the portfolio we see again and again that good hardware can’t be rushed. This isn’t something you can hack together in a few weeks.

Our model is to invest in a small number of companies every year (10-12) that we think we can add significant value to through our process. By not having classes it allows us to ensure that the companies we invest in have the time they need to hit the milestones to be successful.

–jeremy

Into The Forge, Episode 02

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To subscribe to this podcast in iTunes, click here

Welcome to the second episode of Into The Forge. This podcast, produced by Lemnos Labs, interviews Makers who are leading the hardware renaissance. In each episode we go behind-the-scenes with a hardware entrepreneur to learn how they came to be a hardware founder, their motivations, goals, tools of the trade, words of wisdom for other aspiring hardware founders, and of course, what they are building.

Episode 02′s guest is Ilya Polyakov, the co-founder of Revolve Robotics.

Revolve Robotics is creating a tablet-based robotic platform that enhances video calling with remote controlled movement thus enabling consumer grade telepresence.  The initial product called Kubi is a desktop robotic stand for the iPad. Kubi allows a remote user in a different location during a video call to have complete control of pan and tilt of the iPad and therefore its on-board camera. With Kubi, a remote user can follow the action and movement of people on the other end of the call, look around a large meeting or group, and even convey physical social cues of a present individual such as showing others where and whom they are looking at. Revolve Robotics plans to leverage advances in mobile computing platforms to enable greater functionality in telepresence and personal robotics.

Contact Information

If you have comments about this podcast, please send them to info@lemnoslabs.com

For regular updates from Lemnos Labs, follow us on Twitter @lemnoslabs

To contact Revolve Robotics, their Twitter is @RevolveRobotics and Ilya’s email is ilya@revolverobotics.com

Lemnos Labs Jobs listing is live!

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In a previous post, we talked about people, not financial capital, being the most important asset a hardware startup has. A startup team is the most important form of capital; human capital. This makes recruiting one of the, if not the, most important task a young company works on every day.

Recruiting is hard, especially in today’s competitive startup environment. As our Lemnos Labs startups scale from founders to integrated teams spanning engineering, production, operations, marketing, and business development, they are constantly looking for the best talent available. To help our companies find the best talent, we’ve partnered with VentureLoop to bring together all of our startups’s job openings.

If you are looking for an opportunity with a early stage, well-funded startup that is going to change the world and you love working with hardware, click on the Jobs tab on our main navigation bar. Hopefully we’ll see you in the near future here in the Forge or at one of our recent graduate startups!

-eric

Into the Forge, Episode 01

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To subscribe to this podcast in iTunes, click here

Welcome to the first episode of “Into The Forge”. This podcast, produced by Lemnos Labs, interviews Makers who are leading the hardware renaissance. In each episode we go behind-the-scenes with a hardware entrepreneur to learn how they came to be a hardware founder, their motivations, goals, tools of the trade, words of wisdom for other aspiring hardware founders, and of course, what they are building.

Episode 01 is an interview with Chris Bruce, the CEO of Sproutling.

Sproutling makes parenting a little less scary and a lot more fun. We grow parent IQ through tools that seamlessly fit their lives, and provide real-time, trustworthy insights about their children. By taking the worry out of parenting, we help parents focus on building happy families, and we do it in style, so they don’t have to look like a kid just to grow one.

For more information, follow our Twitter feeds:

Lemnos Labs – @lemnoslabs

Sproutling – @sproutling

Chris Bruce – @chrisabruce

Eric Klein – @sircoolio

Why We No Longer Host Demo Days

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We’re often asked why we don’t host traditional demo days. There are many reasons, partly driven by the fact our accelerator model doesn’t involve classes, but we feel strongly about getting our companies funded by the highest caliber investors rather than creating artificial demand to promote quick decision-making and the highest valuation. That’s not to say we don’t like hosting events that bring together investors, founders and the greater hardware community (we try to put on a half-day conference twice a year, in the past we’ve focused on themes like Hardware 2.0 or the Internet of Things), but we prefer to expose our startups to the investor community on a targeted & semi-regular basis.

Since we invest on an ongoing basis (roughly 2 or 3 startups per quarter), it’s hard to pick an arbitrary date when all companies are ready to pitch. Our program is totally customized and will vary in length from 6-12 months (an industrial robot with 400 parts might take longer to prototype than a consumer hardware product). As a result, our startups begin their fundraise when they are ready — usually when they’ve developed functional prototype, have plans for production and can demonstrate some customer traction. By the time they’ve reached their pre-funding milestones, they’ve probably interacted with 15 or 20 investors through office hours who have seen them tweak and re-tweak business models, overcome technical challenges and hire a key employee or two.

We know that the best investment decisions are made when you are able to see progress over time rather than a random snapshot in time. (See: Invest in Lines, not Dots) Personally, I think back to my baseball days and the amateur draft. My least favorite scouting events were these high school summer showcases where you’d watch the top soon-to-be seniors in the country compete over 2 or 3 days. Everybody would get excited about the pitching prospect who touched 96 mph in his single inning to pitch and everybody would forget about the poor hitters that he struck out. Fortunately draft day was 10 months away and we still had ample opportunity to figure out whether this performance was more reflective of the best (or worst) day of a player’s life. A professional starting pitcher is going to face 800+ batters over the course of a season, while an every-day position player might accumulate 600 at-bats. Why would we ask our scouts to choose players after a single performance?

Helen

Reflections on Sproutling : The seeds of a great company

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Every story at Lemnos starts with an application. When screening applications, I focus on three things: people, product, and process. I hope to see a team with flashes if not veins of deep experience and expertise, a product I intuitively and rationally feel will disrupt a segment and grow into a product line, and seeds of a process to get from the duct-tape prototype to production.

It seems like only yesterday that we screened Sproutling’s application. My first reaction was “amazing market opportunity, but that product will be hard to build well.” Their founding team fit one of the archetypes we appreciate most; serial entrepreneurs who love and understand the basics of hardware but need help navigating the myriad of challenges separating a prototype from a mass produced product. Chris and Matt have had great success in the software world, knew enough hardware to build a solid prototype, but also knew they were going to need help scaling from prototype through production.

the early evolution of Sproutling's hardware

Evolution of Sproutling’s sensor.

When Sproutling described the product they wanted to build, I bonded to it both emotionally and rationally. That is so important in an application. As a parent, I had instant flashbacks to my first child and the desire to spend any amount of time and money to make sure everything was ok with this new bundle of joy whose cries and actions I did not understand. New parents crave information, and more importantly, insights about how their kids are doing. It starts with their first cry and really never ends ;-) If Sproutling could wrap those insights into an intuitive and beautiful solution, I knew parents would buy their product. The Sproutling team rationally described the size of this community of parents and had done solid research beyond simply describing the total addressable market (TAM). I knew they would build their product with their hearts and their minds.

In terms of process, it’s always great to deal with a serial entrepreneur. Hardware and software process are different, but common engineering practices backplane both efforts. I knew Chris and Matt lived through multiple ship cycles, and our diligence revealed founders who not only knew the “what and when” of development, but the “why and how.” Chris’s style and personality was energizing according to his references, which is a refreshing statement in a Valley filled with egos, intelligence, and “winner take all” engineering meetings. What sealed the deal for me was Chris’s willingness to learn. He craved the opportunity to learn from others how to ship a best-in-class hardware based solution. Sproutling was by all metrics, people, product, and process, a perfect fit for Lemnos.

Chris and Matt have exceeded our wildest expectations, both in the product they are building and their contributions to the Lemnos culture. They truly reflect an archetype of the founders we hope apply to Lemnos. Congratulations to the Sproutling team on their significant seed round investment. We can’t wait to be a part of your expanding story. Onward to shipping your first product!

-eric

Congrats Local Motion

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We first met John and Clement in the Fall of 2011, just as we were starting Lemnos. Helen and I had spent the late summer meeting with anyone we could find that was working on a hardware company. The introduction came through a venture capitalist we knew and we were off to the races.

In some sense it couldn’t have been more of a stereotypical start up. Two Stanford grads working out of a house in East Palo Alto. From the beginning we were impressed by the shared vision that the founders had. They wanted to change transportation from the ground up. Part of the planned was the embedded boxes that made the vehicle shareable, but when we invested they were also building a new light electric vehicle.

Part of what drew us to them was their domain expertise. While at Stanford [and after] they had looked extensively at how transportation works and what the best options were. The reason they were building a new electric vehicle is that their analysis had shown nothing on the market met 100% of the needs they had.

The company was named Weng Motors, which stood for Where Everyone Needs to Go [WENG]. Even though in the first meeting they said it was just temporary it took another year and a half to find a new one. Lesson learned, what ever name you pick is going to be with you for a while.

We chose to invest even before we had found warehouse space. 60 days later they were the first to move in. Clement had reached back into his network in France and recruited two more French programmers to join the team. As a result French because the unofficial second language of the Forge for their duration [currently it is Russian].

Over the next 18 months they design and built a car from the ground up, along with the sharing system to go with it. They debuted at the Launch conference and even had the president of Israel take a ride.

It was round this time that they [like many startups] hit a cross road. They had secured initial customers and had a working system but were running into issues with the vehicle itself. Between scale manufacturing and the capital required to do it the prospects were not great. Most venture firms didn’t want to fund the amount required to tool up to build a fleet of vehicles and the near term volume was too low for most manufacturers to be interested.

On the flip side the customer traction with their embedded / sharing system was growing. Based on these two trends they made the decision to drop the car. I know this was not an easy decision for the team who had put all they had into getting that first prototype working. They still proudly display it in their garage for all to see.

After that decision it was heads down to build the company around making existing fleets shareable. The team went full tilt with the new business model and started to gain traction. With the announcement of the funding from A16Z it gives them the capital they need to grow. We’re excited to watch what’s next for them.

Recruiting for hardware startups

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What is the biggest challenge startups face? Some say that delivering products at the intersection of compelling, intuitive, and quality is the biggest challenge. First time founders say it is raising venture capital. Experienced entrepreneurs, however, often point to hiring, saying there is a hierarchy to these challenges. Great talent creates great products which in turn attracts smart capital.

Hiring the best people is difficult on a normal day and even more challenging in today’s bullish technology market. There are more ideas chasing bright talent than ever before. Market segments that exhibited slower growth in previous business cycles (e.g. hardware, education, government) now have significant market, entrepreneur, and venture capital interest. When you combine this growth with the documented shortfall in new and experienced engineers and the US’s more restrictive visa policies, hiring has never been harder.

If the current quantity deficit making hiring difficult, then filtering for quality makes the task seem herculean. A golden rule entangling hiring is that “A” talent hires more “A” talent, while “B” talent tends to hire “C” talent. This rule is never more important than when you first starting hiring. Your first 10 hires will in turn hire the first ~70 people in your startup. Your startup’s success depends on permeating the tradition of only hiring “A” talent into the early roots of your startup. But there are only so many “A” level individuals and most are already gainfully employed!

Customers, venture capitalists, and partners also place tremendous pressure on you as a founder to quickly build product. Seed or Series A funding only intensifies that pressure to build and hire. The venture community doesn’t give you capital so it can earn simple interest at the bank. We all use the words “lean” and “agile” to describe engineering process, but what folks really want is speed. You know you need to hire “A” talent but are simultaneously pressured to hire “quickly” and “good enough” to get rapid iterations of products into customers’ hands.

A unique challenge for hardware startups is the diversity required in their first hires. The word hardware, viewed in the context of hiring, is too limiting to describe the scope of this challenge. A successful hardware startup has to nearly simultaneously recruit for hardware (Mechanical Engineering, Electrical Engineering, Industrial Design, etc.), software (client, embedded, back-end), and production (manufacturing, logistics, etc.) teams.

With all of these hiring headwinds, it is critical that you employ best hiring practices. But how do you learn these best practices? It’s your first time building a hardware team, you are manically focused on only hiring “A” level talent, and you are surrounded by other startups recruiting in the same small pool. What do you do?!

There is no magic formula, no silver bullet to make hiring easy. But there are practices that experienced founders and recruiting professionals use to make the task a little easier. Nothing replaces having an experienced recruiter on your team, but until you can afford one, here are a few tips.

Tip #1: Make hiring your company’s focus

While your startup’s main focus is the product, it’s your team that delivers that product. Growing your organization is a full time job and it starts the first day of business. You are always looking for great candidates, even if you are not ready to hire for a particular role just yet.

Do you have job descriptions for all of your current and near term hires? It is really easy to keep a rough description in your head, but turning that into a compelling description that stands out in a long list of competing jobs is almost an art form. Your social network can’t recruit for you without a concise sentence or two of what you are looking for and a full description at an easily accessible URL. Can you articulate your description in a single, impactful tweet?

As you write job descriptions for your first team members, think about the growth path for these roles. You might initially be looking for an individual contributor but your startup’s rapid growth could easily change that. If a position could scale into a managerial role, it’s important to document that in the job description and screen candidates with those criteria, as opposed to dealing with painful discussions and changes later on. People joining your startup may also have the expectation that as your startup grows their responsibilities and role will too automatically grow. Being explicit about when that is true and when it will not be is really helpful.

As you post a role, you need a compelling and holistic compensation plan that is written in a form people without an MBA can understand. Compensation is more than salary; it includes stock, startup specific benefits, titles, and the intangibles associated with working for your company. It is very important to know what competitors are paying in your market segment, in adjacent spaces, and in the geographic region you are based. While you are not a large company yet, knowing what both large corporations and startups pay gives you insight into what prospective employees will be weighing when reviewing competing offers. You should play to your strengths, taking elements you can offer more of (stock, unique benefits, time off, etc.) and selling them aggressively. In a final preparation step, test your compensation package with a neutral but knowledgeable third party who can objectively comment on whether they think your offer is really competitive.

Tip #2: Recruiting is an offensive maneuver

Recruiting is not a passive or defensive activity. While you want to believe your startup is so exciting and so well known that candidates will come streaming to your door, remember there are potentially hundreds of other companies that are as exciting and well known. Posting job descriptions on a few job sites and waiting for results is a sure-fire way NOT to get the candidates you want.

You need go on the offensive with recruiting. The best source of qualified candidates is from people you already know and trust. Your goal is activate your direct contacts and their connections when hiring. You want 50 people helping you look for a candidate as opposed to just yourself. When you are with friends, colleagues, and partners, let them know about your open positions. When attending industry events, consider that somewhere in the crowd could be your next engineer. Your personal, business, venture, partner, and mentor networks all need to be activated to help as you recruit.

One thing many founders shy away from is cold-calling potential candidates at other (e.g. competing) companies. When you wrote your job description, you probably discussed where similar people work. It’s time to use LinkedIn and your networks to reach out to folks at those companies. Be graceful in your requests to people you don’t know as well, but remember, you don’t get what you don’t ask for. While the engineer you pinged at a large Silicon Valley company might be quite happy where they are, it didn’t hurt to ask them if they were interested in a new role, and they might just end up telling another colleague about your opportunity over lunch.

And don’t forget to recruit for diversity. Race, gender, experience, and mindset. A diverse set of “A” players gives you the varied perspectives you need to win!

Tip #3: If you can’t hire a recruiter, learn from a recruiter

When you are just starting out, dedicated recruiters can be quite expensive. That doesn’t mean, however, that you have an excuse not to start building relationships with great recruiting resources. Recruiters are just like every other employee; they want to work someplace fun amongst great people. Reach into your connections and find recruiters you can grab a coffee with. Talk to them about your startup and ask for some of the tricks of the trade. Ask them how they use LinkedIn to mine for candidates? What events do they go to (and which ones do they avoid) to interact with high quality candidates? How do they reach out to second level connections? Ask them to review your job descriptions to check if they are compelling. Do they have any good suggestions on how to cold-call companies laden with the talent you need? In their opinion, is your compensation package competitive? The more you ask, the more you learn!

Recruiting is a two-way street, so offer to help the recruiter with some of their open positions. Often recruiters are looking for roles you are not hiring for but might have great connections to. Establishing great connections with recruiting resources can help you well before you hire one full time. And remember, the recruiter you’ve built a meaningful relationship with already knows how amazing your startup is when you go to recruit them!

Tip #4: Get sexy

You are not alone in recruiting talent. You’ve got to make sure your job descriptions and startup stand out in the sea of companies looking for employees. When writing a job description, have fun with it. In a long list of dry descriptions, one that has a sense of humor, is inspirational, or challenges the reader stands out quickly. Consider these two job descriptions:

Option 1: Barnyard Industries, a funded startup in San Francisco, is looking for an experienced Mechanical Engineer for its upcoming projects. The ideal candidate balances theoretical and practical experience, having a Bachelor’s degree with a Masters in Mechanical Engineering preferred, and 2-4 years of work experience with a Fortune 1000 company. The position is focused on the design and engineering of complex mechanisms, assemblies and systems, using advanced technical knowledge. The candidate will direct and coordinate projects and other engineering personnel. Experience with industry standard tools from Autodesk and Solidworks is required.

Option 2: Barnyard Industries, makers of the amazing new robot pet Milo, is looking for a Mechanical Engineer who wants to delight kids and families. We’re an early stage company funded by SuperTopDog Ventures to change the way robots interact with kids, and you’ll be the person in charge of helping make Milo move and interact like a pet. This means you’ll be working on complex robotics systems with a team of insanely talented roboticists from around the world. You’ll have a bachelors or masters degree in Mechanical Engineering from a great school and some time under your belt making products elsewhere, but your adventure really starts at Barnyard. We hope you like working with the latest tools including the Autodesk suite and Solidworks, because we’ve got a top of the line PC environment with three monitors waiting for you. And did we mention our amazing beer bust Fridays and crazy fun corporate culture? Come work hard and play hard at Barnyard!

They both have the same basic asks of potential employees, but they come across very differently. At the end of the day, your job description needs to reflect the ethos and culture of your company, but a dry, concise job description has trouble standing out in a crowd.

To bring in more candidates and to highlight your strengths, consider open house recruiting events at your startup with a compelling draw. If you want folks to give up a night or weekend to visit your startup, make sure the event drawing them in is worthwhile. An industry luminary, a cocktail tasting, video games, it can be almost anything, but make it your own and make it fun. The event should reflect your startup’s atmosphere and personality. You want visitors to remember what a great place your startup is so they’ll tell that story to others as well as consider it for themselves.

Recruiting is a full time job that starts the day you start your company. In this strong tech economy, it is hard to get the “A” level talent you want without proactively reaching out on every channel possible. You work incredibly hard to build the best product possible, so remember to work as hard to get the people who are going to build your amazing product!

We’re hiring a part-time office manager!

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Lemnos Labs is looking for an organized and creative part-time Office Manager to support our program, portfolio companies and outreach initiatives. The ideal candidate will be a self-starter, capable of multi-tasking a variety of projects and working with a diverse group of individuals.

Primary Responsibilities Include:
- Coordinating the incubator program, including scheduling weekly meetings and events
- Greet and direct all visitors, vendors and service providers
- Facilities management including ordering of office equipment and supplies
- Arrange catering for team meetings and other events
- Interface with partners, portfolio companies and hardware community
- Assisting with on-boarding of new portfolio companies
- Miscellaneous administrative tasks

Ideally you’ll have:
- 2+ years related office experience
- Good communication skills
- Outstanding time and project management skills
- Proficiency in Microsoft Office programs
- Interest in working in a start-up environment

To apply for this position, please email resume and cover letter to jobs@lemnoslabs.com

Is This The Year Of Gesture Control?

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I always find it entertaining when I watch one of my friends writing code in Emacs because by and large it’s the exact same interaction that their fellow coders would have had in the early 80′s. Yes, the laptop they type on is infinitely lighter and more capable, but there is still a screen with a keyboard, and mouse as the input being used to write code in the same program. Not to mention the fact the keyboard layout most people use was invented in the late 1800′s.

Over the past decade there have been endless new technologies that have come out that have promised to change human computer interaction. These range from voice control to augmented reality but outside of one exception we still use computers the same way we used to.

The only game changing technology that has achieved large market adoption is the touch screen. Part of the reason of their success was the incredible investment in the space by the giants like Samsung, Apple and Corning. Today touch screens are ubiquitous and some people are starting to use them as their sole input device.

The new frontier is now gesture control. The first inkling of how big this type of technology could be was the introduction of the Nintendo Wii in November of 2006. This blew the gaming community away for a number of reasons. Not only did the technology work and was enjoyable, it opened a large community of people who had never considered a console game before. Four years later, the Microsoft Kinect went a step further and eliminated the controller in your hand completely.

Since then all bets were off. A number of apps for the Xbox have tried to integrate the gesture control, with limited success. To date the biggest problem has been wide spread adoption of the technology by the OEM’s who make the computers and TV’s we use. From our view we have seen more and more applications to Lemnos in this space, but the path to market is always uncertain.

For me, the company to watch in 2013 is Leap Motion. They have managed to crack the nut of getting into the major companies. Just like Gorilla Glass was just a research project without Apple’s pull, many gesture control devices lacked the scale of a major corp. Leap is not only selling their units through Best Buy but have also partnered with ASUS who is going to be integrating them into their laptops this year.

Part of me is still skeptical of gesture control. I remember using some of the early Kinect apps and my arms would get tired just trying to watch TV. Part of that may have been the implementation or the technology. I’m pumped to see what this year will bring in this area.

Our 2013 New Years’ Resolutions

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After taking the last week to reflect…2012 was a wild ride. We raised our first fund. We made nine investments. We saw two other incubators pop up in our space and a new fund dedicated to robotics. In March, Kiva Systems was acquired by Amazon for $775M and in November, Cisco acquired Meraki for $1.2B. In year one of our existence, we’ve seen two major myths about hardware debunked:

Hardware companies can’t raise money

Hardware doesn’t have big exists

What’s changed? Everything really, but we’ll delve into the details with a series of subsequent posts: changes in how we interact with physical & digital world, advances in rapid prototyping, and disruptive new e-commerce platforms.

What can you expect from Lemnos Labs in 2013?

  • We’re now accepting startups into our incubator program year-round. Feel free to reach out even if it’s before you’re ready to submit a full application.
  • We’ll be hosting a variety of events from happy hours to panels to conferences. Join our events list so that you don’t miss out.
  • We’re going to keep you up to date on the latest happenings in the hardware startup world. We’ll try to blog a couple times a month ourselves and we’ll ask our mentors and portfolio CEO’s to share a few of their experiences as well. We’ll also aggregate our favorite articles from around the web on twitter and facebook.

 

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