Monday, May 29, 2017

From Start-Up Tech to International Success- An entrepreneur shares his story

Richard Smith is co-founder of CleverLoop-  a business that markets innovative "smart" security camera systems for both home and business, that can alert you to any unusual activity.

Richard is responsible for international sales, marketing and growth. He has worked in both small businesses and large corporate environments - across Australia, New Zealand, the UK and the USA, including having a focus on China (he speaks Mandarin). He’s regularly asked to present at start-up and small business accelerator forums, particularly to share insights into doing business in China. 

I recently had the opportunity to have a long chat with Richard and posed some questions about his experience 

Journey of an Australian start-up

1. What inspired you to start your own camera security business? 

For a long time, I was one of those people bursting with ideas for running my own business - while still churning away at a well-paid 9 to 5 job ..... Starting a new business certainly fixed all that. However, the challenges were enormous, and I always advise budding entrepreneurs to be prepared for fast learning on the job, long hours and a pay packet that starts small. 

Instant millionaires are few and far between, but the deep sense of satisfaction, pride and achievement that comes with being in charge of your own destiny is immense, and continues to inspire me.

Together with a couple of friends who are highly technical, we kick-started our company. Our aim was to change the way that people think about camera security systems, particularly in terms of the benefits for home security and, more recently, small business security.

2. What were some of the early challenges you faced during the first year of start-up – which can be both an exciting and yet stressful time for many new small business owners?

In today’s fast-moving world, if a fledgling business is to thrive  then entrepreneurs need to be flexible enough in both their skills and thinking to work across boundaries and respond quickly to change  Thinking outside the square is essential in order to seize the opportunity when it arises

In our situation, CleverLoop needed a team capable of handling security camera system technology, hardware design and production, the development of leading-edge video footage analysis algorithms, the creation of user friendly Android and iOS security apps and integrating servers, as well delivering important business strategy, sales and marketing functions.

Whilst we could cover the majority of the skills needed within the core team, it took early innovation to bring the outcomes needed. For example, our approach to PhD students studying video footage analysis technology at a leading university provided us with key skills at the forefront of development, without the need for permanent or full-time staff in this area.

Our strategy towards staff location was also key. We decided early on that it made sense to have the best people doing the job, no matter where they were based, rather than selecting people because of a local location we were working in. A small but distinctive difference, which now means we have people in four countries working collaboratively together ‘virtually’.

Jumping the funding speed bumps
Another challenge that we faced, as do most new businesses in Australia and elsewhere, was how to get going when the costs of starting can be high. For us, we boiled this issue down to the need for a proof of concept.
" ...... we accessed large crowd-funding platforms"
How did we demonstrate that our concept for the future of smart security was marketable, before spending the time and money needed to manufacture a new camera security system? The reality is, asking friends and family will only get you so close to the truth.

We turned to large, international crowd-funding platforms, such as Kickstarter and Indiegogo. In the end we ran a campaign on Indiegogo and successfully hit our funding goal. Meeting the funding goal provided us with three benefits:

i.               Early money in the bank. Crowdfunding gave us a number of pre-orders paid upfront, which in reality is money that can go towards final development and initial manufacturing costs, which can be high.

ii.               Confidence. A positive response from the market gave us the confidence that we had a concept worth pursuing, a consumer product with genuine potential in the well-established security sector.

iii               Funding options. Positive market responses give venture capital investors the belief needed to back a team and a product with some serious funding, something we were lucky enough to secure.  
3. What have you learned about marketing?

Listening to your customers, when it counts
Listening to your customers is one of those fundamental concepts that we’ve all heard before. However, balancing what customers say with what you know is also important, especially when you’re looking to change some-long held beliefs.

Home security in Australia has long been dominated by back to base security systems that rely only on old-tech motion sensors and come with ongoing monitoring fees of $30 to $50 a month. Most people either don’t have a system, or if they do have some sort of burglar alarm, then they just don’t use it.

So how about a home security system easy enough to self-install, and one that sends alert clips directly to your smart phone security app whenever anything usual happens inside your home, at the front door or in the back yard? One that filters out the unimportant stuff like pets, trees and shadow changes, but that also lets you live view the cameras at any time if you do get an alert. And one without the monthly fees, because you and your family are ‘self-monitoring’?

This is what CleverLoop delivered to home owners and is the reason that we gained sales in over 20 countries in the first 6 months. We did this by understanding what our customers needed, but not necessarily by meeting their previously held home security expectations.

But then something unexpected starting happening. We began receiving more and more emails and phone calls from people in small businesses and mid-sized companies asking if CleverLoop would work as a business security system.

The CleverLoop feature set was perfect for this – continuously stored CCTV like footage during opening hours, video alerts to your phone if anyone is in the premises after-hours, live view of your business if you’re not there and no additional monthly outgoings.

We quickly developed new marketing collateral and specific business security web pages, explaining how smart security cameras could be of benefit in the business world, whether for store security, office safety or keeping an eye on stock. And it wasn't long until our business security system market equaled the number of people using our product for residential security.  

Making marketing budgets go ‘better’ not ‘further’
New businesses generally have similar constraints when starting out, including a limited number of initial customers and limited budget. These two constraints don’t work well together, so it’s certainly a case of finding the way to get the best from what you have to spend.

And you have to cover a lot of marketing disciplines when starting a new business. For those starting out, you can make your marketing budget go ‘better’ by making use of affordable outsourcing services such as Design Crowd, Fiverr, Upwork and Freelancer. This provides instant access, when you need it, to specialist people with proven track record. And it’s significantly less expensive than the traditional ‘hiring staff’.

The other way to get better results is test a few marketing methods with different segments and then focus on the ones that provide the most return. For CleverLoop we found that Facebook and Adwords didn’t provide the ROI we were looking for, but other techniques were more effective.

4. You have several patents and trademarks to protect both your technology and your brand ........ What advice would you give to small business owners when they are weighing up the costs versus benefits of this?

Get the groundwork right 
If you are aiming at building a long-term and successful business, then you want to put the right foundations in place. Accounting, file sharing, contact and relationship management, task management and customer support are all systems that should be in place early. Be sure to choose ones that scale up easily as your business does, otherwise there is a lot of rework later.

The other important area to consider is trademarks and patents. It’s well worth investing some time and money into making sure that what you are developing doesn’t infringe on the patents and trademarks of others, and that you also protect your brand into the future.

Early on, we found that the brand name we wanted to use could be registered in Australia, NZ and other countries, but not in the USA. Although seemingly different to anything else on the US Patent and Trademark Office register, the name turned out to be too close that of another company in a completely different sector. We now enjoy the benefit of this same level of protection.

5. Tell us a little bit about your product development journey – and what tips you would offer to entrepreneurs about getting their product to market?

There are 3 quick tips that I would offer -
i) Think hard about where you manufacture. Locally manufactured is generally easier to manage and control, whereas offshore manufacturing is often more cost effective and can let you tap into technology that’s not available locally. We manufacture in the city of Shenzhen in southern China. It happens to be the same place that Apple, along with host of the world’s other major tech companies, manufacture their products.
ii) Test your product. Following our successful crowd-funding campaign, we selected 20 ‘test pilots’ from around the world to use a beta version of the CleverLoop product. We worked with these people for a few months to build in the features they thought would be super useful and to iron out any problems they came across.
iii) Continue to evolve. Delivering your product to market is the first step in developing your product, especially if it is in the tech market. Ongoing development is key, and so creating a road-map which includes user input, is well worth doing. For example, our experience was that we’d offered indoor cameras from the beginning, but it was user input about protecting properties from the outside as well as the inside, that brought forward the integration of weatherproof, outdoor security cameras.

6.  Any final bits of advice to budding entrepreneurs?

One of the keys to being an entrepreneur is resilience. Let’s liken this to climbing Mount Everest. It’s hard, it’s challenging and needs the right support people, the right equipment, the right systems and the drive to push through the barriers that almost inevitably eventually appear.

These elements are, by default, a regular part of an entrepreneur's job description. If a product or a service was easy to develop or create, then the chances are it will have been done already. So make sure you have ways to strengthen your own resilience, as well as that of your co-workers and your business.

Thanks to Richard, for sharing his experience. A related article that might also interest you - How To Be An Entrepreneur

About the author
Brian Carroll is a qualified psychologist and the founder of a Melbourne based training consulting business  Performance Development, providing corporate training & HR services.