Hardware is inherently harder to build than software, but advances in technology are making it much easier for engineering minds that are interested in bringing physical products to life.
When Christine Schindler and Dutch Waanders got the idea for PathSpot, a hand scanner that instantly detects invisible signs of bacteria and viruses, they wanted to figure out how to iterate on their product as quickly as possible. After getting accepted to the Venture for America Accelerator, Sergei helped them get access to a 3D printer there and pretty soon they were going door to door to restaurants to pitch their new idea – a revolutionary technology designed to prevent foodborne illness.
In this episode, Christine tells us how she secured meetings with restaurant owners with a simple 3D Printed Prototype, and how her team continuously improved the product over the coming months to eventually secure their first order. Over the course of just a year, the team went on to complete the TechStars accelerator program, raising millions of dollars from investors, and streamlining the manufacturing/supply chain process to handle contracts with restaurant chains that are placing orders for thousands of units.
0:18 Today we have a special guest — Christine Schindler of PathSpot. She is the founder and CEO of this company, and Christine and I met a year and a half ago when this project was just an idea. Since then, Christine has gone such a long way and we are really excited to tell their story. They have been featured in Business Insider, TechCrunch, and recently went through a very competitive accelerator program here in New York City. Just fresh after raising a few million dollars, they have several customers now — and all this just after a year and a half.
1:30 PathSpot is a system for protecting food service companies and their customers from the threat of food-borne illness by scanning employees’ hands to see if they have any harmful contamination that could make someone sick: all these things you don’t want when you go out to eat. Then, we aggregate that data from those locations and give it to management teams, so that they can see any gaps they have in their sanitation procedures, and they can use it to customize trainings and create a positive culture around sanitation for their establishments.
2:28 A year and a half ago, Christine’s co-founder Dutch came to me, and he showed me a picture of this thing that he thought could be attached to a phone to show you if there’s any bacteria on it — so many potential applications. Hospitals should be using it, restaurants should be using it. Pretty cool, but difficult to sell it this way. What are some ways to help figure out the market for this? In this conversation, we narrowed the potential applications. Besides, hardware products are notoriously difficult t0 not only produce but also sell.
3:35 At that point, we literally had just a bunch of wires taped to a dinner plate. We thought that something like this already existed — we originally wanted to partner with a company that already produced such a product and there was none. That is how and when we decided to create it ourselves. We would go to RadioShack, buy a lot of electronic components and then work on an algorithm that could indicate food-borne bacterias.
4:20 It felt like we just stumbled upon it as we never intended to start a business: we just figured out that we could do this. It was really through other conversations that helped us to get what our target market should be. For the first few months, all we did was go around to people who had either scaled companies in the healthcare space or in a food service space and ask their advice on what their process was like of getting technology like this to market.
4:53 But at the same time, we were going door to door, asking people what they thought of this as an idea — while still working full-time jobs. And then people would start telling us that they had been waiting for a technology like this for 10 years and they also couldn’t believe no one had developed this before; that’s when we decided to quit our jobs and go full-time on PathSpot.
06:00 What made us confident enough to reach out to people and tell them about your product?
We both studied biomedical engineering, and that is how we had the technical background, but we had absolutely no idea how to run a business. That is why we asked for advice both people from the healthcare field and those who built products before. Every single person told us that the first thing to do is start having a conversation.
06:50 We also started a non-profit organization while in college, and it was a great way to try out this entrepreneurial mindset, and that experience also gave us confidence as we created something from nothing before. And even though engineering can seem like it is very technical, the engineering mindset of filling the gap was something that we learned in school and later took that approach for business.
08:15 This was also the first time when you had to pitch something without necessarily having a product yet. What was your pitch, how did you ask to meet people?
We had absolutely no idea, and it changed every single time: from changing “idea” to “project” to coming up with new statements and testing out pitches in different cities and places. What people responded to in Manhattan was not the same what people responded to in Cleveland. That way, we were able to start figuring out what got us a conversation: getting coffee, starting casual chat with employees, joining loyalty programs. So there wasn’t a formula, we just did whatever it took to get the right answers to the right questions. And then always asking one more.
09:50 We were also looking for food-events. If entrance fees were expensive, we offered volunteer help just to be in the room and meet customers outside their restaurant locations.
10:30 Here is what you did. 1). Offering value where you can. 2). Making sure you are actually building relationships. 3). Once you were already there, you were making sure to continue to ask one more question because you never know what question can spark an interest or result in commitment to try your product.
11:10 What was the first indicator that you have something interesting?
In the beginning, it was people just saying that there was a problem and willing to have a conversation with us. We had restaurant owners telling us that food-borne illnesses were something that kept them up all night every night. To remind ourselves of the importance of our product and to overcome anxiety and worries about it, we set up a notification to our phones to beep every time a food-borne incident was reported in the news.
12:36 When it came to getting someone to try the product, we got turned down. Even though everyone told us it was a huge problem, they wouldn’t want our unit, and that was another barrier to overcome. We also didn’t want the hardware to be a barrier, so we got a 3D-printer and we used it constantly: people could ask “well, what it looks like?” and we had to be ready for that.
13:24 At first, we 3D-printed a little case that clipped on to a tablet. If they wanted to hang it on the wall, we would spend all night printing a customized version of the unit that could be hung on the wall only to be turned down again. And we just kept doing that until someone finally said: “I’ll put it on the wall for an hour”. Our goal there was to get constructive feedback and it helped us figure out what to build today.
14:38 Hardware does seem intimidating, but no matter what you are building, there is no substitute for a visual representation of what you are building. It is fine to have just a website or an image at the beginning, but the next step is to have the physical version of it. There is no substitute, and people always react to the visual.
16:08 How did we close our first deal? It was a combination of continuously getting people to put it on the wall for an hour, a day, a week, and then asking them what they thought a fair price would be. This helped us to determine what people would pay for our product, what it would be used for and how to craft a narrative. One of the most impactful things for our business was that we got continuous advice from people who sold their products to restaurants. If you go to another restaurant tech founder and say “hey, I really admire what you’ve built and I’ve never done anything like this before, can I have 10 minutes of your time?”, and almost everyone would say yes.
17:30 Entrepreneurs really want other people to be entrepreneurs. They would give insights on what the sale process looks like, what it feels like, who you should be asking for in a restaurant. Eventually, all these insights dictated our sale process. And because we built relationships with them, they would introduce us to their customers.
18:36 Were you too worried about what the costs are and how much margin you need and how much that should affect pricing or was it mostly sensitivity to what the customer you were speaking to was willing to pay?
We didn’t know and we were terrified of all these things. At the early stage, when we were still building units with 3D-printer, we recognized that our early customers deserved a different price from the price we gave to our new customers, and the goal was to make it a mutually beneficial partnership. And we still approach all our customers that way, trying to make it as affordable as possible.
19:30 We are all still doing everything for sales: the structure of our organization is pretty flat. For our current stage, it is really important for everyone in the team to be involved in everything because we are still figuring out where the holes are.
20:35 What was the most interesting and exciting part of building your own company?
I never intended to start a business. The internal drive for me comes from when there is a gap in the world that needs to be solved, and I have the capability to solve it, then I feel a real responsibility to be able to put everything I have into filling that gap. We continuously ask — customers, investors, team members — what is the next thing that we are missing? What could we be doing better? What can we do to make it more impactful? We work backward from these questions and try to find a solution.
22:05 How do you get yourself pass through difficult times when you feel like you want to give up?
I think everyone has this feeling of questioning if you can get through one more hour, one more day, one more week. Conversations with either people who have done it before or people who are doing it right along us are something that gets me through. “Running a business is hard” — it sounds so simple, but I feel it every day. There are an incredible community and network of support that we have access to; people who are willing to listen to what challenges we have and, in return, we are willing to do the same.
24:00 Entrepreneurship is hard work, sometimes you feel like the world is collapsing around you. But the reason why we keep doing it is that nothing can beat the positive feeling that comes of it; it is very rewarding.
25:00 Can you think of a recent conversation that you might have had with a mentor or some of the advice that they gave you that really stuck with you or was really helpful at that moment?
Our mentors are the backbone of the company: we would be nowhere without the generosity of so many people involved. Every time I have a meeting with a mentor, I ask “what is it that I am missing?”. When you are constantly in the moment of actually working on the product, you can miss these big holes that can be visible to others with more experience.
It is important not to feel embarrassed or shy with the problems that a company might have. One of the best pieces of advice I am getting from the mentors is to be transparent about those worries and those fears and to be honest about them because that is the only way you can work through and figure out how to solve them.
26:50 One of the things for us right now is to grow a team: Dutch and I have never had to hire before in our past jobs. Fortunately, many of our mentors were able to bring their expertise and help us through the hiring process by advising or actually sitting down with us for interviews.
28:00 It sounds like you are really good at asking people for help. But how do you actually do it? Do you reach out to people at a certain period of time or approach them when specific questions come up?
It is a mix of both. I do text people when I am thinking about things that terrify me to ask for their advice. Sometimes things that you are spinning on for hours are really simple for someone who has done it a hundred times before.
28:50 But we also want to be continuously engaged with our network. It can be hard, especially when you have so many people invested in the company. Every month we send out an update email with 3 bullet points of successes, 3 bullet points of failures, 3 bullet points of general updates, and 3 bullet points of really critical asks.
Sometimes people bring so much expertise that you didn’t even know they had in the first place. Really thinking through the asks and being very specific is helpful; no one is going to feel related to questions like “how do I scale?”. Good example: “I am worried about this one supply chain issue, and we’ve done X, Y, Z and this is our next step, and we are not sure how to get there”. And even if people don’t know how to help, they would refer you to their network. People love to be engaged and people love to be useful because they are excited about what you are working on.
31:22 Even if our contacts can’t help us this month, they know our updates from the emails, and there is no need for them to go all the way back to remember what was going on with us. If they find a relevant question, they will reach out to you. It is really easy to pick up relationships that way.
We always finish these emails with offering our help, too, and these mentor relationships can go both ways, and we can all push each other forward.
32:07 A year and a half later you as a company are in a different place: you have 6 people on your team, you are no longer selling to just single locations — you are selling to restaurants with thousands of locations. You just came back from China, where you looked for manufactures. Our question is what did you change in your sales and supply chain processes now that your company is more mature?
32:59 I am constantly reflecting on where we have been and where we are going to shift the narrative accordingly. A year ago I was basically saying “We have this idea, take a chance on us, we are scrappy”. Now we refined who our target customer is, and we now say “we are a company that is almost 2 years old, we’ve got a team behind us”.
We have a weekly meeting where we sit and talk about what happened this week and how does it make us feel. Narrowing is the biggest difference; a year ago we would take anything because we were just trying to learn.
34:58 You mentioned very briefly that now you are trying to figure out how to scale and maybe you are getting ready to ship a couple of thousands of units. Tell us a little bit about your trip to China and how you figured out the manufacturing process.
This is one of the hardest parts of being a hardware company. Once we figured out how we want the units to be built, we started having conversations with so many different manufacturers both internationally and domestically to find out what is the fastest way to get our product into as many hands as possible.
What we realized that you have to do trade-offs in the supply chain process and we had a giant spreadsheet again with questions we needed to ask.
36:58 We flew to China over New Years and went door to door to manufacturing facilities with our powerpoint showing them what we were building with our 3D-printed prototype. We asked them “What would you change? What’s gonna make it easier to manufacture? What’s gonna make it less expensive?” until someone said they could make our units. We were also fortunate to hire people there to help us navigate it. Showing up and really putting yourself out there is something that can make someone to actually listen to you.