How NOT To Build a Startup: Ned Hill, CEO of Position Imaging (Part 6)

Sramana Mitra: Five years have gone by at this point and then you do the pivot. How much money has gone in in these five years?

Ned Hill: $3 million or $4 million. It wasn’t that we weren’t doing commercial deals. I had prepped everybody that this was going to take a while. We had the ability to show people what we had created. It is mind-blowing. They had faith in me.

They knew we had created something special, but when I dropped the bomb and told them I was pivoting to logistics which is a bigger market, it almost cost me the company. I had investors who were funding us on a tight leash. You would have thought I just killed somebody when I presented to the Board. It was a nightmare.

Sramana Mitra: Legitimately so. Today, we are further along in the evolution of the startup industry. The biggest mistake you have made in developing is you built technology without a problem to solve.

Ned Hill: Right.

Sramana Mitra: That is a no-no. Our philosophy is, “Do not write a line of code until you figure out what market you’re going after and you validate what market you’re going after.” Your early stage journey was full of mistakes.

Ned Hill: Absolutely.

Sramana Mitra: The investors are the ones to blame, because they shouldn’t have let you make those mistakes. They should have guided you.

Ned Hill: I think you’re right. We have the technology now. We do have applications in sight. This wasn’t like, “Let’s have a science experiment and see if we can develop it.” When we did the computer vision, it was clear what we were going to do. I had laid it all out in my mind. It was going to start with multi-family buildings that were having a lot of pain with package management. Then, we would have gone on to retail.

All of these use cases were clearly laid out. The round two of the computer vision was much more focused. It was much more dedicated to actual use cases. In fact, those use cases drove us to develop the technology.

Sramana Mitra: Were customers involved from the beginning?

Ned Hill: I met with people and analyzed the space. It’s not terribly complicated. It’s about building the platform around the use case to make it really magical. What you build around the tech gives you that magic feeling. We knew we were clear about what we can do with the technology to solve the problems for those use cases.

Sramana Mitra: What problem were you solving?

Ned Hill: There are really two. I’ll use a multi-family residential space. Because of the growth of e-commerce, multi-family wasn’t equipped to manage that kind of volume. Landlords would suffer greatly. It was a huge pain point.

They would solve it in one of two ways. One was staff. Throw a bunch of people at it. It’s very expensive. In standard package management, one package takes eight minutes because you have to receive it, sign it, send it out, wait for the person to come, and find the package. We realized that if we could solve that problem for them, it was a huge win.

The other approach was lockers. Lockers have been used for about 12 years. They were fine at that time, but they are an incredible waste of space. A third of it is taken by the metal. Another third is the mis-sizing of compartments. And they can’t scale. It was very clear what the pain points were. The way to do solve that was with computer vision. We had to add laser guidance.

If we can create a computer vision platform that could effectively track every package, identify them, put it on a shelf, and I see it the whole time. Our biggest push back was somebody’s going to steal packages. We have now delivered millions of packages through these smart package rooms. A couple of people have tried stealing, but we caught them.

This segment is part 6 in the series : How NOT To Build a Startup: Ned Hill, CEO of Position Imaging
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