Interview Series #02 - The Future of Manufacturing
Interview Series #02 - The Future of Manufacturing
An interview with Manuel Bönisch (Co-Founder and prev. CSO at ProGlove).
Hey there!
this is the second interview of my new interview series with founders and commercial leaders of manufacturing technology companies. I will share these interviews regularly with you. The interviews consist of a written summary below including a link to the full transcript.
Enjoy reading - and as always, sharing and feedback is a gift.
Robin
Conference recommendation
My friends at the REALTECH Conference are hosting the fifth edition on September 20th in London. The conference connects Europe's leading founders, VCs and policymakers building in critical industries such as climate, manufacturing and national security.
They have day of awesome panels and company presentations, with speakers such as Matt Clifford (co-founder of EF), Taavet (co-founder of Wise), Mike Butcher (editor at TechCrunch), amongst others. If you'd like to join, apply here.
Got a friend or colleague interested in the future of manufacturing? Help me spread the word by sharing the newsletter if you like it!
Intro 👇
In this interview, I sat down with Manuel Bönisch, Co-Founder and until recently CSO of ProGlove.
ProGlove started in 2014 and specializes in developing smart wearable devices for industrial applications. The company's flagship product is a smart glove designed to improve efficiency and safety in manufacturing and logistics. ProGlove's wearable technology integrates barcode scanning and data capture directly into a glove, allowing workers to perform tasks more quickly and accurately. ProGlove was acquired by Nordic Capital for around €500M in 2022. This has been one of the largest exits for a European industrial startup to date.
Manuel and I talked about his learnings selling to large enterprises, ROI calculations, how it was to build a hardware startup in the mid 2010’s and which advice he wants to give to fellow entrepreneurs. Below you can find a summary of the interview. You can find the interview transcript here. Thanks again Manuel for the insightful conversation and for sharing your journey so openly.
“Figure out what you can do for your champion so (s)he climbs the ladder - without taking any risk.”
The main take-aways for builders
👉 Close customer interaction: be very close to the customer during pilot projects to ensure they select the right use case and see the value quickly. Often customers are picking an edge use-case they always wanted to solve but couldn’t. You want to work with them on the main use case, not on the edge use case. So make sure to work closely with them on this and educate them
👉 Focus on sales: someone in the founding team needs to take full responsibility for sales. Sales is crucial for traction and growth and a founder needs to own it initially before bringing someone in
👉 ROI calculation: always have a clear ROI calculation to convince customers with numbers. Collaborate with an internal champion on the ROI calculation
👉 International expansion: when expanding internationally, pair a founder with a local hire to set up operations and understand the local market requirements
👉 Hire a founder associate: early on, get a founder associate to handle various tasks, extending the founder's capacity and helping with key projects
👉 Understand the “VC game”: know the rules of venture capital if you want to play that “game”. This includes to understand what VCs are looking for and market size calculations. Avoid non-interested investors early
Getting ProGlove of the ground
The early team consisted of 4 founders and an extended team of 6-11 people. One of the founders (Paul) has given tours at BMW production facilities. He observed that a lot of humans are doing something with their hands. So he thought it would be great to build intelligent gloves for these people in the BMW production line
ProGlove pitched that idea and won Intel’s “Make it Wearable” challenge and got $250k prize money. Winning this challenge provided credibility and initial funding (bear in mind this was a lot of money for a startup in 2014, especially since it was prize money)
The early product was a glove that could track movement, read RFID tags, and measure voltage. After working in close feedback loops with BMW, ProGlove pivoted to focus on barcode scanning
ProGlove generated €100k in the first year from customer projects. To avoid high production costs, they used paper prototypes in sales meetings
Early on, ProGlove focused on providing clear ROI to its customers and an amortization period below 6 months which is critical for enterprise buy-in
Challenges of running a hardware startup in the mid 2010’s
Investor hesitation: hardware companies such as ProGlove faced significant challenges in attracting investment, as most investors were more interested in software and e-commerce. Many investors were hesitant to invest in hardware due to perceived higher risks and longer development cycles
First-time founders: being first-time founders didn’t help either. They struggled to navigate the venture capital market and understand its intricacies, which made fundraising particularly difficult
Proving market size: how big is the market for gloves that can scan barcodes? They initially struggled with calculating their market size and needed multiple iterations before they got it right
Building credibility: establishing credibility was challenging. They had to leverage every opportunity, such as winning competitions and securing endorsements from well-known brands to build trust with investors and customers
Pilot projects: ensuring that pilot projects delivered clear ROI below 6 months was crucial. The ProGlove team worked closely with customers to select the right use cases and demonstrate tangible benefits quickly to move from pilot to production
Resource constraints: With limited funding and resources, they had to be creative in generating early revenue. ProGlove sold evaluation projects and used paper prototypes to secure initial funding and customer interest
How to win large customers
Educate the customer: be on-site with the customer to help select the right use case, implement the product, and educate users to ensure they see the value quickly. Still do this even thought you have product-market-fit. You should educate the customers which use case to pick since they might not pick the one that suits your product best
Calculate ROI: work closely with the customer to calculate the ROI and build a strong business case that shows how your product saves or makes them money. Ideally you can create a “risk-free opportunity” for them to use your product
Persistent follow-up: be persistent in follow-ups and ensure you understand the customer's needs and interests to tailor your pitch effectively. Don’t be afraid of following-up multiple times even if you don’t hear back
Show your product (for hardware companies): provide a physical representation of your product that potential customers can touch and see in action - even if it is not a working device. This helps in capturing their attention and to share feedback
Build strong visibility: participate in events, competitions, and take every opportunity to build brand recognition. While “brand” is very hard to measure, it has worked well for ProGlove. Other people often argue that many events are a waste of time for founders
Leverage customer voices: create impactful customer videos featuring well-known brands and key figures endorsing your product. For example, a BMW board member endorsed ProGlove in a video - which is a strong sign for every other automotive company
Advice for ROI calculation
Identify metrics: understand the specific metrics that the customer uses to evaluate their processes. For example, in the automotive industry, they know exactly how much time it takes to scan a barcode and how much each second costs
Work with a champion: find a champion within the customer organization who is enthusiastic about your product and is willing to help gather the necessary data for the ROI calculation
Collaborative calculation: sit down with the champion and collaboratively build the business case. Let the champion define the wording and ideally create the presentation to pitch it internally. Use the customer’s internal data to calculate the savings or additional revenue generated by your product. Input the corporate numbers provided by the customer into your ROI model to ensure accuracy and credibility
Amortization period: ensure that the ROI shows a clear payback period, ideally within 3 to 6 months. Anything beyond 12 months might not be attractive to the customer
About hiring, roles and responsibilities
Local sales people: When expanding into new markets, especially the US, hire local sales personnel who understand the market and culture. Pair them with a founder to set up operations and ensure alignment
Founder’s Associate: Hire a founder’s associate early on. This person can handle various tasks, extend the founder's capacity, and take on significant projects, like building CRM systems
Sales responsibility: needs to sit in the founding team. Ensure that someone in the founding team takes full responsibility and ownership for sales
Building a local teams: for effective scaling, especially in different countries, build a local team that can handle the specific needs and nuances of that local market
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