T-24-001 : Haytham Elhawary - Transitioning from Hardware to Insurance
Welcome to TRADEOFFS, where we take you on a deep dive into hardware innovation and what it takes to make it one of tech's most demanding spaces. I'm your host, Chris Rill, along with Nate Padgett.
Nate:For this episode of TRADEOFFS, we're joined by a good friend, Haytham Elhawary, founder of Kinetic. Welcome to the show, Haytham.
Chris:How long has it been?
Haytham:Way too long. It's been a long time. Turns out I've I've been on an odyssey to try to become a US citizen for the last two years, and it's been terrible because I keep getting rejected and for silly reasons. Like, you know, yeah, like I did all the interviews, I did everything and the last step is like, I just have to go to like a pledge of allegiance, right? So it's literally like a ceremony and we take out swag and you take some pictures and you say the pledge of allegiance and you're American.
Haytham:That's literally what was left. And I failed to turn up a couple of times because I didn't receive their letters. So I appealed and they said like, oh yeah, you can come to appeal on the July 14, but you have to come that day. Like, if you don't turn up, we're basically rejecting the case.
Nate:Man, you will be in New York then?
Haytham:I'll be in New York and I'll have no family with me. So it's just going to be like, I may just be like in a gutter. But can
Chris:you talk to one of your investors who has like a friend whose uncle's cousin is a Senator and just do it the way big company CEOs do it?
Haytham:See, if I were a true American, that's how I'd do it. But I'm clearly learning.
Chris:Well, congrats. Or actually I'll hold my congrats until the fourteenth.
Haytham:So guys, tell me a bit about this podcast. Like I see you have a nice name now, TRADEOFFS, which sounds very, very off point.
Chris:Thank you. Thank you. That was some feedback we received. And so we shopped it.
Haytham:I like that. It's funny you're saying that trade offs between people that build hardware. It's been a while since I've thought of Kinetic now as a hardware
Nate:I know.
Chris:Was going to ask you about Save it. Save it. Don't we're not talking about that. Save that thought. Yes.
Chris:Yes. We will get to it.
Nate:So the point of this, Haytham, is Chris and I spend all day every day talking to really cool people that build hardware for a living, and there's just so much nuance around building that type of startup. And honestly, there are a lot of trade offs that go into bringing physical products to market, and we thought,
Haytham:you know, it seems like good content.
Chris:I would say, like, selfish reason is I miss having these conversations.
Nate:Now, as you can tell, we're building this plane as we fly it. So thanks
Chris:for experiencing this with us. Sounds like we're in the air, Nate. Not even in the air.
Nate:We're building this plane as we taxi it. Yeah.
Chris:So let's dive in. Haytham, tell us about what you and the team at Kinetic are doing.
Haytham:So essentially, we're building a wearable technology that helps reduce injuries in the workplace. And I mean, we're selling injury prevention, if you think about it. We focus mostly on musculoskeletal injuries. So, you know, throwing out your back, tearing a muscle, things like that, which are very, very prevalent in industries where there's a lot of physical labor, like manufacturing, warehousing, even like nursing, parcel delivery, all those sort of industries where there's a lot of repetitive motion. Those industries tend to have very high injury rates.
Haytham:And most of those injuries tend to be strain and sprain injuries, right? So people who over time they're using sort of incorrect body mechanics and over time they hurt themselves. And the thing with these injuries is that I actually read the other day that more gets spent on musculoskeletal injuries every year than they do on pharmaceuticals. And that's like a lot of money gets spent on pharmaceuticals. So it's massive, massive amount of money that gets spent on that every year.
Haytham:And the other part of it is that because it takes so long to recover from these injuries, like if you're an employee, you're out of work for a while and that creates a ton of operational sort of difficulty for your employer. So it's like, it's an expensive injury. Obviously from a human tragedy perspective, I could say terrible because these people are getting hurt and they're getting out of the job. And then from an operational perspective, it adds a ton of problems because now you're asking people to work overtime, you're constantly hiring. So really it is a big problem.
Haytham:And so, you know, when we started the company, really the goal was how can we prevent these injuries at scale? And the way companies have done that now, which is sort of not at scale is they just send out trainers and consultants and physical therapists to sort of train people to use better body mechanics on the job. And what we've seen is that that really isn't effective. So the way you move on the job is so ingrained in your habit that someone trained you to do it in a different way. You'll sort of remember for a couple of days, but it will never be enough for you to change your habits.
Haytham:And so when we started the company, we really thought, okay, technology is going to be a key part of this solution if you want to make this scalable. And really what we built is a wearable that you can almost think of as a real time coach. So it sort of detects the movements and the body mechanics of the worker. And whenever it detects a high risk movement, it gives you a little vibration. So it's almost like this real time coach that really helps you use proper ergonomics and proper posture
Nate:on the job. Do you think that your product is changing behavior?
Haytham:So I think what tends to happen is when people wear at the beginning, they'll be doing like hundreds of high risk movements a day and you'll start to see it go down. So by month three or four, people have got it down to a pretty low level. And what we've seen is, you know, even if you take it off and we've simulated that by just turning off the vibration, people start to go back into their older habits.
Nate:And why did you go into injury mitigation? Was it like a personal thing or like what led you to this?
Haytham:Yeah, so really, yeah, was a combination of my mom got injured a lot. So I sort of was familiar with the impact that workplace injuries have on your personal life, right. On your ability to enjoy life outside of work. And, you know, going back to mission, I mean, that's, that's, that's how I talk about our mission. Our mission is a better life for an industrial worker, because if you're safe at work and you can come home, you can enjoy your life.
Haytham:Right. And so if you come home injured and it's a type of injury that makes you much more likely to get injured again, it's just, it really has a massive impact. So I think part of it was my mom. Part of it was there was another company that I was working closely with that was sort of building exoskeletons. And I realized at that point, was like, you know, I don't know if exoskeletons is the answer to this, but it's an interesting problem.
Haytham:So yeah, so that's sort of how I got into the space, but without really knowing the industry, without knowing how to build robust hardware products. So it's just a big learning curve.
Chris:And who are those early adopters? Like from a department perspective, who like, who are those people and why are they so keen on getting this hardware product?
Haytham:Most companies that really are interested in a product like this tend to be, you know, the Home Depots of the world, the Walmarts, the anywhere where they have just large workforces that are doing a lot of physical labor every day. So those are really the companies that we've targeted. And there's another nuance, which is that in The US, if you get injured on the job, it's your company's responsibility to pay for that injury. So for all the medical bills and for part of your salary while you're out. And so most companies fulfill that obligation through workers' comp insurance, but all the large companies just pay for the injuries themselves.
Haytham:And so for us, the business proposition to these large companies is if you invest in technology like ours, you'll reduce injury rates and you'll save a lot of money. And so that's really the business proposition. So we've targeted to the large fortune 1,000 companies that do a lot of physical labor.
Nate:Haytham, you started talking about the insurance side of the
Haytham:business, and you were before that, I haven't thought about hardware in a while or thought
Nate:of Connecticut as a hardware business in a while. How does it feel?
Haytham:It's interesting. I guess you go through phases and it's wearable device that we sell to enterprises where you don't really have a twelve month innovation cycle. You have to get the next version of the product out in twelve months. So it's a little more forgiving than the consumer sort of hardware space. But when we started the company in 2015, it was just all about the hardware and it was all about building the product and will people wear this?
Haytham:And can we make it cheap enough and can we make it robust enough so that it doesn't break on a factory floor? And like all those things are just consuming us for the first two and a half to three and a half years. And now really it's much more around, you know, what's the sales process like? Can we monetize this through insurance and how do we create those partnerships? So it feels that like hardware, you know, I guess at the start up really, you just focus on whatever's your highest risk in that moment.
Haytham:And so for a long time it was the hardware. I think luckily now the hardware isn't as high risk, but we are making a new version of the hardware, you know, taking into account everything we've learned. And so it is starting to come up, but I was even saying there it's not as high risk as it used to be because they're going to be small changes. Right.
Nate:What you were saying you don't have the twelve month innovation cycles, constantly bringing out a new product or making substantial changes to an existing product. Was that a function of the industry that you were playing in? That you didn't need to build other devices? Like why you didn't have multiple SKUs all those things?
Haytham:In terms of adoption cycles, whether this becomes as prevalent as other safety gear, like a hard hat, this is really nascent. So the idea of using any technology to reduce injuries in the workplace is very nascent right now. And so what you're seeing, if you sort of look at a classic sort of technology adoption curve, you're looking at the really, really early adopters who are using this right now. And the reason I sort of giving you all this intro is because if you think of how long it takes to sell into those organizations, this is a twelve to fifteen month process, right? You're educating them on the product.
Haytham:You're allowing them to pilot to make sure that their workers like it and are okay with it. You're really helping them sort of de risk as much as you can, something that's going to require a lot of change management on their side to deploy thousands of devices to their workforce. It's a long sales process. So having to improve the technology is secondary, I would say, to just educating the market on how much of an impact this technology can have and how much it can change operations.
Chris:I was going to ask, I've seen in a number of cases where hardware companies get into this pilot hamster wheel where like it's pilot after pilot after pilot, and they go absolutely nowhere. What allowed you to convert your customers from like a piloting customer to, you know, a customer who's starting to scale?
Haytham:Yeah. You know, pilot hell. I mean, I think that's very real, especially selling into large enterprises. And I feel it's almost like a rite of passage. They almost have to go through that.
Haytham:And really, I think what it is, it's a reflection of not completely understanding the sales process. So in our case, what we realize very quickly is if you're selling safety technology, the people who are in charge of safety at a company are the people who are going to be deploying the technology. But unfortunately, the person who will actually be paying for it, and we can say the person who owns the employees and the company is operations. And until you understand that that's the dynamic and how you speak to each one of those groups, what you end up doing is naturally going towards safety as like the person who'd be in charge of this and doing pilots and then realizing that they can't actually pay. Right.
Haytham:And so, so then you wish you'd gotten operations involved earlier. And by the time you get them involved, all the good results and the momentum you had from the pilot has sort of dissolved. And so you realize actually, look, it doesn't make sense for me to do a pilot until I understand the buyer involved in this process. And I think it's just the pilot hell thing. You just go.
Haytham:It's just a natural middle step. And so we spent years doing pilots and not really understanding what it takes for a company to spend real money and who's going to be spending and what they care about, which is often different than the users. So, it's just, I think, like a rite of passage. You get there, you haven't seen it, then you rapidly realize that
Chris:if you don't want it
Haytham:to happen again, you better understand your sales process.
Nate:Was there like an moment when you were like, maybe it's our approach that's the problem? Or did you kind of stumble into it where like you just happened to have the ops perspective early on and you're like, God, that was way better.
Haytham:Nate, I would say that what really was the eye opener is, you know, our device worked really well from the beginning. Like we could measure how many high risk movements workers were doing when they started using a product. And after a week, after two weeks, after four weeks, after six weeks, and we could see it going down dramatically. So we're like, look, this is doing everything you'd expect it to do. So, you know, tell me where you want to sign the check and we'll send you the, you know, the other 10,000 units.
Haytham:And what we realised very quickly is that these pilots were finishing, the results were going great and nothing was happening. Right. And you know, this is especially, I think at the beginning where the founder tends to do a lot of the same thing. So I was at the sites, I was talking to the folks, I was listening to firsthand, like how they just couldn't make a decision to spend a whole bunch of money because they just didn't have the budget to do it. We're just at the mercy of folks that we just didn't have the decision making capabilities, to decide to spend the money or not.
Haytham:So we decided to change our sales process. And, and you know, the, the big problem with enterprise sales is that sales cycles are so long that you make a change and it takes you six, nine months to know if it's going to work. And so because of that, again, just going back to your original hardware question, iteration number two on your hardware product is irrelevant if you can't get past the pilot, right? And if it's going to take you a couple of years to understand the sales process, then again, the hardware is sort of secondary.
Chris:So going back to the early days, do you have a hardware survival story where something went catastrophically wrong? And what did the team do to kind of turn the tides and overcome that adversity?
Haytham:I can think of sort of two moments. So we have a wearable that goes on your belt or on your waistline, and often the workers will be in environments of like 100 to 110 degrees in Atlanta. They're in a trailer unloading a truck full of packages. It is, it can be brutal. And the, and the device just started not sending data for a while.
Haytham:And then we started realizing, Hey, what's going on? None of these devices are working anymore. And when we took them off and sort of dissected, we'd open them up and literally that you'd just be able to pour out the water from the inside. And then you'd see like all this salty residue around it. Saltwater intrusion.
Haytham:Yep. So I think, I think we rapidly realized, Hey, we've got to waterproof these things. So I think that was one. That was definitely one that we learned pretty quickly. But again, you know, we'd spent a lot of time in hardware development and then only realized this during the summer when we had people working at just an incredible temperature and sweating like crazy and then had to do a whole bunch of changes again.
Chris:How long was the product? Sorry to jump on that. How long was the product being used by customers before you figured that out?
Haytham:I would say we're still probably in like a beta version, but you know, because because of everything I've told you around sales cycles, mean, this was probably two years in. Oh wow. Yeah. Yeah. And then the other one was actually really scary.
Haytham:So we had some devices that had been in the field probably three or four years and they were going well. And, and I remember at some point, one of our clients sending us a picture of a device that had completely just melted to the charging dock spontaneously. I guess it was charging. And yeah, there clearly had been a small fire or explosion. Was like, because everything was completely melted.
Haytham:And so we suddenly panicked. Mean, what is this starts to happen to a lot more of our devices? And so we just started to pull devices out of the field because you just don't want to risk it. So again, that was like, that was a pretty scary, scary ordeal.
Chris:On that particular issue, did you do any sort of root cause analysis to be able to identify like what went wrong for that particular device?
Haytham:You know, we tried, but yeah, literally the evidence was burned. So when there was very little, we could actually figure out from there. And then as we started to dig into like, yeah, that's, that's where we realized, Oh, this is probably a battery issue. Most likely some chemical breakdown in this battery. And then start, you go back to battery manufacturers and they said, it actually does how, depending on the chemistry, the number of cycles.
Haytham:Yes. Your chances of an explosion or a battery breakdown are much higher. So again, for the next version, we'll have a much better battery.
Chris:Do you still have that customer? We do. Salvage.
Haytham:I mean, you know, what I realized with customers is customers are very forgiving as long as you really like deal with the problem properly and expeditiously. And so I think as soon as they send that to us, okay, this is what we're going to do. We're to replace all your devices. This is what we think happened. You know, obviously no one's happy in that situation, but if you're willing to do things quickly, expeditiously, I think they appreciate that.
Chris:That goes a long way.
Haytham:Yeah.
Chris:So I think we should take it back way, way early on in your hardware journey. I'm curious, where did you get your start in hardware?
Haytham:Yeah. For me, I studied mechanical engineering, but I studied it in Spain because when I was a kid, my parents moved to Spain. And the thing about, I think generally sort of European universities or at least non Anglo Saxon ones is that engineering degrees are very theoretical. So I did lots of calculus, lots of algebra, lots of differential equations, but actually very little building of hardware. And so when I finished, I thought I wanted to be an academic and say, if you want to be an academic and do research, your next step is like a PhD.
Haytham:And I really wanted to choose a PhD that would allow me to have the hardware experience that my degree never actually gave me, even though it was mechanical engineering. And so, I went to The UK because it was closer. Those are PhDs are much shorter, which is, which is nice if you're an impatient guy like I am.
Chris:PhDs are shorter in The UK.
Haytham:They are like literally you get funding for, you have four years max to do it in and you get funding for three. Wow. So like you, you get pressure very quickly to finish.
Chris:I had no idea. If you want to become a doctor, just go to The UK.
Haytham:Yes. That's right. So yeah, I spent, I spent three and a half years doing a PhD in medical robotics. You know, there was a theoretical component in simulation and things, but really it was just about build a device that could do a biopsy of your prostate. That was my mandate.
Haytham:And, you know, my super eyes at the time told me this isn't something you just make in it. We're going to put this at the time we thought an animal. We're to put this in an animal and it's going to take a biopsy of their prostate. We ended up actually finishing a PhD by putting it in three humans and doing human trials. So the nice thing was like, it was actually like build a real thing, you know, a prototype, but that actually works and does the job it was designed to do.
Haytham:And so that was just an incredible experience. It was very stressful, I will say, because graduate student level code that's actually going to go into someone's rectum and take a biopsy of their prostate. That is a scary proposition. You can't really get that wrong. So I spent a can get that wrong.
Haytham:But it was a great experience. So it really immersed me in building prototypes. So yeah, that's really how I sort of got into hardware and I loved it ever since. How were you
Nate:able to test the prototype on three human subjects? Was that
Haytham:a thing about being in
Nate:The UK? NHS just makes it great. You can do all kinds of human trials, no issues. What strings did you pull?
Haytham:Yeah, so actually we have a great story with that. Usually when you're doing research in robotics, what you'll do is, instead of trying it in humans, you'll usually try it in an animal that has an organ very similar to a human organ. So in the case of the prostate, I hope that not too many dog lovers here, but surprisingly dogs have prostates very similar to humans. And so that was the plan. And what happened is in The UK, we really love our animals.
Haytham:And so it got rejected and we weren't given permission to do this on dogs because there wasn't enough safeguards. But what we realized is that the physician, the doctor who was going to help us do them said like, look, I think I could get approval to do this in human subjects because it's a cancer based thing. It's very hot topic right now. And she got us permission to do this in three humans. So we were rejected to do this in animals and got permission to do it in humans, which is sort of crazy.
Chris:So can you describe a bit about what the robot actually did? Because I'm just imagining in my head this gigantic machine that's got a needle that does a core sample or something. So what exactly was that? Yes. What exactly did the robot do?
Haytham:So, no, very good point. Really the premise is that for a subset of people, in order for them to see cancer in the prostate, have to get an MRI. And then what would happen is you'd see the potential tumor in an MRI image and you wouldn't be able to sample it. You'd have to take the patient out, go to ultrasound and you wouldn't be able to see it anymore. Then they end up taking 12 different biopsies all around the prostate.
Haytham:So really what our premise was like, well, once someone's in an MRI machine, you could you use a device that would immediately do one or two biopsies around the specific area of interest? So in a way, there's a definite benefit. You know, you could touch the image, the MRI image and say, here, I want you to take a sample from this point over here. And then the robot would insert the needle into the right place. And so it was really a robot that goes inside an MRI machine.
Haytham:And the way you access the prostate, which honestly I should have asked before I signed up for this PhD, but I didn't. The way you biopsy prostate is you go trip like in the rectum. So what happens is the robot puts an arm inside your anus and puts a needle through the arm and puts it in exactly the right place in the prostate. So I was very popular at cocktail parties telling people what I did.
Chris:Especially in The UK.
Haytham:In The UK.
Nate:My gosh. Just wasn't crude for dogs. This is wild.
Haytham:It's crazy.
Chris:So I guess of those three subjects, was the actual biopsy more traumatic just because you had Johnny Five going in that side? What was the result of those three trials?
Haytham:I would say for the patients involved, you know, it was pretty effective, which was good. And I think from a user perspective, it's like I said, you're in an MRI machine, which is pretty tight as it is. You're getting your robot yucking bum. So not fun, but, you know, effective and that's the important thing.
Chris:So did that research kind of die with your PhD or is there some grad student continuing to probe the prostate So
Haytham:very good. Very good. So actually, you know, it's a good question because the thing that frustrated me the most out of academia and sort of why I got out is, you know, I would build things, I would do all this research and then they would just die. Right? Like the end product wasn't the device.
Haytham:The end product was the paper you wrote about the results. And so, you know, I then got out of academia and went into the healthcare industry, healthcare technology, and I was still building robots for surgery, mostly cardiac surgery. And what I realised is like, okay, in this case, the end product isn't just a research paper, but it's a medical device that's going to take ten years to get to market. So being the patient person that I am, that just really motivated me to sort of get out of that whole space and build something that could get to market much quicker and just make an impact much quicker. So I'm very happy that I'm out of that.
Haytham:I will say that I wouldn't have imagined that Kinetic, I'm seven years in and we're still building the business. We haven't had a breakout yet, but I would say that the challenges and solving the problems happen a lot quicker. But yeah, it still takes a long time.
Nate:Yeah, it's so interesting, the product development cycles and consumer versus what you're doing with enterprise compared to medical devices. It's just such a spectrum of experience. And it's cool that you've seen so much of it.
Haytham:Yeah, I would say that I was just probably on the easiest side, to be honest. When I see the folks who have to design a consumer product every holiday season, right? And if you don't get it right, then you're in trouble. Like that is brutal. Right.
Haytham:That is brutal. For us, I think it's more just like, you need to have a hardware product that works robustly in the enterprise and figuring out the sales is going to be the problem that takes the longer amount of time. So I think that while our ramp up was really hard I think that now I guess steady state is much more benign. Whereas the folks who are, you know, year having a hope that the CES show really highlights their product, way they go out of business, that's a really tough one.
Nate:Right. Exactly. Benefits of enterprise.
Haytham:That's true.
Nate:Can we talk about insurance now? Sure. And like how that came about? Sure. And why that is an important evolution for the business?
Haytham:You guys, you both can relate to this. Every IoT company that exists, every investor asks you, So how are you going to monetize the data? Or actually, would say that even before that happened. Every founder tells investors how they're going to monetize the data. Our device is great and we're going make a lot of money with that, but you should see how we're to make money with this data and everything it can be used for.
Haytham:And so in our space, when we started talking about the data from our devices, naturally people started thinking about, Oh, can it be used for insurance? And so from the beginning, it's one of those things that we throw out there is like, Hey, it seems reasonable if I say it and seems like there's a massive market opportunity associated to it.' But in reality, I have no idea how we're to even do that and if it even makes sense. But as we started selling into these large organisations, we had this sort of moment where we had like 35,000 workers where we had fifty millions of hours of data and we had like enough years in the field that we could be like, now's a good moment to have a look and see what is the quantify the impact of the product. And we've done it for individual clients like, hey, you know, we did a six month trial with you and we actually reduced these injury rates and we measured it specifically for them. But we hadn't done it sort of like across all our clients.
Haytham:Right. And so we hired a sort of third party firm that would take all the claims data of our clients. So all the injuries they had before using Kinetic and then during Kinetic for all the clients that were willing to give us their data. And it was the majority and they came back with some incredible stats. I mean, we were reducing strain and sprint injuries by 55 on average, mostly in wholesale, like warehousing was really the place where we had the most impact.
Haytham:And then we were reducing lost workdays to days that you're out injured by seventy three percent. So it was really meaningful. This is across like, you know, 35,000 workers. And so, so that was a really important thing that happened to us. And, and then I remember reading an article about how a company that was building a safety app was now offering it for free as part of workers' comp insurance.
Haytham:And I was like, Oh, that's interesting. And the interesting thing about it is in workers' comp insurance, everyone has to buy it. Right? So like everyone, every year has a budget set aside for workers' comp. So unlike in the enterprise where we're telling people, look, spend your money on us right now, what we're telling people is like, you see this money you set aside to workers' comp that you have to buy by hours and we're going to give you free technology that's going to help you reduce injuries.
Haytham:Right?
Chris:So are you offering the service at a discounted rate or are you matching your competitors and you're just providing better performance? What is that conversation like when you're selling?
Haytham:Yeah. It's it's a little bit complicated because before I get on to that question, I needed to sort of tell you how do you sell insurance? A regulatory perspective, I can't just start selling insurance. There's a bunch of licenses that I need. For every dollar of insurance I sell, I actually have to have some money set aside to pay for potential claims.
Haytham:So there's a bunch of regulation around capital requirements and stuff. So what we did is instead of saying we are going to sell all that up, we partnered with Nationwide, an insurance company, and they were like, look, we will let you sell workers' comp on our behalf. So we take care of all the regulations, the capital requirements. You just have to go sell it. But what Nationwide doesn't want us to go out there and say like, Hey, how much is your workers' comp, Chris?
Haytham:Oh, it's a $100. Well, I'll send it to you for 80. And you'll be like, great. Nationwide will be like, no, no, no, no. Can't do that.
Haytham:So for us in practice, we can't actually just go out undermine the competition. Not today. Not today. Yes. But what we do do and Nationwide is okay with is we say, look, we're going to be very competitive.
Haytham:We're to be top three quotes. And if you wear the technology at the end of the year, I'm going to give you some money back. Right. And the nice thing about that is that it creates the incentive for them to adopt it, which is, you know, it's very hard to sort of force that on someone. So you're like, look, we're not going to force it on you, but if you wear it, then you're going to get a rebate because we know that it's going to reduce your injury rates.
Haytham:So that's really sort of the carrot that you use to get people to wear it. And honestly, it's been very effective. That's awesome.
Nate:That makes a ton of sense.
Haytham:And the other thing is like, there's a self selection that happens here, right? So it's, I don't know if you remember when Progressive sort of released their car insurance with the dongle that you had to put in. But really what happened at the beginning is the safe drivers took it because they're like, look, I know I drive well, so I'm going to get the discount. Whereas the bad drivers were like, hey, if I use this, I'm going get caught and they're going to charge me more. So there was almost a self selection of like safer customers.
Haytham:And so for us, it always weeds out the people who don't care, which is fine by us, to be honest. And then it gets the people who do care enough about safety technology and their workers to really buy into this.
Nate:Who would you describe as your competitors? Are they taking a similar approach of partnerships with insurance or is the kind of pretty novel in that respect?
Haytham:There isn't much innovation in the space and to be honest, and it's understandable. The only reason Nationwide partnered with us is one, they've been an investor in the company. So they've seen the impact the product has had. And two, we had this three or four years of data proving that we had, we could have the impact on claims that we have. And so anyone that gets into the space, like the burden of proof before anyone will sort of partner with you on the insurance side is pretty high.
Haytham:So it's very hard for competitors to come into the space right now until they, unless they can prove that they have something that's really going to move the needle. And so the downside to that obviously is that just means that there's little innovation in the space. And, know, we've been in it now for under a year and like, yeah, it's incredible. People are using fax machines still. It's very old school.
Haytham:But the plus side is, you know, once you are in, then it sort of allows you to stay in for a while without much competitors. So we're seeing some things. There's a company that has a safety app that they give that for free with Work is Cranked. There is another company that's trying to do something similar, but that hasn't quite come in yet. So I would say that it's still very early.
Nate:Yeah. You were talking before about how wearing sensors and that being a part of the industrial workforce is still pretty new. As someone who's kind of, you know, been in the trenches for a bit, I guess what would be your advice to other founders who are starting on kind of frontier technology?
Haytham:I was thinking about this the other day, actually, like, advice should I give myself ten years ago? And, and I think one of them is definitely, you know, it's going to take ten years to do anything meaningful. Like you don't think it's going to take you that long. You think you're going to be faster than everyone else, but you know, it took us two and a half years to get this product to market, which if someone had told me that upfront, I would be like, no way, no way is it going to take us this long. So I think definitely, especially people in frontier tech, it's a ten year endeavor.
Haytham:So just make sure you're in it and committed enough that you could spend ten years doing this. Also just, you know, there's a lot of pain upfront getting it right. But I think once you have it 80% right, then it's at least in our case, it's been a good ride afterwards. Actually, you know, the thing I've always grappled with as a CEO is, you know, our device right now is in steady state. Right.
Haytham:And what that means is that like we're making changes to it. We're going to release a new version. And it's minor iterations. It's based on comfort, things we've heard in the field, blah, blah, blah. Right.
Haytham:But we could have taken the approach of like, no, we're going to have a wearable today and tomorrow we're going to have a security camera that takes images in the warehouse and we're to build safety products based on that. And hey, we're going to put a device on every forklift so that if you get too close, it will tell you. And so we could have built a suite of products in the safety technology space. And the thing I've always grappled with as a CEO is, you know, hardware takes up so much of your funding, especially, you know, if there's a supply chain crunch, right? How much are you spending on what could be like the next iterations or the next generation of that product?
Haytham:If you look at how much innovation we put into our hardware, it was a ton upfront and very little now. But really that the reason was that is that we just couldn't put more budget towards that until we had product market fit. And that was really frustrating for our hardware team because we would always be on a shoestring budget and we want to make these changes quickly. Yeah. Why, you know, I've got this great idea for another version of this product that we just couldn't act on it.
Haytham:And you know, people would be upset, leave the company because they're just like, Hey, this isn't a hardware company. And so I've always struggled with how do you lead on innovation when you don't quite have product market fit yet? And I would even argue now, I think we have a way of growing at the pace that a mentor back seller needs to grow, but it's only really happening now, right? Seven years in. And so now I can envision saying, all right, well, what's our next set of products?
Haytham:Because I think we're at that point with product market fit. But before I could never do that.
Nate:You can justify the investment at this point.
Chris:I think that's the key differentiator. You're no longer selling widgets. And then that person needs to know how that widget fits into the bigger picture, which is injury prevention. You're effectively selling a mandatory service. It's like the combination of hardware and insurance and all the downstream benefits.
Chris:And that almost sells itself, right? So to your definition to product market fit, it's like when your product sells itself because you have the person that you're talking to wants to buy it, they understand why it's valuable. And that's a very complicated dance. Right? And it took you guys seven years to figure it out.
Haytham:Yeah, exactly. We still have like, when we go talk to potential investors, again, look, this is advice, seven years in the making, blah, blah, blah. Tell them about the algorithms. And they're like, well, can't you just put that on a phone? Like you always get these other questions that you're like, couldn't anyone just build that and copy it tomorrow?
Haytham:And you're like, let me tell you what my last seven years have been like. So yeah, it's a interesting space.
Nate:You started touching on how talent responded to maybe the realization that you're not purely a hardware company, that there's more importantly a service component to it. How do you deal with that? Shifting expectations with employees and coaching them through that transition?
Haytham:Yeah. You know, it's been tricky, right? Because again, when you don't, if you're a breakout company and you just knock it out of the park immediately, I think everyone is excited. Like, you know, people will be forgiving with a lot of things that happen in the company just because like you're growing like crazy. Right.
Haytham:But it's been a journey and it's been a winding one between like building hardware, getting into enterprise and getting into insurance. So I think that there's sort of two big parts here. You really need to be as transparent as you can, so you can bring people on that journey with you. And so they're learning as you're learning and you're communicating to them. And I think the second thing is, in our case, I think the idea of them being a mission driven company is very obvious.
Haytham:Like people know that we have an impact. We set a goal of wanting to reduce a million injuries by 2030 and we count them. So we have a little, little ticker where we're saying how many injuries have we prevented so far? So it's very clear.
Chris:Where are you on that? How many have you guys prevented?
Haytham:Thousands, but less than ten thousand. So we still have a long way to go.
Chris:The more devices, it should be an exponential curve. So you guys will be good.
Haytham:Exactly. So I think we've been able to keep a lot of very good people just because they've been excited to be on this journey and really feel that the work makes a difference.
Nate:Mission driven. I feel like the mission of the business is the most important glue.
Chris:No, that's a good point. You don't necessarily need to have a mission to be successful, but I've found that your job as a founder or a leader is to be a good storyteller. And it makes your job so much easier to kind of, you know, weave the ups and downs and all the different things around a mission because it all goes back to that. If things are going well, it's back to the mission. If things are not going great, you can use the mission to rally the troops.
Haytham:Yeah. You know, the storytelling, like, I'm I'm constantly surprised at just how far that goes. Like, good leaders. And, you know, this is something I honestly struggle with because, you know, I think being British and subdued and I know if you use Peloton, but it is a real easy comparison between like the British teachers and the American teachers. The American teachers are like, come on, you don't know it.
Haytham:And the British are like, know, jettigood tabs, pedaling. You know, it's much more subdued. And so the storytelling thing goes so far in like just hiring people retaining them investment. Know, at the end of the day, marketing and brand, right? It's so important and just goes so far.
Haytham:It's like the further we go, like the more money we need, the bigger the investor you talk to, it still goes such a long way. It's really remarkable.
Chris:Should we jump into some weird questions?
Haytham:That's what
Nate:I was thinking. I'm actually like, look at
Haytham:a couple of these.
Nate:Question that, obviously the name of this podcast is TRADEOFFS, right? So curious what you've kind of had to give up for your business. What was your trade off in getting you here?
Haytham:I think that the hardware component extended the time it took to sort of be able to test the market. Right. And so if you have a software product, obviously you should, whatever that minimum viable product sounds like, you can get feedback on it visibly quickly. With hardware, I think it just extended significantly the time it took for us to figure out if we can make it work. Can this reduce injury?
Haytham:Yeah, but will they wear it? Cause if they won't wear it, it won't reduce injury. Right. And so you have to do that. Like, Hey, will they wear it after a week?
Haytham:Because then will they get bored with it? Then we had to add like gamification and screen. And so like, it just became a lot of different problems until you could ask the question, does it reduce injuries? And you had to build a whole bunch of hardware before you could get there. And so in practice, that meant that a lot of my time at the beginning was spent in a combination of just like testing the product, but fundraising because you need money to do this stuff.
Haytham:So I was just raising small checks from lots of angels. And so my trade off was just spending like those two and a half years could have been compressed if we just were able to get the money upfront and be able to spend it on this. But it was really sort of piecemeal as we proved small things, we could get more money to prove more things.
Chris:Is there any advice you'd give new founders or new parents who are in the startup world or even the hardware startup world? Like, is there anything you'd looking back that you had wished you had known so that you might have a less adversarial journey? I'm sure there are like some bumps along the way where, you know, something clicked.
Haytham:You know, I have a bit of an obsessive personality, right? Like and so because of that, you sort of go all in and then you can't separate yourself when you do something else. Right. And so, you know, the easy advice is like, hey, if you have an obsessive personality, you know, you can do one thing at once. Like, just make sure it's the most important thing in your life at that time.
Haytham:But in practice, I think those people are the ones that tend to found companies, right? Cause they get obsessed with a specific problem or specific challenge and then they just go all in. And don't want to say anything trivial like, well, you know, your most important thing is your family and who cares? I mean, like your startup is important, but like, look, what's the worst that can happen if it fails. Right.
Haytham:And it's good to have that perspective, but in practice, it never feels like that when you're in it. And the longer you're in it, I think the harder it is to just say like, well, screw this. Because you're just, you're so invested in it. The employees, especially if a Xerox journey, need to feel that you're this rock that truly believes that it is never going to waver. And your investors who are now, you know, not 5,000,000 in, but 25,000,000 in.
Haytham:Like, they really want to see that you're, you're so, so it can be all consuming. Right. And maybe this is another discussion, but like lately, especially in the last year, I've been like grappling a little bit with anxiety just because I'm finding it really hard to separate myself from the problems that are happening at work and then being out of sleep or spending a weekend and not having that affect you. So honestly, I don't have great advice for this because I haven't really figured it out yet, but you need to do things like, Hey, I stopped working at eight or I leave my phone on the Saturday morning and I don't pick it up to leave. Like there's things that can help you with that.
Haytham:And you've to figure out what they are for each person. But you know, something happened a couple of years ago at Kinetic, which is after we raised our series A, we brought on a COO and the big feedback that he gave me was just like, Hey, you're a series A company and you cannot be in the details like you have been until now. Like there's a moment where you just got to hire some senior people and you've got to let them do their thing. And then you just, you're to set goals. You've got to give them feedback and you bet you've got to get out of their way.
Haytham:And that was really, really transformative feedback for me because I just had a tendency to get into all the weeds because from the beginning that's what you've got to do. I'll say that I still have to be sometimes told, hey, you know, back off a little bit because I do have that tendency. But generally being able to just delegate setting goals and then sort of seeing the magic happen without you getting in the way too much is just been amazing. That's been very, very helpful.
Nate:Did you just admit to being a micromanager?
Haytham:Was. Okay.
Nate:All honestly, I think all founders, especially CEOs, fall victim of that because early on, you have to do that, but then eventually you just are an obstacle.
Haytham:It's true. And, you know, it's hard to hear that and then it's hard to be reminded of it, but it's true. Like you, you end up, you hire great people and you have to tell a great story because these great senior people are in demand. And then, and then you really just couldn't get out of their way. Otherwise they will leave as well.
Haytham:So like, it's, know, it's one of these things where, people feel very empowered if you give them the ability to perform well. And it's just been, yeah, it's been great to see.
Chris:Well, Haytham, we just wanna thank you for coming on and being our first official guest on TRADEOFFS. Thank you for your words of wisdom, and good luck to you and the team at Kinetic.
Haytham:Okay. This is fun. Thanks so much. I mean, it really it just it was nice catching up with you all.
Nate:This was fun. Thanks, Haytham. Really appreciate it.
