All Segments
A Conversation on Hard Tech with Eric Migicovsky
31 segments available
YC Partner Adora Cheung talks to Pebble founder and YC Partner Eric Migicovsky about hard tech. Learn more at https://startupschool.org Chapters (Powered by https://bit.ly/chapterme-yc) - 00:00:00 Introduction 00:00:37 How did you end up with the name Pebble? 00:01:52 Quick story of when you came to YC? How big were you? What did you do in YC? 00:03:29 So $15,000 thousand dollars let you manufacture, was it the first 100 units? 00:05:38 How many units had you sold before you actually went through the entire manufacturing process? 700 to 800 units 00:05:58 What happens if I have to move my business to Mountain View? Its gonna interrupt my production process 00:06:44 Hardest part in the whole journey with Pebble? 00:08:28 But now that you've done it do you think it's possible now? 00:10:50 It's often people get really creative with no money but forget once raised money 00:12:14 Advise on right time to do crowdfunding campaign, is a real product required and should it align with the campaign? 00:16:00 In the first route, delivery of product within six months is unknown. Should I use crowdfunding platform only if I know I can deliver? 00:16:53 Sometimes there's a group (Facebook, Subreddits) before the early adopters on Kickstarter 00:17:27 What's the right call in terms of outsourcing the various components? 00:19:46 Belief in “hardware without software (subscription instead of one off)” and thoughts on people who say that? 00:23:11 How do you define hard tech, deep tech? What does that really involve? 00:24:35 Crazy rocket idea but have no money, where do I even start? What do I do? 00:24:53 What will be an MVP in this case? 00:26:51 What do you encourage startups accomplish by demo day? 00:27:45 Sales and talking to users gives more confidence that your on the right track 00:29:58 Advice to scientist in Ph.Ds. at school who want to make the jump and commercialize their product. What should they consider? 00:32:15 Users interested in your product but need lot of money. What do you need to show to investors? 00:33:59 What's an idea that sounded so crazy when you heard but when you met the founder you were like this is totally possible? 00:37:17 Q1 - How do you get your first customers? How do you get 1-50? 00:39:40 Q2 - Bunch of software engineers, we have an idea that includes software and hardware, how do we get started on the hardware? 00:42:55 Q3 - Pre product market fit, do you recommend move closer to suppliers? 00:44:12 Q4 - Do we have to protect (IP/Trademark) our products or how can we protect? 00:47:02 Q5 - Building Hard-Tech and solving a long term problem but first problem looks too small? Marginal markets are great 00:48:58 Q6 - Should I pick a recurring business model or just sell the product? 00:50:48 Q7 - How do you do hiring, especially when you're scaling? 00:54:23 Q8 - For some project problems, they can be solved exclusively by software, how do you know when to involve hardware in it? 00:56:05 Q9 - How do we demo really complex product or how do we convey it to people? 00:57:21 Q10 - Why hardware companies need financing?
Segments Timeline
Meet Eric Migicovsky
In this introduction, YC Partner Adora Cheung welcomes Eric Migicovsky, founder of Pebble and fellow YC Partner. They discuss Eric's journey with Pebble, which was part of the YC batch in Winter 2011, and the evolution of the startup landscape since then.
"welcome we have Eric here today so Eric is a YC partner he was previously the CEO and founder of pebble which went through the YC batch and all the way winter of 2011 a long time you're gonna ban Eric..."
The Name Behind Pebble
Eric shares the story behind the name 'Pebble.' He explains how the original names were generated using a thesaurus and how the name came to him while lying on a beach, emphasizing the importance of keeping a list of good ideas for future use.
"original names were found using a thesaurus or some sort of like we just like scan through a book for words that were related to like alerting alert ah that was how we got to it yeah originally peple ..."
Eric's YC Journey
Eric recounts his experience applying to Y Combinator (YC) and the early days of Pebble. He discusses the company's size and progress when they joined YC, including their initial product, the Impulse watch, and the challenges they faced in shipping their first units.
"months so we applied to YC started the company in 2008 started working on it while I was still a student at Waterloo kept working that through 2010 we hadn't actually shipped or we were we were just s..."
Funding and Manufacturing Challenges
Eric explains how a $15,000 investment allowed Pebble to manufacture its first 100 units. He details the hands-on approach they took in production, including sourcing components from various suppliers and the lessons learned from early manufacturing mistakes.
"units I we ended up making them had one by one actually so the first watches for this first watch they were manufactured we bought the circuit boards from China we had the metal the kind of metal casi..."
Navigating Production Interruptions
Discussing the logistics of running a startup, Eric addresses concerns about relocating to Mountain View during YC and how they managed to keep production going despite the move. He highlights the importance of maintaining sales momentum.
"continued to manufacture hand by hand one by one by hand up until around 700 800 units so even when so one of the things that people ask about YC is like well what happens if I have like have to move ..."
The Hardest Part of the Journey
Reflecting on his journey with Pebble, Eric shares the challenges of achieving product-market fit over five years. He discusses the difficulties of staying committed to a vision and the uncertainty that comes with pivoting in a startup.
"different because you know seeing it forward it actually took us a long time to get from the initial idea to any sort of like real product market fit it was five years so we started the company in 200..."
The Naivety of Startups
Eric reflects on the naivety that can benefit startups, emphasizing how their lack of knowledge about the industry allowed them to persevere. He discusses the importance of maintaining a belief in their vision despite the challenges they faced.
"hotspur who know what I'm saying is I think like the hardest part that we had to go through was not letting other people get us down and kind of like maintaining that naive it say one of the things th..."
Creative Solutions in Scarcity
Eric discusses how startups often become more creative when resources are limited. He contrasts this with the challenges that arise when companies raise significant funding and lose their scrappy mindset.
"we raised a bunch of money and then started hiring it and this is a big problem even mostly the successful companies run into and so I think the moral of the story for me at least how I think about yo..."
Timing Your Crowdfunding Campaign
Eric shares insights on the right timing for launching a crowdfunding campaign. He emphasizes the importance of having a tangible product and aligning it with the campaign to ensure success.
"after having gone through a couple of these cycles here's my advice I think crowdfunding can be useful for two specific points I mean mainly useful for two specific points in a startups like you could..."
Early Crowdfunding Strategies
Discussing early-stage crowdfunding, Eric advises startups to focus on raising small amounts of money to develop prototypes. He highlights the significance of gauging interest from friends and family as a test for product viability.
"are making something that people really want they're basically throwing their money at you so that's it that's an opportunity for kind of this early crowdfunding I really encourage people to not try t..."
Leveraging Early Adopters
Migicovsky discusses the significance of early adopters in the crowdfunding process. He explains how engaging with niche communities, such as Facebook groups or Reddit, can help validate product ideas and generate initial sales. He stresses the importance of understanding your audience and building credibility within these communities before launching a broader campaign.
"opportunity for crowdfunding I think there's actually another opportunity using it more as like a marketing and sales channel which I think more of what we did where we had already made most people do..."
Outsourcing Challenges in Hard Tech
In this segment, Migicovsky addresses the complexities of outsourcing in hard tech startups. He highlights the diverse skill sets required for product development and the challenges of relying on contractors. He advocates for building a flexible team of technical experts who can adapt to varying project needs, emphasizing the importance of trust and commitment in early-stage ventures.
"like there's a ton of customers there so when you talked about pep Laura Lee talked about hiring people and outsourcing things what's the right call in terms of outsourcing the various components so t..."
The Role of Software in Hardware Success
Migicovsky explores the necessity of integrating software with hardware in tech products. He discusses the concept of 'business model company fit' and how the right business model can drive long-term success. He reflects on his experiences with Pebble and the importance of understanding customer needs and market dynamics when developing a product.
"research into this category it's really got me interested right after pebble because that was some feedback that we often got could you launch a subscription service could you have some sort of paymen..."
Defining Hard Tech and Deep Tech
In this segment, Migicovsky defines hard tech and deep tech, emphasizing the slower iteration cycles compared to software development. He discusses the regulatory constraints and technological challenges that hard tech companies face, highlighting the importance of understanding these factors in the product development process.
"so pivoting a little bit too hard tech so we've funded lots of cool hard tech companies lately quantum computing self-driving cars pretty printing entire homes so for agriculture technology yeah nucle..."
Starting with Limited Resources
Migicovsky provides advice for aspiring entrepreneurs with innovative ideas but limited funding. He emphasizes the importance of developing a Minimum Viable Product (MVP) and understanding the market's needs. He encourages leveraging available resources, such as startup programs, to validate ideas and gain traction.
"you might be regulatory regulatory constrained either in the medical device space drone space transportation space software on car space these are all like there's external processes that you can't co..."
Sales Skills for Technical Founders
Migicovsky discusses the necessity for technical founders to develop sales skills. He emphasizes that understanding the sales process is crucial for early-stage companies, especially in hard tech. He encourages founders to embrace their roles as salespeople to effectively communicate their product's value to potential customers.
"the better I think oftentimes engineers we love to build things we don't as much love to sell them and so what I look for in early-stage companies is are the founders technically competent and do they..."
Navigating the Transition from Academia to Startup
Eric provides advice to scientists and Ph.D. students considering the leap into entrepreneurship. He discusses the challenges of transitioning from a research-focused environment to a market-driven approach, encouraging them to step out of their comfort zones and engage with potential customers to validate their ideas.
"product for them than if you just built it first and showed it it also gives you confidence that you're going down the right track someone said it's hard like we had a company in the last batch that h..."
Finding Product-Market Fit
In this segment, Eric emphasizes the importance of demonstrating interest in a product to investors. He explains that successful companies often do not require massive funding to reach MVP status, and he contrasts the paths of different tech companies to illustrate how iterative development and customer feedback can lead to success.
"because they've kind of you know stopped working necessarily on just building their technology they were still working like they had a three or four person team so they hey they were able to split it ..."
The Role of Innovative Technology in Startups
Eric discusses the significance of innovative technology in startups and how it can be leveraged to solve real-world problems. He shares insights on how companies can pivot their focus to meet customer needs while utilizing their groundbreaking technology, highlighting the importance of aligning product development with market demands.
"and I think that that sometimes affects people who are in universities even more because the the the default is raising money through grants and working on longer-term projects whereas the special cas..."
Crazy Ideas That Become Reality
Eric shares a fascinating story about a startup that aimed to revolutionize rocket manufacturing through 3D printing. He reflects on how initial skepticism turned into belief as the founders demonstrated their vision, showcasing the potential of innovative ideas when backed by determination and technical expertise.
"build it you can eat lots and lots and lots of money what do you need to show to investors so the best the best companies in my opinion are the ones that don't require a ton of money to work on or at ..."
The Journey of Relativity Space
In this segment, Eric discusses Relativity Space, a company that aims to build 3D-printed rockets. He explains their unique approach to rocket assembly and testing, highlighting how their innovative technology could disrupt traditional aerospace manufacturing and the challenges they faced in gaining investor confidence.
"that went through YC for three years ago not very long they wanted to build 3d printed rockets their thesis was it's not actually rocket assembly that cost a lot of money it's the testing phase of int..."
Pivoting with Customer Insight
Eric Migicovsky discusses the importance of pivoting a startup based on customer feedback. He shares how companies can leverage their pioneering technology to better serve customer needs, using Relativity's 3D printing technology for rockets as a prime example of adapting to market demands.
"mind-blowing ly cool and revolutionary but you're finding that customers don't want to buy it pivot your companies so you're actually doing what your customers would have done and just use your pionee..."
Finding Your First Customers
Migicovsky shares strategies for acquiring initial customers, emphasizing the value of engaging with niche communities online. He recounts his own experience of leveraging relationships with bloggers and attending conferences to generate buzz for Pebble, illustrating the hustle required to gain traction.
"do you get your first customers how do you get one through 50 I talked about this a little bit earlier some of the best ways is to kind of infiltrate the community of people who want who you think wil..."
Starting Hardware Development
In this segment, Migicovsky provides advice for software engineers transitioning to hardware development. He suggests starting with off-the-shelf products to prototype ideas quickly and efficiently, highlighting the benefits of modifying existing technology rather than building from scratch.
"bunch of software engineers we have an idea that had includes software and hardware how do we get started on the hardware well the good news is that it's easier than ever I wrote I wrote a blog post t..."
Iterating Towards Product-Market Fit
Migicovsky discusses the importance of being close to customers during the product iteration phase. He explains how moving closer to manufacturing can facilitate faster iterations, while also emphasizing the need to understand customer needs to refine the product effectively.
"question is should you move should you move closer to changing or factories when you are pre product market fit if your free product market fit and you have a product that you're iterating on like fig..."
Building a Competitive Moat
This segment focuses on strategies for protecting a startup's intellectual property and creating a competitive advantage. Migicovsky argues that building a strong product with network effects or data lock-in is more effective than relying solely on patents, which can be costly and difficult to enforce.
"protection trademark protection is that kind of what you're interested so yeah patents that kind of thing so this question I think kind of touches on how do you build a moat for your company how do yo..."
The Value of Small Markets
Migicovsky explains why targeting small markets can be beneficial for startups. He highlights that small markets allow for easier customer identification and quicker feedback on product viability, which is crucial for refining offerings and gaining investor interest.
"question was what happens if I'm building a hard tech problem longer-term trying to solve a longer-term problem that first problem that I'm solving what if it looks too small honestly the best investo..."
Choosing the Right Business Model
In this segment, Migicovsky discusses the decision-making process behind selecting a business model for hardware startups. He emphasizes the importance of understanding customer savings and revenue potential, and encourages experimentation with pricing strategies to find the best fit.
"feminine so in my company by chance we just like to it's an electronic treatment for reducing sweating and we we are so happy that people are so this cuz this questions related to like do I do I pick ..."
Hiring for Startup Success
Migicovsky shares insights on hiring practices for scaling startups. He stresses the importance of prioritizing trust and reliability over specific domain expertise, reflecting on his own experience of rapidly expanding his team after Pebble's Kickstarter success.
"yeah how do you do hiring especially when you're scaling hiring is a mode that the companies in and it's a very distracting mode so I think like the mission of an early stage startup is to get the pro..."
When to Involve Hardware
Eric discusses the decision-making process for involving hardware in projects, suggesting that startups should first explore software solutions. He advises entrepreneurs to prototype using off-the-shelf components before committing to custom hardware, emphasizing the importance of validating the problem and solution before investing significant resources.
"and I knew them I trusted them they were instantly part of a team because it was just like we were working on another school project again it seems like the best source pool is either people you met i..."
Navigating Hardware Financing
In this segment, Eric explains the challenges of financing hardware startups, particularly regarding inventory and R&D costs. He shares strategies for managing cash flow, such as pre-ordering products to gauge demand and reduce inventory risks. Eric highlights the importance of balancing lead times and costs to optimize financial health while scaling a hardware business.
"almost solves the problem because like I was saying more often than not that initial test will prove that either you have a really good problem that really needs to be solved or nobody really has that..."