Thought Leaders in Internet of Things: Sridhar Iyengar, CEO of Elemental Machines (Part 2)

Sridhar Iyengar: In 2011, my business partner and I started our second venture together. It was a wearable tech company called Misfit Wearables. We were heavily inspired by the digital health area that we were exposed to. We wanted to do something in digital health.

Back in 2010, the only way to do that was to not be a medical device, but to be a consumer electronics product. We made fitness trackers. We grew that rapidly and sold that to Fossil. What was interesting about that was that our fitness trackers were just motion sensors. We had almost a million people using them all over the world.

It occurred to me that we accidently created a global distributed sensor network. I can see data from a million sensors around the world with less complexity, effort, and maintenance. That was the inspiration for Elemental Machines. I saw this opportunity where we could take 90% of Misfit and repurpose that for a B2B offering.

We have basically 90% of what was needed to create smart factories. In fact, you can get sensor agnostics. You can just have a digital interface and everything else was already there. That was the idea. As I was thinking about this, we started a process for selling Misfit to Fossil. At that time, I decided that this idea had some legs. That’s how Elemental Machines got started.

Sramana Mitra: Were you able to use the technology that you had built for Elemental Machines?

Sridhar Iyengar: No, we didn’t want to complicate any of the potential acquisition mechanics with Fossil. This is something we felt we could built from scratch anyway.

Sramana Mitra: Which customers did you start working with? Where did you start getting your early traction? How did it play out?

Sridhar Iyengar: When you start, you don’t exactly know what the product-market fit is. My original thesis was that we can make it very easy for factories to create a smart factory and measure everything. Customers can use that data to do their own modeling or we can model it for them. I wanted to start with life sciences – biotech and pharmaceutical companies.

I went to people I knew and said, “This is what I’m building. What do you think?” When somebody invests $10 million in a factory, that has to run for 10 to 15 years. Five years into it, the people who are running it are not necessarily the ones who designed it. There’s a lot of enhancements you need to do. We were going to be that layer to make it very easy.

The challenge was and the feedback we got was, “Fantastic idea. Unless you have ISO-9001 certification and other compliance, we can’t use you in production. It places a huge burden on us to validate everything.” When you are three to four people working at a startup, you’re not there yet. We also heard, “Why don’t you talk to our colleagues in the R&D department. They have many of the same problems that we do, but they have none of the regulatory requirements.”

We heard that from multiple folks. We talked to the R&D folks in the same companies. They all said, “Come on in. We’d like to try out what you’re doing.” That’s how we got pulled into the lab and R&D side of pharmaceutical, biotech, and MedTech companies. 

This segment is part 2 in the series : Thought Leaders in Internet of Things: Sridhar Iyengar, CEO of Elemental Machines
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