Hi, this is Wayne again with a topic “Incubation: Brady Forrest, PCH International”.
I used to be at o’roural and before that i was at microsoft, doing software and before that i was actually doing supply chain software and doing implementations of ge plastics, using my engineering degree from rpi for just a hot second uh, but it wasn’t that wasn’t this Isn’T my first tasted hardware and right now, i’m at pch, international and liam spoke here last year, uh jeremy had the pch logo up on his slides. What pch does is they help companies go to china? They help companies, manufacture and they’re a partner to that company and i’m part of the accelerator group there with my colleague, emrick who’s been floating around this conference, but i first had my taste of hardware. Thank you at burning man. 2004 me two phds, a mecci, a blogger got it uh, we teamed up and we wanted to create a car that had never been created before a circular car that would feed that would seat 12 people could spin in place could spin. While we were driving it and ran on batteries, we had dreams of taking on elon musk, it’s possible.
We should have made it road size uh, but here it is actually working and driving along, and i learned one thing during this process always think about the cost of your prototype per hours that you want it to run. So it’s about five thousand dollars per hour, and here it is uh spinning in place, and it was a lot of fun if you, if i had the volume on you would hear me like laughing howling with laughter at spinning in place uh. We didn’t really know what to do with it afterwards. It be. It ended up becoming a couch for about five years. I took out pictures because some of the hair wasn’t so good back then um, but i mean this was a real endeavor. We spent a lot of time on it. We got a grant from burning man, we had our own circuit boards printed up and, of course, we had an amazing lighting system for uh barry white mode, as we would call it, which was the slow circle at the edge of the desert um.
I don’t think it ever actually made it that far, but you know the dream: was there and dc’s were skittish? We just knew they were skittish, so i went back to software and kept going, but the hardware bug was always with me and in 2007 i met liam casey while he was working on chumby and we were in beijing and he was explaining to me how the Chumby, which is an open source hardware company created by this guy, showing off a chumby right as he was giving them out, was relying on pch for manufacturing, distribution and pioneering c2c. You know chumby to consumer shipping and how they were able to stay just a couple person company, and it really just seemed amazing to me because i’ve been watching companies use, aws and scale up and it just didn’t seem possible for hardware now. Pch is an irish company, i’m based in san francisco.
The accelerator is based in san francisco and but they’re, also in shenzhen. So i’m over there all the time, and i kind of view this as like a bridge to china. There are 10 million skews that flow through pch daily. I guarantee that every single one of you has touched a pch product in their lifetime. Every so often i’ll be walking around with liam and he’ll just grab something out of my hands be like we made this by the way we handle 8 billion dollars worth of products annually and we work and manage a thousand different factories.
So we don’t have any one factor that we work with when we work with a client we design their supply chain around their needs. We don’t have like real designers in-house. We work with design firms because we think that each company wants their own design firm. I like to think that we’re going to try to become the aws of hardware now back in the early days of the web.
When i was first working at music, it was really hard to scale up. I mean we had about three thousand users streaming and we were scared to death that we would someday be popular uh. We ended up being acquired by microsoft, and so that wasn’t an issue, but it happened. It was the advent of aws that allowed a four-person company to go from 30 000 users to 30 million users, with just a spinning up more virtual servers and having a credit card limit that could handle it.
That really, i think, enabled the web to grow and dropped prices and allowed companies to be lean and become profitable in this new way, and my hope and my the reason that i joined pch was to help enable that, and so at the accelerator we work with Seven companies you’ve probably saw little bits last year. Uh they make kind of like electronic legos lark is a fitness alarm. Clock gnu is a cosmetic applicator, so we we run the gamut from consumer to enterprise. I’M going to talk about lively, which is one of our most recent clients, and they just have a kickstarter running right now and they’re. A team of three guys who came to us experienced entrepreneurs had been at apple and, as they were getting older, they saw a problem. They knew that their parents, they weren’t living near them, they were getting older and they wanted to kind of keep tabs on them. Help them out, and so they came up with a way to kind of not intrusively, not creepily, they hope uh just kind of track their activity. So there’s a hub in the house, you put sensors on things like the refrigerator door or the faucet or the medicine cabinet, and each week or each day you kind of get a dad still moving around or oh didn’t didn’t.
You know didn’t get his medicine today and honestly i mean having had a grandmother who went through dementia and we had to take her out of the home. This would have been really helpful for at least my parents, and i think that this type of company wouldn’t have been able to exist, at least not in the way that they are right now, if pch hadn’t been there and a year ago, they met the three Entrepreneurs got together with us in november, after they had incorporated, we launched their prototypes, we exchanged engineering for equity and they made use of our manufacturing a little bit of our industrial design around the packaging and we’re handling their distribution, and they have a dedicated engineering team. At pch that they work with and they’ll stay in kind of the accelerator program, where we’re working with them very closely with this dedicated team for two to three years. Basically, how, however, long it takes for them to get to become a mature company where they really know what they’re doing, because it takes a while to learn this stuff? There’S a real education deficit around how to manufacture how to build, and especially how to do it.
In china and as zach was saying earlier, i mean this – is it’s an amazing ecosystem over there? However, a lot of the people that especially u.s companies want to hire are here in the us, and they don’t want to live in china. They don’t want to spend their time on a plane, and so in lively’s case, so far, they’ve only made one trip out to china. Instead, they do skype calls daily weekly with our team and they’re, going to go into production in june, with just one more trip and they’ll be shipping in july and the ceo instead of spending five weeks in china, he gets to hang out with his kid and They’Ve only had to hire, i think, seven people now and they went and they were when they made that china trip they only hired four at that point and it’ll really allow them to conserve their money and really focus on the product. So for the accelerator, what we really look for are good teams, and so we want to quote dave mcclure.
We want a designer who’s going to make. It awesome, make it beautiful. We want a hacker who can just make it go. We want a hustler who’s going to make the deals happen, but in particular for us we want the maker.
We want the person who wants to build things and who wants to make that next connected device and then solve problems like this, like livelies that weren’t able to be solved previously and, of course, and of course we want you to be awesome now today, i have Something else to announce uh, as i mentioned, we think education is a huge part of this, and so, as we’ve worked with these accelerator companies, some of which are in their series, a series b, we’ve seen that they still need help and they still need more help Than we would have expected, and so we want to front load that, with our incubator, we’ll be launching our applications in june, and our first class will start in october in san francisco, and this is going to be a very education, focused incubator. The first month will be spent learning about chinese manufacturing learning about supply chains from stanford professors learning about how to get into retail from our sales guys. You know one of our accelerator companies lark made it into the apple shelves, with just nine hundred thousand dollars in funding.
Meta watch spun out a fossil with just two guys, we’re also partners with alya who partnered yesterday or who spoke yesterday and we’re helping them out. So, there’s a lot to learn on this front and that’s what we want to do. We want to help companies come out, say we’re going to do hardware and really make hardware as easy as software both to ship and to fund, because right now, a lot of vcs are scared of it, because they know that software people want to do hardware. They want that tangible thing and they don’t have the skills, and so that’s what we’re hoping to do is to bring that education component back to everyone back to entrepreneurs through the incubator and we’ll bring your prototype to product ready. As i said, it’s going to be a four-month program.
You’Ll have access to pch engineers in san francisco and in china, where we’re going to provide seed funding, we’re building out our mentor network right now and it’ll be a four-month program with two weeks in shenzhen. So you’ll be building your product in san francisco, informed by your time in shenzhen, doing factory tours and checking out the electronics markets and then coming back to san francisco, where the people you want to hire are where the money that you want to raise is you’ll. Be doing it in our 30 000 square foot facility in san francisco, which will have a tech shop on the second floor, not the brand sorry, a machine shop uh right now, it’s under construction, but it will be launching in time for the first class. Thank you very much for having me thank you dale.
This is a great event. .