Mister Beacon Episode #9

Kontakt.io CEO Interview

July 13, 2016

Szymon Niemczura is CEO and Co-Founder of Kontakt.io. He talks about the strategy and applications that have enabled his company to sell the largest number of beacons in 2015 (by ABI's reckoning). We explore how they intend to make money while maintaining their partner relationships, their future offerings, what inspired the founding of their company and what developers need to be aware of before choosing their beacon provider.

Transcript

  • Szymon Niemczura 00:04

    70% of Kontakt.io with our customers are solution providers, so we are there for them. Okay. We want to help them we want to empower them to do business and to to go with us. That's why they like us because we are very transparent. I would say one of the pillars of contact are you around around expertise. They actually coming up live next week. It's called proximity studio. Right and the cost of switching that there are there and they're increasing with your infrastructure. The question is, are you at the right party? No, because everybody hates the installation part because everybody is treating it like, I liked it. I like it. You know, nobody wants to go up with them. Okay, welcome back to The Hitchhiker's Guide to the Beacosystem. My name is Steve Statler from Statler Consulting and we're doing this in partnership with our friends at Proxbook this week we are communicating with Poland. So one of the biggest players and Beacosystem is Kontakt.io. And I am really pleased to be talking to the CEO of Kontakt.io Szymon Niemczura. Almost got through your name. Welcome to the show. Thanks very much for joining us. Welcome, Steve. Thank you for having me. It's a real pleasure. And you know, we're recording this just go on 10 o'clock Pacific time. What is it? What's the time for you over in Poland? So right now, it's, it's actually 7pm.

    Steve Statler 01:35

    Okay. Yeah, my home. I appreciate it. I'm in my home. And they're doing building work. So we may hear that a little bit in the interview. But let's kick off with the kind of traditional brief elevator introduction to your to your company, it'd be great to hear your how you introduce Kontakt.io, when people are not familiar with what you do.

    Szymon Niemczura 01:58

    Yeah, so Kontakt.io is one of the leaders in Beacon space, especially from the from the from the level of hardware that we're live, we're producing. But our mission is to delete the market by empowering our customers by empowering businesses, with big an infrastructure and also with expertise. So they can focus on their core business, they don't have to rethink the wheel. They can have a partner they can rely on in terms of Beacon infrastructure, and by infrastructure, I mean, hardware, software, services. And lastly, the expertise. Very good. And I noted that emphasis on expertise, because one of the big questions I always have when I try and find out about companies, as you know, what's the game plan? How do you make money. And I think one of the things that's actually been really appealing about what your company does is is a pure play company, you seem to seem to be very focused on the beacon hardware. And my observation from the outside is you've done really well with partners, because you are not making noises about building layers of software that might compete with your partners. So whenever I talk to people in the bigger system, your company is one of the first ones they mentioned. And I think it's probably because you have a good product, but also because your partner friendly. So that's a little long, rambling question. But really, I know that you talked about expertise. And I'm thinking that wasn't just accidental thing. Is that an area where you're looking to do monetize, to monetize to generate revenue from your expertise? Okay, so answering your question twofold. First, yes, we are very partner friendly. But this is to defect, we are very horizontal. So we don't want to go we don't want to go vertical. We don't want to go to this sort of a use case software. Because this is this is where our customers are 70 more than 70% of contact with our customers, our solution providers. So we are there for them. Okay, we want to help them we want to empower them to do business and to to go with us. That's why they like us, because we are very transparent. And we're a partner in their, in your business, on the owner and the expertise for it is where we actually are on top of a lot of use cases, a lot of solutions. And we know who was doing best stuff. So upon a friendly and just go a little bit more into where you see the future in terms of revenue. I can't let that that piece go. Yeah, from the from the expertise part. We truly believe that, you know, Kontakt.io being on top of a lot of different use cases, a lot of different solutions that are being there. We can help our customers to choose the right solution to choose the right methodology and the right partners to go with hand to hand. So that's where the expertise comes in. This year will end produce, I would say one of the pillars of contact audio around around expertise. They actually is coming up live next week. It's called proximity studio, which is, which is both offline and online way of connecting, you know, businesses with the expertise and with the final customer. So that should be that should be our answer to to the expertise element.

    Steve Statler 05:29

    So, proximity studio that sort of sounds like a IDE, integrated development environment, but it's, is this sort of similar to a proxy book where you're kind of providing access to consultants? Or or would your staff be providing the consulting?

    Szymon Niemczura 05:50

    So this is, so it's a, it made my, my sound similar, but this is more about showcasing the real software, you know, for example, getting to the physical place and seeing a demo of something working. And then on top of this, there's the expertise, there is the server, easy way to choose the right provider? The right software? So that's the offline part and the only element, it's about making sure that we can capture the value of presentable enterprises, we're interested and tell them. What is that is being done? What is that that works? educate the market, technically. So we say similar to Proxbook, but on a totally, totally different angle.

    Steve Statler 06:38

    Okay. So if we just spend a little bit more time on that? How do you deploy services, so it sounds like you're selling, you will be selling services, and you've got a lot of expertise, you do a great job and with your webinars and capturing information and sharing it already, but this is much more kind of customer specific advice, rather than kind of a general education piece, which you've already been doing quite well for some time. How do you do that across so many different geographies? Because and maybe we should go back and level set? What geographies Do you sell to at the moment?

    Szymon Niemczura 07:17

    All right, so So contact is pretty global right now. But definitely, we're very strong in Europe, and also in America, then around 20% of our sales is APAC region. So based on that, we're also building a bar offices. So a strong office here in Krakow, but also business office in Berlin, then office in Guadalajara, Mexico. And that supports our New York office. And last but not least, the shinjin office supporting APAC region. So out of that, we want to make sure that through the proximity studio, we can drive to valuable things. So deliver quality business partners, to our solution providers, to our partners who are using our technology to build their solutions, and also to the people on the other end, we're looking for quality service, we're looking for quality use case software. So we want to connect them. So I would say different than than then approx book from the perspective of the value delivery, actually. But it does sound like it's in a way a solutions directory. Is that a fair is that one aspect of what you're doing, you're providing a solution? Yes, but this is on a very boutique level. So mostly targeting here, I would say medium to large enterprises, and also handpick partners who deliver quality software that are our customers. So this is not a directory that is being created and pulled all the contacts to customers into this. But this is a directory have really successful, really successful players and providers out there who know what they're doing, and have verified their their their business verified their software. And we want to empower this. Because we believe this is a really good way of driving the future of of beacons, by actually connecting the right people together on the level of actual, I would say business impact.

    Steve Statler 09:21

    Well, it's fascinating that you're doing that. And I do think in the industry, it's overdue, because really what you're providing with your beacon infrastructure, we'll get back to the product and talk about the hardware and all that sort of thing. And also how the company was founded, but I'm just really interested by this thing that you're doing, because it seems to me that what you're doing is you're providing a development platform. You have you have some standard API's, but there's some and maybe you'll argue with that and feel free to if you don't agree with that, to what degree when someone's choosing contact IO or one of your competitors, to what degree? Are they committing to a platform? And to what degree? Can they just swap out what you guys do with with something else?

    Szymon Niemczura 10:10

    That's a really good question. And we're constantly answering this constantly looking for the new answers to that question. As for now, contact audio is all about this very horizontal approach that our customers really enjoy. And know that they have, you know, freedom over the hardware and also on the software. So, so they can, they can use the software stack, but they don't have to, it's the it's sort of this, this is this is given in the package. And we don't force this, we don't do this as coders that is required to use the software or you have to pay for the software to, to use the platform. Here, we want to be supportive to our customers, to the extent that we're trying to build only the solutions, only the elements of the software that they find valuable. So they don't have to rethink the wheel. And yeah, interconnects, you know, the hardware has to be smart, has to have cloud to basic management or security for all that stuff. But then also, there are new services that we'll be introducing a little more about processing power, that it will be about data that we can help our customers to not, you know, to focus on their core, not to think that we'll worry about the servers, and these these elements that they don't, don't bring value to their to their final use case.

    Steve Statler 11:34

    Right. So if I can summarize, I think you're offering people that are building solutions, whether they are software partners, services partners, or they're a venue, they can use the generic iBeacon API's. And basically, that gives them the ability to switch switch out one product for the other. But we all know that there are big gaps in in the basic offerings that are provided at the OS level. And so, you know, my, my hypothesis is, if you're going to build a solution, then one of the places where you can get that missing middlewares from the beacon supplier. And if you do that, then you're making a commitment, you're basically saying, this is a platform, I'm going to build on it. And then I'm sort of throwing my lot in with whoever that platform provider is. And that's just kind of the way it is unless you want to write everything yourself, which no one can do. And so if you're if you're doing this.

    Szymon Niemczura 12:32

    You see, like, you know, for example, Google, building out the platform, so you can always choose to go with Google and use Eddystone and the ID to to handle all your infrastructure. The only problem is, this is not ideal with iBeacon. Again, so you need to have those both standards handled. So ideally, a platform like contract IO is providing you a service solution, where you have both iBeacon and Eddystone, provided with security provided with everything you need to have your infrastructure being run easily. But on the other hand, yes, of course, this is like choosing your server provider, like AWS versus Microsoft versus whatever else you are committing, right, and the cost of switching that there are there and they're increasing with your infrastructure. The question is, are you at the right party? Are you with AWS or any sort of other business of that scale growing into the to the level that is decreasing the total costs of ownership for you? So it makes your business grow? Easier? Right? So? Absolutely, yeah, I mean, this is this is the system decision that all businesses have to do. And this is like not only the software platform, but also the hardware, but also the support, and the services that you can get. So we're back here to do basic relationship and business. This is not just a lot of business that you can scale up online. This is a business where you have to build a relationship with the customer. And this is like when you need the rail, regular sales when you need to build this this relationship and carry on.

    Steve Statler 14:09

    All right, yeah. So this is not just a commodity, it's not something that I would buy purely on the technical aspects of the product, although the those have to be satisfied. I'm deciding on a platform. So I need to decide, is this platform provider going to be around? Does their business complement or conflict with mine? And also, what are the solutions that are available on this platform? You know, why did Windows win? To the extent that it did? Well? I think it did. It's because there's a huge amount of software available. And so it just as amazed me that very few, if any, I don't know any of the beacon providers have said, here's our solution portfolio, here is your here's all the software, here's all the analytics, here's all the integrators and then we've seen partner announcements, but I think you will be One of the first that really goes to market with with a directory of of solution providers that you've curated. So I think that's, that's a significant commentary on the maturity of the market and your strategy.

    Szymon Niemczura 15:15

    Yeah, definitely, you know, it's also about the quality our customers get customers on both ends, right? So the customers who are the solution providers and customers who want the solutions, so we want to make sure they get the best thing. So then again, that's why I don't like the name of directory more like this expertise where we are choosing the the ideal, the ideal outfit for for the customer. So, so yeah, it's it's more of, again, business relationship building stuff than than a diary directory, actually.

    Steve Statler 15:50

    So you announced recently that you are going to be helping your customers with deployment? So that is less about recommending someone that is qualified or is it? So how do you intend to do the delivery of those Deployment Services? Is it going to be your staff or your partners?

    Szymon Niemczura 16:10

    So this is going to be our stuff, because even our partners, they have this pain point. So most of our customers, they want to have this problem solved. And we've been listening to this and we said, Okay, we have to try to tackle this problem. And we're building we're building for, for teams across the planet. Scalable teams that can that can execute on any sort of a beacon deployment and maintenance program. Of course, this is limited through the sort of scale, but with the biggest, biggest projects that we're doing with our customers, we're helping them with the installation. And they love it because they can, they can mitigate the whole operations and the risk. And even the even the sort of, you know, paycheck on the on the accounting side doesn't ruin your p&l out to contract IO, which is a significant openness, significant partner in terms of revenue. So we're not that we're not that, you know, reluctant to put people in payroll. So. So that's, that's, that's why we're helping them to achieve success. So they can focus on their core in their final sort of use case, software, and delivery on that customer, while we do everything else on the infrastructure. So it sounds like your headcount is going to be grow. I mean, you've already gone out last time I looked, it was like 80 people from a handful to 80 people. So it sounds like you're gonna be growing even more. Yeah, so last time I checked, I mean, today, it's 87, which is pretty shocked to me, because last week, it was 83. But so that's pretty high. But so again, this, these, the setup for for for installation services will be very flexible. So it means that will be key team leaders, and then everything else will be flexible, okay. So it doesn't mean that there will be a lot of a lot of people on the payroll.

    Steve Statler 18:03

    People driving vans and trucks, it's going to be the people who have the organizational expertise, and then you'll probably contract in and pull in on exactly what you want.

    Szymon Niemczura 18:15

    And then we'll be looking for economies of scale in that process. Ideally, trying to find the sweet spot where we can make it more out stop sort of semi automated process.

    Steve Statler 18:26

    Well, that makes sense. If I'm a venue or retailer, then I don't need to build a team that can do this one awful, very occasional process of deploying the hardware. So whereas you can see, you can smooth that out, and even if I'm an integrator, so I think one of the obvious questions is, how do your integrator partners feel about this? Because you're sort of are you not getting into this space a little bit?

    Szymon Niemczura 18:49

    So I'm, actually no, because everybody hates the installation part, because everybody is treating it like, I liked it. I believe that, you know, nobody wants to go out with them. And and the truth is that they all love someone who's going to do a to z, and they don't have to touch it. So even the integrators, they're all about. They're all about, you know, making sure the software works here and there integrates with the existing legacy software that the customer has. And then all they want to hear is, hey, here's the invoice for the installation. Thank you. Bye bye. So they don't want to mess up because the demo is a lot of risk. There's a lot of risk with the company, you're going to subcontract with people screwing it up when people have no you know, not having expertise, not having the right mobile app to, for example, pinpoint the beacons in the map. So there's like there was a tons of problems that we have identified for our customers and in the installation process to fix so we believe that this is this is this is going to be something something successful.

    Steve Statler 19:53

    Yeah, I agree. I think it's a great area. It's a critical success factor for any deployment. You put the beacons in the wrong place. It's an it's very expensive to fix that. And it can just ruin the impact of the software. So I can see why people would want you to do it. I grew up in England and north of England in Yorkshire, there's an expression, I want to undo the Yorkshire accent, but the expression is where there's muck. There's brass where it's dirty, there's money. And I think it's a dirty area, but it's also a highly skilled area. So I think that is a great decision on your part.

    Szymon Niemczura 20:25

    Yeah, it's also an area of when you when you look at the infrastructure costs, it's a pretty, it's a pretty thick line, because these are the costs of logistics of pulling it out. If if if one can make it scalable globally, then it's it's a pretty big revenue chunk.

    Steve Statler 20:42

    Yeah. And you can probably do more. So is it fair to say that the cost of the beacon hardware is actually less than the cost of the deployment is that that's, that's what I hear people.

    Szymon Niemczura 20:55

    That's definitely that's definitely an issue. Of course, it is. Sometimes it's, it's three or five or six fold.

    Steve Statler 21:02

    So if you actually get really good at this, which I think you are probably well placed to do, then you can offer efficiencies and economies just because you're really good at doing it.

    Szymon Niemczura 21:13

    So it's, it's about finding out the scale. And if you find that scale, if you if you can determine that economy, and for example, to semi automate the process, this is this is this is something that will that will be meaningful. Very good. So what's your what are the four geographies that you're starting off doing this in? So So obviously, the first one is, states. So America, but also we are, we're right now, aiming to roll out in Mexico. So we're willing to do one of the first deployments there. Obviously, Europe, operated out of Poland and Berlin, and lastly, the APAC region, out of Shenzhen, where we'll be looking into deployments in China, mainland, but also in, in the surrounding Asian countries.

    Steve Statler 22:07

    There's just a huge potential for growth isn't there? You kind of you're starting off in some great locations, but it's clear that there's gonna be a lot of potential to go beyond that. Well, let's, let's change tack here and go back to the beginning. And I'd love to hear how the founding story I think I've heard bits of it. But I personally have a passion for using beacons for good. And you've actually caught up to that phrase and say, I'm a Program beacons for good. And tell me about beacons for good. And then before that, tell me how you founded the company.

    Szymon Niemczura 22:47

    Yeah, this is pretty aligned with with sort of the beginning. So I was I was at a bank, and I was talking with my, with my business, business bank here. And, and he was he was just doing the regular stuff with with the account for us. And then he asked what we're doing. And I explained him that we're, we're a tech company was in the, in the previous company back then. And he asked me if I could, if I could advise him, like 15 minutes of my time on his project. So I said, Yeah, of course, no problem. He visited me in the office. And he said, Of course, he visited me with his friend who was blind. And they told me that they've been, you know, testing out different museums in Europe and in states, and the solutions for visually impaired, and they haven't found anything that works. All of the people that get the devices, they don't know, they can see, they have the interfaces, they can only use because they don't see them. So usually you end up with a device, and then you have a person that's going to guide you through. So it's ridiculous, and it doesn't work. So even so I was I was I was amazed that the sort of this this, this this project, it's affecting roughly 300 million people on this planet, who have some sort of either are visually impaired or have a severe visual disabilities. And, and I found this very attractive. At that point, I was already departing from my previous company. So I was like, Okay, this is an interview for a dentist that I really like it. There isn't much business to this, but I really like it from the social impact perspective. So I decided to go on that I invested together with my partner, we invested their own money into this. And we found out that the only device that they know that blind people know by heart is their smartphone. So we have to give the smartphone some sort of a context some sort of a navigation inside to deliver the audio description to deliver navigation in the objects in the in the building and how so we created the very first weekend. It was just the old Bluetooth device, sending out the data from the from the device, so not just broadcasting its MAC address, but also sending the data. And we realized that, okay, first, we have to take it to the cloud, assuming that the internet is everywhere, and we have GSM. And then second thing, we have to share this, because there's too many ways of using it, there's too many use cases that you can create with that. And we've been overwhelmed with that. So our hypothesis was, we can do more social impact, if we actually share it with with the world. And luckily, you know, we have created the very first prototype, we tested it out. And a couple months, two months later, we had Apple releasing iBeacon. So for us, it was like self self fulfilling prophecy, we were like, Okay, we definitely want to go that way. So reverse engineered that, put the beacon and we open it up for for pre orders. And then it blew up, we had orders from all over the globe, hundreds of orders in a very first month of operation with no marketing, absolutely no marketing, just couple of blog posts, or, or discussions on the web, about what we just launched. And, and that was the story. This is this is where we realized, Okay, the first month of operations, we're a global company, we have no deliver, we have to No, you know, scramble, and make sure that our customers get what they want. And now when I look back and the hypothesis of the social impact, this is what I see. I would say dozens of apps for visually impaired dozens of apps for accessibility that are out there that people use, and that we support, we support with our technology, but also we support them with our free hardware that we're giving out to them and to their organizations across the globe. So this is where the beacons for good. emerged, I thought, okay, let's now enable, enable everybody who has ideas or an accessibility, to stand on a contest where they actually not only get the free hardware, but they also elevate their businesses, they have to, you know, run those extra miles to show their app to show what they're doing. Then gain some, some, some, some PR against them, some surfacing on top of this. So yeah, that was that was pretty successful. And now we're continuing this and launching new editions of that. But we're constantly supporting different apps and different organizations across the planet.

    Steve Statler 27:36

    How much uptake Have you have from people who are applying for beacons for good grants to because I think it's 100 beacons that you offer, people that are successful? Have you had much interest? Because it seems like it's probably a very specialized niche market. So I'm not thinking you've had very large numbers, or maybe I'm not.

    Szymon Niemczura 27:59

    So it depends. Some of the projects are, there is a couple of projects, which are very large at scale, some of them one of them is actually blind square, which is an app that is developing across the planet. It has an open started center for beacons, we're supporting it heavily. And helping them and the beacons goes goes into hundreds. But on the other hand, you have those, you know, small projects, like a university solution, which all they need is 50 or 100 beacons, and they're all happy. And this is this is great. It's all that much that you need to make our local society happy and enable them with navigation and context. Wherever, when, when it's important. And on the other hand, you have, I would say a larger projects as well, that are about the infrastructure. So for example, putting weekends inside of bus stops, buses, and making use of this not only from business perspective, but also in the perspective for of accessibility, which we are supporting as well. So I think last week, I we shipped around 200 beacons to Australia to support a local community on a project like this, where they became nice, a part of town, just to just to test out this with with the local, non local but country association for visually impaired. So this is this is definitely growing and definitely going into somewhere.

    Steve Statler 29:29

    That's really encouraging. And I think it makes so much sense a because we want to feel good about the work we do. So I'm sure it's motivational for your staff to be part of a company that has a culture that has this aspect. But I actually think there's a hard nosed commercial justification for do doing this and I, I've put this to some of my clients. So I've been encouraging to get into this space. Because I think you know, beacon projects are hard and the ROI isn't Not gonna happen overnight. But I think people, if people can help 50 blind people navigate through their venue, they can declare victory, but a press release out there. And that hopefully gives them the political currency to then see the project through and get to a point where they can make money from that infrastructure, because infrastructure is, is really challenging to prove the value of it. And so doing some good and genuinely helping people, and being able to get some social currency from that should be part of anyone's business plan. So just just don't think about it in terms of doing good just help people claim the PR benefits. And that can be part of your survival strategy, so that you can also show an ROI for your organization. I don't know whether you think that's cynical, or but I feel like?

    Szymon Niemczura 30:49

    That's what I feel at the bottom of my heart as well. This is this is how it should be. I mean, the beauty about beacons is that they're not, they're not running out, if you're using them, you can just multiply and you can just share the infrastructure securely, for example, through contract is secure that anybody else I mean, or designated apps can use it. Apps, for example, blank people at no cost at security that they did is that your infrastructure is not being used, maliciously. So. So this is this can be done, we're encouraging our customers to do so. Later on. Of course, as the infrastructure majors, there's more infrastructure on the planet, we'll be encouraging them to donate their sort of access to the network for those visually impaired apps, of course, securely and fully with, with abilities to monitor that. But the thing is that you can do good and it doesn't cost a penny.

    Steve Statler 31:48

    That is a great point, I love the point you made about you don't you know, run out of packets from these beacons, it's I was sorry, all that the blind people used up the all the packets, we don't have any left. So that is wonderful. And just to kind of bring out this point that is implicit in what you said is, when you control access to the beacons, then you have the ability to say, Oh, I'm gonna give free access to blind square, but I'm going to charge Pepsi for access to these beacons because they're making a lot of money. So if so, that's the wonderful thing about what we call conditional access as part of a beacon network. And we're gonna get back to that, I think in a little bit. But I'm interested in just hearing a little bit more about Poland and what businesses like in in your part of the world these days. I had some experience with working with some really creative people in Poland. And it seems like, you've got a great education system. So you've got amazing human capital. But let's kind of stray into an area of controversy. What is your view of Brexit? What is your view? Do you think there's any, I'm just interested in what you think about what the British people have done and why they did it? And I am just to be honest, yeah, depressed about what.

    Szymon Niemczura 33:11

    Definitely looks different from from a European perspective, and from where you're sitting. But to be honest, I mean, of course, we can assume this, that Brexit will happen. I believe it will not happen.

    Steve Statler 33:25

    This is Britain leaving the European community for anyone that's been locked up in and not reading newspapers. But yeah.

    Szymon Niemczura 33:35

    I think a lot of will happen, because the next the next person who is going to take over the task of actually doing the Brexit, that's going to be difficult because he will be facing actually a failure right away. Because if he does the Brexit, Brexit, he will face the the economy downturn. So very difficult situation for the new person. I think the new person will be all about, hey, let's not do that. Because it's crazy. From the underside, what does it mean for us? I don't believe much because it only means a lot for for Britain, they will definitely feel that. It I think it's more about their sort of right now current social state than actually business state. It's not a business decision that they make, I think this is what we see in media. And this is what we see on the streets actually, which is not nice. I would say for contact by your doesn't mean a lot. It means maybe there'll be more talented people coming out in our direction back to Krakow back to Berlin where they can, where we can use their expertise, use their reach their skills, and take them on board. In terms of doing business with Britain, I don't think that would make any difference because in the short term, you can tune down the business and you can set up the policies but in the long term, which will do so, you did the you know, effects of that will Be will be terrible. So I think long term business always wins.

    Steve Statler 35:05

    Yeah, I think you're right. So what are the advantages and the disadvantages of running a business that's headquartered in Krakow, Poland, as opposed to San Jose, California?

    Szymon Niemczura 35:21

    Well, I guess the winter is better in California for sure. And, and other than that, it's really hard to get a Tesla around here. But no, seriously, it's, it's, I would say, talent for engineers, the tech people you can have here is a really good quality. It's a really open minded people who, who are right now opening up opening up for the, for the world for Europe for for for an entire planet. And this is where I believe the true strength strength of Poland is also this. Sort of you can see this across Europe, you know, entrepreneurs are becoming more brave. They they are more, they have more guts, and they're, they're just not afraid of starting things up. Where 1010 years ago, it wasn't that wasn't that pretty. So it's like when you mix up the intrapreneurship with right soil for talent. This is where it blows up. And I love it. So I would say yeah, tech talent, especially here in Poland, then you have to mix it up with business skills, either here or in places like they're there. And then then it takes off.

    Steve Statler 36:40

    So it sounds like entrepreneurship is on the rise. And you've always had a great as long as I've been aware had great education system, you got no shortage of smart people. What what is the typical weighted cost for an engineer in, in Krakow, Poland? Because because we're not I mean, I probably can't save the numbers from my old company. But I know that it's just amazingly expensive. People are so expensive. In California especially.

    Szymon Niemczura 37:09

    Yeah, yeah. So somebody in Krakow, Poland, in general, because it's pretty, pretty similar. We can, we can look at five to $8,000 a month, gross, gross costs of having an employee that technical engineer on board. So of course, from the I would say regular salaries ever salary. Now in the market of any jobs, it's pretty high. It's like two or three times big higher than their average salary on any other job. But, but from a point of point of view of Europe, so Western Europe, and also, of course, the states, this is this is this is much less than.

    Steve Statler 37:56

    And what about health care infrastructure? And that sort of thing? Is the universal health care? Or do you have to pay for the health care for your?

    Szymon Niemczura 38:04

    So there was a, there was a pretty good public healthcare, it's getting better and better. Of course, it's like, I don't know, a place on the earth, people don't. People are super happy about their system. But it's pretty okay, I would say. And then, of course, you have this whole private, private infrastructure, and you can use that, you know, companies like contact eo will provide that access to free medical, private medical care, but you have all the specialists within one day, you have, you know, dentists and everything, everything you can think of accessible, like a pretty, pretty good quality level. So universal health care doesn't necessarily mean you're preventing people getting the kind of the faster access and the private health care which in this country, when when the right wing people were trying to persuade us that we were better off with having lots of uninsured people that, that if we went the other way, then we didn't have to give, give away the opportunity to have the extra coverage. But I'm getting too political. Let me get back to business. And talk about contract manufacturing. So I was gonna looking at your staff and the 80 people, I love the fact that you've got pretty much everyone's photograph on the website. And so you change the names of what people do. So it's a little bit so I'm assuming you have a lot of people with the title of growth. And I'm assuming that means sales, is that right? Actually, no, the growth is about something else. So the sales team is the team that executes on on the selling strategy and the relationship building with customers. The goal theme is about, of course, many different things. But I would say in general, it's about finding out the future revenue, analyzing different opportunities in the market and the product on the server that you know, come competitor outlook. And also like making sure that we understand every single dollar that comes into contact IO, what's kind of values behind it? What sort of sort of, you know, values that customers are paying for? Are there and that dollar? What is the sort of a trend? What is the? Anything that attached to it?

    Steve Statler 40:23

    Yeah. Sounds like a mixture of strategy and business development functions, maybe. But as well, yes. So that was a very long way of me saying you don't have like 14 manufacturing people. So it seems like you, you use partners to actually do the physical manufacturing? Is that true?

    Szymon Niemczura 40:41

    So yeah, I'd contact as we, as we started, actually, we approach the whole manufacturing world with no knowledge about it, we went like we've been learning from from nothing. And for us, guys that come from software, it was like, Okay, this is insane, right? How do we make this happen? How do we produce this? How do we make the injection molds? Why did it why did why does it take three months to create a tooling for that? It's, it was it was a total total, totally different world for us. So we approach it also on from a different route. So now we have the centralized ordering. We have subcontracted factories, delivering on tiny tasks. And that's why we're able to have not only very high volume capacity, but also very high effects of scale on what we do. But to be Tu, Tu, Tu, Tu shock, you hear the assembly, the final assembly, when the beacons are programmed, they are put into the cloud, and they are given the security elements. It's all happening at our own facility. So we have just a couple of people doing this, this is a very effective process. But this is all in our hands, because every single beacon that contact IO manufacturers is, is sort of a different entity, a separate entity that has its representation in the cloud, and security credentials, and keys for the handshake. So it's, it's something that it's not just just it's not just a piece of hardware, it's already something that is an element of the system.

    Steve Statler 42:24

    That's interesting. So the risk of being insulting and let me Yes, the best way to put it is our beacons are commodity do, I'm sure you one of the things that you have to do or your sales teams have to do is convince people that they can't just make their own beacon. And I think some people feel like, Oh, I get these amazing modules from the chip, guys. I can just do it myself. What, of course, what's the first of all are beacons of commodity and let me just keep it sustained.

    Szymon Niemczura 43:02

    Definitely. beacons are becoming a commodity. And it's, I believe this is great because it means that this technology is actually you know, saturating the market, and it's going into direction that it's going to be everywhere. We're not there yet, of course, but then again, of course, a lot of people have their ideas of building their own beacons and doing this stuff themselves. Usually, they end up going back to us and doing this stuff with us. Because there's, there's this little thing about hardware, it's called scale. And something that you just cannot overcome. It's when you when you look at the prices of the modules and everything in there. At the at the beginning, you'll end up with $20 or $25 of cogs on a beacon. So like, this is not a sustainable and of course, the drain drags you away from doing your core business. So scale in the hardware business is king, actually. So you need to have scale and doing even if you are a big solution provider for a certain region, you will not get the scale of someone who is you know, servicing all the software providers on the planet. So that's, that's where it kicks in the hardware has to be scalable.

    Steve Statler 44:21

    So if I am a, like a Walmart, or even if I'm not a Walmart, if I'm a I'm a top 50 retailer, I may have the scale. But what I'm also hearing you say is Well, you may actually be able to get a good price on the cost of goods if you're buying hundreds of 1000s of beacons, but you still won't have a platform, you won't have the software development community around what you do.

    Szymon Niemczura 44:45

    And of course, you will lose all the time for development and all the time for tooling. You will have a lot of risks that goes with that. Right? So all in all, it's like it's like you decide whether you build your own servers and server house are you go with AWS? This is that simple. So it's like, yeah, you can have your own server house, you can have your own servers and everything set up by yourself. But well, this is not going to be easy and cheap, right?

    Steve Statler 45:16

    So are any of the really big venues, the big retailers trying to make their own beacons?

    Szymon Niemczura 45:22

    I've never heard about any of those doing that. I know that, for example, Facebook, have introduced their own beacon, which is pretty shocking for for the space, I believe. I don't know how he's doing. I haven't seen it in a field. Also the data on different apps, they're not showing it up. So hard to tell, what's the attraction there? But then again, for me, this is probably a waste of money. Yeah, interesting. So what's the difference? So buy your beacons from someone who's in the beacon business? Is one of the lessons from that? What is the difference between your beacons and anybody else's beacons if we take the community and the software stack 100 If we just kind of looking at the product level? Right, so so we know from the perspective of different sort of research, different tests that have been done is, one first thing is the stability of the signal, it's, it's pretty solid, and competitors, they have a hard time getting close to that. This is because our own proprietary design of the board, lots of testing lots of sort of iterating, on the design, on parts for the antenna, and all these elements. That's one thing. The other thing is the way how we built up the firmware. So it's very stable. It's, it's very flexible in terms of different configurations. And also, of course, something I believe with, it was also a strong factor is that our design for the rate for the regular smart beacon, is very, very discreet. And this is something that our customers were looking into, they wanted a discreet beacon on the wall or whatever that people don't see. So for example, funny story, of course, you can have them wide, so they do not visible on this on the wall. But for one of our customers in Switzerland, they had golden ceilings, so we had the beacons painted gold. So for them for the beacons to be discreet. Yeah, this is all about this technology. It has to be it has to be in the background. You can think about it and you should see it.

    Steve Statler 47:41

    That's really interesting. When when I was at Qualcomm when we shipped the first beacons to the Apple stores, and they had to be sprayed silver, because they had to blend in with with that. And so here's one of the people haven't seen. It is one of the the smart beacons, I guess, although this is the original version, what's changed with the new version?

    Szymon Niemczura 48:06

    This is, I have no idea which version you're holding, because they all have the same casing. But yeah, so there's a constant development and the firmware. So it means you know, better performance on the battery better performance and signal different features for broadcasting, for example, iBeacon and Eddystone. Together with the pocket interleaving. Of course, the new version has doubled the battery so it can hold for for at least five years on a regular configuration. So yeah, it's a constant development on both iterating the hardware and also enjoying the firmware, while the form factor stays pretty much the same. Okay, my favorite version of this that I've seen anywhere is the one with the London Underground logo on there. So I think you guys actually will ship with the customer's logo on is that is that table stakes? Now? Does everyone do that? Or is that a differentiator? So it was definitely something that our customers wanted at some point, because they wanted to showcase the technology to give this to people so they can touch it. So this is where the logo is important. And in some other minor cases where the logo is important to identify the tech easily. Like for example, the underground. So someone sees that and knows that this is this team, this belongs to the underground system. So it's not just something that that's that hasn't supposed to be there. But other than this No, I think they actually we sold a lot of these even without any any sort of logo on top because again, this Create Element.

    Steve Statler 49:48

    Well that's an interesting point actually reminds me of I was on a I was moderating a panel at the Bluetooth beacon SIG in London and one of the guys who was a beacon provider on the panel told a story about how They actually had a whole bunch of beacons shipped in some government building. And they'd been removed and detonated because people thought that they were this foreign electronic object. And so if you don't want your beacons, incinerated or blown up, then maybe you should put your logo on it. So what? Because you now actually have quite a broad range of products, and you're one of the first providers to offer a gateway, this cloud gateway product that can talk to the Wi Fi infrastructure and also monitor the other beacons is that how prominently is that used? Is that something? Are people using that technique? Or where does it fit in in terms of the product mix and the popularity of your different products, the cloud beacon.

    Szymon Niemczura 50:52

    So for the gateway gateway product, definitely, this is something that is used in narrow use cases, for monitoring of beacons. But there's definitely a main mainstream for for this device to pick up. The beacon signal beacons that are on things are on people, we can enable location tracking people tracking, use cases. So this is where the new generation will go. That's the direction where we want to take it. Because we found this to be a big problem of our customers. How do you actually track things? How do you attract people? So you need both software, and also the hardware to make it simple. So we're solving this with our last generation cloud Beacon, the new generation, the gateway?

    Steve Statler 51:44

    Okay? It's interesting. So we're kind of running out of time on fortune, I could go on for another hour, but you've got to get to bed. And we've got limited attention span from our audience. So let me wrap up with just a question about the number of beacons that you've shipped. And how many beacons Have you sold so far, roughly?

    Szymon Niemczura 52:04

    So we crossed the half a million mark. Yeah.

    Steve Statler 52:08

    Congratulations. That's, that's really significant. What is that is driving that other than making really good beacons and being a well run company? What are the use cases that are driving that? Because I've seen the the largest numbers I've seen in the beacon business are where people, you know, like tag beacons, where you there's a lot of beacons being sold for tagging keys that get lost, but I'm assuming your beacons are used for that. So this number is very significant. What what is it that is driving that volume of applications?

    Szymon Niemczura 52:44

    Yeah, so So that's a very good question. Right now, it's purely around navigation. So navigating at different places, but mainly airports, you can see a lot of our beacons on airports. If you download our our our contact your app, then you when you travel, you can clearly see that there are these the most of the airports, bigger airports are already delivered on contact I O beacons. For Yeah, mostly for for navigation, but also for some explorations around marketing communications. But then, then then it's about retail element where, you know, for example, Jamba Juice is delivering their campaigns together with Groupon. So these kinds of these kinds of solutions, where it's about sending the right message to the right person at the right time.

    Steve Statler 53:39

    So did you say that Jamba Juice and Groupon is using contact iBeacons? Or was that just a general example? That's That's the fact. Yeah. All right. Congratulations. That's pretty cool.

    Szymon Niemczura 53:50

    Thank you. So So, so these kinds of retail use cases where where do you have to meet the audience together with with the customer and then engage him? Sorry, yeah, with the customer. I mean, the retailer, right. So so this is so that that's something that was definitely driving a lot of the of the revenue and a lot of the beacon sales. We see right now the whole new world of industrial applications. So the industry 4.0 opening up for for this and finding beacons to be really, really, you know, usable to fix some of their problems around logistics around security, around tracking things and people are interesting. What about sports stadia and that sort of thing? I know the gimbal guys have really done an amazing job in the US, but my sense is that they don't do so much business outside of the US are you seeing use of your beacons and sports stadia is all that less of an important vertical for you? Yeah, there is. There's definitely interest there. And we did we did Some of the stuff in the US in the United States as well. But here in Europe also, stadiums are a really good example of, of monetizing the beacon infrastructure on many levels, because you can monetize that with with, I would say, the team mobile app, you can monetize that with other mobile apps, for example, like, like a brand app, like McDonald's or something like that. It can be it can be, it can use the infrastructure, to trigger messages and to drive the customers after the game after the match to the right place. So definitely, stadiums are really interesting sort of out of home spots where we're beacons can play a significant role. But I think still the biggest one that that will, that will be, I would say, obvious very soon, is the general out of home. So companies like JC to call, like Clear Channel, like straw are they all going to come out with beacons they all gonna come out with with stuff like that, for them, this means entering the digital world, with their with their physical ads, their physical, out of home media. So that's pretty exciting for me. And I'm looking forward to this to happen. And then how, how this will evolve into a shareable infrastructure that you have to manage and use as, as, as a medium, like any other like, like you would use your, your online space for advertising, back in the 90s.

    Steve Statler 56:32

    I think that's when this market really takes off. I was actually just, I was being interviewed before I was interviewing you, I was being interviewed by David Kaplan and geomarketing. I was promoting my book, which I guess I'm promoting that by mentioning that. But my view to him was this, the future of this ecosystem is when the beacon networks take off, you just basically, you can when it becomes as easy as a Facebook campaign to select your beacons and go for it, then then the friction will have disappeared. And you can get on your jet and fly over for the next interview. Because Because I think that's when things really will take off.

    Szymon Niemczura 57:13

    Yeah, exactly. And when you connect this with with physical web, when you connect this with, with progressive web apps, and sort of the direction that iOS and Android are taking into, you know, less apps, more, more stuff happening. This is where it's getting really exciting, because this is finally where technology is truly enabling you to do computing that you don't have to prompt computing that happens in the background for you to have I don't know is your life, right, for example. I promised to wrap up, so I'm going to try and do that. But I got to ask you a little bit about Eddystone. And what you're seeing in terms of traction for Eddystone e ID versus proprietary methods of controlling access to beacons when you see that guy and is, where is it today? And where do you think it's gonna go? So controlling the access to beacons is all about? Well, first securing it from piggybacking. But the other thing is making it shareable infrastructure among different peers, right? This is purely the motivation for companies like, like, like Google, to introduce e ID, they have humoral ID where you will technically secure the broadcast. Same thing that we're doing, we're doing this for both iBeacon and also Eddystone, where we provide the security for the broadcast for our customers, it's it's definitely something that it will be very important when the infrastructure is at scale. Something that can enable, for example, a free use of Beacon infrastructure for for accessibility, still not. Not, not not not, you know, opening it up. But on the other hand, this is something that I'm looking into, because you have iBeacon, and you have Eddystone on both ends. And for for anyone who's building an app, this is a problematic thing, because they have to account for both. And it's really, it's really hard to tackle this without having a company that will deliver it for you. So I think I think that we will see some sort of some sort of attack from from Apple answering this, this sort of a Google entrance and Google entry to the to the beacon space, because we've seen Apple to be very, actually positively shocked how iBeacon was accepted. Because you've seen with every single new version of iOS, we've seen more and more stuff around beacons more in depth in terms of, you know, putting this beacon into deeper elements of system, so definitely, definitely Apple will show something Interesting. And then companies like contract IO in means that, yeah, now we have to help our customers to make to max it out to, to use both technologies to the full extent.

    Steve Statler 1:00:13

    So it's apple and not going to let Google get away with a clean suite with your ad on everything. You think there's gonna be some healthy competition there.

    Szymon Niemczura 1:00:24

    Yeah, I'm pretty sure there's going to be competition because purely for Google, this is a big infrastructural game, where for them, you know, having information on all the infrastructure is super valuable. It's you can compare it to AdWords and AdSense to that to that level. So it's all about that. And I think Apple well, it lacks the advertising element, of course, but they know that this is, this is, this is something of value. So ideally, then they can work together, which would add space to share that information. So yeah, I think I think Apple will definitely pick it up. All right. Well, unfortunately, we've got to wrap it up. But I really, thank you so much for a really interesting conversation, great to get the chance to talk with you and meet with you in person, or remotely. And congratulations on breaking that half million barrier with the beacons and congratulations on what you're doing with beacons for good. That's an amazing venture that you have going there. And I think it's good for business as well as good for people. Thank you so much, Steve. Thank you for having me. And thank you guys on the other end, for listening this all the best.

    Steve Statler 1:01:41

    All right. Thanks very much for joining us for The Hitchhiker's Guide to the Becaosystem. Don't forget to check us out on iTunes, if you want to listen to the next episode or the past episodes, we appreciate your engagement, share it with your friends. One of the questions that is this is actually a homage to a radio BBC show called Desert Island Discs. But the question I was like to ask, and we tuck this in at the end of the show is about a imaginary trip to Mars, and the music that you would take what are the three tracks that you would take on your mission to Mars if you were the Martian? And and first of all, is this something that sounds like a nightmare to you a trip to Mars? Or is this something exciting that you'd like to do?

    Szymon Niemczura 1:02:48

    Well, it depends. Depends on how fast we travel. Although, should I say that? Because it's about my family guy. So that's super important for me if the trip is with my family, and I don't care. I can I can fly there forever. Yeah, I mean, that sounds exciting to some extent, but also sounds very, very alone. Yeah, so it's like we've seen it in a movie, right? Yeah. But the thing is that there has to be a really great reason to go there. Right, otherwise, no point.

    Steve Statler 1:03:24

    Well, let's say you We persuaded you to get on the on the spacecraft and you need you have a limited bandwidth to send you the music. So you just get three songs. What are the three songs that you would take? These don't need to be American or British songs.

    Szymon Niemczura 1:03:39

    A pretty good angle, I would just say there's only one in my head right now. And this is a song that it's very, very basic lyrics but down to down to earth and it's, it's Aviolation. Track is called Kill your Heroes.

    Steve Statler 1:03:56

    Kill your Heroes. That sounds scary.

    Szymon Niemczura 1:03:59

    It's really nice, because it's super simple. It's about meeting a dying guy on the train. And, and asking him for last advice. And advice is never never let your fear decide your faith. So it's, it's something that I truly find appealing. And something that motivates me like when I look at my sort of life and my my story, and I always find this like you just never fear. Just just go and do what you think it's right. And that's something defines your defines your life.

    Steve Statler 1:04:38

    Well, thank you for sharing that with us.