Building a Business around Your Idea: SolePower’s Growth as a Company
SolePower puts a slick new innovation right at your feet: it makes a shoe insole that generates and stores power for your smartphone or other electronic devices every time you take a step. It has applications for anyone who spends lots of time walking, but especially for hikers, soldiers, and people in developing countries who don’t have electricity.
In an earlier post, we talked with SolePower cofounders Hahna Alexander (CTO) and Matthew Stanton (CEO) about how they have approached the design and engineering of their product as they’ve refined it for the marketplace. In this post, we share their experiences — in a startup incubator, running a successful Kickstarter campaign, and more — so other hardware entrepreneurs can benefit from their experiences in building a viable business.
From Class Project to Full-Time Startup
As discussed in the last post, SolePower started as a project in a senior engineering class at Carnegie-Mellon; Alexander and Stanton were assigned to the same group by chance. While other students finished the course and went on to other things, the two cofounders kept working on their design. As Alexander explains, “After we were done with the class, we decided to demo — and that’s when we found out we could make it into a viable business.”
It was tough, though: both of the freshly-minted graduates were trained as engineers, so they didn’t really know anything about running a business. But they learned on the fly. “It was mostly Googling as many concepts as possible,” Alexander says, “and a lot of late nights.”
At the beginning, Stanton worked on SolePower in the evenings, after his workday as an intern for a government contractor was over. “I was sitting there, working in the cube all day — you know, the standard nine-hour day — and then I would come home and work eight hours on SolePower,” he says. “And I realized that I liked those eight hours at home way more than working in the cube, even though I was working on some really cool stuff [at the internship]. My heart wasn’t in it the way it was when I was working on SolePower.” When Stanton was offered a full-time job by his employer, he turned it down.
“At that point we didn’t have funding,” he explains. “We didn’t know what was going to happen and I just said flat-out: ‘No, I appreciate the offer, but I’m going to go try and make SolePower a reality.’” As luck would have it, that very afternoon SolePower’s key investor informed the cofounders that the company had landed the funding they had been looking for. “I went from quitting a job to having funding for Sole Power in a matter of two hours,” Stanton says, calling it “a nice rollercoaster of a day.”
Incubating SolePower at AlphaLab
The two engineers entered the Pittsburgh startup accelerator AlphaLab, where they went through what Alexander describes as “a boot camp for running a business.” In the AlphaLab program, young scientists and engineers are put through a business education program that lasts five months for software, or eight months for hardware. The program teaches participants the skills they need to validate their market, start customer development, and make their business viable. AlphaLab also pairs the startups with mentors; Alexander says that SolePower’s mentors have been very helpful in sharing lessons learned — in everything from corporate governance to manufacturing — based on their many years of experience in running electronics businesses.
Stanton adds that it was the combination of attracting funding and then getting into the AlphaLab program that convinced him that SolePower was becoming a reality. At that point, he says, it was no longer “just some college kids messing around with this cool idea,” but a real company.
SolePower now works in AlphaLab’s Gear facility, which they share with about ten other hardware startups that have all gone through the AlphaLab program. Alexander says that most of the people in those startups are only a couple of years out of college. “We really lean on each other for advice,” she says, “and sometimes for emotional support.” All of the young entrepreneurs are also able to share their practical experiences with the new cohort now going through the AlphaLab curriculum.
Getting a Boost from Kickstarter
In July 2013, SolePower conducted a successful Kickstarter campaign. Although they raised a substantial amount of money — $60,000, well above their goal of $50,000 — it was more important to Alexander and Stanton that the campaign helped them find early adopters for their product. Nearly 500 people put in preorders, even though they knew they would have to wait at least a year for the product to ship.
The success of the campaign helped SolePower prove its market appeal, which in turn helped them secure follow-on funding from investment groups. It also brought them much more pointed feedback on their product. “It’s interesting,” Alexander says, “that the type of customer feedback you get before and after people pay for something is very different.” Once they’ve paid, backers started giving what she calls “that super critical feedback we could use to improve the design.” Ultimately, SolePower solicited feedback on everything from company taglines to the color of their insoles.
Both cofounders emphasize that a successful Kickstarter campaign will be a lot more work than you ever expect it to be. Alexander’s advice is not to double your projected timeline, but to triple it. SolePower wanted to reach the most people possible, even before the campaign started, to ensure that it would be a success. To that end, they had two full-time business developers working to find reporters who would want to write about their product; the cofounders also reached out to family and friends, the Pittsburgh tech community, and the companies that they wanted to partner with.
Stanton says that initially they did not have a big enough list of media contacts, so they burned through their list of 150 names very quickly. After that, they had to get creative about coming up with new avenues for approaching the right people and media outlets. They also had to figure out on the fly how to take money from foreign contributors after their Kickstarter was featured on a big tech site in Germany. Their efforts ultimately paid off: SolePower was featured not only in the big tech venues Mashable and CNET, but also in Outside magazine, which has a large audience of outdoor enthusiasts. As Stanton puts it, “the more eyes on the product, the more likely you are to get funded.”
Assembling the SolePower Team
When their insole design project started at Carnegie Mellon, there were five people on the team. After school was over, some of the team members left to take other jobs or to attend graduate school, leaving only Alexander and Stanton working on the project. After going through the AlphaLab program, they added a Berkeley-trained electrical engineer named Elliot Kahn, who had previously worked on energy-harvesting circuitry. An intern named Davit Davitian did such good work for them that they ended up hiring him full-time; he now helps with business development and project management for SolePower.
Laura Vanvalkenberg, who already had more than ten years of experience in electronics sales, began working with the team as a mentor, but she liked what they were doing so much that she ended up joining them permanently. Electrical engineer David Matten knew Alexander socially from their days at Carnegie Mellon; after half a year of traveling in Europe and a fellowship at the Jet Propulsion Lab, he told the team that he would love to stay in Pittsburgh and work with them. They rounded out the team by hiring Ashley Stephens, who contacted them out of the blue after finding them online. Her husband was relocating to Pittsburgh for work, and it turned out that she had exactly the kind of marketing background that SolePower needed.
Alexander calls the group “probably the best team we could ever hope for,” especially because of the range and balance of experience the different team members have. Stanton notes how they have found a diverse group “from all sorts of places.” As great as they are to work with, Stanton says, it has also been a “huge learning experience” for him to go from no managerial experience to leading a team with such different personalities.
Daily Life in a Startup
Going back to his earlier metaphor, Stanton says: “A startup is a rollercoaster.” One day your company wins a design contest with a six-figure prize . . . and then the next day your prototype breaks in a way you never expected. “You have so many things that you’re juggling,” he adds, “between funding, product development, marketing, building customer traction, recruiting the right people, finding office space.” The challenges just keep coming.
Alexander calls it a “once in a lifetime chance to get to work on something this exciting.” She says she especially enjoys being involved with the entire design process, from market research to working with manufacturers. That process has led to many lessons learned, especially around how long it takes to actually get things done. “Everything is more expensive and takes longer than you think it will to produce,” Alexander says. “We’ve learned,” Stanton adds, “not to make assumptions on anything.”
Stanton’s biggest advice for other entrepreneurs is to “talk to your customers and talk to them constantly.” For SolePower, that includes not only the end users who will be wearing their products, but also the retailers who will sell them.
Ready for Launch
SolePower showcased its wares for those retailers in August of this year at the Outdoor Retailer trade show held in Salt Lake City. In the months leading up to the show, the company was already getting calls from retailers who had heard about the product and wanted samples to evaluate. By the end of 2014, SolePower will ship its first production units to Kickstarter backers; the insoles will be available to the public in the first quarter of 2015.
Both Alexander and Stanton are excited to see their product launched in the real world, even though they know it will take more months of hard work to get there — and then even more work to digest all the new feedback they’re sure to get from customers. Stanton says that the most rewarding part, for him, is “building something and seeing it out there in the consumer market and saying ‘Yeah, that was us. We did that.’
“That’s what I really love about it.”