Wireless-charging sale shows how it’s done
OPINION: There are a lot of things to love about iPhones.
The intuitive user interface, the lack of ‘‘bloatware’’, the terrific camera and the new 3D touch display. It’s seriously cool kit.
There’s also a lot to annoy. The easily breakable screens, the vulgar retail price and their power foibles. Their Lightning power cables fray and break. Plus their batteries tend to lose capacity and die early.
Apple are aware of these shortcomings, if the iPhone 8 is anything to go by. Both the 8 and the 8 Plus feature integrated wireless charging, which is pretty neat.
They each have a glass back that works with the Qi wireless chargers that are starting to be used in cars, cafes, hotels and airports. But the Qi system has its limits, including issues around metal cases and the limited workable distance between chargers and phone.
All of which helps explain why Apple has just bought PowerByProxi, a 10-year-old New Zealand company that provides wireless charging solutions.
While the purchase price is confidential, educated guesses range from $75 million to well over $100m. Not a bad sort of return for founder Fady Mishriki, who as a fourth-year engineering student started a whimsical project in 2006 to allow remote charging of equipment in wet and dirty industrial environments.
The sale has had a bit of a mediocre reaction locally because of the fear that the capability will head overseas. That’s a response that I feel fails to appreciate the reality of tech company growth trajectories.
Last time I checked, selling a company for somewhere around $100m after 10 years of hard slog is no mean feat.
It’s a superb acknowledgement of value creation. It also recognises that the next stage of growth – taking it to being a $500m or $1 billion company – will be far easier thanks to what the likes of Apple can bring to the table.
The classic start-up pyramid has three stages.
First base is product market-fit, knowing that you have something that will take pain from, or add joy to, consumers. Without that you got nothing.
The second layer in the pyramid is go-to-market. Rather than relying on inbound marketing and soft sell, it’s about putting the foot down on pushing hard on sales to deliver growth, quite possibly breaking it up into standard and enterprise buckets.
The top of the pyramid is scaling. Really expanding the business to not just double revenue but quadruple it or better. That means a grown-up channel strategy and the network grunt to engage with distribution partners.
Go-to-market and scaling are tough. They take severe capability and serious resource. A handful of companies can do this in-house, Xero being a notable example. But it’s risky and most small businesses simply don’t have the horsepower or the shareholder patience to get it done.
What Apple will deliver PowerByProxi is marketing clout, massive distribution capability and the trust that goes with that white apple logo. Simply put, if Apple calls up to talk about wireless charging, the chances are you will take the call.
Beyond confirming the essential worth of a buyout, there’s a few good learnings from the PowerByProxi deal for other New Zealand startups in the ecosystem.
First, it’s great having a solid base to operate from. In Mishriki’s case it was Auckland University and its commercial hybrid, Uni Services.
Second, it’s about having a razor-sharp focus on your niche and the macro trend that the niche exists within. For PowerByProxi the niche was inductive charging and the macro trend was the exponential proliferation of mobile devices where battery life is failing to keep up with the energy demands of today’s users.
The third learning was getting founder-friendly investors on board and at the right time. In this case it was Movac, probably New Zealand’s most experienced technology investment fund manager and the biggest. An outfit that could not just add capital but real-world experience, including how to find the right buyer.
Which leads to the fourth learning – identifying potential acquirers early and than managing the relationship over time so they become a natural buyout party.
You will never get bought by a company that has never heard of you and doesn’t trust you. And trust doesn’t come overnight, most certainly not $100m worth of trust.
In a couple of years time I’m betting wireless charging of personal devices will be as ubiquitous as wifi is for connecting to the internet. Just as the plug-in ‘‘aircard’’ has disappeared from your laptop bag today, tomorrow the charging cables will be goneburger.
Apple’s going to be at the front of that change. And a great little Kiwi company will help take them there. Good on them.
❚ Mike ‘‘MOD’’ O’Donnell is an e-commerce manager and professional director. His Twitter handle is @modsta and he’s pretty handy at breaking charging cables and screens on iPhones.