Technology always moves forward. For business owners and entrepreneurs this means trying to stay ahead of the curve while also keeping up with the pack. Wearable technology is one of the latest trends. Steve Caldwell, CEO of Strap, helps make sure wearable technology works at different levels. We spoke with Steve to learn more about Strap and advice on raising funds.
Why did you start your business?
My wife bought me a Pebble smartwatch for Christmas in 2013, roughly 5 years after I started my web and app development shop, Crosstek. That business was winding down and my mind was starting to wander to the next big thing. I’m a geek at heart, so over Christmas week I built a couple of apps for the Pebble. I started thinking about the app and development ecosystem in general. I thought, “we have great monetization and analytics frameworks for web and mobile, but who will build those for wearables?” We began whiteboarding some ideas, and the framework for a wearables focused analytics platform was born. Over the course of 2014, we were able to zoom out and look at the broader wearables market as it evolved quickly, and with support of The Brandery and our investment partners, were able to craft a vision for a wearable development and analytics platform.
What makes your business unique?
We are the world’s first cross-platform and analytics solution built for wearables. We focus on the unique challenges presented by the ever growing and fragmented wearables ecosystem like UI and sensor differences, different data formats, and varying SDK paradigms.
What advice would you give to entrepreneurs trying to raise funding?
First of all, be yourself. One of the best compliments I received from multiple VC’s is that we came across as very transparent (because we were actually very transparent). Most of these folks get asked for money and pitched dozens of times per week, so they are very good at detecting BS. It helps to think of the person on the other end of the table as an actual human being, versus some demigod who controls your future. Try to relax and take the walls down; typically investors can provide very helpful feedback if there are certain areas you are uncertain about in your business model, so just be honest!
Secondly, be honest with yourself about the opportunity and your ability to execute on it. Does your business genuinely deserve to exist? Can you clearly explain why? Know your market size. Know why you’re the right person to make this thing a 100 million dollar business. Investors at the early stage tend to bet on people and markets, so if you can check those blocks you¹re in a good place.
Finally, know what you’re signing up for. Once you take money, the game changes. Sure, it is very exciting to have money in the bank. You get to hire a team, buy swag, and even pay yourself for a change! Your business’s “runway” gets a lot longer. However, you want to make sure you have clear goals for the newfound time you have, and know that once you take money the expectations are different. Investors are very helpful, and most will tell you they are about more than the return; at the end of the day that may be true, but chasing unicorns is the real fun of investing. Most of the advice you receive will be towards growing to a large outcome of some kind (exit, IPO), so if you’re content to build a comfortable business that does a small amount of revenue each year, taking VC funding might not be the right strategy for you.
What is wearable technology and what are some future trends?
Wearable technology describes any connected device of computer that is worn on the body. The first main category of wearables is the fitness trackers, like FitBit, Jawbone UP, and Misfit, and the second category is smart devices, like Apple Watch, Android Wear, Google Glass, and Pebble. The big trend we see on the radar for 2015 is the smartwatch category beginning to dominate the mainstream demographic. Last year, smartwatches grew as a category, with 6 million devices sold; however, the dominating category was fitness trackers which have steadily grown in the past few years. Smartwatches have been mainly reserved for geeks and early adopters. All of that is expected to change this year with the launch of the Apple Watch. For the first time, sales of smartwatches are expected to surpass sales of fitness trackers, which will reach 35 million and 30 million sales, respectively.
Another trend we predict is the connection of more fitness and activity data to brands and enterprises. For example, imagine being able to be pushed two dollars off of Kind bars when you hit 50,000 steps for the month. That might incentivize you to go take a walk around the block a few times a week. There are plenty of platforms that are capturing lots of data points, but we think bringing all of that data together and providing rich analytics on it will produce real wins for enterprises.
When you reach a funding goal how do you set metrics or goals for your team to reach?
At the moment, our metrics and goals are mainly centered around what it will take to get to the next funding milestone. Those metrics drive every decision we make from hiring to marketing to product development. The best way to sum up our strategy for goal selection revolves around creating momentum. If we have a healthy, engaged developer community and a handful of enterprise customers using our products, we’re on the right track. That means we have to make kick-ass products that developers actually want to use, and develop lasting enterprise relationships that can lead to us proving our technology in those environments. Of course, there are revenue milestones as well, but at this stage it is more about the momentum. If we do that correctly, the revenue will follow.