Forget your keys There's an app for that - Small Empires Ep. 6

**Building the August Smart Lock: A Journey from Concept to Shelf**

In the heart of Silicon Valley, amidst the bustling streets of San Francisco, Alexis Ohanyan and Jason Johnson embarked on a mission to revolutionize home access. Alexis, a seasoned startup founder and Y Combinator partner, had traversed North America meeting entrepreneurs and exploring hardware innovations. Jason, as the CEO and co-founder of August, was determined to solve the age-old problem of keys. Their collaboration resulted in the August Smart Lock, a product that seamlessly integrates technology with everyday life.

**The Problem of Keys**

Jason's journey began with a simple observation: keys are cumbersome. Whether misplaced or lost, they create unnecessary stress. In New York City alone, 2 million people annually face lockouts, highlighting the inefficiency of traditional keys. The inconvenience was personally felt when a friend got locked out, prompting Jason to seek a solution that eliminates key-related hassles.

**Design Choices**

The August Smart Lock's design philosophy revolved around simplicity and subtlety. Instead of replacing entire door systems, August opted for an add-on mechanism. This approach ensured minimal disruption to existing hardware while maintaining the aesthetic integrity of doors. The decision to attach the lock inside the door allowed it to blend seamlessly with daily life.

**Manufacturing Challenges**

Designing a product is one thing; manufacturing it at scale is another. Jason and his team faced numerous challenges, from refining the aluminum face's LED indicators to perfecting the mechanical heart of the system. They employed various prototyping techniques, including 3D printing and CNC machining, to iterate efficiently before committing to injection molding for mass production.

**Lessons Learned**

As a first-time hardware CEO, Jason learned invaluable lessons. Hardware development is capital-intensive, requiring meticulous planning and execution. Prototyping is costly, and the transition from prototype to production demands precision. The August team understood that their product had to be reliable, as consumers expect quality in hardware solutions.

**Advice for Aspiring Entrepreneurs**

Jason encourages potential hardware entrepreneurs to approach their ventures with caution and preparation. Hardware startups are complex, involving significant investment and meticulous project management. He advises focusing on essential tasks, streamlining workflows, and regularly reviewing processes to ensure efficiency. While the allure of a great product is tempting, it's crucial to be prepared for the rigors of manufacturing.

**Conclusion**

The August Smart Lock exemplifies how innovation can transform everyday challenges into elegant solutions. By addressing the pain points of traditional keys and incorporating thoughtful design, Jason and Alexis crafted a product that resonates with modern consumers. Their journey underscores the importance of perseverance, meticulous planning, and user-centric design in hardware development.

For more insights on navigating the complexities of hardware entrepreneurship, visit AT&T's Business Circle for valuable resources and advice.

"WEBVTTKind: captionsLanguage: enI know I know we're here in San Francisco we had to come to Silicon Valley though because small EMP Pirus has never covered a hardware startup and we found a pretty interesting one called August and we're going to learn just what it takes to go from an idea in your head to something actually on a shelf I'm Alexis ohanyan startup founder and Y combinator partner over the last year I went on a 200 100 event book tour and met people building small Empires all across North America now I'm back with a new season revisiting some of my favorite stops from the tour ever since Pebble Technology's $10 million Kickstarter for an ewat in 2012 a lot of upstart entrepreneurs and established players alike have been trying to enter the hardware space but what many don't realize is just because you made a cool video and you have a working prototype doesn't mean you can get your product to shelves on budget with the same degree of quality that you or more importantly your customer's desire the August Smart Lock just came out and it looks like they may have cracked the code they have a beautiful working product on the shelves but getting it there wasn't easy I'm Jason Johnson I'm the CEO and co-founder of August we make the August Smart Lock This is a new line of product called a Smart Lock and so I can control it with my phone I'm going to just lock the door it's authorizing it's telling me that it's green so that means the door's open let's close it there we go the door is locked it's a device you put on the inside of a door August is designed to go on the inside of your door so it's just on the inside of the door to attaches to your existing deadbolt lock to allow you to stop using metal keys and instead use your smartphone uh to access a house or a business and also to give keys to say your your family your housekeeper you can set the time the hours it's it works and it really solves the problem of keys also it knows when I get home by geolocation so if I've got my hands full of baby and grocery I come near it opens up the main advantage of this is that you can invite people to your house without actually having to give them a physical key right or you don't have to worry about whether you're made you know like made multiple copies of your keys or the ex-boyfriend ex-girlfriend situation so there's a lot of convenience and some security elements to it uh that are really compelling for a lot of our customers why solve this problem of unlocking doors like why do you hate Keys yeah so you know it's funny the past two years I've been working on this I I I if it's a phrase I've heard more than than anything it's that it's I hate Keys like I've heard that you know 100 times and and we do hate keys in fact in New York City 2 million people a year are locked out of their houses keys are a pain we working another job got locked out of your house and just said get it I'm solving this problem right now I'm ending Keys forever yeah I I I I wish it was it was that dramatic um for me it was actually somebody else that actually suffered I I had a a friend staying at my house and uh and uh they got locked out um and I had to crawl through the dog door in the back of the house right and it was a very small dog proud moment not a proud moment that's how they got in got locked down and and so they're telling you this story and you're sympathetic I presume and you're like I'm going to solve this problem so you never have to crawl through my dog again you know I I built a couple technology companies and so I you know I have I have a little bit idea what you can do with technology and I thought you know there's got to be a way to do this way to kind of change those old metal locks and keys that we have and do it with electronics because of crowdfunding and pre-orders a lot more people are thinking about starting Hardware companies that's great thing is when you start a software company you really just need a laptop internet connection and time with Hardware companies you need all of those things as well as contacts and factories distribution Supply prototyping so much more the list goes on and all of those things cost a lot of money yeah so you know I'm I'm fortunate that I've I've built a couple companies previously and uh and when I started August I started over at Founders Den which is a a private co-working space in San Francisco the great thing about being in a space like that is you're around all kinds of interesting people entrepreneurs also investors and so I casually started mentioning the idea of August to a few people uh that are active Angel Investors and I was very fortunate I got I got great reception everyone could relate to to the problem of keys and the hassle of keys and um and so very quickly um people uh started asking if if if if I would be interested in them investing in the company there are a lot of folks who have tried different approaches to creating like the Smart Lock how did you settle on this one I'm always interested in technology that becomes you know Universal that become that's easily attainable I'm not so interested in technology that is exclusive or expensive and this is what a home automation has been for you know the last 20 years or so you know very complex very expensive systems that usually you know it's the person who installed them in the home who likes them and then everybody else in the household really like hates it right cuz it's over complicated and it breaks down and it requires you know specific equipment so this was you know one of the ideas how do we make automatic kind of smart door lock um how do we make it very easy and very attainable the key was to make it to not make it a full replacement product to not force people to remove their Hardware remove their doors right and to and to make it um an add-on essentially to what you already have So when you say you know you look at your front door well actually when you look at your front door you see whatever was there before from the outside right we're not changing the the outer part of the dead bolt you know if somebody has a key that can still use it um and the fact that this just attaches on the inside is in a smart robot that will be able to determine whether you're getting close and will unlock and lock for you you know that's a way to make the product attainable meaning anybody can install it you know people don't have to have a big discussion or a big you know change in what they already have the secret was to to kind of tackle it in a way that is really cognizant cognizant of you know what people already have what they live with and maybe they don't want a big flashing you know techy product uh on the outside or the inside of their doors um you know sort of with a big screen maybe they want something that is subtle and discreet um and so this is this was an exercise in Restraint in a way great design should be invisible well-designed products are beautiful elegant and simple and that Simplicity takes a lot of work and it's one thing to build one version of a beautiful product to scale that to thousands or even Millions is a whole new challenge does this start on a cocktail napkin how you there a lot of a lot of companies a lot of approaches to this it seems simple right get rid of the key unlock the door magically but there are a bunch of different ways to do that you've settled on a solution that is pretty elegant certainly very you know sexy um but also so simple uh and and why why was this the right choice for August so we spent a lot of time on this issue we thought you know uh you can you can you can replace doors you can replace a whole locking mechanisms you could do a lot of different ways to to address the issue and what we wanted to do was was to make what we thought would be the most simple solution possible something that that anybody could go to a retail store take it home and install it themselves and under 15 minutes that was that was our that was a design intent and and so we spent 2 years in fact doing doing a design towards that to uh to test it with many people people that aren't technically sophisticated people that don't know how to use power tools want to make it really simple so it just takes a a simple screwdriver in about roughly 10 minutes with regard to this August lock in particular what are what are some of your favorite parts so so from the very beginning my My Philosophy is is you know it's it's not about sticking a display on the wall or on the fridge which is kind of a lot of what you've seen um in the home automation or you know the Smart Home envir for me it's all about discretion I know the the friction of using a key you have to kind of look for it you have to dig in your bag for it you have to remember it you have to physically take it out and and so everything I've tried to do is how do we make you know that experience so much more fluid and so much more discreet at the same time so being able to hide you know a little bit of an indication of okay the lock is turning and it's um It's Working For example with the uh LEDs that you know appear through metal through a technology which is about sort of microscopic laser etching of of the metal for example being able to just get that little vibration in your back pocket so that you know that it's working in the background without you um having to actually um look at your phone and and look at the display for me what you know where where this is going and it's going to go more and more there is this notion of the invisible interface meaning invisible interactions as well so you get signals and it tells you in the background that oh my door is locking after I've after I've come in or my door is locking after I've left the house or it's unlocking as I'm approaching you want this to be happening in ways that are are not disruptive of everything else that you're doing you know they're just it's just lets you kind of live your life fluidly and it works in the background to to make that happen but humans still need signals to tell them that it's happening right and those sub signals can be very subtle and so that's what I'm excited about is in a way the product reveals itself through the experience not what it's trying to scream with on on onto itself in a way you have a problem that you've engineered a solution for and it's a clever one right cuz you don't need a drill it doesn't take very long to set up um it it's a it's a clever way to get the robot to do your bidding what is it like then building a product not just one that you know in theory scales Beyond a few arduinos but like actually scales to thousands and tens of thousands of units when you know you've set some pretty high expectations once we came up with the initial concept like automatic door lock right smart door lock uh then you know we work with Eve and his team you know we want to make something that is attractive to end users we want to make it a very beautiful and magical experience when you're coming in and out of the house then you have to figure out how are we going to actually engineer and build this you know for mass production and that's where a lot of the real challenges came in right so for example um this aluminum face for example uh from a design standpoint we wanted it to look basically completely like a flat piece of metal there no holes or no penetrations in here at all um but at the same time there's a set of LEDs behind right which we want to shine through here and that's that's uh you know an ID goal um uh both for the brand as well from a design standpoint industrial design industrial design yes um and then in order to make the the light shine through the the aluminum we had to uh execute a series of microp perforations uh using a a combination of laser and CNC right so how do we find the right manufacturing process for this how do we control that process well how do we match it up with the LEDs um and how do we ensure that we get enough light shining through here that it's an accurate indicator the end user it's such a subtle simple feature but we went through um at least a dozen different iterations of this combination here and working with different uh factories to try and execute this design really really well one of Eve's uh amazing Geniuses is is is how he's able to push the envelope on almost everything so so over our 2year development cycle um you we've had you know many hour every every week hours and hours and hours in a room with the creatives with the engineers um looking at how we can just tweak the smallest of things and and Eve has this amazing ability to just ask questions like oh could we make that a little bit smaller can we make that a little bit smoother can we make that a little bit um you know blank and he just asks questions and he keeps asking questions until it's refined and refined and refined and either either you refine it right or or you just you just you're exhausted you're like you know I we know the answer is no Eve actually we cannot but he just asks you know in a a in a in a challenging way but but also in a very respectful way he just has this great creative process he just he pushes everybody on the team Twitter was conceived right here in South Park and at the time let's face it it was pretty janky crashed a lot the nice thing with software is you can deal with bugs like that as long as what you're making is still what users want Hardware on the other hand is harder if you're shipping something it needs to be really good especially when the thing that you're shipping is keeping people's homes and loved ones safe you only really pay a cost in time when you're iterating with software right uh when you're dealing with atams obviously there's all kinds of other things that come into it um how do things like shipping and maybe even 3D printing how do those things affect how you can create maybe a little bit more easily right so um this this particular element you know this is the the heart the mechanical heart of the system we went through several different iterations of this um this particular design to get the right torque output to have everything match up mechanically and electrically for instance 3D printing allowed us 3D modeling 3D CAD 3D printing allowed us to prototype a lot of different types of case designs and mechanical features in terms of how it's going to fit um but you know the ultimate uh you know drivetrain that's in here is made of uh at least the case the Cas part is made of injection molded plastic and this is where a lot of people who are uh in hardwood they're like uh this is where your tooling costs come in there's a lot of physical you know plant property and equipment that you have to have in place and you pay a lot of money for it and it takes a lot of time to make it in order to um produce mass-produce these parts you can only really have maybe one or two iterations on it soft and hard tooling so you try and do as you do as much prototyping as possible um this one happens to be a machined aluminum prototype um it's all in a relative sense cheaper and faster than creating hard tools uh for making the parts um but that that's kind of the cycle that we have to go through we try and use every single prototyping technology that's out there whether it's 3D printing CNC Machining uh before we get to the point where we actually have to buy and cut soft and hard tools cuz at that point it's that's serious commitment that's that's a serious commitment yeah yeah that's usually you know under a normal schedule maybe a month to build a set of tools so You' been CEO before of a couple of companies but never a hardware company how much did that help or hinder you yeah so I I had to learn a lot right so I've done a couple of software companies I did a a sizable uh services company uh but the hardware was new for me which meant that you know I had to um rely upon some of Eve's expertise but also Outsourcing right and using using firms that have done Hardware before and uh you know if I had known two years ago that I would know so much about Hardware that I do today boy I'm not sure I would have I would have been as excited it was it's been a tremendous learning curve um cuz uh it's a device that has 167 components inside of it right and ostensibly it doesn't look that complicated it doesn't look that complicated of course is is is the beauty of good Hardware is you know you kind of you kind of hide all that insid but uh it's it's a very complex device so what's your advice to someone who wants to they want to start the next dog August uh and let's say they don't even have the experience of being CEO before maybe they' they've tinkered a little bit with Hardware but if you can take those two years of lots of lessons and distill that in some way what would you say so um I would probably more readily encourage someone towards software umly because you don't want the competition or no I'm not I'm not so concerned about that um it you know Hardware requires a tremendous amount of capital right it's uh and I had some great people um you know give me advice on this when I when I saw council at the beginning and they said yeah prepare to spend a lot of money cuz you know prototyping is is is is an expensive Endeavor and and uh tooling for manufacturing is very expensive and some you got to change the tools and you know you spend several hundred, on on a on a tool and you got to you got to redo the entire thing right um you know not not to trivialize when you sp a lot of hours into software but but you don't have that level of cost generally yeah uh with software oh definitely not so it's really Hardware Founders beware it is an expensive Endeavor um and and I I don't want to scare people off but just be prepared for that because the worst thing you want to do is spend a lot of time and energy and your own money working on something and then you find out you can't actually make it into a product because it require a lot more Capital to turn into an actual product you could sell there's no beta in Hardware um you know people's expectations in in Hardware is that um it has to work and it has to be you know of high quality um and I think you know in many ways the reason why Hardware is is becoming more sexy is also because generally the the public has become a lot more you know sensitive to um to Quality I mean sometimes you know when you when you when you struggle to kind of explain design to people if you just change the word design to the word quality then people start getting it um a lot faster right you're welcome Silicon Valley we came here we shot a small Empires episode and we taught you something really important Hardware is hard what software is one thing get away with a few bugs here and there but Hardware may seem really cool really sexy right you can put together a really compelling video people get really excited money pre-orders all this stuff starts coming in you still got to build something got to build a lot of something and it has to be good cuz if you don't build something great you're August smartlock found success by bringing home safety into the internet age but it isn't just about having a great product having a clear process will help your business work efficiently and greatly succeed start by identifying specific areas of your business that are struggling and Tackle those right away make sure everyone knows exactly what their responsibilities are and that no two people are working on the same thing are you spending too much time on work that isn't necessary eliminate time wasters and keep your team focused on a simplified workflow and finally don't get tied down to any specific step scheduling reviews will allow you to make sure that everything is running smoothly and let you adapt to anything that might come your way for more business bus advice visit AT&T's Business Circle\n"