A key element to Hackspace success is a constant pipeline of cutting edge technology products to offer holders of HAC tokens and the public at large. Hackspace has thus entered into a formal agreement with EnCata, the leading regional catalyst for hardware startups, to receive an exclusive first look and right of refusal at investing into startups with which EnCata is working.
EnCata, is based in the dynamically evolving and engineering rich tech hub of Minsk, Belarus. A December, 2016 Wall Street Journal article labeled «Belarus is emerging as the Silicon Valley of Eastern Europe» highlights the growing importance and opportunity of Belarus as a hi-tech and development center. There are currently 40,000 Belorussian software engineers, and such popular applications as MSQRD, AIMATTER, Viber, Vizor Games and World of Tanks originated in Belarus.
EnCata, founded by 2016 Minsk «Person of the Year for Industrial Innovation,» Oleg Kondrashov, employs nearly 200 developers, design and manufacturing engineers in taking the most promising hardware startups from Russia, Belarus, Ukraine and Kazakhstan from the ‘good idea’ stage to a company with completed 3D design, manufacturing documentation, bill of materials and fully functioning prototypes ready for mass production.
EnCata provides a fully integrated ‘one stop’ service for tech entrepreneurs in order to help them develop the most appealing and efficient products possible. EnCata not only performs the necessary tasks of creating the engineering design documentation and working prototypes, but also acts as a full service engineering consultancy in organizing the most cost effective product development and manufacturing process. EnCata houses all the necessary facilities in one place, including a design office, project office, its own production managers and consultants, impressive world-class R&D facilities and an array of industrial machinery for industrial prototype manufacturing. EnCata is working under the philosophy of LEAN and Toyota Production System (TPS) that helps to manage the entire Product Lifecycle. EnCata is able to impart its knowledge and experience with these systems to its clients.
EnCata has become the darling of regional private investors, business angels and incubators as EnCata’s full service ‘catalyst’ program provides the highest chance of success for hardware startups. It is fair to say that EnCata has virtually no quality competition in its central markets of Russia, Belarus, Ukraine, Kazakhstan and thus has a virtual monopoly in seeing and working with the best startup teams and projects in the region.
Critically, for Hackspace, EnCata engagements require 3–6 months of close working cooperation with the founders and management teams of the startups. Thus, EnCata not only understands which are the most promising products emerging from the region, but their close work with startup teams enables EnCata a lengthy period to evaluate the quality of the management, which is arguably the most critical element of any successful enterprise.
Aside from its Minsk hub, EnCata has opened regional offices in Latvia, Russia, Oman, Estonia, Czech Republic, Israel, Australia, Canada and will open representative offices in other locations, including the USA and Belgium, within the next 6–9 months. EnCata’s R&D centers are the heart of the company, where EnCata’s engineers develop new designs and also manufacture sophisticated prototypes. R&D centers are built on the Toyota Production System.
EnCata utilizes the US Space Agency (NASA) Technological Readiness Level («TRL») classification system to identify 1) the developmental stage of startups EnCata engages and 2) the necessary process to bring the company and the product ready for mass production and market launch. TRL is based on the scale from 1 to 9, where 9 is a working technology and a finished product fully prepared for the production chain. Most startups fail at TRL 3/4 (lab demonstration and home-built prototypes) but EnCata’s one stop program takes companies from this stage through TRL 9, ready for mass production and public launch.
- TRL 1. General principles observed and reported. Scientific knowledge generated, general concept proposed.
- TRL 2. Concept formulated in greater details, applications identified and assessed.
- TRL 3. First lab demonstration, key predicted parameters validated.
- TRL 4. Key functionality demonstrated and documented in a form of MVP
- TRL 5. Prototype or system elements validated in a relevant environment
- TRL 6. Full-scale prototype demonstration
- TRL 7. Prototype performance fully demonstrated in operational environment
- TRL 8. Final configuration of the prototype demonstrated through a set of validated tests. production documentation completed
- TRL 9. Final product entering the market
Hackspace and EnCata have agreed that EnCata will identify to Hackspace its most promising hardware/connected hardware products and teams and Hackspace will have the first exclusive opportunity to review and invest in these projects.
During the first nine months of 2017, EnCata has been engaged in approximately 50 projects and identified 10 exceptional companies which it has referred to Hackspace. Most of EnCata’s projects involve Russian and Belorussian startups but have also recently included projects in the USA and Oman. Start-up projects are brought to EnCata from sponsored incubators or entrepreneurs who need a quality, reliable engineering catalyst to advance their projects from early TRL stages to mass production readiness at TRL9. Often, when entrepreneurs bring projects to EnCata directly, EnCata will organize pre-seed funding to provide the essential early financing. EnCata has been so successful in the quality and reliability of its work with incubators, that it has established a relationship where it provides an initial review of projects for the incubators to streamline the bureaucratic work of the administrators. Incubators then pass their accepted projects back to EnCata for product development and implementation.
When a startup, led by EnCata, has advanced its project to TRL 8, the startup needs to raise a seed funding round of capital to finance and bring to market the first mass produced batch of its product. The required capital will generally be in the range of $500,000 — $2 million. It’s at this stage that EnCata will identify its absolutely best products and management teams and refer them to Hackspace as a potential source of capital. With assistance from EnCata, Hackspace then carries out a thorough due diligence of the product, market, management team and capabilities of the startup. In addition to seed funding for mass production, Hackspace/EnCata will assist the startup in branding of the product, creating unique photo and video content, developing a marketing campaign for a “loud launch” of the product on the international market, potentially creating and realizing a kickstarter crowdfunding campaign (for market evaluation and analysis); performing viral media campaigns and direct advertising of the product in physical and digital media space.
Currently, there are 10 hardware startups which EnCata has referred to Hackspace based on what EnCata views as superior products with superior management. These products (and most of the anticipated Hackspace products going forward) are primarily connected hardware products, combining real world devices with sophisticated operational and/or community oriented software.
Four of these projects are still in internal development and six are approaching TRL 9 and ready for further investment in mass production and market entry. Hackspace expects as many as 20 more projects will enter the pipeline by year end.