Imagine your home were powered by a network of smart devices that regulated everything from heating and cooling to air purification. That's the vision of Nayeem Hussain and Ryan Fant, the co-founders of tech startup Keen Home. The company came to life in 2013 with the release of its "Smart Vent," which has already grossed over $2 million in sales. Over time, Fant and Hussain plan to create more smart products, which can be controlled via a smartphone, tablet or computer, to help improve the efficiency and comfort of the average home. They are currently engaging in equity crowdfunding to begin research and development on future products, while improving the Smart Vent. Hussain and Fant spoke with Business News Daily about the origins of their company, finding capital and the challenges of building integrated devices from scratch.
Business News Daily: In a nutshell, what service does your business provide?
Nayeem Hussain: Keen Home is focused on improving your home's core systems with innovative hardware and software. Our first product, the Smart Vent, allows homeowners to control the efficiency and comfort of a home's heating and cooling system by intelligently redirecting central HVAC airflow.
BND: How long have you been in business?
Hussain: Keen Home incorporated in March 2013.
BND: Did you start with a formal business plan? If not, how did you lay the groundwork for your business?
Ryan Fant: Keen Home started as a part of the NYU $200K Entrepreneurs Challenge while Nayeem and I were completing our MBAs at NYU Stern. This competition afforded us the opportunity to consult with professors, mentors, other entrepreneurs and investors as we developed what was to become Keen Home. Many of our early deliverables involved synthesizing our ideas and the advice we had been given by the aforementioned resources into a cohesive business plan. We then shared this business plan with several mentors, who helped us iterate and refine our business model. In addition to a business plan, we also completed a Business Model Canvas.
BND: How did you finance your endeavors, both initially and as your business grew?
Hussain: We initially funded the early operations of the company with our own money. We were then funded $120,000 as part of our acceptance into a Techstars accelerator program. That early funding was used to grow the team and also complete early product development. Upon graduating from the accelerator, we raised our seed financing round of $1.62 million from professional investors.
BND: How much did you invest personally?
Fant: We invested $50,000 of our own money into Keen Home to get the company off the ground. Nayeem turned down an offer from an investment bank, and I left my full-time job in the finance industry to start the company on a full-time basis.
BND: Is your business today what you originally envisioned at the outset, or has it changed significantly over time?
Hussain: Keen Home has grown from being a "vent company" to a brand that signifies a proactive approach to innovation for the connected home. Our products provide increased comfort, improved efficiency, a healthier living environment and a better maintained home. Our Smart Vent product has given us a beachhead into the home, and we have been able to develop a brand vision around sanctuary and peace of mind in the home.
BND: What are some lessons you've learned? Is there anything you would have done differently?
Fant:We have learned many lessons in the past two and a half years. Building connected devices is incredibly complex and involves the most challenging aspects of both hardware engineering and software development. Throughout the process, a company must also be focused on sales and marketing, quality control, logistics and supply chain, customer service, intellectual-property protection, the competitive landscape, hiring the right team members and managing its finances. Failure to execute on any of the above can be disastrous for a company. It is very easy to underestimate such complexities when giving timelines and estimates to various stakeholders, especially given the pressure to deliver product. In hindsight, we would have been more realistic about milestones and delivery dates when interfacing with investors, partners and customers.
BND: What were the most important factors that contributed to your success?
Fant: I think the two most important factors in our success to date have been the team we have built and the network of mentors/founders we have cultivated. We will only ever be as good as our employees, and we have worked very hard to build a team that allows us to execute both now and in the future.
Hussain: Our network of other founders and mentors has been a constant source of advice. Being an entrepreneur can often feel like being stranded on a desert island. It is extremely valuable to learn from other entrepreneurs and mentors who have experienced both success and failure in the past.
BND:What are the next steps you want to take as business owners? How do you see yourselves achieving those goals?
Hussain: Our main objective is growing Keen Home into a brand that people respect and admire by providing superior products and services to give them peace of mind. Achieving this goal entails consistently delivering superior products to consumers that genuinely improve the quality of our customers' lives. Success also depends on achieving a significant level of consumer adoption, which begets more external investment. This virtuous cycle will allow us to expand our portfolio of offerings and wake up other sleepy areas of the home.
BND: What is your best advice to someone with a great business idea who is ready to give it a shot?
Fant: No matter how "sexy" it seems in today's pop culture, being an entrepreneur is not something you can do in your spare time. You have to be 100 percent committed to your business in order to succeed. Also, don't be afraid to put yourself out there to network, ask for help and engage in customer development. Far too often, entrepreneurs stick their heads in the sand and spend their precious time and money building a product that nobody wants. Make sure you do your due diligence and research to gauge the demand for your product or service.