“CELEBRATING 300”- FREEBOWLER STATUS UPDATE DECEMBER 2019: GROWING PAINS OF THE HARDWARE STARTUP PROCESS
Three hundred done, 49,700 more to go. It’s like a 100-meter dash run with every batch of 100 units, 497 sprints left. It’s been one heck of a ride so far experiencing the highs of highs and the lows of lows. But worth it. The learnings are only just getting better with a more in-depth contextual and practical education. We now have a good understanding of inventory management, managing the cash flow, team building, training the newcomers, fundraising, due-diligence documentation, offline marketing, and just so much more than what we had learned in the phase before this. Let there be no doubt; it’s been a tough six months from the last status update report in May 2019 from going more orders in hand than we could fulfill to having more stock in-hand than the requests we had. The whole process was on tilt just before it normalized itself. Hardware startup space just gave us a big warm welcome.
Yes, things have been going great with freebowler, and we’ve constantly been making progress as always. As expected, we saw a dip in the sales during the transition from Q-2 to Q-3. Mainly because of extended monsoon(rains), people getting back to schools and work from holidays, thus spending less time on social media platforms and also because we spent less on the marketing(running ads) the last quarter compared to earlier. From selling over 150 units in under three months(April — May — June) to just selling the next 100 next four months(August — September — October — November), it’s been a rough cycle from a P&L and balance sheet standpoint. We made up our minds and prepared for it. We saw it coming, that’s what time and experience teaching. We had factored in all these and have been focusing on other business development activities. In terms of team expansion, strengthing the production base, fundraising, on-boarding sales, marketing and distribution partners, and, more importantly, preparing for the upcoming summer, which is not too far away. We have come this far along the process over the last six months.
Administration & Team Operations
We have finally(and fully) restructured the company from LLP to Private Limited, just like (C-Corp /S-Corp), to make it a favorable structure for investors. The time was just about right for us to move on and graduate to a more organized company structure. We generated enough revenue in the last fiscal year to justify the move. Of course, it came with a cost that was close to $10,000 or about seven lakhs for the entire process of restructuring because we also carried over the losses from the previous LLP structure to gain tax benefits. We didn’t anticipate it to be that expensive to be honest, which also put brakes on our marketing activities as we had cut down costs to make up for it. So if any other startup thinking of restructuring, please be advised that it’s going to be a fairly long and expensive process (both time and money). More importantly, we’ve also expanded the team, and our team size has increased with two more additions to the product development and manufacturing department. Still a small team of 8, but bigger than 6. (LOL)
Product and Manufacturing Development
This time around, we again manufactured 100 units, done in the batches of 25 and 75. Once again, a painful process as expected to be early on, we’ve taken a ton of notes and observations to streamline the future manufacturing processes as we continue to manufacture these items at scale over the next 2–3 years. But the most fulfilling thing, a sight to watch, was when the entire assembly section filled with colorful superthrower units. There’s no better feeling than seeing your invention produced in numbers for real. We’ve now almost emptied the inventory, just about 5–6 left from returns and refurbishment, which will be sold out by the end of the month (Dec 2019). We have begun the preparations for the upcoming production batch. We have just upgraded the design based on the inputs/ feedback we have received from our customers and the observations we’ve made internally on manufacturing and assembly processes. Pre-production will commence in the next few days, and once it’s approved, the next batch starts rolling out. The last design iteration for the year 2019. #FRB2019C.
Our most favorite things of all, and we didn’t do a lot of social media marketing campaigns as we’ve been doing it in the past. We’d like to at least call ourselves as an ‘up and coming innovation cricket brand,’ but that branding part took a back seat this quarter. It wasn’t ideal for us to do, but we had to make a hard decision to stop advertising on social media platforms to accommodate other business activities. Honestly, it could screw up our Facebook algorithms and the learnings, we may have to start it all over again anew, which could be a good thing. We’ll wait and see. We had just begun YouTube advertising, and as we were starting to see some good results, but had to pause it at the wrong time. YouTube looks promising and cost-effective compared to other platforms just because of the sheer volume of attention the platform has got for the online cricket coaching space. We couldn’t do much for the current Australian summer, which again is a huge market opportunity. Still, we are hopeful of making up for the lost time on the internet over the next few months leading up to the T20 cricket world cup down under. Some impressive numbers popped up on Tiktok and Instagram despite the slow down in marketing efforts, which is further validation that our content gets consumed on the internet.
News and Media
We had a lot of news and media attention last quarter obviously because we had just launched the product with Ravichandran Ashwin through a press conference. Understandably, we had a dedicated PR effort during the launch to get the news out far and wide. But since we didn’t have anything interesting going on this quarter, we couldn’t garner much attention. Still, a couple of notable ones, including the likes of RedBull Cricket, picked up our stuff and did a featured story on the innovation. So that’s it from the News and Media section. Still, we are hoping to crank up some revenue numbers and demonstrate serious growth potential over the next 12 months and help be a meaningful case study for the Indian hardware startup ecosystem.
Sales & Distribution
We’ve been working on securing a potentially huge “Sales and Distribution Deal” with Cricket’s biggest/largest equipment manufacturer. Most people would be easily able to guess who’s the biggest cricket brand in the world that’s responsible for over 60% of all the cricket equipment produced. Although it’s taken time as long as 1-year, we were finally able to agree upon the terms and conditions in principle mutually. These big deals generally take longer than expected as it involves a lot of legal considerations, especially working with a big brand and one of the top stakeholders in the sport. It’s still a start, and we’ll build on top of it as the time progresses.
What comes along with this deal is now gaining access to over 2500+ dealers all across the globe. So we are looking at tapping into the network a 2500–3000 dealers with predefined distribution channels in total. We are slowly beginning to activate the dealer network both locally and globally, and we’ve secured anywhere from a minimum of 2 order deals to a minimum ten order deals with at least 12 out of the 18 dealers we’ve interacted through the big brand’s introduction. We are looking at the next 12–24 months window as the actual period to maximize the sales opportunity with the dealer network as setting up the dealer itself takes 8–12 months as it involves a lot of groundwork — physical interaction with the machine, live demonstrations, in-person meetings and more. And post that market development activity, even if we are looking at one sale per dealer per month in the next phase, we are still looking at the 30,000–40,000 (2,500 dealers x 1 unit x 12 months) units getting sold through the dealer network over next two years. It’s ambitious, but when executed right, there’s a pretty good chance of getting closer.
These are some of the deals from the recent past. It’s just twelve dealers now; there are about 2500 left to explore.
Soloco Enterprises (Bangladesh) — 10 units(potentially ten more); 2.Brewing Cricket (Bangalore) — 2 units; 3. Shiv (Kolkata) — 5 units; 4. Nothing But Cricket (Bangalore) — potentially two units by the end of the year 2019; 5. Navya Sports (Meerut) — 2 units; 6. Sportus (Chennai) — 4 units; 7. Mahadev Sports — 3 units; 8.Cricket Arena(Kerala) — 1 unit; 9. NFSSportsTech — 3 units; 10. Kreeda Park(Chennai) — 1 unit; 11. Super Sports House (Haryana) — 1 unit; 12. Seethi Sports(Delhi) — 1 unit.
Customer Service and Support
Again not much to talk about here except it’s getting better over time and experience. As a cricket innovation brand, we’d like to get to a point where we take full pride in our customer experience. Brand building is all about how much as a company and product are you consumer-centric and how well you take care of your customers post-sale. We’ve been making a conscious effort to handle all our customers well, but there’s always scope for improvement. Somebody on a business podcast show once said -
“Every business in this world irrespective of the product or service is in the hospitality industry. You can’t say NO to your customer. It’s the fundamental duty and responsibility of the company to provide the best experience for their customers. And don’t expect your customers to know anything about your business or product, it’s our job as businesses to make them understand it. And any business complaining about their customers is already losing.”
So we’ve been trying our best to follow this mantra. And we’re confident of delivering the best as the company grows, and we get matured as a whole from the learning experiences.
The long road trip of 5500KM across the country from South to North has helped develop business for us. We took the risk and traveled across the country to meet as many brands as possible, seeking business development opportunities.
Strategic Marketing Partners
Agreed, in principle, execution begins soon. We have on-boarded a few top brands who are in the cricketers’ database management space, which gives us access to 5M+ registered cricketers across the world. We are exploring the opportunity and identifying the process of reaching cricketers through these brands who work directly with various cricket associations, boards, and organizations managing their email newsletters, live scoring platforms, and similar portals of cricketers’ attention.
We’ve got into a beta testing agreement with Queensland Cricket(QC), where QC will use a freebowler superthrower non-electric and portable cricket ball thrower as a part of their training module and share documented feedback with us. If the pilot testing goes well, then we are hoping to get a bulk order from QC very similar to the arrangement with Southern Australian Cricket Association(SACA), who bought 26 units for their clubs in February.
Pitch Vision(PV), leading technology solutions provider for Cricket South Africa and other significant associations around the world, has come up with a technology integration solution for our product, which acts as an add-on and makes it an IoT device. It tracks the batting sessions and clips it into a video highlights package for players and coaches review. So we are looking at a potential technology-partnership with PV shortly.
Investment and Fundraising
We are making good progress on the fundraising process, and we are 60% through the due diligence process. It’s just a matter of time. Our prospective investors are expecting us to gain more traction and begin planning the sales, marketing, distribution, manufacturing, and related logistics activities for the upcoming Indian summer — IPL as the cricket season has already started. They want us to see the activation process of the global dealer network(2500+ dealers) through an already secured deal with the big brand. So that they can come in and invest in sourcing the machinery/equipment, setting up the manufacturing operations, marketing, and expansion, which allows us to manufacture the units at scale at a cost to accommodate dealer network and distribution channel partners.
We are hopeful of launching the beta version “freebowler superthrower mini” this summer to garner some attention and get initial feedback from the early adopters. It gives us a chance to test the market and understand the market potential. We might be taking the global launch and the pre-order campaign route to create worldwide awareness and accessibility. So we’ve our work cut out for the next 12 months entirely on the market development and brand building process; what follows as a result and consequence of the process is sales and revenue, which again is a by-product of building the right product and a good brand. Our current job is to focus all our energy on building the global distribution network ahead of the big summer(in 2–3 months) and manage our options to finance the next phase of growth. Although the cash flow situation is a little tight, just like with all other hardware companies, we are finding ways and have been managing to keep the activities afloat.