A motorcycle crash with a silver lining
“I was driving my motorcycle when out of the blue I slipped in an oil slick on the road. Within seconds I was pinned underneath the bike, fractured my kneecap and suffered a concussion. My camera on the side of my helmet smashed apart and I was lucky that it didn’t penetrate my helmet as I fell.”
“I realised as I was on the ground that these accidents happen within a few seconds. If we could do something to increase reaction times for riders or athletes in general, we could save a lot of people and give them foresight.”
For his final thesis project in university, Alfred worked on a project that looked at how to relay video, data and the location of police officers in congested CBD areas. “The prototype we envisioned was 100% autonomous. It would’ve saved previous seconds across the whole of the emergency services fleet.”
“If we could get the ambulance or fire brigade to move to the scene of an accident without needing to manually relay the information, we could improve the likelihood that people could survive. That was the goal—to create more time to react to situations with the helmet than without.”
Before Alfred began building a prototype, the blueprint had success in the media. It was featured in Time Magazine, Gizmodo and TechCrunch, and won the Hill’s Young Design Award and the Dyson Award—both [notoriously difficult awards to win in the product design space]. The press led to multiple PR agencies and investors reaching out to Alfred to help facilitate the building of a prototype.
That was in 2012. Alfred ended up graduating university and started work as a structural engineer. “I thought I wanted to do design work, but I realised that a lot of corporate work was very boring. Had I been there for any longer, I would’ve been working on CAD models of screw bosses until I had the permission to start working on really interesting products. That gap was too long.”
“I quit that path and went freelance in wearable technology, building everything from smart watches to pet tracking devices. However, the money I was making through these jobs wasn’t important to me at all. I wanted to do something exciting and meaningful, and these projects weren't cutting it.”
Later, Alfred sat down with university friend—Julian Chow. Once class clowns, they became close friends after sitting beside each other in an industrial design course. As Julian spent two years in Hong Kong, he had perspective on the direction that Alfred’s smart helmet could go.
Canvassing and designing the first helmet prototypes / Raising funds and re-defining their target group
“We were sitting in a café in Sydney and looking at everyone riding around with GoPros strapped to their helmets. I rode like that. Alfred rode like that. We knew there was a trend where motorcyclists were getting better with technology..
“Alfred’s initial prototype integrated a camera into the helmet with multiple other technologies—[heads up displays, blind-spot detectors and ???.] It was exactly like what motorcyclists were already doing only packed with more features.”
“We also came to the conclusion that targeting the emergency services industry was far too ambitious for what we could accomplish. Going forward we decided to switch from a commercial B2B product to a consumer-oriented B2C product. We knew we would be more comfortable targeting this market, since we knew what sort of helmet consumers like us were looking for.”
The pair found themselves choosing between three target markets—cyclists, motorsports and snow sports. Each had their unique style of helmet with its own specifications, legal requirements and capacities. After careful deliberation, they chose to go with the snow sports category.
“We wanted snow sports to be our apex product,” recalled Julian. “It was a logical decision—it had the smallest profile as a helmet, with the ability to showcase all the features that Alfred’s prototype had at university. Once we brought that product to market, we believed it would be an easy translation to a motorcycle helmet.”
Their first investor—a [South Korean man], found the company online and wanted to invest $10,000. More funding came soon after. In their seed round, they raised just over $1 million which got them a small office in Waterloo—outside the Sydney CBD. The increased attention connected them to Michael Drysdale, who later started structuring Forcite into a business.
With a host of new contractors and investors, the company launched their initial product on Kickstarter—the Alpine. By then, the helmet had gone through four variations and now had a 4K camera, GPS, helmet-to-helmet communication, on-board sensors, a Bluetooth headset and an emergency beacon.
As Julian described, “we were trying to replace the walkie-talkies and GoPro’s with a helmet that was lighter and integrated all the features they needed. It was as though everyone was wearing a bag of potatoes on their head but no one had a solution to solve it.”
However, even before they launched the Kickstarter they had a sense it was the wrong channel to launch with. The customer feedback they gained confirmed their beliefs.
“We were selling a seasonal product that people needed to feel in their hands,” Julian remembered. “They needed to know whether the ergonomics suited them, whether the size and design was suitable for their needs. Many customers were waiting until the product would launch in stores, hoping to answer these questions for themselves.”
Despite the project being 75% funded, they cancelled the campaign in late October. In the aftermath, they lost connections with some of their contractors and investors due to differences in opinion. “I think at that point, me and Julien was disappointed about what happened. We knew we decided to do the Kickstarter against our gut feelings, but we were spurred on by the idea at the time.”
“Luckily, the campaign spread like wildfire across the motorcycle community. They came to us after the Kickstarter and said they wanted a smart helmet built for their needs. The reaction was 20x more than any hardware product we’ve seen, and even before the snow campaign we knew it should’ve been helmet we started with.”
“The only fear they had was the features were fake. Launching the snow helmet would’ve been like seeing broadband internet in 1995—there’s nothing else like it on the market.”
We knew however, that if we could build a prototype and put it into someone’s hands, we would have something very successful. The marketplace told us what they wanted. We just had to build the company up again.”
Pivoting the business model, partners and consumer feedback
The team at Forcite spent the next year gaining connections in the motorcycle industry. They pivoted from the Kickstarter to a licensing model where they would sell the hardware to manufacturers who would be willing to put R&D into smart helmet technology.
The pivot gave them the opportunity to work with big helmet brands all over the world, and helped them develop the relationships necessary to make sure Forcite succeeded in the long-run. They started rebooting their product line, worked with an American football manufacturer, and lasted through the rest of 2016 with less than three months of capital to spare.
Along the way, there were two major lessons the team learnt before taking their motorcycle helmet to market—learnings that became second-nature only after the Kickstarter campaign.
“Our main issue was the technology was ahead of its time. We didn’t have a challenge setting up the meetings. We didn’t have a challenge convincing their R&D teams. It was that helmets were going from a piece of Styrofoam to Iron Man in a day.”
“We learnt from meetings with executives that packing so many technologies into one product was counterproductive for our mission. A far better idea was to take the best two or three and execute those in the first helmet.”
“If we could do a helmet with an awesome 360 degree video system upfront, we could build in the communication unit, the navigation and the heads-up displays later for the second, third and fourth generation.”
The second challenge they found, was the layout of the marketplace.
“The motorcycle industry is ruled by old helmet brands that own all the distribution networks. They don’t want to build smart helmet technology because it’s expensive, doesn’t result in the same margins, expensive to maintain and requires lots of new hires.”
“So far, about five companies have tried to release a smart helmet for motorcyclists. Not one has been successful in bringing the product to market. It’s a testament to how difficult it is to break into the industry.”
In the book Blue Ocean Strategy, W. Chan Kim and Renée Mauborgne argue that the best way for a company to succeed in the long-run is by creating new market space (a “blue ocean”) rather than competing in an existing industry (a “red ocean”). Alfred knew this was a textbook case of a Blue Ocean market. There were no existing competitors in the space, and of the companies that launched previously, none were able to gain mainstream demand.
There were however lots of barriers to entry. The cost of marketing, R&D and production meant that very few startups brought their helmet designs past a Kickstarter campaign. And of the products that gained a following, bigger companies would [typically buy the license to the product and then abandon the project altogether.]
After their Kickstarter experience, Alfred and Julian wanted more than just an online experience. They needed to expand their operation through traditional channels—their helmets appearing in retail stores across the world.
“Being a startup against these huge companies is like trying to take down a tank with pebbles. It’s possible, but it would take a very long time.”
“If we want to take our product to market faster and with less risk, there’s only one way to do it. You have to stop throwing pebbles, and piggy-back yourself off a bigger tank.”
Bringing the Smart Helmet to Life—The First Launch Scheduled for 2019
Alfred and Julian stepped into Haymarket HQ wielding a matte black motorcycle helmet that looked like a prop from the film Tron. With a camera integrated in the front and a [collision detection system], the design piqued the interest of many of the founders in the space.
“We’ve been in stealth mode for a while,” Julian said. “But now we’re putting together a go-to-market strategy and refreshing the face the company.”
At the time of the interview, there were lots of new developments the team were managing. In the middle of 2017, a series of connections led them to meetings with a global motorcycle brand. Over a couple of meetings the team found themselves closing a deal to test their prototype with real motorcyclists.
“We’ve spent two years building up the networks and the know-how to make the helmet a possibility. Now we’re looking to raise $2 million and launch the motorcycle helmet by early next year. It’s ambitious, but speed is crucial.”
Although the team were starting to gain their first taste of progress, they were careful to avoid oversimplifying the reality of entrepreneurship.
“The most breathing room we’ve gotten was 3-4 months of capital,” Alfred describes. “You have to make your decision as a founder on whether you’re going to sit around on life support, or whether you’re going to get your remaining money and put it into a crazy, high risk idea.”
To make sure Forcite didn’t go bankrupt, Alfred and Julian refused to pay themselves in the first two years of starting the company. They had a brief period in the third year where they reversed this decision, but went without income again in the fourth year. Both founders were clear on the consequences founding the company had on their personal lives.
“You sacrifice holidays and relationships with friends and partners. It sometimes drives them mad that you’re always talking about work. It’s hard to rent a place. You can’t take people out to dinner. And the idea of regular work hours evaporates instantly.”
“But the good news is you get down to one or two genuine friends that are willing to help you. They’re the people who stick around despite the fact that you’re broke, because they can see you’re doing something you care about.”
“In the end, it’s a blessing in disguise. It helps you see the world very clearly, and separate what’s important. You start funnelling your earnings and time into what matters. It pushes you hard—forces you into the position to make a decision on what you value. It filters things that are non-essentials, and makes you more secure, despite the financial insecurity.”
“When you do get a win, all these sacrifices start to make sense. The pain of working until late at night, the uncertainty of whether you’ll be able to survive until next month, and the struggle of getting up when you’d rather be watching Netflix—all these pale in comparison to the rush we get when we succeed.”
As Alfred looked back over the history of Forcite, he remembered an image he had earlier in the life of the company.
“I thought to myself the worst thing I could ever imagine is sitting in a design consultancy making screws for someone, when one of my coworkers shows me an article on TechCrunch.
“As he’s chewing an apple, I’d be reading about a smart helmet company that’s completely blowing up, and he’d be saying—hey, didn’t you want to try that?”
“That image is why I’ve kept going for so long. I don’t want to be that guy. I’d rather say—yeah what are you talking about? I got bought for $40 million. That’s such a better answer!”
“So long as Forcite doesn’t end in bankruptcy I think it’s a win. Either it ends through a partnership, an acquisition, us getting the product all the way out to market, or working for a company to sell it. All I hope is it doesn’t end through a lack of capital.”
