How NOT To Build a Startup: Ned Hill, CEO of Position Imaging (Part 4)

Sramana Mitra: Tell me how you put one foot before the other. Try to tell the story of your lessons from the trenches. Did you have an investment thesis that panned out?

Ned Hill: I had a business plan.

Sramana Mitra: What were you going to do?

Ned Hill: The thesis was on tracking technologies as they apply to warehouses. If you could provide a very accurate radio tracking solution, that would enable you to open up all sorts of applications for logistics all over the place. You can improve the efficiencies of workers. You could improve the visibility of assets. There was a thesis about the cost-benefit and what the technology could do.

More importantly, I knew this was a heavy technical lift to reach the stages that we needed to get to so that I didn’t stretch myself. Otherwise, people would be waiting for this. That’s an exercise in controlling the expectations of your investors. In the beginning, it was a very low burn rate. Probably $50,000 a month in the beginning.

Sramana Mitra: $50,000 a month is a significant burn rate if you have a couple of hundred thousand.

Ned Hill: It was more about $300,000 in the beginning. It was a six-month snip. It was carefully curated in terms of the milestones. It was tight. Because we laid out the milestones so clearly, people knew that we were making the steps ahead. I went back to the same thing with the follow on, but they also expanded the team and brought in friends and family. For the first four or five years, that’s how we operated.

Sramana Mitra: How did you justify what you started off by saying, “Eat what you kill.”?

Ned Hill: We were doing it on the technical side. The kills in this case would be proof points on the key elements of the technology. It’s unique. My company developed the most accurate radio tracking technology in the world till this day for 2mm resolution in 3D. One of the other use cases we were looking at was image-guided surgery. I chose that as a use case because today, they use cameras. Every time you walk in front of a camera, it’s invisible.

With radio tracking, that would all go away. It was a good use case to focus on but also a good use case to justify the accuracy requirements that we were going to need. That was one of the end games. There were things about the technology that we would take in blocks and complete. How are you going to explain a big advancement to a non-technical person? That had to be managed. We chunked it up pretty well. Luckily, I had some patient investors.

Sramana Mitra: When was the first customer validation?

Ned Hill: In 2017.

Sramana Mitra: 2005 to 2017, you were just doing technology development.

Ned Hill: We did a pilot with UPS. We played around with a couple of institutions. The first paying customer was Smart Packaging. That was another good example of nobody has ever done package management with computer vision before. We have laser guidance in there and a lot of machine learning going on.

I got pushed hard by the investors about this. I kept it in beta for almost two years. We weren’t ready. The technology wasn’t refined enough. The user interface wasn’t refined enough.

This segment is part 4 in the series : How NOT To Build a Startup: Ned Hill, CEO of Position Imaging
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