Startup Spotlight: TrackR
As Co-founder and CEO of Trackr, Chris Herbert kicks off presentations with a bit of self-deprecating humor. “I’m a loser,” Herbert admits. Years ago, while on a surfing trip near Santa Barbara, disaster struck when he lost his car keys in the sand. “The tow was going to be $2000,” Herbert says. “And worse, we had parked beneath the high tide mark – meaning if we didn’t act quickly, my car would have been flooded.”
Herbert ended up convincing beachcombers with metal detectors to help him find the keys, managing to rescue his car just as the tide was approaching. The stressful – and all too common—experience of losing things drove Herbert, then an electrical engineering student at UC Santa Barbara, to build a simple tracking device for keys, wallets, phones or any personal items that people frequently lose
Herbert soon discovered he was on to something. He launched his first prototype in 2009, managing to sell “a couple thousand” at that year’s Consumer Electronics Showcase. “They were these ugly black boxes that used Bluetooth,” Herbert says. Although an aesthetic work in progress, the device attracted the attention of Cobra Electronics, who offered Herbert and his partner, Christian Smith, a development deal. They partnered to build the Cobra Tag, which ended up winning numerous industry awards. “This was great for us because as our first development deal, we got to learn a lot about the industry.”
In the meantime, Herbert and Smith had begun working on their own crowd GPS network, an alternative to standard GPS powered by a network’s own users. When it came time to raise money to build a new version of the Trackr, they tried first on their own website, but it was difficult to promote and gain traction. “Around this time, crowdfunding got hot,” Herbert says. So they first tried Kickstarter—and were rejected.
They landed on Indiegogo, where they attracted $300,000 in donations within one month – among the most successful hardware campaigns to date. But for the Trackr team, crowdfunding was just the beginning of what Herbert views as the new sales cycle of a hardware startup: Crowdfund, build up your own website, get deals with online retailers, and finally reach brick-and-mortar shops worldwide.
One of the main challenges in getting deals? “In the crowdfunding space, there’s skepticism that founders can take it to scale,” Herbert notes. In order to gain the kind of visibility and cred needed to lure major distributors, you first have to prove the ability to not only make great products, but to grow sales and reach the right customers.
Following their successful crowdfunding campaign, Herbert found that with the help of “early adopter” evangelists for the product, they were able to drive customers back to their own online storefront, where they further strengthened their margin position through minimizing customer acquisition costs. But to make the leap to outside retailers, they needed help. “We were engineering things, but they weren’t beautiful,” says Herbert. As for marketing, “We were horrible at it,” he laughs. “With our first website, there was so much wrong, it was hard to see what was right.”
With the help of mentors at Orange Fab, which Trackr joined in 2013, they quickly elevated their marketing and design to match the effectiveness—and growing popularity—of the product. One ‘aha’ moment arrived during a website re-design: “We were describing features instead of benefits. We needed to move to a more benefit-driven approach to communicate our value proposition effectively.”
That more focused, benefit-driven approach to marketing snowballed into a highly successful marketing push developed by Herbert, mentors and the Orange Fab internal design team. “We learned how to do things like email and social content really well. Email was our most effective channel – we collected 350,000 emails in one month.” They also integrated ‘sales funnel’ strategies like sharing incentives and referral programs, ultimately helping to drive sales of 400,000 devices.
Trackr also gained exposure to European distributors and to further market testing in foreign markets, which proved instrumental in understanding what it takes to scale globally - regulations and other market traits that can make or break certain international prospects. This made for a valuable foundation for Trackr's current push in further expanding its crowd GPS network. "Next, we're aiming for complete coverage in every major US city, and in main international hubs - Tokyo, Paris, London and others." Additionally, Trackrs can now be found at BestBuy Canada and with more retail rollouts coming in the third quarter of 2015.
Using the analogy of phone numbers, Herbert stresses that personal inventory management has the potential to greatly improve day-to-day life: “Remember how we used to memorize phone numbers? Our phones do that now. We want to do the same for your personal items.” By automating that database inside your head, Herbert says, technology can help make sure you never go through the irritation of losing your keys, wallet or purse again. Chronic ‘losers’ everywhere, take heart in knowing that Trackr is on its way.