Biomedical engineer by trade, with a deep passion for health & technology, We sat with Ata Ghofrani to understand his experience starting Quitbit - the FitBit for smokers.
"Quitbit was ranked as the top 3 smoking apps in USA, with MAU of 30K users"
What was the inspiration for Quitbit?
Not surprisingly, my cofounder and I smoked. I recalled asking how many cigarettes he’d smoked a day and he wasn’t sure! That incident sparked this idea where we started tracking our cigarette consumption using a simple google sheet, and the act of recording actually reduced the smoking. However, there was high friction for users to keep track, thus, we started brainstorming on more convenient methods.
That led to our Aha moment of incorporating a counter in the lighter, to record the number of times a user would strike their lighter. At its peak, Quitbit was ranked as the top 3 smoking apps in USA, with MAU of 30K users.
(Quitbit smart lighter) (App interface)
What was the first thing you did to kickstart this idea?
Upon graduation, I actually turned down a job offer in consulting, to spend my next 2 months formulating decks and preparing for Quitbit. The first thing we did was to buy the necessary equipment from Amazon to 3D print the housing of the lighter. We pitched the idea to our professors and the smoking researchers at school. They loved it and recognised it for its academic value, but had their reservations about the commerciality.
How did you acquire your first 100 users?
We found users off the street, and emailed smoking clinics to conduct pilots.
What was your revenue model?
Freemium model - the app is free to use, but users have to log their smoking sessions manually. We then upsell the e-lighter ($129), which automatically logs your smoking count, and sold replacements for the heating coil.
What were your margins?
We have a 75% margin - our cost was $28 and retailed for $129. However, half of that portion goes to the distributor, thus, direct to customer still has the highest margins.
"The first potential investor we met was Founder Collective, known for their early Uber investment in 2010"
How was your experience getting funding?
We had a hard time finding investors in the early days, and there were very little accelerator programmes around. The first potential investor we met was Founder Collective, known for their early Uber investment in 2010, which they exited at USD $300M from an initial USD $100K. We met their MD and he actually said that our firm was one of the most interesting they have seen. Unfortunately, they passed as it was too early for their portfolio. Nonetheless, a memorable experience. We were eventually accepted into an accelerator in Rhode Island for their beta spring batch, receiving a USD $20K seed funding.
We then decided to head to Shenzhen, China, the hardware zone of the world. It made perfect sense as they had excellent kickstarter programs, with accessibility to investors and factories. We also launched a kickstarter campaign, raising USD $55k and eventually shipping the product a year later.
You received funding even before shipping your product?
You raise money on ideas, not prototypes, and investors invest with the fear of missing out. When you tell them that you are talking to three other investors, they end up being much more interested as they don’t want to lose out.
What was the main difficulty of this business?
Hardware is hard. It was like operating multiple startups simultaneously, and each required people with distinct expertise. First was the industrial design component, to design and manufacture the casing. There is a term called Design For Manufacturing (DFM), which meant we had to ensure our manufacturing processes were suitable for mass production. For instance, the curvature of our casing had to be easily replicable for high volume production.
We then had to work on the electrical board, picking the components to use, and finding chips that are compatible. There was also the packaging designers, and supply chain & logistics which handles shipping, storage, bar codes, and registering for different countries. You also needed a systems engineer to decide what codes to put on the chip, which required a certain type of skilled software engineer.
The complexity of the hardware business was something we definitely did not expect, or else, we would have raised more money!
What were your significant highs and lows?
As a founder, you must be the type of person who can withstand high highs and low lows. We celebrated when we shipped our first box, closed our first investment, and subsequently the second round of investment. However, the most fulfilling would be when our users write in saying that they went smoke-free for 100 days or quit smoking.
On the flip side, we had lows whenever an investor rejected us. The lowest point was when we knew that we were going to fail. At some point, after fixing so many issues, you just end up lacking the confidence that you can solve the next issue.
How did you arrive at the conclusion of pulling the plug on Quitbit?
We made enough money for the two of us, but it was not sufficient to scale any larger. We picked a date and decided if no money was raised or no new plans were laid out, that we would move on. We did work on an improved prototype, which was a sleeve with an inbuilt accelerometer for users to slip onto any lighter. We held talks with 7/11 for retail opportunities, but we couldn’t raise money on that.
Top 3 advice for entrepreneurs?
1) Passion
This is to ensure that when you hit the lows, you won’t quit. If money is your motivation, you will quit once it runs out.
2) Luck
Timing can’t be controlled, but you can control how prepared you are. For example. if you think photos are the next big thing, you can draft an app and test it on the market. We must not only recognise opportunities, but actually prepare and take advantage of them. Internalise your pitch and have your prototype. There is no such thing as dumb luck, but there is smart luck. Always learn to take advantage of opportunities.
3) Industry experience
Have some experience in your industry, as its much easier to start there. It take time to build your connection.
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