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Bootstrapping an IoT Company from North Carolina: Bob Witter, CEO of Device Solutions (Part 4)

Posted on Monday, Feb 29th 2016

Sramana Mitra: What does it mean when you say they distribute? Do they distribute your component or do they distribute the fully-integrated solution of these gas cylinders that have self-monitoring and  self-updating capacity?

Bob Witter: When we started, we were only a device provider. We helped them find the resources to build out the solution and that was the backend. They already had some sensor devices that they were using. We helped them find some sources to build their own. At that point in time, we were just supplying devices.

Today, we have moved to a model where we provide the whole ecosystem. We are in discussions with them so they don’t have to worry about things like subscription activations and support. We are giving them the opportunity to make us the scapegoat if something goes wrong. We are trying to go back and talk to some of our customers who, in the past, thought of us as an equipment provider, and pull them into the family for the whole ecosystem.Sramana Mitra: How big is your gas monitoring business?

Bob Witter: There are about 2,000 to 3,000 monitoring units in the United States. This year, we expect to move that into both Canada and Mexico. We’ve had some difficulty in doing that because it’s all based on Verizon technology. They don’t operate in Canada and Mexico. We have to deploy another technology for Wright Brothers to move them into Canada and Mexico.

Sramana Mitra: In dollar terms, how big is this business? In percentage of revenue terms, how big is the gas business for you?

Bob Witter: It’s very small today. In fact, they are our largest customer. The other ones are fairly small at this point in time. We believe that this year will be a huge turning point where that revenue is going to increase significantly and become a lot more of our revenue. Today, it’s well under 10% of our revenue.

Sramana Mitra: Where do you see it going to? If your projections for 2016 lines up, what percentage of your revenue will be coming from this IoT gas business?

Bob Witter: We believe that it will be well over 25% this year and approaching 50% of our revenue by the end of 2017.

Sramana Mitra: Wow! So this is a major bet for you.

Bob Witter: It is. We think the time is right.

Sramana Mitra: Is there any other significant strategic bets like this or is this the only bet for the company?

Bob Witter: This is the biggest bet for the company. We have some other opportunities that we have invested in. From the start, we’ve worked with startups and we really like working with startups. We remember our roots and how hard it was to get started. Every once in a while, a startup will come to us with a very good idea.

Typically if it helps people, we’re suckers for that. We have to sweat equity and invest in some of these projects. We have three of them out there now. One of them launched a few months ago. They help kids with autism or ADHD to pay attention in classrooms. We have some pet projects like that. We don’t know where they’ll go but they could certainly turn into something big for us.

This segment is part 4 in the series : Bootstrapping an IoT Company from North Carolina: Bob Witter, CEO of Device Solutions
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