By Alfred Tom on September 22, 2017
From Hardware to Software
We haven't posted in a while, but that doesn't mean we haven't been hard at work. In April we joined the Alchemist Accelerator as a swappable modem hardware company. We're now a software IoT security company. We announced it to the investor world at Alchemist Demo Day on Tuesday September 19, 2017 and got written up in TechCrunch. A lot of people are calling it a "pivot." We're just view it as a quicker way to bring our value proposition to IoT. Let me explain why.
Our WiviCard™ swappable modem product had three unique features:
1. pluggable at installation time, and anytime thereafter
2. built-in security optimized for the network
3. built-in network abstraction with our HTTP over PPP protocol and automatic packetization.
The latter two features weren't specific to the hardware and brought the majority of the value. If we tied these features to our hardware their growth would be limited to how quickly our hardware business could grow. If you haven't heard, hardware businesses are very tough to grow because of MIFROG (maximum internally financeable rate of growth). Startups get around this by raising outside funding, either from investors or the crowd. Equity funding is a very inefficient funding mechanism for funding working capital growth and crowd funding can only really be done once per product. Purchase order funding and debt funding also can come into play, but those also have limits. What sealed our decision to break our software free from the shackles of our hardware was the story of Nike, as told by Phil Knight in Shoe Dog (the audio book is great BTW). When Nike started in the 60's there were no venture capitalists. They had to fund their growth on gross margins and debt and almost died dozens of times running with no cash waiting three months for shoes to cross the Pacific Ocean. It's a minor miracle they were able to survive and double sales every year.
We realize we're disappointing many customers who were waiting for our pluggable modem architecture to spread its wings, but security is the number one road block to IoT realizing its $10 trillion potential and if we can solve it in one fell swoop (or one line of code, as our tagline suggests), everyone will be better for it.