Some people will tell you there’s nothing better than being on a boat. To them, a fresh sea breeze in your hair, the sun warming your face, and the gentle rocking of the water are everything you need to have a great day.
Those people might also tell you that the experience of owning a boat can be more mixed. The cost of maintenance involved in just keeping a boat afloat and shipshape is significant in both time and money, and even then, you might not find yourself using your boat all that much. Telegnos CEO Mike Plocek’s done the research: “What we found is that most active boaters tend to spend only 72 hours on their boat per season, which means it spends a lot of time sitting at the dock not being used.” Telegnos COO Edward Moss notes that this in turn means a boat owner can spend close to that same amount of time fretting about the boat while it’s out of their sight. “When we started at Highway1,” Plocek recalls, “we were focused on creating what was basically a health monitoring system for a boat that would enable people to know how its systems were doing at all times. When we left, our goal expanded to building out a hardware/software platform that would make it easy for boaters to maintain, manage, and market their boats.”
A different problem emerges
Round-the-clock health monitoring for boats was an intriguing idea, one that Telegnos was happy to sink their teeth into. But as they went around the San Francisco Bay talking to prospective users, a pattern started to emerge. After conversations with over 30 different charter companies, the biggest pain point Telegnos heard over and over again was far more basic: customers had no idea where their boats were. The instant a boat left the marina, the company would have no way of knowing if it were to become lost or stolen or worse. In the same way not every car is meant to go off-roading, certain boats can only go certain places. If you want to safely take a boat out into the open ocean, for instance, you need to have the appropriate equipment (life rafts, radar, etc), not to mention training. “We talked to a boat club who’d gotten a call from one of their members asking if they were doing a class down in Monterey,” Plocek says, which is a fair distance down the California coast from San Francisco. “They were not; it turned out a bunch of people had rented three boats and taken them down to Monterey, and the club had no idea. After that, they wanted location tracking on all their boats.”
This made sense from a sheer financial risk protection angle; boats can cost anywhere from $50,000–500,000 apiece — not a small investment. But Moss points out that there was another angle to location tracking as well: “[On the ocean] you have a customer whose life is potentially at risk. We had a charter company who wanted to know the instant someone took a boat of a certain size past a certain point. That way, not only could they see when a boat went where it shouldn’t go, but they’d know exactly where it was so they could send help if there was a problem.”
It seemed clear to Telegnos that their customer base was clamoring for a solution to a problem slightly different from the one they’d been expecting. Forget 24/7 health monitoring for your boat — just knowing where it was would be a vast improvement. At the same time, Plocek and Moss were seeing some interest in the Telegnos Boathub, which they knew offered significant value but would take longer to deliver. The two decided to get to market quicker by focusing on their customers’ more pressing need first; they could always upgrade to the Boathub later. It was time to get started on the Telegnos Tracker.
Making the Telegnos Tracker
Amazingly, Plocek recounts, there were no good location tracking solutions out there for boats already: “You could get one for $1000, but that wasn’t something we thought was right for most boat owners.” GPS tracking for cars and trucks was a solved problem, of course, but there was simply no good equivalent for the marine industry at a reasonable price for its consumer base. “We knew there was demand now: a lot of companies we talked to didn’t have a solution in place, so we wanted to move very fast.” Instead of spending huge amounts of time and effort building out their own technology, Telegnos decided an OEM solution was the best approach, leveraging existing hardware along with a custom software backend that would provide a top-notch user experience. And then the work began.
The criteria for selecting a manufacturing partner are many and various, but there are even more when you’re working in a marine environment. Vibration, salt water corrosion, and just plain water everywhere become concerns, and Telegnos had to be very clear about their requirements when vetting manufacturers. They settled on a target Ingress Protection (IP) rating of IP66, which meant their device wouldn’t let dust in and would be able to withstand a powerful blast of water from any direction, but not necessarily full submersion. “If your boat sinks,” Moss notes wryly, “knowing where it was when it sank is useful, but the value of the GPS tracker at that point is moot. Making sure it could survive water splashing on it in the form of a wave was a requirement, however.”
The hunt for manufacturing partners was on: Plocek and Moss went to Alibaba and Global Sources looking for companies making GPS trackers. At this stage, the search is littered with minefields — manufacturers of questionable repute, companies that turn out to be trading partners with nary a factory to their name, etc. Telegnos concentrated on GPS-focused manufacturers with the right set of FCC and CE certifications. “We were making sure the manufacturer and their responses to our emails were credible,” Plocek says, “then we verified the product would work well in the marine environment. They weren’t making their devices specifically for boats, but we needed to ensure they worked well there.” Telegnos talked to a dozen different companies and got samples from each one, and from there they were able to filter down to a couple of vendors they were comfortable with. According to Plocek, “This was also a recommendation we’d heard from several people: have a backup vendor or two. You want to make sure that if they do flake out, you have alternatives.”
“Part of what we’ve been doing with this process is understanding what the growth pattern is with the manufacturing partner,” Moss explains. “We’re ordering a certain number per month now; when we step that quantity up, what kind of arrangements can we expect? It’s really helped our roadmap planning to be able to know that at a certain level, we can fundamentally change our engagement and reduce our prices overall.”
“A lot of it’s about risk mitigation,” Plocek confirms, “making sure that we could start off small and validate the market, as well as get paying customers without putting a huge investment ahead of it. We were able to get smaller batches done; as we increase them, we get the ability to customize more with them, with an eye toward eventually doing more of those processes locally.”
Software was also a criterion aside from Telegnos’s various hardware requirements: the devices they were hoping to use needed to be configurable in the correct way. “We took a look at how much memory a device had,” Moss says, “which networks it could communicate on, how long it could go without a network and continue to store data for upload when it did find one — that sort of thing.”
Why go OEM?
Plocek and Moss are effusive about the amount of time and money they saved. When they came to Highway1, Plocek says “We were building a much more inclusive solution that let you install and access sensors on your boat so you could know its health and access it remotely. The choice to really tailor it down to just this one particular need we were hearing from charter companies was a significant transition. If we’d designed it in-house, it would have been hugely expensive — we’re talking months or years to get this all to mass production. Instead, we were able to shorten time-to-release at a fraction of the cost, which was huge.” The span from deciding to pursue location tracking to the delivery of their first device to a customer was a mind-bogglingly short four months. “Solving solved problems over again just doesn’t make business sense.”
Being able to deliver a solution customers want quickly at a lower price point is helpful in securing Telegnos’s long-term outlook, too, says Moss. “It allows us to build our relationships with them today without having to wait until our total vision is realized. We can spend the next year building our rapport with these customers, giving them exactly what they’ve said they wanted while we build things we think they will want.” Moss thinks it’s a very risky idea to focus only on what you want in the long term instead of what your customers want now; better to leverage that to facilitate and fund what you want to do in the future.
“In a lot of ways,” Plocek muses, “it’s a nice, agile approach to getting hardware out the door.”
Asked if they had advice for any hardware startups thinking about going the OEM route, Telegnos had plenty. “Think about whether what you’re trying to do has already been solved,” Plocek urges. “It might be in a different domain, but there may be pieces of existing technology you can then leverage. If you don’t see that it’s been solved elsewhere, or that it’s only been solved by two players with huge costs, that’s not something you’re going to be able to use; you should look towards rolling your own solution.”
“OEM isn’t necessarily for everyone,” Moss says, but it’s something no one should exclude outright either. “It’s so easy to get caught up in what you think is important. Everyone should retain that vision and drive toward what they want to do, but if everyone you’re talking to is asking for something that differs from what you want to build, you have to consider that maybe there’s another way to go. At that point, if you’re excluding solved problems from your solution, you’re hurting yourself.”
Telegnos invites anyone with questions to contact them at info@telegnos.com. “We’re happy to talk to people, help them with their challenges, and disseminate what we’ve learned,” says Plocek.
