When raising, reputation is everything — Meet Ilan Abehassera, co-founder of Prodontis
ATOMS is the first Hardware Club festival, gathering in one place our elite community of over 600+ founders and 300+ hardware startups for the first time. Paris will throw open its doors to host a selected crowd of the best hardware founders, VCs, top manufacturing partners, and retailers.
Meet one of our speakers, Ilan Abehassera, Hardware Club community member, three-time entrepreneur and co-founder of Prodontis.
This interview has been edited for clarity.
If you had to boil down your experiences into three pieces of advice for someone interested in getting started as hardware entrepreneur what would they be?
Ilan Abehassera (IA):
I. The founding team has to include all the skills you need to move your product.
Sometimes you need software, sometimes you don’t. But electronics, mechanical engineering, some kind of manufacturing experience… You’re really building a team that’s complementary and that has all of these skills. Because if you don’t have that, you will have to hire people who are very hard to hire. It will make you lose time and it will be harder to raise money. Before I started building, I made sure I had four people on the founding team that covered the four pillars of the company. It’s not like a software company where you can sub-contract people here and there; at some point you will manage to launch your app. In hardware there is really no place for failure.
II. Make sure you know ahead of time who can invest in your company.
You don’t really have that many hardware investors in general. You have a club of around 15 people who can invest at any one time. Make sure you get to connect with them early, not just when you want to raise money.
III. Raise more than you think you need to raise.
Just because you feel like $1M is enough, for whatever reason, it’ll take a lot more than that before the Series A. That bridge in the middle? That’s the hardest place to raise because you’re close to launching and people will want to see your product launch before they invest further.
So what have been the most challenging moments you’ve faced over time as a three-time entrepreneur?
IA: The hardest moment is actually convincing people to invest in your idea before it has traction. It seems obvious to put it like this because we see money being poured into early stage companies all the time. Yet for hardware companies specifically, how do you go and raise money before you prove that your new gadget or new device will fly?
I guess convincing somebody to trust you is the big problem. So how did you first build trust?
IA: With my first company I waited four years to start it. I started working in tech in 2004. By the time I started (in 2008) I had enough people around me who trusted me enough to invest $100–400K into Producteev, my first company.
Friends, Fools and Family?
IA: No, not friends actually, but people from tech I got close to and angel investors. I had kept in mind the whole time that at some point I would start my company and so, that’s how I networked with the right people and when I started raising, it was very quick.
When you raise your first round, it gets easier later on to raise another if you have some real traction. But it’s not as easy as it looks, for many companies it takes more time than expected to raise and gain traction. For my second company, Ily, more people trusted me thanks to my first exit. It becomes a virtuous circle and for my third company, it was fairly easy to get in front of the right people, let’s put it that way.
Does building that reputation make up a lot of the work you have to do before you raise?
IA: I think so. Reputation is how you keep all of the right people close to you and how you keep them posted on the evolution of your company. What I used to do was to send an email to a list of people who I wanted to stay close to. Most of the time they were investors or VCs that might have passed on investing in me. I still kept them posted.
Most of the time VCs will pass on your company not because of you, not because of your team, but just because of the market. Or the stage, or maybe they just don’t believe in the product you are making. Sometimes you build these really strong relationships with people and they are generally waiting for the right company to come out of you. That’s what happened with Prodontis, my newest company. So yeah, building trust and reputation are important but so is keeping everyone posted on your evolution.
You don’t want to talk to those people just when you are raising.
It does seem rude, yeah.
IA: Yeah, probably (Laughs).
And do you feel that you’ve almost become addicted to the world you’re in?
IA: That’s for sure. What’s addictive is building something that people have never used before. I really see myself as a product guy, I just don’t build a company, I build a product first. With hardware it’s particularly true because it’s a physical object, because it’s something you can touch, try and play with. There’s a habit that you’re creating with your users.
Let’s get onto Hardware Club, why did you join?
IA: I joined very early on… I thought that the club was needed. It was a good idea to bring people from the hardware community together because we have unique challenges that most people within the space have been through. Most of the time, when asking your VC a question about the right contract manufacturer, the right industrial designer, the right amount to spend on marketing every month to acquire customers etc. is not something they can really answer. Only other hardware entrepreneurs can do that.
You save tons of money and time on finding the answer if you can just ask directly on the Hardware Club community Slack.
What does Hardware Club bring to you personally as an entrepreneur?
IA: Generally speaking, now I have the reflex that when I need to make a decision that’s hardware-centric, I think of the Hardware Club. A lot of the time, I would think of emailing some of the team because I know they’ve been through it themselves.
To profit from the club you have to develop the reflex of thinking about the club when you have a question (and having Slack on all your devices).
Big question: what’s your vision of the hardware ecosystem and where is it all going?
IA: I think the trend of gadgets will soon be over and we’ll more and more build things that are actually needed. The hardware category is maturing. I hope that we become better as entrepreneurs at building things that people need: to build the next wave of hardware products that replace everything we use everyday.
I have two final questions. First up, you’re from France but live in NYC. If you could live in neither of these places where would you live?
IA: Hmm.. Tel Aviv.
For the beach?
IA: The lifestyle is definitely part of the answer! What I really like about it is that the ecosystem there is amazing for one reason: Israeli entrepreneurs think outside the box all the time. Talking with them puts me in a different mindset.
Secondly, if you not yourself who would you be?
Give me a few seconds… Nikola Tesla, a real inventor.
Aha, we all know Thomas Edison was the bad guy there, right?
Hear Ilan speak in person and get a first look at Prodontis’ new device, exclusive to ATOMS: Hardware Club’s first festival, Paris November 16th.
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