At the end of last year, Latvian online media featured a news item about some Finns who, together with a Latvian, have invented the world’s first throwable microphone «Catchbox». Miķelis Studers, the only Latvian engineer in the team, was ready to tell us about developing «Catchbox», its business strategy, as well as main influences that encouraged the project.
Everything began with a wish to study
Miķelis arrived in Finland four years ago when he began his Masters program in Communication Engineering at the Helsinki University of Technology, which later became an Aalto University department. Before that, Miķelis received a bachelor’s degree from the Faculty of Electronics and Telecommunication at the Riga Technical University. The decision to study in Helsinki’s Aalto University was influenced by teachers at the RTU, who recommended the school, and the prominence of the Finnish brand «Nokia». It convinced him that in Finland the field of technology is very advanced and the environment encourages development of personal ideas and projects. Miķelis adds that both in Finland as well as in Sweden industries where such skills have a high demand are highly developed, thus playing an important role in Nordic economy and people’s lifestyle.
Microphone in a cube
«Catchbox» is a microphone built into a cube of fabric, which allows it to be safely tossed from one speaker to the next. Miķelis tells that the idea was born when attending lectures and seminars at the university and seeing how awkward and slow passing of a microphone from one speaker to the next is: «We believe that such an element of play will ease up usually reserved audiences at seminars or conferences.»
Technically, «Catchbox» consists of a wireless microphone and a sensor that switches it off while it is in mid–flight between two speakers, so that when it lands it wouldn’t transmit the noise. Because «Catchbox» casing is soft, the device will not be damaged if someone doesn’t catch it. The cube is available in different vivid colours, which makes it easily noticeable.
The microphone can be used in recording sessions or for «Skype» — it can be useful for companies during teleconferencing. Now the available model is adapted for audiences of a hundred people, and it works within 30 metres from a receiver, which comes within the set.
Preconditions for developing «Catchbox»
The main reason behind creating «Catchbox» was the beginning of a start–up culture in Helsinki and especially in Aalto University. It coincided with Miķelis’s arriving there. Having had already thought about establishing his own company, he began attending start–up events in Helsinki organized by Aalto Entrepreneurship Society, like «Pitch your idea», where each event hosts 10 projects, which is followed by sharing a pizza and socializing.
Another factor mentioned by Miķelis is that these events were hosted in English — involvement of professionals from different cultures encouraged exchange on an international scale. It wouldn’t be possible to realize majority of ideas if presentations and talks were held in Finnish.
«It was a conscious decision by organizers of the event — to establish an environment for everyone, because ideas are not born in Finland alone. It’s not a coincidence that in the «Catchbox» team there is a Latvian and two Finns,» thinks Miķelis.
An important role in creating «Catchbox» was played by other Finnish industries, which helped to build the first prototype. For a long–term development, it was necessary to find partners who could provide sawing, printing, casting, and electronic manufacturing services. Finland has companies from all these industries; they compete, and that encourages high quality. It was possible to visit all plants and consult professionals about the best solution for each part of the product.
Team first, then idea
People involved in the «Catchbox» project are Timo Kauppila, who is responsible for business development, an industrial designer Pyry Taanila, and Miķelis Studers, an electronics engineer. The interdisciplinary team met at Aalto University’s «Design Factory» product development course. «Design Factory» offers tuition, office space and technical support for students and researchers from Aalto University who want to lead their project from an idea to realization and who look for colleagues, know–how and space for work.
Then followed participation in «Summer of Startups» acceleration program in the summer of 2012. After a selection process, «Catchbox» received 5,000 Euros for building the first prototype and developing a business framework. The project regulation allowed the funding to be used for salaries, which is useful for those who work in programming, but the «Catchbox» team invested the money in developing a functioning product. The «Summer of Startups» program lasted for 2 months, and included lectures, tuition, workshops, and meetings, during which field professionals helped the participants with establishing a successful enterprise. In 2012, ten teams took part in the program, with three or four still remaining. After the program ends, everyone makes a decision whether to register a company or dedicate efforts to something else. Miķelis concludes:
«The only thing which actually determines whether you get into «Summer of Startups» is the team. Not the idea. Of course, an idea about a product or a service is important initially, but what one should take into account that in young enterprises ideas are often changed after they have been tested outside the circle of friends and with real clients.»
«Catchbox» has received funding from the Finnish government, which has been invested in the development of the company and patenting the product in Europe and the USA. In Finland, there is a grant system beneficial to new companies, which, unlike with private investors, doesn’t mean giving away a share of the company or profit. Companies registered in Finland are supported because they expand the country’s economy by paying taxes.
The main steps in the process of developing «Catchbox»:
- Applying for «Summer of Startups» selection process, the idea, and the first prototype;
- Participating in «Summer of Startups» — further development of the prototype, building a business concept, creating product design and technology, creating a name and a logo, establishing partnership with others;
- Official registration of the company;
- Product development, business management, fundraising, initiating a patenting process;
- Creating a demo video and a website; product lending; developing of presales campaign; fundraising; developing of mass production.
Profit from the prototype
Their business strategy is not waiting for the moment when a microphone actually goes on sale — both these and other devices are already being rented out for events. «Catchbox» offers for rent models with improved technical solutions — such that are adapted for use with audiences of up to 1,000 people. Miķelis confirms that what is rented are the prototypes — if they were sold now, the company would earn less from sales rather than from renting. Thus, they not only get extra resources to invest in the business development but also can evaluate and stimulate users’ interest in the product. In future, they plan to make different changeable microphone casings available for purchase.
«All the parallel ideas were born during the development phase of the «Catchbox» prototype. It must be said that a business idea cannot be born without a prototype, developing which means understanding what of all of it can actually be sold,» Miķelis explains.
It was clear right from the beginning that what would be needed was a product’s demo video, a website, and publicity materials for media. Developing each point demanded a lot of effort and means, that is why Miķelis suggests taking one’s time: «Before there is confidence in the product’s final stage, and prototypes are ready for mass manufacture, marketing or other communication activities are not a priority, since there’s a chance that the product will change during the development, or it will take more time than intended.»
At the moment, «Catchbox» is available for preorder on the internet. The microphones will be available in June, 2014.
Most of «Catchbox’s» clients are from the USA, Finland, England, and Germany. They are planning to open company branches and search for dealers in these countries. Although there has been an idea of developing the product in Latvia, the fact that the company is based in Finland has raised questions whether even the small distance could become an obstacle for an effective work process. The guys have come to a conclusion: «Partners should be available for reach within an hour’s drive. It must be the case if you want to develop products really quickly and effectively. Of course, making the microphone in Finland costs more, but if one takes into account time that would be spent on developing a prototype in another country, it would turn out to be the same. Miķelis adds, though, that the moment there is a chance to optimize the product’s manufacturing and transportation costs, «Catchbox» would rather have the sawing and printing works be done in the Baltic countries.