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Xaiko Cider on Disrupting the Industry and Black Entrepreneurship

Xaiko Cider Talks Black Entrepreneurship

Last year, we began interviewing CEOs and Founders of early-stage companies to learn how COVID-19 impacted America’s most innovative startups. This year we continue the series with a new two-fold theme- the state of entrepreneurship in 2021 for social impact start-ups and BIPOC (black, indigenous, and people of color), as well as other underrepresented groups. 

We chose this theme for two reasons. First, because this year, we will be launching our own social impact enterprise (stay tuned for more details). Second, because our leadership team features BIPOC and we believe in the importance of entrepreneurial opportunities for all. Per that belief, DataDay Design is committing to donate $3 to the NAACP Legal Defense Fund for every order made through our blog series from a highlighted BIPOC-owned start-up.

With that, we are excited to launch our first interview with our client, Tobin Costen and Xaiko Beverages. Tobin is a BIPOC-business founder. His company, Xaiko Beverages, offers an exciting new twist to the alcoholic cider industry. Even amidst the pandemic, it’s so popular that the business struggles to fulfill all its orders. Read on to learn more about this up-and-coming beverage brand and how Tobin views the state of entrepreneurship for Black business owners in 2021.

Xaiko Cider

Tobin Costen, Entrepreneur at Heart

Tobin is a business and sports marketing professor at Holy Names University in Oakland, California. He got his start in entrepreneurship in the ’90s when he met and started working with Master P.. Tobin became the Executive Vice President of Master P’s label, No Limit Records, and his business manager. When he found out the financial benefits of running a business oneself, he decided to start his own label, Me & Mine Entertainment. The label was a success and signed rapper King George. Independently, Tobin also signed rapper Lil Troy (of the ever-famous “Wanna Be a Baller”) and his record label, Short Stop Records, to a major distribution deal. 

Tobin Costen, Founder and CEO of Xaiko Beverages and proponent of Black Entreprenurship
Xaiko Beverages Founder & CEO, Tobin Costen

How to Start a Cider Business; Start With Sake?

In 2007, Tobin was attending graduate school when he went out with some friends to a Japanese restaurant for Sake. Some in the group were doing Sake Bombs, but others didn’t like the taste, so they didn’t participate. Tobin recalls having an idea at that moment- “what if I made a Sake that was smooth and had flavor? No one does that.” 

It was then that the name Xaiko came to him, as in being psycho for crushing Sake Bombs. The more he thought about the name, the more he wanted it to look different, so he chose Xaiko Sake. Tobin began researching because he knew nothing about the beverage business. He soon found a flavor chemist who agreed to make samples once Tobin picked a few flavors. 

After spending years on product design and struggling to get a liquor license (few are handed out in the U.S for Sake), Tobin reached a breakthrough. He met with Two Rivers Cider in Sacramento, California, who wanted to take his flavors and do them with cider. Unfortunately, they had a capacity issue, but Tobin’s mind had already turned to cider. 

He met with Hidden Star Orchards, a cider production facility in San Leandro, California. They agreed to begin producing his ciders marking the official birth of Xaiko Beverages. Xaiko Ciders started with four original flavors; Orange Lime, Raspberry Dragonfruit, Kiwi Lime, and Blackberry Rasberry. Today that offering has grown to eleven flavors with infinitely more memorable names. Those original four flavors are now known as Citrus Mistress, Mother of Dragons, Kiwi Herman, and Blackberry Bonds #25 (a la former San Francisco Giant Barry Bonds).

 

What is Xaiko’s Approach to Branding?

Xaiko’s most significant effort is to ensure people recognize the brand as high quality and fun. In general, cider is a lowkey hang-out drink. You chill at a restaurant or brewery, sip cider, and look at nature. Xaiko markets itself as the cider drink when you want to party, no matter if you’re 21 or 70. Unlike most sugary alcohols consumed on a night out, Xaiko Cider is low in sugar with a smooth taste while still packing 6.7% alcohol. Overall, it’s about branding for entertainment, fun, and enjoying oneself. 

As part of its efforts to be fun and enjoyable, the company tries to be present at as many events as possible. Pre-Covid, events were the main focus for branding and marketing. You could find Xaiko at almost every major event in the Bay Area or Central Valley of California. 

 

How is Xaiko Beverages Positioning Itself for a Post-Vaccine World?

Xaiko is expanding its operation. The company recently invested in a state-of-the-art canning machine to produce more cases to match growing demand. Also, Xaiko is working with distributor Geyser Beverages to get more products out in Northern California. Then the company will expand to the rest of the state and northwest. While there are plans to distribute Xaiko Cider further east, they are further down the line. 

In addition to its logistics focus, Xaiko is also emphasizing its digital presence to position itself as the go-to drink for a good time. As such, the business has placed a strong emphasis on the need to expand its digital presence. To do so, Xaiko contracted with DataDay Design in January 2021 to improve its social media and online engagement. We are proud to have Xaiko Beverages as a client and partner company. 

 

The State of Black Entrepreneurship in 2021

“As I look at entrepreneurship, in general, I think there has been no greater time to be able to provide a solution for people. The success of any business is determined by its ability to solve a problem for people, regardless of race. When we talk about Black businesses, it has always been challenging because, for whatever reason, black business owners usually do not get the benefit of the doubt. 

For example, if someone has a poor experience at a Black bakery, they don’t often say, ‘I’m not going back to Tobin Costen Bakery’; it’s usually ‘I don’t mess with black businesses or won’t go to them anymore.’ For a bakery owner of any other race, if a customer had a bad experience, they’ll say, I’m not going back to so-and-so bakery, not I’m not going to see a baker of this race ever again. As a Black business owner, you are forced to serve as the face of and speak for every black entrepreneur out there. 

Black businesses also face preconceived notions, such as that they price gouge or want to negotiate. In reality, many people devalue black companies and want to pay a black business less. ‘It’s almost like they want us to be thankful for their business.’ If you’re going to be a black business owner, you need to know that’s what you’re dealing with. You need to outwork folks and show you’re on top of things. On the other side of the coin, some people go just because you’re a black business. 

 

Building Wealth for the Future Starts With Entrepreneurship

In general, entrepreneurship is already a challenge, but adding in fighting the demons of being a black business makes things even more difficult. Still, in 2021 there are more opportunities and more money available for people to start businesses. Black people need to know how to do their own research to get that money. It’s a challenge for black folks, but it’s important to have more black businesses.

I believe to build wealth truly, you need to start a business. It’s a lot harder with a 401K, working for someone else. When you build a business, you get tax write-offs and can develop your personal brand. I think it is the best way to go so people can build generational wealth for their children and grandchildren. I strongly encourage Black people to consider entrepreneurship and start their own business.”

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Hellofriend is Encouraging Friends to Stay Connected with Social Ordering

DataDay Design is interviewing CEOs and Founders of start-ups and early-stage companies to talk about entrepreneurship, learn how these businesses are navigating the COVID-19 pandemic, and understand how they’re rethinking growth strategy in 2020. This interview is with Salman Habib, CEO & Co-Founder of Hellofriend. Hellofriend is a social ordering app that encourages individuals to enjoy their favorite restaurants and businesses while getting rewarded for bringing along their friends.

You can read more of our interviews with America’s brightest entrepreneurs here.

How did Hellofriend get started?

Hellofriend grew out of intellectual curiosity. Salman and his brother, Shaban, noticed how the college experience became devoid of in-person interactions as more things shifted online. The brothers didn’t expect to go down the entrepreneurship path when they first discussed the concept for Hellofriend in 2017. Their focus was more on the problem of in-person social interaction itself. When discussing how to address that issue area, some professors suggested that they consider starting a company. This led to the first iteration of Hellofriend.

Salman and Shaban’s initial concept was for a digital events planning platform. It quickly gained traction on-campus, and the brothers were accepted into Harvard Innovation Labs. Around this time, they decided they wanted to look beyond on-campus events to more effectively address their initial problem space.

Co-Founders Shaban Habib (left) and Salman Habib (right)

How has the company evolved?

In normal years, college students go out to movie theatres, beauty salons, fitness studios, and restaurants at least every week, and sometimes every day. Focusing on those interactions gave Hellofriend more to work with than on-campus events, which students typically don’t attend as frequently. The team pivoted into this space by putting forward a dynamic group discount model. Individuals received discounted orders at local restaurants and businesses by inviting their friends to join them. Hellofriend began calling their service “social ordering.”

Hellofriend onboarded Drybar early on in the Boston market, which gave the company a huge boost. They then expanded to Richmond- the brothers’ hometown and a city with one of the highest concentrations of local restaurants from Boston. The move presented the opportunity to advance their product further with the help of Lighthouse Labs. Currently, their development team is based in Boston, while their sales operation is out of Richmond.

How has COVID-19 impacted Hellofriend?

In their first month after launching at Virginia Commonwealth University (VCU), 15 new restaurants and 4,000 individuals joined Hellofriend. This huge momentum coincided with COVID, which created significant challenges for their team and their local partners. Many restaurants and vendors had to close their doors due to COVID concerns.

Hellofriend recognized this as an opportunity to not only help their local partners but to grow alongside them. Within a few weeks, their team built a contactless ordering platform using QR codes, recognizing that this was the ideal time to move into that space. Many of their local business partners were able to re-open because they had access to Hellofriend’s contactless ordering platform. The majority of those early customers were given access for free.

Hellofriend seeks to help people stay connected with social ordering
Key Features on the Hellofriend App

What’s next?

Hellofriend was planning to do a bigger launch in Chicago and LA over the Summer but has had to push back their timeline due to COVID. When identifying cities for expansion, some of the key considerations include what college campus Hellofriend can grow out of, whether there are similar products in that area already, and whether the social ordering concept is one that locals will engage with.

Though the foodservice industry is highly saturated already, its size and potential for innovation make it a promising focus for Hellofriend moving forward. COVID-related uncertainty poses the greatest challenge to companies in the space because it’s so unclear how consumer behavior will continue to shift. The Hellofriend team, which now numbers nine full-time employees, will have to continue its vigilance in tracking emerging trends to keep up with the market. As is the case for many industries, individuals’ safety on all sides will be a top priority as Hellofriend expands its operations.

Hellofriend is in its third seed round. The company’s first and second seed rounds were led by Counterpoint Ventures and Right Side Capital Management, respectively.

To read more of our interviews with America’s brightest entrepreneurs, click here.

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EdTech VC Edovate Capital Is Investing in K-12 Education

EdTech VC Firm Edovate

DataDay Design is interviewing CEOs and Founders of start-ups and early-stage companies to discuss entrepreneurship and learn how these businesses are navigating the COVID-19 pandemic. We are pleased to have the opportunity to interview Graham Forman, Founder and Managing Director of Edovate Capital. Edovate is an EdTech VC firm that invests in impact-oriented seed-stage start-ups serving the K-12 ecosystem. They help companies accelerate their growth and expand the reach of their empowerment efforts.

You can read more of our interviews with America’s brightest entrepreneurs here.

How did Edovate Capital get started?

Graham Forman started Edovate Capital after selling his third business, Netchemia, to Vista Equity Partners. With a wealth of experience working in EdTech entrepreneurship, education policy, and angel investing, Edovate Capital brought together the unique skillset he had developed. Graham focused on investing and advising when he realized he could impact more companies as an investor than an operator. Edovate targets seed-stage EdTech start-ups, with a focus on companies serving the K-12 B2B market.

One of Graham’s priorities when evaluating an EdTech start-up is to predict its ability to democratize access to education resources. Often, companies focusing on empowering key stakeholders in the education ecosystem are the ones solving easily overlooked problems.

To date, Edovate has made 16 investments through its micro fund. In 2020, it’s expected that six to seven of its portfolio companies will grow from 2x to 7x due to the increase in virtual learning demand. 

EdTech VC Firm Edovate Capital Founder Graham Forman
Edovate Capital Founder Graham Forman

How has COVID-19 impacted Edovate?

While uncertainty is typically unfriendly towards investing, Graham says the pandemic has brought forward demand for EdTech infrastructure by 5+ years. Edovate invested in two areas experiencing elevated need due to COVID-19, including solutions to address chronic absenteeism and digitizing curriculums. Attendance is a key metric for school boards and provides a clear ROI from an impact perspective. Because attendance is tied to school districts receiving state funding, and since COVID-19 has made consistent attendance a bigger issue, investing in this space made perfect sense for Edovate.

While there’s less investment at the seed-stage now than pre-pandemic, Edovate began to see a return to normalcy in May. From an industry standpoint, this has been the largest fundraising year in the history of EdTech globally. The heightened focus on virtual learning has propelled the industry to witness its first decacorns ($10B valuations from investment).

Pre-COVID, K-12 parents in the U.S. spent, on average, just 3% of their income on education resources outside of school. To put that in perspective, in both China and India, that number ranges from 30-35%. However, COVID-19 has enabled parents to be more informed stewards of their children’s’ education. This is especially true as the gaps in existing EdTech infrastructure become clearer. As a result, U.S. parents are increasingly spending on tutoring resources, supplemental learning tools, and other educational technology.

Graham notes that this is likely the most disruptive moment in anyone’s lifetime for education. The industry will not likely return to the way it was.

How do you think about the metrics for impact as a Social Impact EdTech VC?

Impact is usually very context-specific and isn’t always obvious. At the seed level, “it is rare to find companies that have done randomized trials to prove the efficacy of their product.” 

Since that’s the gold standard for demonstrating impact, VCs often must turn to anecdotal evidence for seed-stage start-ups. In the instance of BookNook, one of Edovate’s portfolio companies, their early results demonstrated small group reading instruction’s power in closing literacy gaps among young children. For other EdTech companies, their impact is often based on empowering teachers or local communities. Though not as statistically significant, survey results are often crucial for demonstrating the impact of such solutions.

As seed start-ups begin to grow, randomized trials quickly become a priority. Another of Edovate’s portfolio companies, Everyday Labs, has completed multiple RCTs (randomized control trials) and demonstrated that their platform can reduce chronic absenteeism by 10-15%. 

When children attend school, there’s a clear positive impact on engagement and learning outcomes. Other factors that Edovate considers (more specifically as an EdTech VC) when making investments are reach and whether or not platforms support underserved populations. Based on the proportion of students in a district on free and reduced lunch, Edovate can get a sense of underserved communities or those that provide education to socio-economically disadvantaged populations.

To read more of our interviews with America’s brightest entrepreneurs click here.

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Equality Rewards is Enabling Consumers to Discover LGBTQ-Friendly Brands

LGBTQ-friendly brands identifier Equality Rewards

DataDay Design is interviewing CEOs and Founders of start-ups and early-stage companies to talk about entrepreneurship, learn how these businesses are navigating the COVID-19 pandemic, and understand how they’re rethinking growth strategy in 2020. This interview is with Justin Ayars, Founder of Equality Rewards, and EqualityMD. Equality Rewards is empowering consumers to discover LGBTQ-friendly brands. Their latest focus is on a Chrome plug-in which suggests how LGBTQ-inclusive a company is based on synthesized data. EqualityMD is Justin’s latest project, which we’ll do a deeper dive into in 2021.

You can read more of our interviews with America’s brightest entrepreneurs here.

How did Equality Rewards get started?

Equality Rewards wasn’t always the company that it is today. While taking part in Richmond’s Lighthouse Labs accelerator, the business pivoted from a consumer-focused app to a data-driven, consumer insights web extension. Making a major pivot like this is highly unusual during an accelerator, says Justin Ayars, their Founder.

Justin started as an attorney. When a mentor encouraged him to take his creative spirit and merge it with the logical frameworks of law. He turned to entrepreneurship. After starting a successful coffee company in Williamsburg, Justin opened a restaurant and nightclub in Richmond. Not long after the move to Richmond, he helped start Richmond’s LGBTQ Chamber of Commerce.

For six years Justin ran Q Media, a platform for people to share their journeys and promote equality through storytelling. This non-partisan digital media company brought together a range of diverse perspectives. It also gave companies an opportunity to engage with those consumers in a new way.

As companies became more exposed to the LGBTQ market, they began asking for metrics on consumer purchasing behaviors. Justin realized that there wasn’t much data out there other than community surveys so he started Equality Rewards to highlight LGBTQ-friendly brands.

Justin Ayars, Founder of Equality Rewards, a web plugin that highlights LGBTQ-friendly brands
Equality Rewards Founder Justin Ayars

What inspired you to launch a product for LGBTQ-friendly brands?

The LGBTQ+ community’s economic decisions and leverage aren’t given proper credit. People delegate talking about the LGBTQ community to June every year and then move on to other things:

“Let’s look at a self-identifying person not as someone on a pride parade float once a year and then go back to them 364 days later, but as a living, breathing, human being with wants, needs, and desires of their own. They are actual consumers and a market businesses would like to target”

The LGBTQ community is extremely cross-sectional and provides a $1 trillion niche market. Focusing on this one community and recognizing that it’s not monolithic allows companies to connect with a lot of different market segments.

One of Justin’s main motivations has been to get companies to move beyond “rainbow-washing” and contrived attempts to attract the LGBTQ community. His goal is to get them to engage with the community authentically. Members of the community want to vote with their wallets for values they believe in. Increasingly, a number of companies also want to understand and be a part of the LGBTQ communities’ stories.

Why did you pivot to focusing on the Chrome extension? How does it work?

“Surveys don’t justify marketing spending based on opinions that are collected once a year. Companies change and peoples’ preferences change frequently.” 

The information yet to be collected are the consumer choices individuals that self-identify as queer actually make – not just who they say they’re going to buy from. In reality people that value inclusivity may buy the cheaper option, regardless of which brand is more inclusive. Equality Rewards makes it easier for both individuals and companies to better understand LGBTQ consumer behavior and engage with more inclusive brands. 

The web extension allows users to see LGBTQ-friendly brands and those that aren’t. The plug-in synthesizes data from the human rights campaign, and the national LGBTQ Chamber of Commerce to give companies a green, yellow, or red inclusivity rating. Equality Rewards’ prototype is already live but the company is planning to roll out a new version before the holiday shopping season as they make additional UX improvements.

One thing that sets Equality Rewards apart is that they recognize having access to users’ data is a privilege. The company plans to reward users for granting access to their data, something which Justin is confident will be an emerging trend in the years to come. Recognizing and rewarding that data is acting in this way also allows Equality Rewards to develop stronger trust with their users.

How has COVID-19 impacted Equality Rewards?

While COVID didn’t hurt Equality Rewards in the sense of losing customers as the economy took a hit, the uncertainty that came with the first few months of COVID did keep some investors from writing checks. Because of coronavirus, consumers will be doing more shopping online than they would in typical years. This has presented a huge opportunity for Equality Rewards to capture more data than ever before going into the holiday shopping season. 

How do you think about Equality Rewards’ brand?

“Equality Rewards is focused on coalescing a broader community and understanding the LGBTQ network better in order to empower the community.” 

The company needs to listen to what their consumers want in order to create the most effective product and brand possible, says Justin.

“From a brand perspective it’s really all about trust” 

Equality Rewards is being very deliberate about how they listen, and their bringing in people from many different backgrounds to ensure they’re getting a full picture of their user base. Justin says he is constantly learning as a result of this process and looks forward to Equality Rewards’ continued product improvement, and community empowerment.

Is there anything else you’d like to share about your journey in entrepreneurship or Equality Rewards?

Justin attributes the company’s success so far to his 10 years of professionally engaging with and being a part of the LGBTQ community through speaking tours and other engagements.

“I had been building this company for ten years without even knowing it”

The hope is that Equality Rewards’ extension will encourage consumers to buy from more inclusive companies, and over time push companies to be more inclusive so they don’t lose market share. 

Finally, Justin believes the most important thing you can do as a founder is to listen to your potential users. If you listen all the time you can continue to iterate and improve your product to give it the features that they want.

A Note About EqualityMD

In the last few months, Equality Rewards has pivoted some of its resources towards a new idea: EqualityMD. EqualityMD is a mobile LGBTQ telehealth platform that connects members of the LGBTQ community with medical professionals and resources relevant to their needs. It will launch in America’s 4 most populous states (CA, FL, TX & NY) by the end of the year and go national in the next year.

This major pivot was decided on in the last two months. Equality Rewards is indefinitely on pause.

Justin’s team interviewed over 1000 users and community members, all of whom said that healthcare was top of mind. After an intensive study of data, user interviews, and evaluating the ever-changing market forces, they believe this pivot is not only good for business, but it has the potential to save lives.

“Entrepreneurs have to move at the speed of life, have a pulse on the needs of the communities they are serving as well as the market in general, all while learning how to dance on quicksand like Fred Astaire and Ginger Rogers. We believe we can do a lot of good for a lot of people across the country with our new product and can’t wait to launch it!”

Stay tuned for DataDay’s 2021 update on EqualityMD.

To read more of our interviews with America’s brightest entrepreneurs, click here.

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Automatic Irrigation System SEED Controls Water Distribution On the Farm and in the Kitchen

Grow Your Own Food with SEED

DataDay Design is interviewing CEOs and Founders of start-ups and early-stage companies to chat about entrepreneurship and learn how these businesses are navigating the COVID-19 pandemic. This interview is with Sabrina Williams, co-founder, and CEO of SEED, a Bluetooth-operated automatic irrigation system that both gives farmers the ability to control water distribution for outdoor farming and provides people the power to grow food from the comfort of their kitchen.

You can read more of our interviews with America’s brightest entrepreneurs here

What is SEED?

SEED, or Sustainable Entrepreneurial Ecosystem Development, is a Bluetooth-operated automatic irrigation system that uses precision moisture sensors to allow people to combat one of the major challenges of growing food: watering. There are two ways to use the system. Indoors to grow herbs in the company’s Seedbox, or the individual sensors can be placed outside and controlled via smartphone to manage watering on larger plots of land.

Traditionally, water distribution is dictated by historical data or a simple timer. The Bluetooth-controlled sensors, however, distribute water based on soil needs, determined by the moisture sensors. As such, plants are watered to their exact specifications, including local environment and soil conditions.

SEED co-founders Ruby Rios and Sabrina Williams

How Did SEED Start?

SEED grew out of a non-profit organization that Sabrina ran for twenty years which helped people from low-income backgrounds grow their own food. There she developed the automatic irrigation system to help farmers engender more productive yields. Towards the end of her non-profit work, Sabrina and her travel partner, SEED co-founder Ruby Rios, traveled to Cuba to introduce the irrigation system to local farmers. 

The farmers there combined organic and regenerative farming processes with the automatic irrigation system to increase their yields three-fold. Sabrina and Ruby incorporated these changes and branched out to start SEED. 

Does SEED Participate in CSR?

SEED is incorporated as a benefit corporation to confirm its commitment to sustainability and agricultural technologies that support food security. It is part of the company’s mandate to provide its systems to small-hold farmers globally. Accordingly, for every SEED kit sold, one is given to a farmer around the world to help improve food security. 

SEED's automatic irrigation system
An in-home SEED kit

How Has COVID-19 Affected SEED’s Approach to Growth?

At the beginning of the pandemic, SEED was working at the prototyping center of the Los Angeles Cleantech Incubator (LACI). The company had created and installed its MVP in the field for testing. The testing process was going well until March hit and put a halt to the company’s plan. SEED had a month’s worth of data but was hoping to gather data over a four-month period. 

Sabrina and Ruby realized, with the large model on hold, farmers were craning for the smaller version. They’d used it in Cuba and in South Los Angeles, so switching models was an easy pivot. SEED quickly partnered with the Los Angeles Community Garden Council to provide a portion of proceeds to underserved farmers. According to Sabrina, when SEED offered the “starter kits” online, they immediately started selling. 

The success was a bittersweet feeling though. The smaller kits were popular, but the larger model, which they’d poured time and energy into was indefinitely paused. 

What was SEED’s Experience as a Part of LACI?

SEED was working out of LACI’s advanced prototyping center when the company learned about the local incubator’s Founder’s Business Accelerator. They applied for the program and were accepted; the company’s development was quickly catalyzed, in part by some of the fantastic mentors there. 

After its experience in the accelerator, SEED applied for and was accepted to LACI’s two-year incubator program. Joining the incubator helped SEED to narrow down its business strategy and to procure helpful resources to develop the company. For example, many startups don’t have the cash outlay for legal help, but SEED had access to LACI’s legal services.

SEED co-founder Sabrina Williams interacts at LACI

How Has SEED Approached Fundraising?

As a hardware company, a lot of early work must prove consumer traction. In the beginning, the company struggled with fundraising without having an actual product in-market. However, with the launch of SEED’s starter kits, that has now changed, allowing the company to better illustrate consumer interest. 

Still, instead of pursuing VC firms and cash-rich grant competitions, SEED has focused on smaller pilot programs and pitch competitions. SEED seeks to prove its value while continuing to practice and hone its investment pitch. 

Climate Change Has Accelerated a Trend Towards Small-Hold Farming; How Has That Contributed to SEED’s Development?

It is a primary piece of the company story. Agriculture utilizes a large portion of the world’s resources and has a heavy impact on climate change, whether via water consumption, carbon and methane release, or other forms of pollution. With an efficient system like SEED, farmers not only save water but also have an opportunity to learn practices that enable them to capture more carbon. 

In keeping with the trend towards small-hold farming, SEED is dedicating resources to education. Specifically, the company is educating farmers on how to be more regenerative in their farming practices with the SEED system. 

Currently, the company is also developing a sensor to include in its larger SEED system that will allow small-hold farmers to measure their carbon output. Small-hold farmer’s supply about 70% of the world’s food, but often lack the tracking tools and resources that large-hold farms have. That’s why SEED is developing the carbon sensor to help farmer’s measure their output and subsequently, reduce their carbon footprint so that they can enter into carbon marketplaces. 

Automatic Irrigation System SEED's logo

How Does SEED Approach Digital Strategy and Branding?

SEED’s Chief Operating Officer, Ruby Rios, has a strong background in digital strategy as a former web developer and marketing consultant to non-profit organizations. With her guidance, the company has utilized multiple channels to develop its brand essence, especially email marketing and social media content production. In addition, SEED also runs PPC campaigns and delivers a monthly newsletter. 

It is a lot for just two people to manage, but thankfully, once again, LACI has proven its worth. The incubator has helped SEED to develop a content strategy which has streamlined its marketing efforts, making it easier for two people to manage. 

Is SEED’s Focus Domestic or Global?

Because of the pandemic, SEED is primarily focused on domestic consumers. However, the company has partners in multiple foreign countries, including Cuba, Mexico, and Kenya. Those partners are waiting for SEED systems to be delivered. If not for COVID-19, the business would already be in these markets and expanding further globally. 

Where Do You See SEED in 2-3 Years?

For the smaller system- in every gardener in America’s hands (42 million to be exact). In addition, Sabrina hopes the larger systems will be implemented in those countries of SEED’s global network. 

The goal is to work with international organizations like USAID to help solve the global food crisis so that the world can feed 10 billion people by 2050.

To read more of our interviews with America’s brightest entrepreneurs click here

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Fundraising CRM Humanitru is Changing How Nonprofits Raise Money

DataDay Design is interviewing CEOs and Founders of start-ups and early-stage companies to chat about entrepreneurship and learn how these businesses are navigating the COVID-19 pandemic. This interview is with Alan Wei, CEO, and co-founder of Humanitru, a custom fundraising CRM, uniquely designed for the needs of non-profit organizations, helping them to develop and streamline the process of raising funds! 

You can read more of our interviews with America’s brightest entrepreneurs here.  

What is Humanitru?

Humanitru (est. 2016) is a software company that provides non-profits (NPOs) with CRM and fundraising solutions. It helps NPOs to source, manage, and engage with supporters, such as donors and volunteers. This allows NPOs to better oversee their stakeholders from one place and helps improve their understanding as to why and how they engage with them. 

In 2019 alone, charitable giving by individuals was over $300 billion, making up nearly 70% of total giving. Despite that, 8/10 first-time donors will never donate to the same non-profit. In practice, that means that, on average, an NPO will churn 55% of its donor base each year. As such, NPOs constantly face the issue of finding and attracting donors. This is where Humanitru fits in; helping non-profit organizations maintain their donor base.

Fundraising CRM Humanitru
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How Did Humanitru Get Its Start?

The company began as the brainchild of two University of Virginia students. While an undergraduate student, Alan met PJ Harris, who was studying law, and together they started a social media app called Totem. The app was designed to engage local college students to fundraise on behalf of local NPOs. For example, they’d get student groups to fundraise in competitions for which the winning groups would receive a prize like free pizza or lessons at a local yoga studio. 

However, as Alan and PJ built the platform, they realized that NPOs didn’t have the tools to engage their audience effectively; their social media app meant little for non-profits if they couldn’t retain their donors. That’s where the inspiration for Humanitru began (though the name did not change from Totem until October 2020).

How is Building a CRM Different for NPOs vs. For-Profit Organizations (FPOs)?

NPOs interact with their customers (donors), very differently than do FPOs. Humanitru’s chief consideration is the breadth of how these organizations engage with their audience. 

FPOs, for example, are typically divided into sales and marketing teams. Alan notes that marketing teams communicate through all different types of media channels. Though they have target markets, they don’t usually know, down to the individual, who needs to receive their message. For Sales, FPO’s are driven by the intent to get consumers in the door to buy the product, and less focus is placed on a multi-year relationship timeline. 

NPOs, on the other hand, often have uniquely personal relationships with their customers which allows them to focus on strengthening that tie.Furthermore, the timeline of the relationship with customers is often much longer than for FPOs. 

For instance, a relationship might begin with a high school student volunteering with an organization; as they enter college, that might turn into seeking a small donation through a fun event, let’s say a charity cornhole tournament. Then, as that student graduates college and begins to earn income, NPOs might seek larger monetary donations. Finally, as a mature workforce member, these organizations might receive stock and eventually benefit from estate bequeathment. Clearly, this is a long-tail timeline that FPOs strive for, but is more often typical for non-profits. 

Traditional CRM’s aren’t built to handle such lengthy relationships; Humanitru, on the other hand, is designed specifically with this type of relationship in mind. 

Fundraising CRM Humanitru

As a Fundraising CRM, How Has Humanitru Approached Raising Capital Itself?

Humanitru has raised two rounds of capital. The first was in July 2018, the second, in early 2020, right before the COVID-19 pandemic. Initial capital fundraising was for the purpose of proving out the business model. 

Thanks to these first rounds raising capital, Humanitru currently serves about 65 NPOs in the United States with a team of 8 people, including part-time employees. 

How Was Humanitru’s Experience With Lighthouse Labs?

Humanitru participated in Lighthouse Labs during the summer of 2019. The timing was extremely beneficial because it gave the company an opportunity to gain feedback and practice their pitching skills right before their successful second round of fundraising. 

What Has Been the Greatest Challenge to Winning Over Investors?

Unfamiliarity with the non-profit space. Many investors think NPOs are not run like businesses but like charities. There’s also a general misconception that these organizations do not have strong cash flow or that it’s not a serious market. That’s why the development of tech in the non-profit industry has been so underfunded. 

However, NPOs do have strong cash flow. Including corporations, Americans donated $450 billion in 2019, which is about five times the size of the US coffee market. Furthermore, NPOs will, on average, spend $3 million annually on CRM, analytics, and digital marketing software. As such, it’s certainly not a small market and the challenge is changing investor’s preconceptions. 

One way Humanitru has done that is by introducing the market, but removing the word “non-profit” and replacing it with “small-to-medium sized companies”. According to Alan, investor’s ears perk up when the industry is illustrated this way; that’s when they know they’ve created an opportunity. 

The tide may be turning though. In just the last month, the company has begun to receive more interest from the VC space as investors have begun to realize the opportunity in the non-profit sector. Even if NPOs have a social-focused mission, money can be made. 

What Challenges Has COVID-19 Presented to Humanitru and Its Growth?

Like many other industries, the uncertainty that the pandemic has engendered in the non-profit space has been the greatest challenge. For Humanitru, that has hit home with fundraising. This year, the company’s fundraising round was cut short by half. Their outbound strategy was proving extremely successful, but the global crisis required a re-evaluation and shifting of focus. 

On the positive side of things, Alan feels that the forced transition to remote work has actually helped to develop a stronger company culture. Many businesses struggle with culture and process when dealing with remote workers, so Humanitru made an intentional effort to focus on these areas when the pandemic began. 

Perhaps most importantly, the state of the world has strengthened Humanitru’s mission. Non-profits continue to need help fundraising in the face of declining economic growth and Humanitru continues to ensure that they achieve their goals. 

How is COVID-19 Affecting Humanitru’s Approach to Digital Strategy?

At the time of our interview, the company was in the process of rebranding from Totem to Humanitru. In combination with the pandemic, the rebrand required a greater shift of focus to digital and inbound marketing. Prior to the global crisis, Humanitru had a more outbound approach, but that has changed to a content-focused perspective. 

In practice, that has meant running case studies, connecting with fundraising consultants, and building networks of thought leaders in the space to develop and share content that will attract consumers to the business. 

How Would You Describe Humanitru’s Brand?

Humanitru revolves around the idea of serving humanity. The business serves an under-resourced and over-burdened sector. As such, the company slogan has been “helping the helpers”. 

Everything Humanitru does, from its business model to its pricing and product is designed with its users in mind. While Alan recognizes that may sound trite, he notes that the company’s focus is on listening, and testimonials on Humanitru’s behalf recognize that fact. As such, the business brand upholds values of empathy and humanity. 

In keeping with their values, the company recently chose to change its name from Totem to Humanitru out of respect for Native American people. You can learn about the company’s decision to change its name here

 

 

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Water Management System Wellntel Grows as America Notices Its Resources

Water management system Wellntel

DataDay Design is interviewing CEOs and Founders of start-ups and early-stage companies to chat about entrepreneurship and learn how these businesses are navigating the COVID-19 pandemic. This interview is with Marian Singer, CEO, and co-founder of Wellntel, a cloud-based water management and information system that helps customers quantify and sustainably control their water resources. 

You can read more of our interviews with America’s brightest entrepreneurs here

What is Wellntel?

Wellntel is a patented monitoring technology, data management, and decision support platform that helps customers get the insight they need to understand and dynamically manage their water consumption and use. 

Why and How Did You Start a Water Management Company?

The idea came to Marian and her co-founder, Nick Hayes, during a project at their boutique consulting firm in Milwaukee.

Together, they spent a year on a groundwater project for a global client and realized that the measurement system for groundwater was lacking. They decided to change the system for how water is measured by bringing in new technology to make monitoring ubiquitous. 

Pictured: Nick Hayes and Marian Singer

In the past, academics or the government measured water. They’d typically send an individual out a few times a year to a monitoring well where they’d use a special tape measure to determine the groundwater level.

Six months later, they’d measure again, knowing nothing about the changes or trends in between. 

That approach created more questions than answers. Were the changes naturally variable, or was it a trend to be concerned about? This sparsity of data was fine when groundwater was relatively stable, but with growing populations, industrial agriculture, and climate change, groundwater has become much more dynamic. 

A lack of rich datasets and insight make it increasingly difficult for communities, businesses, and farmers to know that they have sufficient water resources to stay in the places they are and ensure sustainable development, production and harvest and safeguard real estate value.

This is how Wellntel was born. Marian and Nick decided to take advantage of the advances in remote sensing to create a non-invasive, battery-powered sensor that could be installed at the top of any well and connected to a cloud information system, measuring constantly. This creates a greater understanding of the ebbs and flows in ground and surface water levels. Additionally, it helps provide detailed information to make better decisions. 

How Has Wellntel Grown From Its Earliest Stages?

Wellntel commercially launched in 2015 with private well owners as their customer target. The business pivoted to public agencies and private business well owners, including beverage manufacturers and farmers in 2017. The company began to sell in “networks” (multiple sensors) to help businesses and communities track groundwater levels over large areas. 

In 2018, Wellntel broadened its scope to include the entire water cycle. That meant not only focusing on groundwater supply, but also on surface water supply, precipitation, recharge, and total water use. The company brought third-party data feeds into their cloud platform. Specifically, the USGS online monitoring network, NOAA’s (National Oceanic and Atmospheric Association) weather monitoring station data, and other manufacturer’s sensors. Now, Wellntel is an all-encompassing water management system. 

Water management system Wellntel
Wellntel’s water management system

How Is Climate Change Affecting Water Management and WellnTel’s Growth?

The climate change conversation has typically focused on the carbon cycle. However, in the last few years, companies have begun to answer a larger range of questions from their investors. Businesses have realized that their access to capital is increasingly impacted by their ability to be sustainable and prove sustainability. 

Water, for many industries, is either a key input to their product, or it’s a key part of their production process. At the same time, consumers have begun to say, “I want to buy things that are sustainable”. In addition, communities are refusing to let corporations pilfer their resources (in the US, water is one of the main resources communities fight over).

 A perfect storm has developed in which businesses have a vested interest in improving their sustainability, especially around water use. This transition in corporate America is accelerating interest and action around water management, a decidedly positive trend for Wellntel. 

 How has COVID-19 Impacted WellnTel and Its Digital Strategy?

Similar to most other businesses, during the first three months of COVID-19, things really slowed down. Luckily, there were no cancellations, just a few postponements. Wellntel took advantage of that pause to better orient themselves towards the future via strategic planning, a website relaunch, and a renewed focus on marketing. 

In the past, the company would typically speak at eight conferences a year. Since those conferences are all virtual now, the one-on-one conversations they’d usually have are much harder to come by. This change forced Wellntel to think about how to utilize digital marketing to better market its value.

For example, the company has focused on improving its SEO presence and invested in email marketing to pinpoint customers. Overall, they’ve placed a greater emphasis on raising their digital presence.

In the last couple of months, things have begun to speed back up. Since Wellntel’s sensor work is outdoors, and its cloud-based system is ideal for remote collaboration, the company has weathered some of the harsher impacts of COVID-19.

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Drone Technology Startup Linebird is Innovating Our Grid Management System

Drone technology startup Linebird

DataDay Design is interviewing CEOs and Founders of pre-seed and recently seed-funded start-ups to talk to them about entrepreneurship and to learn how start-up enterprises are navigating the COVID-19 pandemic. This interview is with Michael Beiro, founder and CEO of Linebird, an innovative drone technology business powering the resilience of our grids by using unmanned aerial systems to make contact with live power lines. 

You can read more of our interviews with America’s brightest entrepreneurs here

What is Linebird?

Linebird uses unmanned aerial systems (yes, that means drones) to work on power lines. What makes Linebird’s drone technology novel is it allows them to make contact with energized power lines. 

This innovation opens a host of opportunities for the utilities industry. It takes traditionally dangerous work that could only be completed by a manned crew and robotizes it. That means tasks like running diagnostics and conducting repairs on live power lines may be a thing of the past. 

Drone Technology startup Linebird
A Linebird drone prepares to make contact with an active power line

How Did Linebird Get Its Start?

Linebird grew out of an independent research study Michael worked on in 2018 while pursuing his B.S. in mechanical science from VCU. At the time of the study, he thought he might simply be offered a post-graduation job with the company he was researching with, or that he might be recognized as an accredited inventor of the new technology. Instead, about a year after he began working on the project, Michael branched out and formed Linebird. 

What Factors Have Influenced Linebird’s Approach to Growth?

The utilities industry is typically focused on the here and now. Technology that may be useful in the future often takes a backseat to more immediate concerns that must be dealt with swiftly. When dealing with critical infrastructure that powers the nation’s economy, energy companies can never be too careful. That means always taking time to understand and vet whom or what is interacting with their grid. 

Couple slow tech adaptation with an industry notorious for its risk aversion and it’s clear why Michael says Linebird decided to take a long-term approach to developing and marketing its technology. 

The company has worked tirelessly to prove the safety and efficacy of its prototype system. Now, it is preparing for its launch which should occur in about the next year. 

What Challenges Has COVID-19 Posed to Linebird as an Early-Stage Start-Up?

COVID-19 has put a pause to some of Linebird’s momentum. In February 2020, the company won the Dominion Energy Innovation pitch competition. As a result, Linebird was granted access to a de-energized linemen training yard, which essentially serves as a practice field for powerline workers. There they hoped to conduct prototype flight tests in a low-risk environment, but then COVID struck and scuppered those plans.

That is why Michael suggests that COVID-19’s greatest hindrance has been the delay it has caused to Linebird’s R&D work. 

What is Linebird’s Approach to Digital Strategy?

Linebird recently revamped its website to better market its legitimacy. The company’s previous online presence failed to develop a satisfactory brand image. Additionally, the company is extremely active on LinkedIn in introducing itself and building a network of players in the industry. 

While Linebird’s digital presence isn’t immense, Michael suggests that they do make a point to be transparent about who they are: a team of subject-matter experts committed to expanding the capabilities of unmanned aerial systems in pursuit of alleviating the dangers of one of the most fatal and lethal jobs in the country. 

Image Source: Richmond Times-Dispatch

What Has Been Linebird’s Investment Timeline?

Linebird raised funds over the last two years through friends and family to build their prototype and file for patents. 

The company has received strong financial support from its local ecosystem in Richmond. There it has earned funding in the form of awards and grants through pitch competitions and accelerator programs like Lighthouse Labs.  

When asked if Linebird will seek to raise capital in the near future, Michael confirms, suggesting that the company will look to raise heavily in and around the next 12 months when it comes time to rapidly scale the business.

What is Next for Linebird?

Linebird’s early go-to-market strategy is to operate as the sole service provider of its technology. The company will fly its own fleet of drones, equipped with its proprietary technology, to take specialized infrastructure diagnostics.

In the meantime, the business will continue to improve its technology and build out its training procedures. Once it is proven on a smaller-scale, Linebird will utilize the utilities industry’s strong network effects to undergo mass deployment. It will transition to selling a product; the licensed technology and training regimen which will be implemented into and used by other businesses drone fleets.

No matter what the future may hold for Linebird, its mission will stay the same: to sell a product that enables people to safely provide advanced services for power infrastructure while continuously innovating new solutions in a critical industry.

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EdTech Startup EdConnective is Growing During COVID-19: Here’s How

EdTech startup EdConnective

DataDay Design is interviewing CEOs and Founders of start-ups and early-stage companies to talk about entrepreneurship and learn how these businesses are navigating the COVID-19 global health crisis. This interview is with Erik Skantze, co-founder and Chief Product Officer of EdConnective, a Richmond, Virginia-based EdTech startup platform designed for the new era of education by providing virtual coaching to teachers.

You can read more of our interviews with America’s brightest entrepreneurs here

What is EdConnective?

EdConnective is a platform that provides instructional coaching for teachers and administrators at the school and district levels to improve their delivery as educators. Teachers fill out a comprehensive survey and an algorithm matches them with coaches with compatible experience. They then record and upload footage of their classroom while doing live instruction, which they share with their coach.

The footage is carefully analyzed before the coach and teacher meet for an intensive training session designed to improve delivery. These coaching sessions occur 1-2 times a week, typically for 8 weeks.

The platform has engendered tremendous improvement among its teachers; one need only look at the raving testimonials given by its users.

One teacher at a private preparatory school in Maryland noted how much she grew each week. A different high school educator was impressed that “practically every student shows a brighter attitude and more engaged behavior in class” after starting on EdConnective. 

Overall, EdConnective has found that these one-on-one coaching sessions lead to much greater knowledge transfer than traditional teaching conferences.

How Did EdConnective Get Started?

EdConnective is the academic brainchild of Erik’s co-founder, Will Morris. The two met at the University of Pennsylvania while both were in graduate school. 

Erik was pursuing his MBA after recently selling an edtech startup in the D.C. area. Meanwhile, Will, a master’s student in education policy, was working on EdConnective as a part of his thesis. Their backgrounds suited each other well, and a partnership was born. 

The pair agreed that the most important thing in the classroom, at the end of the day, regardless of technology, is the teacher. If they could help educators improve and feel more supported, they’d have the opportunity to positively impact a broad range of students. 

While there are already many extremely intelligent people in the teaching profession, according to Erik, they get a large dose of pedagogy and not much practical support in terms of the tools required for classroom management and student engagement. The lack of such resources contributes to the high rates of burnout and attrition among educators. That’s ultimately the problem EdConnective set out to solve. Improve support for teachers in the classroom to help create more fulfilling careers while also improving educational outcomes.

As An EdTech Startup, How Has COVID-19 Affected EdConnective’s Growth?

Pre-COVID, teachers had a particular set of needs for in-person classrooms that has shifted with the transition to remote learning. 

Now, instructors need to figure out how to use new technology, how to engage students virtually, and how to balance synchronous and asynchronous learning. 

There’s an entirely new set of concerns for teachers, principals, and administrators, but overall the root problem is the same; educators are undersupported.

Accordingly, though EdConnective has faced COVID-related challenges, such as in-flux budgets wreaking havoc on the clarity of the sales cycle, the company has remained relatively unscathed. In fact, there is such a tremendous need for educational support that EdConnective has actually witnessed an uptick in demand. As such, the business has managed to surpass its growth goals for the year, despite COVID-19. 

What Were EdConnective’s Takeaways from the Lighthouse Labs Accelerator?

EdConnective was a member of the Fall 2018 class of the Richmond-based, Lighthouse Labs Seed-Stage Accelerator

According to Erik, Lighthouse Labs was especially helpful for providing a better understanding of the Richmond start-up ecosystem. It allowed EdConnective a chance to not only hone its pitch and bounce ideas off a great cohort of advisors, but also to be connected to local sources of capital and advisors. 

It proved to be a pivotal relationship for the edtech startup, as most of its funding to date has been raised locally to Richmond, a fact the company is especially proud of. Lighthouse Labs was key in helping to shape a strategy that helped foment those investor connections. 

What is EdConnective’s Relationship with the Local Community in Richmond?

It’s easy to fall for the idea that successful start-ups only come from Boston, New York, and San Francisco. However, EdConnective was excited by the opportunity to move to Richmond and become a part of its burgeoning start-up ecosystem. The choice of location has proven to be beneficial.

For one, there are plenty of opportunities to work with and bounce ideas off of bright people. Erik mentions, for example, EdConnective’s relationship with Trilogy Mentors, an e-learning platform focused on online tutoring. About a year ago, both businesses were facing similar strategic challenges. They both gained from being able to work through those challenges together. 

Furthermore, along with a few other local companies, EdConnective put together an EdTech startup Shark Tank, helping hone their pitch skills for investment meetings. 

Perhaps most valuably, Richmond has recently seen a number of venture funds come together. For example, Trolley Ventures, which invested in EdConnective. 

What is EdConnective’s Approach to Digital Strategy and Branding?

EdConnective takes a multi-pronged approach to its digital strategy. The company hopes to solve a common question posed by educators, “what the heck is EdConnective?” 

The goal is to help teachers quickly realize the platform is a tool to support them and help them with their personal development. To provide that information, EdConnective is utilizing social media, email marketing, and its soon-to-be-released new website. Additionally, the company has a paid advertising strategy in place. It coincides with a huge need and corresponding search for virtual support for educator coaching. 

Finally, the company is utilizing its experienced team of coaches to help develop engaging content, like blog articles on how to institute better practices for diversity, equity, and inclusion. The aim is to deliver content of real value, not just SEO clickbait to build an engaged and connected audience.

How Has EdConnective Approached Fundraising?

Similar to the vast majority of start-ups, fundraising has, at times, proven difficult. There is an exorbitant number of conversations that need to occur to understand the right people to reach out to for investment and why. Erik remembers hundreds of conversations, many of which did not prove fruitful, but were beneficial in providing valuable feedback. He notes that they always made sure to clarify what investors were looking for and why. That way, they might tweak their presentation, offerings, or how they communicated their value proposition in the future.

Going through that iterative process has been useful for understanding both how to proceed with and diversify fundraising options. For example, EdConnective has local investors from Richmond, but also investors from San Francisco as well. 

Where Do You See EdConnective in 2-3 Years?

In each of the 100 largest school districts in the United States, in every Title 1 school, and every urban school with the need of EdConnective’s services. The long-term goal is to provide the platform to every teacher that wants to improve their craft, both in this country and globally.

The beauty of EdConnective’s solution is that it’s highly flexible. Struggles with education have become a worldwide issue and the platform is certainly adaptable to international markets. Reigning in his own enthusiasm, Erik suggests EdConnective’s focus over the next 2-3 years is largely in the U.S., but the prospect of supporting education abroad is on the horizon.

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DeepTech Startup Active Energy Systems Cools the Competition During COVID

DataDay Design is interviewing CEOs and Founders of start-ups and early-stage companies to talk about entrepreneurship and learn how these businesses are navigating the COVID-19 global health crisis. This interview is with Dr. Levon Atoyan, co-founder of Active Energy Systems, a seed-stage cleantech and deeptech startup developing ice thermal storage systems that will allow corporations to cool buildings more efficiently, at a lower cost. Their innovations provide opportunities for facilities to reduce their HVAC-related greenhouse gas emissions.

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How did Active Energy Systems start?

Levon and Mitchell both earned their PhDs from Cornell. After meeting through Cornell’s technical entrepreneurship club, the pair applied to NEXUS-NY, an accelerator with a focus on customer discovery, hardware development, and cleantech. NEXUS provided Mitchell and Levon an opportunity to explore the cleantech space and put their technical backgrounds to work. NEXUS also provided the initial funding that allowed Active Energy Systems to start on their prototype.

Over the course of the NEXUS accelerator, their team got serious about entrepreneurship. In 2017, they earned funding from ORNL’s Innovation Crossroads. As a result, Active Energy Systems moved its headquarters to Knoxville, TN. They’ve spent the last few years conducting research, testing different iterations of their product, and improving their prototype using government grants. Active Energy Systems will begin to seek seed funding and move beyond the R&D phase in the coming months.

From Left to Right: Mitchell, Lucas, and Levon

The company will also be shifting to commercial product development in 2021. So far, they’ve focused on building an MVP to generate confidence and trust from their end-users and partners – commercial building owners, energy/facility groups, and chiller manufacturers. Their current MVP is scaled down two orders of magnitude from their final product.

How has the global health crisis impacted AES?

Because the company is still in the product development phase, they weren’t exposed to a rapid loss of customers when COVID-19 caused an economic downturn. Active Energy Systems had to shut down their research lab in April, but their team quarantined together to continue working. Their smaller size allowed them to return to the lab in May.

Coronavirus has also impacted Levon and the team by slowing conversations with several funds they had been in contact with. 

What are some of the greatest learning experiences you’ve had since starting your own DeepTech startup?

Many of the product development processes typically employed in a start-up, such as Lean and Agile, didn’t apply to Active Energy Systems’ early-stage operations. The company’s deeptech focus typically means rapid iteration usually takes months. One of the greatest early challenges was figuring out how to adapt those traditional product development processes to their situation. By shifting to a customer discovery strategy that frontloaded concept exploration, the team was able to apply relevant development frameworks.

Another realization of note was the importance of securing non-dilutive government funding for deeptech start-ups. Those funding programs are more willing to accept technology risk than equity investors. As such, these sources of funding are critical to the early stages of developing a hard tech product.

Finally, Levon suggested that any grad or Ph.D. student planning to pursue entrepreneurship in the deeptech space has a lot to gain from exploring government SBIRs, as well as commercialization programs such as Innovation Crossroads.

Commercial Prototype

What is Active Energy Systems’ Digital Strategy?

Active Energy Systems’ growth depends on developing strong customer relationships and nurturing them over time. The company’s digital strategy is different from typical D2C companies and even most B2B companies. That’s because quick conversions based on brand or digital marketing efforts are nearly impossible.

Via direct digital outreach, AES hopes to connect with established companies looking to fulfill corporate social responsibility commitments to reduce their emissions. These corporations provided the initial customer insights that led to Active Energy Systems’ conceptualization, and their team hopes to continue focusing on corporations with a mind towards GHG emissions reduction.

Active Energy Systems is currently seeking seed funding as well as OEM partners to bring their commercial product to market.

You can read more of our interviews with America’s brightest entrepreneurs here