Hey everyone – Happy New Year!
I wanted to take some time to write up a letter published novel to you all to recap 2019, talk about our vision for 2020 and discuss a few upcoming events that we’re participating in.
Before I do so, I want to personally say thank you for all your continued support and for hanging in there with us as we grow. I know we’re not perfect, but I can promise we try our best to be as open and honest as we can with you all and while it may not always be the best news, everyone seems to have a positive attitude and that really means a lot. So, thank you all for being who you are and for continuing to work with us to make the smart home company we strive to be.
TLDR: 2019 was a rollercoaster, thanks for riding it with us. 2020 has a ton of potential that we’re capitalizing on and look for us at CES.
Overview (In case you don’t want to read a novel)
2019
2019 was a great year for us in terms of starting fresh with a new manufacturer, finding investors, putting out products that are next level, and building an incredible team.
It also came with a ton of opportunities to learn (or as in the corporate world, we used the fancy buzzword called, “Teachable Moments”) from many mistakes we made.
One of the biggest challenges we faced was major delays with our manufacturer. This caused a lot of cash burn due to no sales (as we had to cut ties with our old manufacturer and didn’t have anything to sell) up until around September.
Once products launched, it was such an incredible feeling. Seeing something come to life that you’ve designed, thought about, and stressed over, finally coming to fruition is pretty amazing.
But all is not always rainbows and butterflies here at Inovelli. We definitely experience the same issues as many other companies and turnover is one of them and unfortunately, we lost a couple really good employees around the same time that left a fairly large gap in experience. To be blunt, I (Eric H) had to pull out of my bread and butter (marketing) and learn all about finance (still a work in progress). This is honestly, why we’ve been MIA lately.
2020
Alright, so what’s in store for 2020? Excellent question. For one, we’ll be at CES showing off our line of switches (including Fan and Fan/Light) as well as introducing a separate line of products catered towards ZigBee as we’ll be entering that market as well due to the news of Apple/Google/Amazon moving that direction. It’s been something we’ve been considering for a while (having a secondary lineup) but with this announcement, we really needed to pull the trigger.
We’ll also be launching some really innovative products that will fill a lot of the voids in the Z-Wave/HA market such as a Fan/Light combo and remotes (to start).
Part 1 - 2019 Recap
What a rollercoaster ride. But, I guess that’s business in general!
Chapter 1 - Ramen Noodles
Transitioning from an old manufacturer to a new one was a much larger feat than we thought and caused a ton of heart-burn both from a forecasting perspective and also just a learning curve perspective (new team, new ways of doing things, etc). The unfortunate thing about our old manufacturer is that it was an immediate transition as things went south extremely fast, leaving us out of stock for quite some time and all of our firmware we worked hard on was left with them (big lesson learned here).
At the same time, we were looking at securing Series A funding as we were growing extremely fast. Problem was that with the manufacturer issues, being out of stock, etc, it was extremely difficult to find an investor who wanted to take on the risk. But, we kept trying as we believed in ourselves, our support (you), and what the future could bring.
Keep in mind, there were four of us working here, with only two of us full time… yeah, nothing but Ramen Noodles and Potatoes for dinner for me!
Luckily, through one of the weirdest interactions in my life, we met a couple local Angel Investors that believed in us enough to invest in us around February. This is a story for another day, but I’ll throw in a teaser… the check was written on a paper bag. Yes… a flipping paper bag. Imagine yourself walking into a bank to cash a large check that’s written on a torn paper bag. I thought for sure I’d be arrested, but miraculously, it went through. And no, I realize we’re from Michigan and are a little weird when it gets cold out, but this is not the norm lol.
Chapter 2 - Pre-Orders (Please Put the Pitchforks Away)
We started Pre-Orders in February with the intentions of having them out by May. Believe it or not this was with a one month buffer in case the manufacturer couldn’t deliver on time. We were promised that switches could be delivered in 3 months as it should be a fairly simple project and they’ve been able to make a keypad for one of the largest IOT companies in 3.5mo.
Well, we all know how this plays out… we finally launched these in early November! So embarrassing.
The learning experience for us was that this was a completely different business model than we were used to. In the past, we simply took, “white label” products (products that were already developed) and we simply put our logo and custom firmware on it. This allowed them to be launched extremely fast. Whereas these products we decided to build from scratch. We tried as best as we could to incorporate all the scenarios into a switch (neutral/non-neutral, 3-way w/dumb switch and aux switch, and insane firmware) which caused a ton of delays.
Chapter 3 - Hiring For Forecasted Demand vs Hiring For Actual Demand
This was another learning experience and quite frankly sucked. One of the biggest mistakes we made was hiring for forecasted demand vs actual demand.
What I mean by this is since we were promised products by May, we hired staff to help us support the upcoming sales. Well, with the delays, delays, and more delays, cash burn, cash burn and more cash burn (with no sales coming in due to no products), you can do the math as to what happened. Not good.
Chapter 4 - Products Arrive!
Alright, so we’ve moved past the crappy part of the year and finally got our On/Off switches out, which was super exciting (no more “vaporware” comments from the peanut gallery). Next came the Dimmers, which really was a huge relief to finally get those pre-orders out and that chapter closed.
In addition, we made the decision to launch a few more products that were white-label so we could get additional SKU’s out that aligned with our vision of an entire ecosystem by end of 2020. So, in came bulbs (which a ton of larger B2B companies requested) with a multi-sensor in the mix.
Things are starting to turn around and we’re back! Ready to take on Q4…
Or were we?
Chapter 5 - Road-bumps and Growing Pains
Around November / December time-frame, we started to experience some growing pains as well as some turnover in the company with a couple key members taking roles outside of Inovelli. This left a pretty significant hole in headcount as we’re really only a 6 person team.
However, both have been gracious enough to help us through the first couple weeks of January.
The ramifications of this has been that I (Eric H) have had to learn my least favorite subject in business… finance and my second least favorite subject… operations in a short period of time. The great part about our team, however, is that we’ve all stepped up into areas that we don’t necessarily know much about, but are willing to learn and I think this whole ordeal has made us stronger and more organized moving forward.
More on that below.
Part 2 - What’s to Come in 2020
I feel like I do have to put a disclaimer here in that these are our plans, but if it’s anything like 2019, they’re subject to change 
Chapter 6 - Level 10 Wizard has Arrived Full Time & CS Update
The time has finally come where @EricM_Inovelli has joined the team full time and quite frankly, I feel as excited as @Courtney_Inovelli & @Brianna_Inovelli do when talking about the cute guy downstairs 
!
Not many people know this, but Eric M. has been working part time with us (although I’d argue it’s full time with part time pay) for just about as long as the company has existed. He bailed me out when I was running this solo when SmartThings broke some code in one of their notorious hub updates rendering our 2-Channel plug useless.
Not to bro it up any more but, it’s been awesome having Eric helping out and really crushing it from a device handler/driver, working with our manufacturer(s) on firmware and helping with 1000’s of tickets over the past 2.5yrs. Looking forward to having him on full time to really lead the integrations between all the hubs, work on firmware and help with strategic partnerships… oh, and help in the forums lol.
From a Customer Service standpoint, believe it or not, it was a free-for-all in 2019 in that we had a lead, but we’d also all pitch in when we could. The other issue was that we found that we were hiring great CS reps with the hopes of training them on the technical side, but these are some insane switches and the technology behind them requires some in depth knowledge.
So, we made a change in 2020. We’ve hired @anon64478871 who has a background in smart home tech and is very familiar with Hubitat and ST (in fact, he’s written code for Hubitat) and has worked with us (Eric M. and I) for some time. In addition Eric M. and myself will also be able to help with the technical side. We’ve also hired another rep to help us with the basic questions (ie: where’s my order, returns, etc), so I think we’ve finally got a hold on CS.
Chapter 7 - The Future
Ok, so where are we going? Without going into to much boring detail, we’re going to start branching out and exploring ZigBee in addition to Z-Wave. Z-Wave will always be our bread and butter and we will continue to innovate there, however, we also realize this is a niche market at this point and need to start speaking to mass market via ZigBee. Fact is ZigBee speaks to the Philips, Amazon, Google, and Apple users, which make up a ton of the market. Many people enter the market via Amazon or Google and unfortunately, Z-Wave isn’t in the consideration set, nor is buying a hub. So, we need to make something that integrates seamlessly into Amazon/Google in order to hit this market segment. Hopefully, some of these users will realize that if they want a truly smart house, they can upgrade to Z-Wave and stay within the brand.
More to come here, but picture two pillars in 2020 – Z-Wave, which targets the, “Power Users” and also the security companies, whereas ZigBee which targets the mass market segment.
Either way, we’re super pumped and look forward to the challenges.
Any questions, I’m happy to answer!
Eric
Founder/CEO | Inovelli