β€Š πŸ“ Have you ever had an idea for a physical product that you just knew had the potential to change the world? Maybe it was something you dreamt up in your garage or a solution to a problem you encountered in your daily life. Whatever it was, you knew it was a winner. If only you can turn that idea into something... Well, you are not πŸ“ alone! Countless entrepreneurs and innovators have stood exactly where you stand filled with passion and drive, but unsure of where to begin, and that's where "The Builder Circle" comes in. My name is Sera Evcimen and I'm a mechanical engineer, hardware enthusiast, and hardware mentor. I've had the privilege of working with numerous hardware companies that are passionate about solving some of the biggest challenges in the world. And I will be your host as we explore the exciting and complex world of physical product development. β€Š β€Š Welcome back to the builder circle in today's. Today's episode with Pete Blake. We'll be discussing how to properly identify the market for your hardware, product, understanding and strategically utilizing your ecosystem. And strategic planning, like creating a product roadmap for ultimate hardware success. We're going to end the show with the notes on effective governance for growth, whether it's internal or. your board, and the power of diverse. Diversity and successful. Teamwork. And towards the end as per usual. Will there will be the TLDL. Too long didn't listen section, where I will leave you with some key takeaways. takeaways. from the episode. Without further. Do I. Leave you with Pete. All right. Welcome to the builder circle today. I have my good friend, Pete Blake on this episode. Pete is a fellow mentor. Well, I guess all star mentor now we're both in that little group now we are. In tech stars, and he has been absolutely wonderful to meet and work with. We've mentored similar startups together, and I'll kind of hand it off to Pete to give a little bit of background of what he's done and what he does. Go ahead. So thank you. It's such a pleasure to join you on your brilliant podcast. I feel very privileged. Yeah, a little bit about me. I work very lucky. I work with clean tech founders hardware, deep tech in electrochemistry, material science, engineering. I get to work with a small number of those as an advisor, non exec director sit on boards, advisory boards. I also get to work with a number of universities, the Royal Academy of Engineering and a range of different accelerators and incubators as a paid advisor and run some master classes. And then the sort of third chunk of what I do is a strategy advisor in industry. So I work with Big energy companies that and others that have stepped into the clean tech climate tech space. So really investing in their path to net zero. So a lot of what I do is actually about connecting up across the ecosystem between investors and founders and research institutes, industry and startups. So that's where I think most of the value really is because if we're going to deliver. This path to net zero, it's going to be because we managed to transform whole ecosystems. Absolutely. Wonderful. And remind me, Pete, what's your background? Oh, gosh. Well, luckily fairly eclectic I've done many different things. I've, I'm, I've built and sold a couple of agencies. I've been a co founder of a couple of social enterprises. I've been in the sort of public policy space, the fund management and administration space I've been. IBM and did some deep tech commercialization with them for five years. I've been working pretty exclusively with startups for the last 10 years. In the UK that was focused on fintech and there wasn't much else going on in the UK. I've been biotech up in Cambridge but in the last five years, yeah, exclusively with clean tech. So I work with the Equinor. Techstars program in Oslo with the greenhouse program, which is Imperial College London and the Royal Institution with carbon 13 and a variety of a few other sort of programs. So It's excellent. One of the things that I feel like both both you and I deeply agree on and buy into is that climate really does need to be solved with hardware and deep technology and right now there is this looming crisis that the most brilliant minds in the world definitely should be investing in solving. So I deeply respect the work that you do and it's really been a pleasure to see the ecosystem in Europe and UK and all around that's really chugging towards this fundamental goal. So today we're going to kind of dive into the, well, the realm and roadmap of creating a product and commercialization and making it exist from not just a conceptual stage, but actually exist in the physical world and So to get the ball rolling obviously a lot of startups and a lot of entrepreneurs or innovators builders start with this idea of okay, we have this problem which is a lot of the ones that we care about are related to climate, but there's a lot of problems out there and then there is a part where they really need to understand what market they're addressing how to how Successfully set up their requirements for their designs or even their product, whether it be technical requirements, but also business requirements. And in order to do that, you need to get data to be able to set it up correctly. You are a big champion for leveraging an ecosystem and understanding and developing your strategy, both technical and market strategy. through that ecosystem. Could you kind of speak to that and potentially provide best practices or just even a stream of conscience would I'm sure be very helpful. great. So that's a, it's a really good question. It's a really important topic for all founders. I think, we're yeah. We're dealing with technologists, we're dealing with scientists, with engineers, with people that love technology and really want to make their technology a great success. It can be very tempting to fall in love with your solution and forget that you have customers and problems that you're seeking to solve. So one of the principles I absolutely love and remind founders of all the time is that you should hold tight to the problem. And hold tight to the customer, but hold your solution very lightly. It's the customer problem. That's the tiger's tail that you're going to hold on to. And it is a wild ride as a founder, but that's what's going to guide you through is being really clear about the customer problem. And that can be very specific that's very grounded in the context in which your technology is going to be applied is going to be made useful. I was I was in Cambridge, University of Cambridge this week and talking with a couple of professors about the sort of spin out process and reflecting that. The sort of linear process to technology spin out is probably it's time is done. The idea of a sort of linear internal, let's develop our technology, and then we've got some IP that we want to spin out. It is. It is pretty much broken. What we need in the context of university, but also in the context of any start up is you want to spin immediately. You've got to lean into that spin. You've got to be understanding more about your market right from the beginning. There's an interesting book called Pasteur's Quadrant. That's worth checking out. Have you come across this, Sarah? You've mentioned it to me and I have looked into it. Yes. So this is the idea that there's obviously huge value in the pursuit of pure knowledge in research. And there's obviously huge value in focusing on the application of existing technologies, developing and refining engineering to, to make it work. But actually some but to separate those out and see them as separate disciplines only is a mistake. And Pasteur is a great example of a scientist that pursued both the development of knowledge and its application in the real world. And I think that's really such a great characterization of the role of our hardware and deep tech founders. Is that you need to, you are bringing, novel approaches, novel technologies to electrochemistry or material science or whatever, mechanical engineering, whatever it may be. And you need to invest in the, in that technology, but you also have to be gathering insight from your market. So to understand how this technology can be made useful in the real world, that's something you've got to do right at the beginning. Yeah, I, this is something that's super difficult, I think, when you're in that research mindset. I've never really deeply thought of that bridge particularly, but You're very right, because a lot of people well, they've been potentially researching something, or researching and working on this novel piece of technology for the past four or five years, depending on how long it's taking them, and then when you go into the real world, and you actually, this concept become, is going to become a real thing, there's so many different parts of it And when you're in that kind of research mindset, it's kind of a mono approach, right? You're really concerned about the technology working. You're really concerned about the data you're getting from your tests or your experiments, whereas In the real world. And this is where a lot of really deep tech companies have a lot of engineers that don't understand why there's a marketing team or why there's a business development team. It's if the technology works, it's a meritocracy in the world, right? If the Yes, works and if it's good, it's going to make it. Unfortunately, we don't live in that linear world. I like that you described it as linear. absolutely. I think another real challenge I see for founders so often is that there's too much choice. They're trying to do too many things all at once. So many have technologies that can be applied in multiple different use cases or applications in multiple different markets or industries. And the temptation when you're trying to stay afloat as a business is you do it all. But that's a really can be a lethal mistake. It's very important to make a choice about which application, which market you're going to go after first. Thank you. You can consider all of those other markets as your growth plan, but what you're seeking first is to find. A feedback loop between the development of your technology and the market into which you're developing it. If you're doing that with multiple markets, multiple segments you're getting feedback from those, all those different sources. So you're really looking for the feedback loop between your market And the development of your product, the application of your technology into a particular context of use. If you've got multiple markets, multiple possible applications, multiple segments, it's almost impossible to hear the signal. It's just noise. Yeah. And that means that you, it's much harder to get to product market fit. I would even argue that it's not just noise it's a lot of signal in different directions where there might be multiple, like good solutions because there might be multiple right solutions, but they're just going to be addressed to different applications, Absolutely. Exactly. Because there are lots of signals overlapping with each other, you can't hear the signal because you've got, you're trying to interpret and pull out multiple signals from all of that noise. So the signals become noise. So the value of choosing the market application where. Possibly there's the greatest value with the least disruption, where you've got the strongest relationships, where the value of this technology is most apparent, then you start there. But this is just an example of the closer that you get and the sooner you get. Into your market, the more successful you're going to be as as a founder, as a startup, it isn't that you need to do these things in sequence. We're going to, let's sort out the technology. And then when we think it's perfect, then we'll go out. It's too late. When you talk about leveraging an ecosystem, are you talking about talking to other people that are building similar things? Are you talking about going to customers and having a really good relationship there to close the loop? What would be best practices there? I think as a, it's going to be a combination of all of those things. You are looking for opportunities to co develop. Your technology, so that's going to be in partnership with a large enterprise. You're going to want to establish your first pilot demonstration on a customer site at some stage. The context of use, the way in which your technology is going to be put to use by that enterprise partner is going to influence not just the balance of plant, but in some ways the configuration of your core technology. There are some really interesting things that then happen in and through that partnership. There will be other suppliers that you will need on. It may be that you're that you don't have to do all of this. There's some parts of this solution, which there's no need for you to try and solve the problems. There's there's good suppliers, people that, maybe you've got a great innovative approach to wind turbine. I've been talking to a business this week that does that they need really great battery storage, but they don't need to solve the battery storage problem themselves so they can partner with possibly, who they think is the most innovative provider of this particular battery technology that would marry with them with. Partner with a with a commercial enterprise client. And you've got some of the pieces. It may well be that you've got a research institute that is investigating in this space that can provide some technology leadership that adds into what you're doing. And through that partnership with a research institute and with an enterprise client, you have access to non diluted grants. So You've got a whole variety of pieces there that start to come together and add value to the whole. Yeah I think, and that goes through the vein of understanding what core competencies you want to keep in house and how you strategically either make partnerships or get in contact with or work with suppliers through paying them. It might be even a good idea to have almost like a core competency matrix where it's like, depending on what you're building writing out the, either the skill set or the core. Knowledge that's required from that and almost grading yourself as a company of like where you are right now, where you want to be and then saying which ones you're going to insource as in, okay, we really need to be the experts. So I'm going to go off of your example of wind turbines. We need to be experts in like wind turbine design and understanding aerodynamics, but. We would be force multiplied if we had a really good battery storage solution, but that's not, that's super far away from what we need to know, have knowledge in. So that's something we're going to partner with. And then say within the wind turbine, there's materials different materials for structural integrity or better aerodynamic profile. That it's like material science, where you're like, okay, we don't need to really be material scientists here. We could work with a research institute that's developing novel technologies in wind resistant or structurally stable but light materials for wind turbines and stuff like that. And almost making a matrix of that and combining all of this to make it it could be a cool tool to figure out your strategy. Yes. Yes. I know that we've got a, we've got a segment coming up a bit later on horror stories and we'll come back to this example then. But just very briefly the way that that we tend to think about it at Sapphire and Steel is in terms of being clear on your role in the value chain. Where do you sit in the value chain? And having clarity on that is actually the key to so much in terms of who are your customers? You think that they might be this, but actually, no, you're selling to an intermediary that sends to the final, that sells to the final end user. Oh we don't need to be involved in the material science. They become our suppliers. So being clear is just, as you said where do you sit in the value chain? What is it that you, what do you bring? To this this value chain that nobody else can bring That enables you to really focus your investment on the technology that you that's unique to you. I really like that. It's a, I think, a very important reflection point that every single founder or technology developer that really wants to get it out there to sit down and reflect on and have an answer for so that all the next steps follow through. Absolutely. It's the technique that we use to arrive at an answer to questions on what is your business model. Yeah. I love that. Yep. Which people find really hard to answer, there's the business model canvas but actually how do you complete all of that? It almost feels that business model is everything or it's almost nothing. So how do you arrive at conclusions about how you make money, who your customers are, who your key supplier relationships are? That really comes down to clarity on the role that you play in the value chain, the role that you play in the ecosystem. That is such. Such a good call out. And I feel that for engineers or technologists or researchers that are nose deep into the tech, that is the, just the bane of their existence question. Yeah, it's so hard. It feels, there's no way in. I just, I just got to provide loads of data, but it can sometimes feel well, I've got a bucket of lots of stuff, But I don't necessarily have. Any structure within that bucket of stuff, and it's the structure, what's important, what decisions in my making and what hypotheses of my testing around my business model. Even on technology, that is how it should be thought of. What hypothesis am I going with my tech? And how do I prove to myself that is a valid hypothesis? What are the tests you do? What are the experiments you do? Same with business model. Like tests and experiments are just talking to people, working with people, getting your product out there. they are. Absolutely. And it's, yeah, let me test my product. Let me test the commercial appetite for this. I'm making assumptions that this particular market sees the value of this. Well, let's go and, let's go and talk to some people and see whether they do see the value in solving this problem. And I'm making assumptions about the cost of implementing or adopting this technology. Any, the adoption of any new technology is disruptive. It takes investment above and beyond buying the tech. I'm going to have to train people. I'm going to have to change my processes, my systems my, my, my supply chain. So how disruptive am I being to, to my prospective customers? I need to make some guesses and I need to go and test, see whether those guesses are right about the disruption as well as the, the pain versus the gain versus the capability of the product to deliver that. Yep, and I think it's really important to, it's really important to be passionate about your product, but I think it's also really important to fall out of love with it, because it's a process where you really need to check your bias out at the door, because what you're going to be like What you're going to think about your product or your solution or your complex system even is that it's the best thing since sliced bread. And obviously you need to have that kind of passion and belief that it's going to get there. I'm not saying you check that all out, but it's also important to have this balance of critique around it and talking to people that not just validate what you think about your product and how it makes you feel all fuzzy and warm inside, but also people that really challenge you. And challenge the product and the solution. Absolutely. And I think there's, there is being open, continuing to be really inquisitive and continuing to open yourself up to the possibility of massive surprises. Sometimes you just like you stumble upon, it's the process of scientific discovery, isn't it? We stumble upon something. Oh my goodness. I never thought that this was, is where my technology could be. provide such huge value. I never realized that this industry had this problem where my technology was perfectly suited. It's, hardware, it's about finding a niche where your particular mix of technology is just innately suited to solve this problem in this context, in this industry. And that, you're going to discover that's a process of discovery. So incredibly true. And. It's I really hate that there's this almost siloing of engineering discovery and like market discovery. It's it almost has these like completely different two camps where it's all science. It's all art. It's just in different forms. And when success is being able to think about all of it and be able to do all of it and link it together that's what success is. Yeah. And so you said it before that, that that, that's the process of setting up a hypothesis thinking, okay, so we believe this might may well be the case. Let's design some experiments to prove or disprove it. Let's conduct those experiments and then to gather the data to see whether we were right or wrong. That's the scientific method. And it can be applied to the development of your technology. It can be applied to the the commercialization of your technology into a particular market. It's the same discipline the same discipline of the scientific method in in, in both. And when you can combine that, when you're using the signals that you're getting, the data that you're getting from your market, the conversations you're having with prospective corporate partners, Customers to inform and influence the way that you're the next version of your product is going to be deployed. You're in exactly the right space, and that's exactly the mechanic that investors want to see. They want to see founders that know how to do. That how to listen to the market and how to use what they're hearing from the market to drive the effectiveness of their technology. That's right at the heart of turning technology into a really high impact business. That's right. That's right. I think that one of the pieces of this that keeps coming back as we speak is the infamous or famous, I'll say roadmap, the product roadmap which I really want to touch on because it is important and it's how it is a mechanism in which A lot of innovators are able to provide the storyline of how they're going to get this concept, this solution, this hypothesis validated, tested, built, and out. So I would love to get your thoughts on how to build a successful product roadmap from kind of this lab to scale. I think, as we were talking before. A lot of this is going to be through this collaboration through these partnerships with ecosystem. Some of this is about the path. Of adoption. So we often talk about the adoption road map as well as the product road map. So product road map can be from your perspective of the founder from, your CTO, we, this is the way in which we're going to, we're going to grow it from a one kilowatt to attend to a hundred to, megawatts, gigawatt. That's part, that might be our part of our technology roadmap or our product roadmap, but there's also the process of your customers adopting your technology and that will, that, that will start with possibly a lab visit. them coming to your labs and actually seeing your tech in in, in operation, or maybe you sending them some samples of the outputs from your processes. That will start to move through a number of steps where you will move to Them having remote access to the, your test rig, for example, and seeing its performance the live performance data how, how robust, what temperature is it running at? How is the, how's the performance degrading over time? You might move to installing a rig subscale rig on the customer's site. You would then move to possibly your first of scale rig. So you've in the first subscale process, you've proved that the technology stack works from top to bottom the next stage. You're showing that it works at scale. And then the next stage on from that is, your proper sort of first of a kind you're proving that this works commercially at scale. So those, that's, those are steps that your customer is going to want to take the technology through and that may be over a number of years. So seeing it from the customer's point of view and understanding what stages and stage gates they're going to want to go through step through from relatively sort of small scale, or even just, being able to see the outputs of your bioreactor. Or to understand some of the components in your electrolyzer or whatever it may be you're stepping them through those processes to large scale commercial deployment across the whole of their estate. And I think it's been very intentional about what that process looks like and recognizing that there are a number of audiences within the enterprise client within the large corporate, and there are a number of things that you have to pay attention to. And for me, they fall into three broad buckets. hmm hmm One one is the product or the technology. So the technology has to perform as you say, it will at the temperature or the output at the reliability, whatever it is, the product has to perform. And obviously, that's absolutely critical. Without that, nothing else is going to happen. like on the bottom. everything falls apart. Yeah, absolutely. It's right. It's right at the heart of this, but there are other threads as well. You must pay attention to. And so the second one is probably the commercial. So even from the very earliest, demonstrations and testing, the customer is beginning to wonder how they can build the evidence that they're going to gain the commercial value. From this, is this going to work within the existing technology the technology stack or the processes that they've got? Is this going to, is this going to play a part in the existing strategy, commercial strategy that they've got as a global player in their industry? So there's the product thread. There's the commercial thread, and then there's the operational, the deployment thread. What are we having to do to deploy this technology? What are we doing right now in this stage? And what we, what must we anticipate we're going to need in the next stage? Of deployment. So this is some of the investment that we need to make as a business, as it, me, as a corporate, looking at the adoption of this new tech, what am I gonna have to do? There's certain utilities, there's certain space, but there's also training of people. There's, insurance, there's health and safety. There's gonna be all of that activity that sits around that to make that next stage successful. And I've seen a number of startups. fail in that progress of larger and more significant pilot demonstrations or commercial pilots because they haven't been demanding enough of their client. So when you get to the end of that first stage of this current stage, it's about being really clear if we're going to move to the next stage, then. Dear client, dear customer, we are gonna need you to do these things if this is gonna be successful at the larger scale. And making sure all of those things are in place. So there's, I say just as to summarize, there's the product thread, there's the commercial, and then there's the deployment or operational thread. And you, when you say demanding from your clients, I guess that's almost a point of negotiation. A lot of early stage startups struggle with that piece. Are you I guess like what are your thoughts on like how demanding can you be and what's reasonable and what's not? I, I think the place to situate that conversation is the shared ambition that you've got for this pilot project. You've got some stakeholders within the business that want this to succeed, that in fact have got some reputation and some budget on the line. They're spending time and money and their reputation with you on this pilot. They want it to succeed. So I think that those people, you're saying to them, look, to make the next stage of success, we think that these are the assets and the resources that need to be put in place. And those people that are champions, genuine champions for you within that client organization are going to want to make sure that's the next stage is a success and are going to want to make sure that those assets, resources, people intention is there. For that. So I think it's not that you're having to stamp your foot and demand and it's that there's a recognition and a clarity around what's necessary for the next step. Yeah, and actually, as I think about it more, it's almost it's almost as a a litmus test where If you are getting a good customer, they should kind of be a partner to you too, because it's a new it's a new technology and that closed loop is absolutely everything for your business to succeed. Making sure that it's a good fit. This is a good way to if you are demanding something very reasonable of just like closing the loop, getting data from them or having a progress plan, an adoption plan with them. And they're. Excited about it. That's a really good sign. But if every piece of the needle moving is just really hard and you need to go with pliers then that's probably not a great fit. And the data that you're going to collect from that might not be as useful. no, absolutely. And, if they are not committing the resources to this for the next step. That could be a warning flag. It could be a red flag for you. As a hardware business selling into large corporates, you don't need volume in terms of numbers of clients. Yes. What you need is a very small number two is enough, three, through your precedes seed, even up to series a, you only need a couple, but a couple where you have started small and you have grown your relationship and your footprint and the scale of the demonstrations or the commercial application, your technology. With that customer, you've moved from one small demonstration project to some commercial pilots in several of their installations, several of their sites. Now, if you do that first small project. And there isn't any appetite for them to move further, then that has to be a warning sign. You haven't got enough bandwidth as a startup to to continue to try and persuade that large corporate to move to the next step. You don't want to be in the corporate petting zoo. Some corporates, they love to to play with startups. Look what, it was great PR. Look, we're doing all this great stuff. There's a difference between that. Innovation theater and a genuine commitment to to operationalize some new technology. And you want to be listening out for that for that signal. And if they're not, you need to say, look, we really want to make this work with you. But if you can't commit to the next steps we, we're on a tight budget. We've got to deliver certain metrics for our our investors in time for the next round. And if we can't do it with you. We're really sorry, but we'll have to try and find somebody else to do it with. So I think that sort of just being very upfront and honest with them about the the journey that you're on and what you need from your corporate partners, I think that's absolutely fine. It has to be The corporate petting zoo. That is absolutely the first time I've heard that. And What a great way to describe it. I love that so much. It's very unfortunate, but so true. It's become a PR mechanism for a lot of people and a lot of startups are getting sucked into it unfortunately. Gosh, but this is this is all I think it's really valuable and I think it's also highlights the importance of customer retention and partnership retention because if, thinking about it as a bucket, if you have a few clients that are coming in and they're really dictating, they're giving you that close up, they're giving you this thing and then they disappear. It's like having a hole at the bottom of the bucket. Like you continuously fill it up, but you're like, why is it not, why am I not succeeding? And choosing the right partner to begin with is obviously a good start, but also then making it very clear what the next steps are going to be from the get go. Maintains that retention. absolutely, because that's a big warning sign for investors is is if you have. Built a relationship with a large corporate, and they've had a chance to see your technology in action and kick the tires on it, and then they don't take any further. That's a warning sign for your investors to think, okay, what's gone wrong here? That's exactly the validation we need is for corporates to say, yeah, we've kicked the tires on it and we want to move to the next stage. If that's not happening, there's a real risk that your technology isn't actually suitable for this sort of client in this sort of industry. The, treating those as even market data points is a good idea. Right? If it's taking so much time to convince someone to invest in this, usually if it's a really good fit and you're really providing value, people will maybe not jump at it, but there will be excitement. And the lack of excitement is also, I think, almost like a metric to Yes, absolutely. And, right on. The people that see the commercial value and its alignment with the broader strategic commercial strategy of the business they don't necessarily understand your technology, the people involved in deployment, it's oh yeah, we're the guys that always make things happen. Or actually, we're the people that have to make sure that it still conforms with our, our overall approach to data architecture or our procurement processes, or, we're the people that actually make stuff happen on the ground. You've got three very different constituencies. Different audiences with within the organization and to think about how you build that sort of that sticky relationship across those different audiences, I think, is really important right from the beginning of that first conversations that, the first Demonstrations or the first visit that they make to your labs, you're already starting to think, okay, let's, we want to do, we want to man mark these people we want, we want to people mark them, who's going to, we want the chief scientist who's going to, who's going to buddy up with the chief scientists from the corporate Those are some of the ways in which you're going to build those longer term relationships. Exactly. And thinking about Who you're going to talk to, how you're going to describe what you're working on to them. That's super important, like understanding your audience and being able to express in a way that they will understand and buy into. And then also which part of the advice or feedback they give you, listen to. Because other, again, you laid it out so perfectly, where it's, they care about different things. They know, they are experts on different parts of the puzzle. And everyone is opinionated. Everyone has an opinion, even if it's outside of their domain. We all do. We're all human and we like to think about things and have ideas on them. So it's really important. To listen to the right bits and have your own signal to noise ratio filter, Yeah. Anytime that you get any sort of feedback any message from your customers, that's just, that's gold dust. You just, you have to take everything seriously that you hear from your customers. It's such a, it's such the central function of the leadership team within a startup. Work with businesses that now series C and beyond and looking at the, you know, possible acquisition or an IPO and the CTO and the CEO still make time for multiple customer calls every week. It's just right at the heart of their role as leaders of that business. Podcast Break I completely agree. Very cool. Okay, I'm going to go into our fun segment now because I feel like we we could use a break and talk through some horror stories, hardware horror stories, or I called it hardware roadmap horror stories just so it's a twist and it kind of relates to Our conversation. So I'll hand it off to you. Hit me. I've got a couple of stories that that I wanted to talk about, and we've touched on some of these issues already. So one is a wave conversion technology. They have. Really interesting. A piece of tech wave energy has been this report cousin of renewables for decades. Many people thinking, well, it's just not good. It's never gonna happen. And why would you need it when we've got vertical techs and and wind. But there are some really interesting applications. They've got a technology that really stacks up. It's extraordinarily cost effective in principle. They needed investment. They needed investment to build their first rig. And to do that, they need to define that, they need to work out the costs of that first rig and what was that first rig going to look like? As we were talking before, one of their problems is there's too much choice. There's so many ways in which this technology could be deployed, different use cases in different industries, quite different things. Is it about beach defense and speech replenishment? Is it about energy generation? Is it, there are different, quite different applications of the core technology. They found it impossible. They were finding it impossible to select a single one. They felt that was gonna cut off their future prospects. And we're struggling without that. They were finding it hard to build any relationships because they were trying to do it with all sorts of different potential partners, and they weren't able to nail down the smallest possible rig, the smallest possible demonstrator project. Because this demonstrator project had to deliver in their minds to multiple audiences in multiple industries for multiple uses. So it was a two million quid rig rather than a three or four hundred. Hey, Rick. Oh and so because they couldn't because they couldn't select an industry, they couldn't work out what the right rig was. So they couldn't work out what the cost of that was. So they couldn't go out and raise any money. So it really does that really brings into focus. The pain of our, and the problem of not focusing, not, you've got to back one horse, it feels like it's so painful, particularly for, this is a really passionate inventor and it feels well, I'm shortchanging my vision, I'm shortchanging my, my the extraordinary capacity of this technology this feels too small but you've got to start small. yeah. And you've got to take out some of the ego from this journey. Biggest part. Yep. Yep. Yep. Yep. Yes. I it's interesting because it's like you think you're short changing your technology, but In large, you're destroying the vision and because it's that kind of slow progression into that final product. This doesn't, you try to leap over the minimum viable product piece of what it means to exist in the world. There's a reason that's a common common stage and it is very heartbreaking. When you see these, but also when you're experiencing it, because it's again it's about falling in love with a version of a product that doesn't exist. Yeah. Yeah. And realizing that the first version of your product that, that makes it into the real world it's going to be a really ugly baby. Yeah. It's like you should anticipate to hate it. You should anticipate to absolutely loathe it. It's supposed to break. It's supposed to fail. It's supposed to look ugly. And obviously depending on what market you're trying to go, if you're trying to go to like user experience realm, it can't be ugly. There are different, priorities there, I understand that, but in general, it is going to be one that you look ba it's like your middle school pictures, it's ugh, like, why did I go through that? Well, even in the community, in the consumer space, if you go back and look at the MVP for Airbnb or or Facebook or even Google, it isn't what it looks like today, Google's probably, we still have that extraordinary simplicity in comparison with anybody else at the time but Airbnb it looks like a dog. It's just, it's, yeah. There's, you have to accept it's going to be smaller and rougher and dirtier. It's going to be cobbled together. But one of the things that you're doing here is you're proving to your investors that you can spend their money wisely. Yes, you can spend their money wisely and there's a light at the end of the tunnel. Yeah, you can execute for early stage founders. It's one of the biggest risks for investors is okay. So you've got a great idea. I can see you've got some IP here and you're pretty well protected on that if you had the money to protect it. But my question as an investor. Is can this team execute on the potential of this this IP or the potential of this idea? And that's what these this these guys were failing to do was just Get on and do a first dirty version of the tech. Ugh that, that's heart wrenching. Yeah. And you said you had another Yes. Yes. This is a business that when When I was introduced to them they had spent gosh, you know 10 million pounds worth of investors money And they were still searching for a product market fit. Oh goodness. They had across the sort of TRL levels from, stuff on the bench at TRL three to stuff out in the market as a product that they were selling, but wasn't what nobody was buying, they had 20 odd products. Oh, goodness. Also, for those listening that don't know what TRL means, it means technical readiness level. Thank you. So they had way too many products. And in fact, they were operating right across the value chain from they had some proprietary approaches technology for being able to listen into the the efficiency, the electrical efficiency of particular devices in the home. They were also, so they had Technology at the level of the individual household, the individual appliance, being able to tell, the efficiency of those all the way up to competing with Google home or Alexa as a presentation layer for people to interact with, smart metering and understanding the performance, the the energy performance of their home. So they had stretched their proposition right across the whole of the value and that's really hard to do. yeah. And I think, not succeeding in any of them. yes, and it's about picking your battles, but it's also about knowing where you're strong and where you add value. Now, when they started up, there was no Google Home and there was no Alexa, really. So they had to fill that gap in the value chain. They had to be able to show the value of their core technology. They had to show the whole set. But I think it's important to recognize. When other people enter the value chain, when other people enter the ecosystem, when you say, well, that's great. You can do that. We don't need, we don't need to do that anymore. Fabulous. Yeah, we, you become our customer then. If, or, oh, fantastic. You become our supplier. Brilliant. I absolutely recognize that for certain businesses that are right at the beginning of a market, they're making a new market. They've got to demonstrate value across the whole of that ecosystem, across the whole of that value chain. But they must know where they're going to defend their business, where their IP is, where they invest and where they retreat and say, wow, that's brilliant. We'll partner with you. So that's, yeah, I think that's key lesson there is being. Really clear about what's your unique role in the ecosystem. What's your unique role in the value chain? Where do you create value that nobody else can create? I really appreciate those two examples. Those are really good ones to, I think anchor off of and have, a moment of assessment around self awareness I think it's really important as a founder or any, whatever you're building is to help, have self awareness around yourself and your team and what you can actually do I, I'm going to kind of shift gears back into our general conversation and try to end on a note when talking through company governance for growth. This is something that I have thought of a lot because I've been in startups where The org chart almost organically grows. It's because no one's really thinking about it. It's not some organic growth is actually good because oftentimes you just don't know what you don't know and you don't know what kind of departments you need and what direction your product's going to go. So how could you know what functions you need to fill there's also another part where there needs to be a little bit of strategy and planning so that you are setting your team up for success, expectations are being set of who's gonna get a manager and like what functions are going to exist and potentially like a group of people will have to offload to other subject matter experts in the in the team and then also obviously there's like the, The higher level from that, which is creating a board and a board of advisors and what that looks like for a company. So that's a pretty broad question, but I'll kind of let you tackle it and we'll go from there. So I'm going to start. Sarah, you were talking about founders, being self aware Yes. and that journey of self awareness. And you need people to help you on that journey. And I think that your non exec chair is somebody that you should be choosing that you believe can help you on that journey. Yeah. You may have as well a a founder mentor. So somebody that's a, that's been a founder or still is a founder and they're, three years, five years ahead of you on their journey. Somebody that you can call up and. You can share your horror stories with it's one of the greatest benefits, I think, from joining an accelerator program is that founder teams on those programs make friends for life. Yeah. And there are certain stories, certain. pains and trials and tribulations that you can only share with another founder who's going through a similar experience or has done. You're pulling your hair out about the, you thought you'd almost got this pilot agreement signed. Now it's gone off to procurement and it might be months or, somebody's starting to say they want the health and safety things signed before such and such. Or, Oh, my God, my board or whatever it is that's, that's that's really most painful. You can only share some of that with with somebody like your non exec chair with with another sort of founder mentor or with, your peer to peer group And I think that's a really important part of the support mechanism for any founder and helps them on that self awareness journey. And some of those people are going to form some of the characters in your governance arrangements. I think that governance is often reduced to reporting, And it's often reduced to a board of directors. The directors, the board of directors, can fill up board meetings. Oh, my God, the number of founders that I talked to, even mature, mature scale up series B, series C, and everybody around the board doesn't say anything, but everybody knows. That it's all a bit of a waste of time in the sense that we spend three, two or three hours every month, maybe hearing reports canned reports from the business and we're not getting to the most critical topics of discussion. You've got some of the smartest people in the room around this business that should be super useful time. For the leadership team, they should be excited about an upcoming board meeting and, rubbing their hands in glee thinking, great, we've got a board meeting. This is our chance to step out of running, being in the business and we can work on the business. These are the best people that we can do that with, we can, these are the three big risks or these are the three big opportunities we've got. These are the best people to talk about. these topics with. So that's governance in, that should be governance in operation. You should have a growth focused agenda on your board. It should be tackling the, the big topics that can help you to reach your next critical milestone, whether that's a fundraiser or a sale or whatever it may be. So that, that's what we always talk about in Sapphire and Steel. We talk about governance for growth. And it is about your board. But it's also about your advisory boards or advisory networks. The, your board and your advisory network should be taking you out into the market. In some ways, it's coming back right back to that first part of our conversation about being engaged in the market. That's something that should continue. You, your governance. Arrangements should to be a way of drawing in the nutrients that you need to grow your business. That's investment, that's customer relationships, that's that's talent your advisory board members, your advisory network however loose or formalized, that is your board of directors. Those are people that should be able to connect you out into the ecosystem to help bring in talent. To help you identify the best possible investors, the best possible corporate partners that helps you to build relationships with research institutes to help you to test and grow the business and equally, they should be able to mentor and coach people right across the business. What a great way to have somebody on our scientific advisory board that's mentoring, coaching one of your bright new styles in your tech team. Yeah. Or somebody on the commercial advisory board that's that's mentoring, one of your new BizDev team members. It should be a two way flow from the business through your board or advisory network out into the market yeah. And I think when you have that mentorship structure, it one, I think a little bit enforces self reflection and self awareness because you, I think one of the biggest skills and competitive edge, a founder or a higher level executive in a startup or any company really is to know what you're not good at. And either, you have many options, one get better at it and work with people that can get you better at it. But sometimes it's also important to see like how much time it's going to take and seeing if it's a worthwhile investment. But then also other times it's like, who can you hire that's going to be your partner and be that core competency that you need. Or finding board members that can potentially fill the void there. Yeah. And what they're doing is providing a different perspective on your business. One of the biggest dangers, the boards that I see go wrong time and again, they suffer from is common every time group think, Yeah. And there you have to call out there are certain, so many boards have limited diversity. and that means they're much more at risk of that group think they come from the same sort of backgrounds, the same sort of industry and they are in danger of not being able to provide the diversity of thinking or perspective. We're huge advocates of building diversity into your boards right from the beginning. It's such a, it's so hard to do it later. In fact, if you don't do it early on, it almost never happens. And it's such a strong signal to bring in the best talent is if you can show the diversity on your board, and it avoids that problem of groupthink, and it creates a culture. of inclusion and a culture of freedom to speak and to generate those ideas. So there's something very powerful in, in, in the board that, that speaks about the culture of the business. yeah, and I think it also creates some level of checks and balances because oftentimes you might have experts on the board and when you're on a board and you've done this for a really long time you might say something with great confidence. Whereas maybe you know that you're maybe 80 percent sure but a founder won't really have this, the intuition to be like, oh, that's likely not something I should listen to or something like that. So what you say has so much As a board member, what you say has so much value and and weight that having other board members that have potentially diverse experiences or you have like similar experience people together in the room to fight it out I think that's also important. I think inclusion is fundamental. That is fundamental for any culture to flourish and for any company, any product, any. project ever to flourish. That is not even a question. But I think also having that checks and balances where, while diversifying your board, also having someone that can check them there is important. Yeah. Yeah. And one of the best examples I've heard about approach to diversity on boards is from Brad Feld. Textiles founder. He's a very, he has a vc so he's actively investing. He or they often say even though they're lead investor and they could very well insist on taking up a board position. They often now say, actually, we'll take an observer position because we want to create the space on your board for greater diversity. Wow. I think that shows the value that Brown attaches to diversity, the importance of that for the success of the businesses that he invests in. That's excellent. It starts there, right? It starts with that kind of it's almost like a micro movement, but more people should have that front and center. And it's not just about like social acceptance. It's really about the success. It it actually has such a fundamental effect on the success of a product. Absolutely. Absolutely. That's what we're driven by is we want these businesses to be successful. We want them to have real impact in the world. And without diversity, they're less likely to achieve that. It's just that's the facts of it. Plain and simple. Well, all right. I'm going to, I want us to wrap up with every, whenever I have a speaker on, when I have a guest on, I try to wrap it up with do you have any all of the things that we talked about, any other advice that you'd want to provide hardware entrepreneurs, builders to get their ideas into the world? Gosh. Gosh, I wouldn't. Yeah. Let me think. There were so many things I was thinking that we might we might think about. I suppose of all the things that we've talked about, I think it's the, it comes back to being very clear about the problem that you think that you're solving. Particularly for early stage, it's what problem are we solving? Who are we solving it for? And do we have any evidence that they're willing to pay us to solve it for them? And the more precise you can be about that, the better. If you've got names, if you said this person in this business, who has these responsibilities, faces this problem in achieving their corporate objectives, and we've got a fix for that. That enables them to do brilliant things. And they're prepared to pay us this sum. That's that. That's that sits at the heart of every single investor proposition. And will help you to drive the success, the value of what you're doing. Absolutely. Beautifully said, Pete. Thank you so much for being on. It was a absolute pleasure. And I'm so grateful. I'm really pleased to have joined. It's a real privilege. So I can't believe the time has. flown by, I can't believe, I can't believe. I've really enjoyed. It's been such a great conversation. And looking forward to all of the other speakers that you've got coming along. So thank you. Thank you. β€ŠHello, listeners. Welcome to the TLDL section. Either you are done with the episode and you're ready to move on, so in that case, thank you for listening and I hope you loved it. And for those who didn't have time but really wanted to get some key takeaways around the topics of the episode, I got you. I am here. I created a pretty nicely boiled down list of key takeaways that came out of my conversation with Pete, so I'll just dive right in. Pete started the episode by saying, hold tight to your problem and customers, but light to the solution, which I greatly appreciate. I always say, fall in love with the problem, not the solution, so this was a great other poetic way to kind of say that. He talked about Pasteur's Quadrant as a book resource. I'll be linking it in the show notes so that people can take a look. We also talked about how the difference between technology development and product development and how they are two very different things and switching out of the research mentality requires awareness around how different it is to be in business in contrast to being in a lab. Understanding core competencies and rating them in a skill matrix to determine what you will insource versus outsource and what you will partner in various strategic operational ways is really important. I actually wrote a article with one of my friends out of Techstars Nicole. So I'll also link that in the show notes if you're interested in building your team and want to do it systematically. So we dove into pilot tests and programs to be able to propel your product forward, and what Pete mentioned was that when you are launching pilot test programs with either corporate partners or clients, there are three very important parts. One, the technology needs to work as you said it would, obviously. Two, it needs to prove commercial value to the client or partner. Three, The tech and the contractual setup should be supporting a seamless operational development. So, these three things were ones that he called out and I completely agree with all of them. And then I asked the question of how demanding can you be from clients and partners on the pilot, because this is a problem that comes up quite often where you do want to set up a great contract, you really want to have a really good partnership, but there's a level of negotiation that still needs to be made, and so I asked how demanding can you be. And he, he said, take into account that they are spending time and money on this, so if they are devoting an entire team, that's a pretty good sign and ensuring that the pilot becomes a success metric for you is really important and make sure that they understand that. Obviously look at the commercial value and look at the relationship and in, in the mission. And if all of those are aligned, it's important for you to be able to advocate for yourself within reason. So basically it's a little bit of a assessment at that point to be able to see where you can take the relationship and how demanding you actually can be. And then we finally ended on talking about boards and board meetings. And what Pete called out and he's been in a lot of boards in many hard tech, deep tech startups and even board chairs. So this is definitely interesting to hear from him particularly. He said that board meetings are usually used as a status report, however and he said that usually people don't look forward to them because it becomes a status report. However, Usually in boards, if you've created them well, there are subject matter experts that come to these meetings and that are proper, not properly utilized. So his advice was that it's really important to come to meetings with topics you're struggling with to get guidance and even ask of your advisors and board members so that it could be resolved. And picking board members that you can actually openly do this with is part of the strategy of creating a board. So, that was the TLDL. Obviously, there's a bunch more very important topics and discussions that happen in the episode, so when you have time, make sure to go back and give it a listen, and don't forget to rate, share, and keep listening to the Builder Circle, The support and the appreciation for the podcast has been absolutely instrumental in having me keep going at it. So thank you so much and I hope you enjoyed it. The opinions and information shared on this podcast are for informational purposes only. We always recommend that you seek professional advice before taking any action related to your business or personal ventures. Thank you for listening, and I hope that you enjoyed the episode