Philippine electronics startup Tactiles, which on Monday officially kicked off its crowdfunding campaign via Indiegogo, the largest crowdfunding platform in the world, aims to surpass funds raised among local hardware startups using the platform.
Tactiles co-founder Joshua de la Llana said, their target is to raise $50,000 in fresh capital. The firm will use it to set up a manufacturing floor to boost the processing time of producing units of its unique technology toy product — the Tactiles iQube — targeted at helping kids, eight years old and above, to learn electronics in a simpler and fun-filled manner.
Tactiles has so far managed to sell iQube units in the Philippines, Australia, and New Zealand.
“A lot of the biggest names in the hardware today started from crowdfunding raising millions in orders. Pebble, Makerboot, and Ouya to name a few. But disproportionately, few of these come from the Philippines,” De La Llana said.
He explained crowdfunding has recently become one of the most crucial stage that most hardware startups have to go through. It solves two problems that makes starting a hardware company hard, such as finding your first customers, and getting the cash needed to start manufacturing.
“Indiegogo only has two technology crowdfunding campaigns in the Philippines with the most successful one raising only $803. In Kickstarter, the largest by a local startup is just above $9,000. This is the trend we have to surpass when we launch the iQube in Indiegogo targeting to raise $50,000 to bring it to the world,” De La Llana said.
Tactiles’ iQube is touted as “a toy that teaches electronics”. It is a combination of hardware and software, such as individual cubes and a companion application called the iQube app. Each individual cube forms a different function within an electronic circuit, and the tactile design allows a child to connect the cubes however they like.
By allowing experimentation, the iQube app provides instructions for complex circuits that will encourage higher-level learning.
In an interaction with DEALSTREETASIA, De La Llana shared Tactiles’ startup journey, its latest business updates, the present challenges they’re facing, and his perspective of the Philippine startup ecosystem.
De La Llana is a graduate of Mapua Institute of Technology and a licensed electrical engineer.
Please take us through your startup’s journey.
We are a company of tinkerers who are very passionate about science education. We were part of IdeaSpace Foundation 2014 cohort as chosen by a team of executives including businessman Manny Pangilinan.
I used to be an account manager at National Instruments which is one of the biggest engineering companies in the world. And one of their main businesses here in the Philippines was producing engineering tools for universities and schools and I was in charge of the academic sector. We engaged with the engineering of local universities and I get to see the usual complaints and demands about a product. So I thought, why not create a tool that gives them exactly what they want?
I thought about creating something that first, leverages software, and second teaches electronics in a much simpler manner. That was December of 2013, and in January 2014 I quit the company. I realised I need to take a leap of faith. At that same time, IdeaSpace launched a startup competition, and so we joined, pitched our prototype made up of very elementary stuff like illustration board, glues, cutter etc, snapped a video and pitch to IdeaSpace and we made it to the top 20 teams, and later to the top 10. Right after that we received support from the MVP Group of Companies.
What was your strategy in producing iQube?
I realised that if we want to make the product that is something for kids, it must be designed well, that’s why I tried to find an industrial designer and that’s how I met Chuck Dela Rama. My co-founder is Billy Millare who is in-charge of software and mobile development. I am mainly in-charge of hardware electronics and anything about hardware.
What type of support did you get from Ideaspace and the investors?
They gave us P500,000 cash. But aside from that money, the support we got from Ideaspace was just great. This includes establishing the company, which is one of the many pain points of starting a business here in the Philippines and Ideaspace took care of that. They also gave us a lot of training, exposed us to several investors and customers, and they even allowed us to use their office.
When and how did Tactiles started doing business?
After graduation from IdeaSpace we had a product and we actually went to a school to demo it, they liked it but we couldn’t sell it because it was a little fragile, it could easily break. It took us another six months to release again a more improved product. And last July, the schools themselves liked it and found it to be saleable already.
Our first school customer was St. Michael Channel in New Zealand, and Auckland University is actually one of our present customers. The schools purchased the kits to teach teachers how to use technology for teaching kids, like an education course.
Right now we have already sold 21 units, not that much revenue but our goal really is to show that it actually works and for us to also know what users like and dislike about it so we can further improve the product.
In Singapore, school principals, teachers, and children themselves are raving about the product, specifically on how it is able to connect play to education.
What do you think is the key differentiator of the product?
This is not patterned after something else although there are similar products doing the same like modular electronics or at least electronics working with software. But one of the unique things we were able to do is having to leverage between the software and hardware component. At least from the competitive standpoint, none of them are doing this to the level and detail we are doing. That’s the world we are living in, it’s a mixture of both hardware and software and the kids today will be growing up with this. And it’s better to start them early.
What’s your crowdfunding target? And what do you think about this opportunity at Indiegogo?
We’re targeting $50,000 and that would mean selling roughly around 500 units. It’s a lucky break. We met someone during the Geeks on the Beach, an IdeaSpace startup event, who knew someone from Indiegogo and the person actually assigned an account manager for us. It’s a big thing because they don’t usually assign account managers to all projects because they get a lot of projects. We launched on November 10 and are offering iQube worldwide starting at $79.
What are the greatest challenges your company is now facing?
It’s not easy to manufacture. There are thousands of components and right now we do it manually. A unit with batches of eight cubes will take us two weeks to complete. The challenge mostly is the process itself. As a startup, it’s not that scalable. But it is something that can be done fast if you have a manufacturing floor. The manual process that takes us three days to produce one unit can be done in just five minutes if we have a manufacturing floor. And for us to have that, we need capital. Because there is a minimum order quantity, at least 1,000 pieces, which is also the reason why we’re into crowdfunding right now.
What can you say about the Philippine startup ecosystem?
There are a lot of good companies, and ideas but it is still very young, very raw. There are a lot of founders who are good but don’t know what they need to be doing in order to grow. So one of the challenges in the ecosystem is how do you get people who would help these founders to get in the right direction. There is common knowledge that we lack investors. So how do you get the help of some people that can help you get to that level where it helps you to get investors.
Right now we have like Ideaspace to help us get to this level where we have a working product, but a lot of investors here are in the level that you need to be selling something already. I think we’re just lucky to have found some people who crazily believed in us.
How do you expect to succeed in all these startup challenges you are now facing?
I guess it all boils down to grit. You have to really be committed. A lot of people tried out being a startup because they find it sexy. Joining competitions, winning, getting news features. But one thing that immediately filters those who will survive one year onwards are those who went through several downtimes already. Now that’s one unsexy part of being a startup.
What can you say to people who want to enter the startup scene?
My advice to people is to realise early why you are doing this and if you are really passionate about it. If you’re not even willing to give up your full time job, then it might not be something that you can put your life on. You can’t do this doing a part time job.