Candl Monthly Update – June 23rd 2017

 

Sneak peak at the upcoming investor presentation.


Asks For Help

Embedded Software Engineers – We are seeking introductions to embedded software engineers familiar with working low level software such as drivers, designing and recompiling kernels, firmware, and building boot loaders. We are seeking engineers who are willing to test the boundaries of what’s possible with Android and Linux devices. Experience working with and inside telecom stacks is a huge plus. Email me at tom@candl.com if any candidates come to mind.

Wireless Carrier Business Development – We’re also interested in meeting business development types with experience building relationships with domestic and international wireless carriers. Specifically we’re looking for someone who can help create, manage, and ultimately own the relationship with the supply-side of our marketplace – the wireless carriers. This would ideally be someone with a lot of wireless industry experience and relationships.

Successes

1. Our lead engineer David is healthy again!
Which means…forward progress on the engineering front! As I mentioned last month, our lead engineer David was ill for a little over two months. He’s about 80% recovered now and has made fantastic progress on the Android core SIM switching system. So far he’s only “bricked” two phones in the process (that he’s admitted to), but he has completed about 40% of the core development in just the last 4 weeks. We should have a demonstrable prototype of the carrier store switching SIM cards virtually by August.

2. We’ve learned that the domestic market for a carrier marketplace is far bigger than we thought.
As we think through our go-to-market strategy, starting in one country and growing internationally makes the most sense. Naturally we wondered whether US-based domestic pre-paid subscribers would be willing to give CANDL a go. We were somewhat surprised by the results – more than 60% of US-based smartphone users would consider using a mobile app to change their carrier if one existed. That’s 133M US-based mobile users.

3. We made some early progress on the user experience and branding.
While this wasn’t actually a core focus for us this month, we were introduced to a world-class head of design, Kent Oberheu. Kent has worked with David in the past and was available to help us with some tasks like redesigning our investor presentation. But Kent couldn’t stop himself from doing a little brand exploration, and we all fell in love with the direction he’s going. If we want to create a world-class experience, Kent would be the perfect person to do that.

Challenges

1. Fundraising timing
With David ill for so long, we lost a lot of time and momentum on the engineering side, which has really hurt our fundraising schedule. Our larger seed round raise will likely start up in September – after the patents are filed and the demo/prototype is complete.

Therefore, we’ve decided to raise an additional $250K of convertible debt.
($4M cap, 20% discount, 5% APR, 2-year term) This will allow us to increase our burn to $90K/month to bring in additional engineering, design, and carrier business development talent while still maintaining our 8 months of remaining runway.
If you’re interested in this round let me know.

2. How important is your mobile phone number?
If you’re over a certain age, say 30, a phone number may be part of your personal brand. Younger generations tend to care less about their number as their identities are wrapped up in over-the-top app screen names like Twitter, Instagram, and WhatsApp.

We’ve heard concerns – mostly from investors well over age 30 – about how swapping SIMs also means swapping phone numbers constantly. We’ve thought through this and are planning to implement a number forward solution such as  NumberBarn, Twilio, or Google Voice. But we need to do some market research on whether that should be a MVP feature or a roadmap feature. Our “sense” is this should be roadmap and we can charge extra for it, but it’s time for us to get real data on the topic instead of guessing.


 

Monthly Highlights

A Heavy Travel Month

The team racked up some frequent flyer miles this month. The plus side of a distributed/remote team is that we don’t have any office costs – we all mostly work from home and our working agreement is to meet in person at least once a month if not more. The downside is that the travel to work in person is absolutely necessary. Luckily we’re all comfortable with travel – especially to Boulder!

This month Kelly, David, and I spent 3 weeks in a row working together in St. Louis, Boulder/Denver, and San Francisco. And we got a TON accomplished in the process!

Friends, Mentors, Food, and Fun on the road.

We even got an opportunity to connect with our good friends at Stateless. They moved into their new office in Boulder which Natty (our Techstars MD) referred to as “a crappy view”.

The Stateless Team and their “crappy view”.

Refocusing on the Basics 

We’ve been trying hard to get used to working as a remote team. This is easier said than done, but we’re committed to making it work. So for that reason we asked Zach Nies to take us through a refresher on the basics of Kan-Ban, company communication cadence, and a few other tools we learned during Techstars. Zach is a zen-master of lean startup and helped us customize our company processes. Thank you Zach!!

Zach Nies taking CANDL through a lean startup refresher.

Real Progress in Engineering

Best of all we made real progress in our engineering efforts this month. With David fully on his feet and working at or near his best again, we were able to make great headway on the prototype and the intellectual property. It was fantastic spending time with David white-boarding and talking through all of the pieces to the carrier store puzzle.

A few of the dozen or so whiteboard sessions this month around the country.

Of course, this phase of development isn’t easy to share – the visual stuff comes later. David estimates that he’s about 40% complete with the hard part. If you’re interested, here’s a screen shot of a part of the virtual SIM assignment code David’s been working on.

40% of the way through the hard part.

 


 

Closing Thought: Our place in a huge industry. 

Knowing where we fit in. 

There are days when all of us at CANDL get overwhelmed by the sheer enormity of the industry we’re working hard to change forever. Many investors and advisors have cautioned us to consider carefully just how hard it will be to work against the inertia of such a powerful and change-averse ecosystem.

At my last startup, David and I worked together on building mobile apps and hardware for the US military. We were laughed out of I can’t count how many conference rooms by program managers, technical leads, security experts, and engineers. They told us smartphones would never be used by the military.

We knew they would, and we were the first ones to build custom apps for the US military. Unfortunately, bigger and better-funded companies reaped the benefits of our labor. We won a few contracts, but the big players took the lion share. And of course they built sub-par, crappy, convoluted piles of software compared to our sleek, clean, and modular solutions.

We are defining a new category. We know we won’t be the only ones to reap the benefits of this category. But much of the work we’re doing is in finding the right ways to connect the various parts of the ecosystem we see filling in over time.

Dozens of companies will build virtual SIM solutions. Hundreds of brands will want their own carrier stores. And CANDL will be there to build the middleware, white-labeled front-ends, and API hooks to new and exciting virtual SIM technologies.

We know where we belong in our ecosystem. We know we have to build the whole thing, teach everyone how it all works, and then make room for others – not competitors, per se, but companies that will naturally fall into the category we help create.

In an industry where hundreds of billions of dollars are in motion, even a fraction of that puts us in unicorn territory.

Cheers,
-tom