A True Startup Lesson: What Does Not Kill You, Makes You Stronger

The vision behind AiBrace and key milestones and challenges

In 2016, there was no device available that could help me in life-threatening situations, so I decided to create one. At the time, I was 17 years old.

I managed to build a team of very talented and very young developers, including Juraj Repčík and Michal Ríša, who are currently on the Consilia team with me. All those who participated in the development did so without pay, only with the prospect of a share in any further profits. Our team was really small, and each member had an irreplaceable role. Specifically, each area of development was handled by just one person, which later proved to be one of the fatal mistakes.

During the first year, we managed to feel certain that in the trade there indeed would be an interest in the device. We saw a number of possible applications for elderly people, newborns, epilepsy patients, and individuals suffering from bee sting allergies.

I created a Lean Canvas (a business model covering nine key areas that help define and analyze the main aspects of a business), which is the essential minimum a budding entrepreneur should prepare to clarify whether the idea makes sense and to communicate the project with other important people.

Since I studied biomedical technology and informatics and worked at the CEITEC in cooperation with The University Hospital Brno, it was obvious for me to consult my idea there first. I had the opportunity to discuss everything with the head physician of the University Hospital and the chief of the neurology department of University Hospital in Bohunice. During this collaboration, we focused on functions that could significantly ease life.  

We defined the essential features of life-saving technology as follows:

• Voice calling
• Automatic ambulance calling
• GPS tracking with geofencing alerts if the bracelet leaves a defined area
• Continuous ECG monitoring
• Breathing analysis
• Fall detection
• Epilepsy prediction
• Fall prediction
• Pill reminders
• Remote access for caregivers
• Physician overview of recorded data

At the beginning of the project, our high expectations were fueled by the motivation to create something that truly saves lives, despite the modest budget.

A very encouraging start

The project garnered significant attention and attracted considerable media interest. We managed to win several competitions, including the JIC Press Award. The media allowed us to speak and share this need among people. We had the opportunity to be the keynote speakers at startup conferences, and I believe we really brought this issue to the awareness of many startups and important people.

We founded the startup company Aibrace Group s.r.o.. As a student, I couldn’t finance the project from my own resources or capital, but we managed to succeed in several accelerator programs, such as Interreg, and secured necessary grants, primarily for marketing and hardware testing, amounting to around 2,000 euros. We set the final price of the bracelet for consumers at 500 euros.

We created a simple website, aibrace.cz, which eased the way for secure pre-orders. In total, we had about 700 pre-orders, including a contract with the St. Anne's University Hospital Brno for 250 units as a part of a project funded by an EU grant to build a centre for elderly people.

Hardware startup challenges

Pre-orders are essential for startups, especially when negotiating with potential investors, as they help define the value of a new company. In our case, we decided not to collect deposits on pre-orders, and later we found out that this made them insufficiently convincing to investors. Investors want to see real transactions on the account.

In 2019, we achieved MVP (Minimum Viable Product) for the bracelet, where it could detect a fall and location, and send an SMS and make a call at the press of a button. We produced about 10 units in total.

Underestimating medical wearables certification costs

However, the most important feature for users and the strongest competitive advantage was supposed to be a direct connection to emergency services and constant monitoring of vital signs. We were in intense negotiations with the Záchranka app and the Medical Rescue Services of the Czech Republic. Our biggest customer was supposed to be a healthcare facility. Under these circumstances, we needed to get not only standard CE / FCC certification for electronic products but also special certification for medical devices.

We found out that the costs associated with this certification would be another 80,000 euros.

The biggest challenge is a properly assembled and balanced team

At that time, one participant decided to leave the project, and we lacked a developer to complete the embedded software programming. For our startup, without financial capital, the cost of nearly 2,500 euros for the usual salary of another embedded developer was beyond our reach.

Ongoing research of competitors and current market needs

We had several grant applications in progress by the Municipality of Brno and the Ministry of Trade and Industry, but in 2019 the COVID-19 wave struck, and all healthcare-related grants focused solely on pandemic-related solutions.

We tried hard to find an investor. However, back then, getting an investor for a hardware project was almost impossible. From experience, they have found that the risk of hardware start-up is around 70%.

In 2020, the Apple Watch with ECG monitoring appeared on the market.  In 2021 the boom of Samsung watches and similar devices (like rings) with apps that could replace some of the functions of our bracelet started to crop up on the market. These products did not have and still don´t have medical certification or direct connection to emergency services. However, to obtain the necessary certifications and get the product to a point where it could compete with these new watches and similar devices, I calculated that we would need about 140,000 euros.

At that point, the decision was made. We would have to end the project.

Lessons learned from failure

Today, we can only analyze what went wrong and what we could have done better.

Hardware development pitfalls

A key step is being truly sure of the resources needed to complete the product.  

Due to inexperience, we forgot about the certifications necessary for selling the bracelets.  

We launched the pre-order campaign and later realized that the price set was too low. Finally, it turned out that everything we expected from the bracelet was not technologically feasible in a form acceptable to users. The combination of too many features crammed in a too tiny space and an insufficient budget ground the project gradually to a halt.

Another factor was that we had no alternative in terms of human resources; each team member had an irreplaceable role, and no one had the skills to take their place. We were unsure where the product would be manufactured, and the estimated expenditures came out too low.

The project has moved me personally a lot forward, in fact, all of us in the team. I gained a lot of precious experience and many valuable contacts that played a really helpful part in my next projects. Because I’ve always felt a strong desire to help people, I became a mentor for other startups.

To colleagues who want to realize their unique idea, I advise...

1. Ask yourself these key questions before starting work on your project:

• Who is the customer
• Who will pay for the product
• What value does the product bring to them
• Is there something similar on the market? If so, how will we differentiate
• How will the product be manufactured
• Who will design the product
• Who will manufacture the product
• How much money can we invest initially
• What are the key responsibilities/know-how that we need to add to the existing team
• Who can be our investor and who is that person
• What are the key advantages

After answering these questions, you should have a decent notion of the viability and the added value of your product, know how the startup will be funded, and understand which key people or companies you need to collaborate with. I recommend creating a Lean Canvas and finding a business mentor experienced enough with a similar project. They don’t need to be successful because "failures" can provide more value than a successful story.

2. Never forget about:

• The value of detailed technical assessments
• The necessity of back-up plans for human resources
• The impact of market timing and competition

If you have a hardware project, you will need to obtain the appropriate certifications, and you must know which institute to contact (e.g. ITC ZLÍN) and be aware of the cost of all these additional expenses you probably didn’t think of in the past. This part is especially important at the beginning because validating the product through an MVP (Minimum Viable Product) and some call-to-action landing page is one thing, but realizing the need for additional costs for certifications after the pre-order campaign has started with a set price is too late. Once you have pre-orders, you can’t easily change the price, and believe me, certifications will make a difference in the price. It’s also crucial to permanently monitor the market situation. The certification process can realistically take many months, and you need to know whether your product will still be desirable and unique after this time.

3. Support from the startup ecosystem is important

I highly recommend looking for startup hubs and workshops; there are many opportunities where you can sign up. During these events, you can get to know business mentors and even funding if the project is well presented and structured. You’ll meet investors, but most importantly, you’ll become part of the startup community, which is highly desirable. You’ll meet new people, mentors, and innovators with whom you can potentially collaborate, making your life much easier. There is a global community F6S, where you can find international startup opportunities and workshops to apply for. In Brno, we have excellent experiences with JIC or CzechInvest.

Hardware development consultancy  

An experienced consultant could have assessed the concept from a technical perspective back then and pinpointed shortcomings in time. Generally, many interesting projects and startups have a well-developed marketing idea and business plan, but often, only after significant investments in development (even if it's just time and energy), do they find out that the project is neither technologically nor financially feasible. Unfortunately, there was and still is a lack of mentors and investors focused on hardware projects.

Today, with no small amount of experience gained from many projects at Consilia, we approach things differently. We’ve learned how important detailed feasibility studies and realistic project planning are from the very beginning. Our current approach involves thorough technical assessment, detailed project scope definition, and proactive risk management to identify and address potential issues in time. This ensures that innovative ideas are not only ambitious but also achievable, leading to more successful and sustainable outcomes.

Consilia helps others avoid similar pitfalls and turn ambitious ideas into successful realities

At Consilia, we specialize in the current market niche, i.e. hardware-based projects. You already have answers to the key questions, a Lean Canvas, and maybe even a project description (executive summary) with an added SWOT or GAP analysis?

In this case, don’t hesitate to contact us.

We focus on risks and turning points that need to be approached carefully, improve your investor presentations or refer you to other suitable colleagues.

Proof of concept and feasibility studies are examples of activities that Consilia does for both startups and, perhaps surprisingly, large and well-experienced players. For prototypes, Consilia also helps with certification, which is particularly challenging in healthcare and the automotive industry. Our experts, who have been in this field for over 10 years, know the relevant standards by heart. Consilia also gives a helping hand to those companies that lack human resources in a specific area of development. We can join a project at different stages of development and offer not only end-to-end services but also fill in specific gaps within the customer’s team.

Although the AiBrace project did not reach its full potential, the experience gained is invaluable. We came out of the unfinished project stronger and more experienced. That way we can help others.