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Accelerators are Crucial for Startup Ecosystems

Hong Kong-based brinc, a hardware startup accelerator, found space at the Technology Innovation Zone (TIZ) in Kochi in January, earlier this year. Entry of the globally renowned startup accelerator facilitated by Kerala Startup Mission (KSUM) imparted great enthusiasm to the burgeoning startup ecosystem in the State. In an exclusive interview, Paul Lalley, Partner & Head

Hong Kong-based brinc, a hardware startup accelerator, found space at the Technology Innovation Zone (TIZ) in Kochi in January, earlier this year. Entry of the globally renowned startup accelerator facilitated by Kerala Startup Mission (KSUM) imparted great enthusiasm to the burgeoning startup ecosystem in the State. In an exclusive interview, Paul Lalley, Partner & Head of Product, brinc, explores various aspects of productisation and prototyping in Kerala.

Brinc, the Hong Kong-based accelerator that opened office in Kochi recently, will help startups overcome the ‘valley of death’ phase in its growth

Arrival of Hong Kong-based brinc accelerator to Maker Village is speculated to provide a great impetus to the State’s startup ecosystem. How will startups benefit from it?

From a global perspective, Hong Kong is one of the largest manufacturing hubs in Asia and on the other hand, I think there’s a lot of work that is done here in Kerala. People are also very competent here. The startup ecosystem in Kerala needs to be given a push in the right direction. brinc is going to create an accelerator here which will provide funding from Seed to Series A levels. Startups that want to build prototypes can approach the accelerator for support in terms of product development and evolving financial and business models. By doing so, we help the promoters to go to markets through different channels. What we see commonly is that there are a lot of engineering ideas but the ideators often don’t know how to evolve the product and reach the market. The accelerator helps them understand the real value of manufacturing, financial management and planning, and whether their projects would be feasible or not. We analyse the feasibility with the help of those metrics. That is where I think the accelerator will play an important role in Kerala.

One of the other key things brinc will do is to help startups safely navigate the ‘valley of death’ phase in its growth. ‘Valley of death’ is a common term used in the startup world which denotes the difficulty in containing the negative cash flow in the early stages of a startup before its products start generating revenue.

What happens usually is that the promoters may have great ideas and good business models to support it. They will succeed in building a prototype, too. As the next step forward, they will approach an accelerator. Usually, most accelerators give a seed fund of, say $25,000. The promoters may exit the accelerator program at the right time after building a more refined prototype. But a refined prototype would necessitate raising of additional funding and that’s where companies die because they can’t raise huge sum of money for scaling up. What we have done here is to help bridge the gap between seed and Series A funding. So if an idea is validated with a clear financial model and if it helps address a real-world problem, then we have funds to power that idea. Are you an engineer just building some cool tech just for the sake of it? Unfortunately, a huge percentage of technology is invented in that manner, retrofitting that technology to problems. And that’s the challenge. This issue can be spotted at the university levels, too.

Patenting is definitely the best way to have control over the use of one’s technologies. However, future proofing is another area where startups seem to have a problem. What are your views as a product design expert?

Startups need hardware engineers and design experts to understand current and future functional needs of the product under construction. Further, the promoters need to evaluate whether their technology solves the problem and is there a market for it. It is important to understand how the product demands will be met in future.

The startup trend in Kerala is growing into a kind of rage. In terms of ideas being generated and subsequent product development capabilities, how do you rate it?

From what I have seen I would say there are a lot of good ideas. In fact, people have advanced skills. Even at the prototyping stage, they are very positive. Having been out there for 14 years and having seen the energy here, I think there are going to be big opportunities. I have seen other parts of the world and I witnessed less enthusiasm, positivity, and engagement everywhere. That means change will come. Of course, much more hard work is needed and I think it’s really an amazing tech space. Startup teams often ask me if it is a good idea to move their operations to Hong Kong. But I don’t see any reason why they should be doing it. Moreover, it is also very expensive there. I know ‘greener pastures’ will always tempt people. But I have seen both sides. Startups should not waste a single chance to save even $1.

Even if you look at India at large, the cost of living in Kerala is much less. Moreover, by being part of the Indian tech hardware space these startups enjoy many other benefits as well. It is really amazing how governments here are engaging startups. That should give a lot of confidence because I have seen governments in other countries not treating startups like that. So the fact that the governments here are engaging, investing in them and contributing to their growth is a very big deal.

If you were to point out areas where the ecosystem could further improve, what would be those?

It is too early for me to take a critical look because the ecosystem is still very young. Connectivity has changed everything. Be resourceful, connect with product designers, marketeers, engineers and use the time that you have prudently. I think events such as Hardtech ’19 should happen more. That means more knowledge-sharing. I am 38 now and have also been in and out of the tech field for a while. But I love the benefits of it. I also see how it has destroyed people. I believe technology should not be invented for the sake of it. If it does not have a purpose, then forget it.

Sometimes I ask people who own smartphones what do they do with it and they say they use it to click photos, write notes or surf social media. But that’s a joke! You have more computing power in your hands every day than people ever had. And you don’t know how to use it. Even I don’t know. But the point is that we need to know how to unlock that true potential of such computing power.

What do you think the future of technology has in store for humanity?

One day IoT and connectivity are going to end our dependence on smartphones. It will be more evident in Asia. When I walk my way to the office in Hong Kong, I get to see how the crowd around me is so immersed in their smartphones. We need to stop looking down. We need to start looking forward and upwards.

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