Podcasts > Operations > Ep. 077 - Hard tech accelerators for manufacturing hardware innovations
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Ep. 077
Hard tech accelerators for manufacturing hardware innovations
Thierry van Landegem, Executive Director, mHub Chicago.
Friday, December 11, 2020

In this episode, we discuss a hard tech startup’s journey from customer development to product design and prototyping to business viability and sustainable market growth.

Thierry van Landegem is Executive Director at mHUb Chicago. mHUB's mission is to develop an entrepreneurial ecosystem around physical product development and manufacturing, and to accelerate industry growth by cultivating a community of collaboration between entrepreneurs, innovators and manufacturers. mHUB is a mission-driven 501 (c) 3 organization designed to support the future economy through the fostering of ideas into sustainable businesses and development of talent. As a leading physical product and manufacturing innovation center in the U.S., mHUB is dedicated to supporting startups and businesses by creating the conditions for product innovation to thrive. mhubchicago.com mhubaccelerator.com


Contact Thierry:






Erik: Welcome to the Industrial IoT Spotlight, your number one spot for insight from industrial IoT thought leaders who are transforming businesses today with your host, Erik Walenza.

Welcome back to the Industrial IoT Spotlight podcast. I'm your host, Erik Walenza, CEO of IoT ONE. And our guest today is Thierry van Langdegem, executive director of accelerator at mHub. mHub provides infrastructure, mentorship, and access to manufacturing industry insiders. To help early stage innovators go from prototype to product to sustainable business. In this talk, we discussed mHub is newly launched accelerator for fast tracking hard tech startups. We also explored the journey from customer development to product design and prototyping, to business viability that a hard tech startup must navigate in order to reach the market.

If you find these conversations valuable, please leave us a comment and a five-star review. And if you'd like to share your company's story or recommend a speaker, please email us at team@IoTone.com. Thank you. Thierry, thank you so much for joining us today.

Thierry: Well, thanks for having me, Erik.

Erik: One of our partners here in China is running an organization that is not doing the same thing as you, but it's basically a factory as a service. So, different business model, but still coming from this perspective of having an industrial environment that is basically server-ties to service a lot of companies. But before we go there, you know, I'd love to learn a little bit more around your background and how you ended up at mHub.

So you have a very interesting background. You have f risen to Vice President of Research and Innovation and CTO of Alcatel in Belgium in France. So, very deep research focus in the telecommunication space. And then you held a number of positions with GreenTouch and MTI² and then eventually ending up at MLAB. Can you just take a couple minutes to walk us through a little bit? How you ended up at this very unique company mHub in Chicago now?

Thierry: I have to tell you that innovation is really in my DNA, and especially when it comes to creating new businesses, or when it comes to creating new products or services. And as you mentioned, I started off my career as a researcher in the telecom space which is fascinating, actually. But soon, when you do research, you want to almost valorize it into a product or a service. So I moved from research to product development to product management, and eventually launched and led a product business unit at the company. And that was a fascinating journey from research to product market lounge.

And of course, the time came and to say, well, what's next? And when I was working at the telecom sector, it was the time, the end of the 90s, early 2000s, where there was a lot of turbulence. You have the upcoming of the internet, there was the income of media. So that whole industry was really being disrupted. And therefore we had to look for new opportunities.

And when you look for new opportunities, new products or services, new business in a corporation, it's pretty difficult. As soon as you go a bit further than what is purely cool business and you're looking to adjacencies, you have to tackle policies and procedures, and so forth. So, because I wanted to move fast, we had to set up what we call that a time, a venture organization within the corporation, which was really like faking startup behavior within a corporation. And so I did that. And we launched quite a couple of new ventures within the corporation attacking new services and new products which was great.

Once you get that type of flavor of doing a bit more than what was typically usual within cooperation, you say it's not enough, because you still don't act really as a starting up business. So that's where I decided actually to put one foot outside of the corporate environment, with one still inside because that gives you somewhat more flexibility. And then later on, I even put both feet outside in another corporation, by the way.

In the meantime, but where I could really do what we call company building, it was almost like a startup studio, which is like incubating new projects, and then really launching startups. So you see that I got this evolution from purely corporate to non-corporate to startups and startup environment.

I also moved in this journey from my early on telecommunications industry towards more IT, towards automotive mobility than manufacturing and now manufacturing again. And I think the reason for the journey is to what I said previously, remember, the telecom has gone through a huge disruption because of the internet because of media and so forth, so the key trend was there, the use of digital technologies. And what I've seen is almost the proliferation of ICT information and communication technologies, those digital technologies in every single industry. And that's why I think after telecom, and IT, I moved to automotive because digital technologies came prevalent there and were disrupting, and are still disrupting the automotive industry.

Think about things like shared mobility with Uber and Lyft, but also think about the connected car. Think about the electrification of cars. So, a lot of disruption taking place there. And then what you see now happening in the manufacturing industry is exactly the same. We have been talking for industry for the zero, the introduction of IoT, Internet of Things, technologies for a decade, and things are happening there. And it is because we bring in these digital technologies that we create not only disruption, but that also opportunities in order to be better in terms of operating manufacturing plants, but also opportunities to build new products and service.

So you'll see these constants throughout the career of building new products and services or rethinking the business and I've done this in multiple industries. Because basically, it's always the same very similar types of journeys that the industry goes through. And so I ended up at mHub, which is really focusing on manufacturing, and also helping the industry at large in order to rethink what manufacturing can be.

Erik: But your background then in innovation at Alcatel, and at MLAB, at GreenTouch, was it primarily in the software-oriented innovation or hardware? Or were you kind of an early mover in the interface of industrial hardware and software? Are there particular technology domains that resonate throughout your movement across obviously, ITC, but that's a fairly large domain?

Thierry: Actually, I started more on the hardware side initially, when working in in telecom, thinking of designs of chips and the like working on that, but moved fastly towards software and implemented some software as well. But which make me find that important in these evolutions is the whole system point of view. And that's where I believe I'm the strongest. It's at the system level knowing what hardware can do or cannot do as well as what software can and cannot do. So this means thinking and talking about what functionality do you keep in software, what functionality do you put in hardware in order to accelerate whatever needs to be done fastly.

But that system point of view and an architecture point of view, knowing both these heart and software bays is what has driven me throughout each of these different industries. And I see over and over initially globally that system perspective where you build architectures that are I always call it Lego block, like where you have these basic building blocks with which you can start to build whatever you need. Don't reinvent the wheel when there is no necessity, reuse these box in order to build whatever solution you need to build in order to solve a problem.

And of course, just reusing these building blocks won't be sufficient. In some cases, you will still need to do your secret sauce in software or even a hardware. And that has been a constant throughout the journey early on to still today.

Erik: This is certainly sometimes people discuss it as if it was the technology, maybe a connectivity technology or something, but certainly, it's a system with fairly deep tech stack. Let's get into a little bit of the business behind mHub. And of course, you're at mHub heading the industrial IoT accelerator. But maybe before we get into the details of the accelerator itself, what is the founding premise behind mHub? And who would be the typical stakeholders that would be involved there either as partners, as customers?

Thierry: So mHub is a Chicago-based hard tech innovation center. And I mentioned hard tech, because actually, it sounds a bit more sexy than just hardware. And it relates back to our previous point on the system aspects. We've seen over and over that, yes, there is hardware, and we will still need to have hardware. But hardware comes with software. And oftentimes, when you look at it from a business model perspective, it also comes with service attached to it. So that's the reason why we call it hard tech.

So it's a hard tech innovation center, focusing on that hardware development and manufacturing. And why is that the focus? Well, four or so years ago, the founders basically were seeing that there was a strong need for support in the broader hardware development space as well manufacturing space. Because, as you know, Chicago is the heartland of manufacturing, but what they saw as well is that there was a lack of support of new initiatives, new startups in that space. And why is that?

Because typically, hard tech, it's not more difficult or easier than soft tech startups, but it just takes more time in order to prototype a hard tech, and it is much more capital intensive. And to the latter point, mHub, a huge facility actually of more than 60,000 square feet has enormously fantastic state of the art prototyping facility. Whatever material you want to use within your prototype, you have it there: metal handling, cold or warm, chemicals, plastics, 3D printers of all sorts and sizes, an electric lab, you name it, even a micro factory for small batches of early production volumes, especially important for startups.

Because typically a hard tech startups and I've been talking to them for a long time, they face the challenge moreso than a soft tech startup of I need to build a prototype. Where can I do that? And there are very few places almost like on Earth, and especially in the US, very few places where you can find a comprehensive set of machinery equipment that allows you to build those prototypes. Typically, startups tell me, we go at some specific dedicated lab in one of the materials or we go, for example, towards China, or Asia.

So having that prototyping facility was a key attractor. And in the three, four years of existence of mHub, we have been able to attract almost 300 hard tech startups, which jointly launched almost 1,000 new hard tech products. So very successful and successful because not only there was this prototyping facility, but also the various stakeholders involved in this ecosystem were also corporate partners, manufacturers.

I mentioned Chicago, heartland of manufacturing, a lot of manufacturers are based out of there; not only big ones, but also small and medium sized manufacturers. They were one of the driving forces also behind the setup of mHub. Contemplating the fact that yes, they are great at what they do as a manufacturer, optimizing to the point while they were doing, but also seeing that there was like a miss in terms of new innovations, and they also wanted to set up something similar to what I would say Silicon Valley is for startups in the software service space.

Look at FinTech, financial innovation in the New York area, they wanted to do something similar in the Chicago area. That's one of the key stakeholders, these corporate partners. And actually, some of these corporate partners work together with these startups. So it was helping this ecosystem to thrive based on that prototyping facility.

And then also, the mentor network. Corporate partners were obviously some mentors and coaches, but also mentors from the more investment community from the local university community and the like. So all of that made that not only could we help hard tech startups with the prototyping, but also starting up and building that business actually, because as a startup, you need to know how to address the market, how to go to market, maybe what the business model is, you're going to use and so forth.

So all of that was basically the success of what mHub was, and which was really also the driver as to think through by the founders they’re hey, we are very successful in what we are doing, but a lot of it was. Ad hoc startups became members of mHub. They were using the prototyping facilities. They were using the co-working space. And they got ad hoc supports in terms of building that business. So there came the idea is like, hey, instead of doing all that ad hoc, we could also think about doing it a bit more structured. And that's where the idea of an accelerator really originated to set up a more structured program.

Erik: So you started as a hardware platform providing this shared assets that people can use to prototype and then it sounds like you've built a very dynamic community of mentors and partner organizations around that who provide technical expertise, business expertise, market opportunities, and so forth.

So I mentioned at the start that there's a partner of ours called Startup Factory, it's a little bit similar. So they're servicing primarily European, mid-sized companies. So these are called hidden champions, maybe they have between 50 million USD to 2 billion USD of revenue. And they are hosting their manufacturing facilities in China, because these companies, on the one hand, they want to have a production footprint, but they don't want to have the overhead of managing their own factory here and having a general manager and IT departments and etc.

So they have about 50 companies, about 40,000 square meters of factory space. And they basically act as the General Manager of these 50 companies production footprint in China. And then the company, they define how things will be built, and they manage their sales in China. And then on top of that, we're working with them to build the ecosystem. But I think we're still more catering to multinationals who then want to demonstrate new technologies.

And I really like your approach, because, of course, the companies that we're dealing with, they have their own sets of needs. But I feel like the pain point that you're addressing might be a bit sharper than the one that we're addressing. Because startups, especially in the US, the manufacturing sector has been a bit a bit depressed these past couple of decades. And so the ability to actually bring a product to market, hardware product has been reduced.

We can maybe go now into the accelerator a little bit because it sounds like that might be the next stage in mHubs development. For the accelerator, I suppose you're then taking equity stakes in the companies, is that the case?

Thierry: And yes, it's similar, but it's different. I would say, based on what I just told you in terms of mHub building the ecosystem, attracting so many great hard tech startups and helping them through the prototyping but also starting up and scaling up their businesses in an ad hoc fashion, it was clear to the founders that maybe there is a need for a more structured approach because then you can accelerate “things”.

And the reason is many fold. One is the one that I just mentioned. If you look at startup scene, I would say globally, but especially also in the US, startups, they need that support, in terms of prototyping, business building, and so forth. So there are these incubators, accelerators, company builders. You have various names for these organizations. But often times they are focused almost solely on software and services startup. So there is only a few that are focused on hard tech.

And mHub is really unique because the accelerator we build is full solely focused on hard tech. So that's a first big differentiator. So if you want to apply to the accelerator, you better be a hard tech company. And a hard tech startup is really building something hard, a piece of hardware device plus then the software and the services.

The second really important thing that we have witnessed and that startups keep on telling me is that if you're a startup, you want to raise funds. And what they tell me is that there is a huge discrepancy. And I've seen some statistics that there is a discrepancy of a factor of 15:1. $15 go to soft startups and only $1 goes to heart tech startups in that field of pre-series A investment. Think about pre-seed and seed money.

So 15:1, that's gigantic. And that's the reason why when we set up the accelerator, we also set up a fund, the Product Impact Fund of $15 million that is solely focused on early stage hard tech funding, which is phenomenal, because that's where the need is, the pain point is for the startups. And that fund will invest in all the startups of each cohort of the accelerator, because the accelerator will work in terms of cohorts.

And the first cohort is industrial IoT smart manufacturing. We have other cohorts coming up later. Think about medical devices, or smart mobility, etc. So the fund will fund all the 10 startups in this cohort, but also earmark some money for follow up investments. So assume after the accelerator journey, that there is one or two whatever startups that have proven a great business opportunity that demonstrated the product that have also shown traction in the market, I mean, this could be the next $100 million startup. And therefore, we earmarked in defense of money for follow up investment. So that's the second item, which is really unique as well fully focused on that early stage hard tech.

And then the third item I would love to add to that is we also work with corporate partners, with corporations. And of course, because the focus of each cohort is different, we will have different corporate partners per cohort. And this first cohort since it’s industrial IoT, our two corporate partners are Panduit and Adnet, and they will help and support the startups in this cohort.

And what does it mean helping and support? Well, obviously, I call it open doors to their customers, because their customers might be the first clients of one of the startups, or maybe even bandwidth and everything might be a customer of the startups themselves. And that's what we have seen in the past as well. Several of our hard tech startups at mHub in the past have used the corporate partner as a client or got their first client through the corporate part.

So the corporate partners will help and support the startups in the accelerator. And they also committed money to the tune of, for both of them together, $230,000 that they committed to invest that in one or two of the startups of the cohort. So put a lot of money on the table there, knowing that funding is really a challenge.

And then finally, we can dwell on the content of that later, the accelerator journey will be within the mHub community. Typically, when you go to an accelerator or incubator, you have the cohort. And you can learn a lot being together as a group, learn from each other within the cohort, learn from the corporate partners, etc. But here at mHub, we will have the cohort, but they will actually live and work and breathe and smell whatever you call it at the mHub facility itself with the other mHub members, with the actual hard tech startup membership that we have currently at the facility.

So they will be able to learn from their peers from those already witnessed some downs, and then ups who went through the journey of building a new business, but also went through the prototyping journey. And they can help also the startups in the cohort. So that is also a big differentiator, and really an attractive proposition for the startups.

Finally, I think, also the mentor network that we can offer to the startups is second to none, because we try to have a mentor network that is as broad as possible, as diverse as possible, in order to help and support the startups.

Erik: As you're describing this, I'm thinking, a lot of the folks in our audience are perhaps not so familiar with how an accelerator is structured, so we probably need to go a bit more into the details here. Of course, there's a growing community among multinationals who have worked with accelerators, but still, I think the majority have come across the term but haven't had the chance to work directly with them. Can we walk a little bit through what the past would look like?

And I'm curious personally, because it's also a typical accelerator, maybe is three months long, and often dealing with software companies, as you mentioned. And so often those companies after three months, it's kind of assumed that they can raise a bit of money and fly away, and okay, they’ll live it, they'll die. But like you said, the cost base to keep that organization alive and moving forward is relatively low. It's maybe a team of four people who are willing to live on ramen salaries in order to survive. But with hardware, you don't just need four brains around computers, you need testing,, you need product development, you need hardware, you need manufacturing equipment, and so forth.

So I'm also curious, how long your program is, but also after people graduate from your program, what is the ongoing engagement going to look like? Because I imagine in many of these cases, a product might not be generating revenue on the market for 24 months or some considerable period of time, even after they've graduated from the accelerator. Can you walk us through a little bit of maybe a standard case of what would a company look like coming in? Is it two people with an idea, or is it already a team of 10 people that has raised a little bit of money? And then what does the period at the accelerator look like? And then after they graduate, what kind of engagement will they keep with mHub until maybe they're a revenue generating or well-funded organization that can survive?

Thierry: So let's assume you are the founder of industrial IoT startup. So what you would first do is you will apply to the accelerator, we will ask you questions, and hopefully you will get selected. So once you selected, you're part of the cohort. And the cohort at mHub accelerator will be 10, 9, 11 startups, whatever, 10-ish great startups in the industrial IoT smart manufacturing space.

Your startup will be either in a phase of having a few people that identified that a problem or pain point and has a solution for it. And that solution can be in the form of a concept, which has been validated with some of these customers so you know it's real. Or you can already have some initial prototyping, maybe a partial prototyping of some key technology that you have done. So we are looking at startups, Erik, that are somewhere between either definitely having that concept, maybe an initial prototype or having already some kind of prototype. That's the focal area of startups that we are looking for.

And what will we now do in that cohort? The cohort basically will cover what I call three major tracks. And I will say them in the order 1, 2, 3. But think of it iteratively. So, this is not just consecutive. This is an iterative type of process. The first dimension is all about going back to that problem, we want to make sure that your startup is really solving a real problem, a real pain point. And we do that by going back to who you think these customers are.

We’ll do some interviewing, listening, observing whatever needs to be done in order to validate that there is really that pain point. It's not because you think there is a pain point that that is really the pain point. There could be an underlying pain point. It's that what we try to really make sure is correct.

We have seen too many instances worldwide, where startups are building something fantastic, great, and nobody buys it. Why? Because it's not really solving a problem or not the right problem. So that customer development part, as in terms of finding what that problem is, and who that customer is, is the first thing we want to validate.

Secondly, once you have that problem, identify that pain point, confirmed and validated, you start to generate the prototype. And that can be based on the new insights gathered during that previous phase. You can say, hey, my concept is spot on. It is validated. Or it can be new insights that say, it's kind of, but you need to change somewhat. And in hopefully not too many cases, you will see oh, damn, this is not the right solution for the problem I identified, what they then call pivoting.

But basically, in this phase, you go from that concept to prototype or from prototype to product. I've been talking to a lot of startups. Startups in the hard tech space are struggling to go from concept to prototype. Sometimes they have a kind of a prototype, which is only covering parts of it. But they struggle to have a good prototype. I've talked to companies startups that already have a prototype, they worked with a lab or university lab, for example, and they have a good prototype. And the prototype is being used in order to validate whatever problem to be solved, or piloted at the customer. But now they are facing the issue of how to scale this to a product that is cost effective.

I've talked to one, and he was like, I have a great prototype, my customer loves it. And now if I get my contract, because I need more than 1,000 of these devices, I won't be able to do it, because 1,000, 2,000 of these prototypes won't make it. I mean, it's exorbitive in terms of cost. So prototype and building that prototype, as well as designing your product for manufacturability is what is essential in this phase. And we have done this over and over and over with the startups that we have today in our membership. We are doing it in such a way even that some corporates now come to us in order to do exactly the same. It's like, hey, we need your help. Because they need to solve a problem, and they don't have the right skills or not all of the skills needed.

So what we typically would do with your startup, Erik, you have a great IoT device, but you want to build a scalable product, you need some additional insights of or expertise that you don't have in your small team of two, three people, we will add those experts for a limited time to your team so that you have an augmented team of experts, which can then think of designing this for manufacturability that it is a scalable cost effective product as an example. So that is the second dimension of the accelerator. The first was focusing on problem and customer. The second one is focusing on that prototype to product journey.

And then the third dimension, but again, it's not 1, 2, 3, it's iteratively, is all about how are we are you going to make money, Erik. Yyou have a great device, you know there is some software associated it, but what are you going to do? Are you going to sell that IoT device? Or are you going to offer a service? For example, I was talking to another startup and the guy was telling me we have this great business model. We do a service model, a subscription model, which is like you pay us X amount of dollars per device per month and it gives us recurring revenue.

But the thing he says, you know what, we have a bit of a cash flow issue because we have to make these devices, a lot of cash out to build these devices, and only very little revenue coming in. Yes, it is recurring for the longer term, but I need some cash now. And that's where the process of thinking through, is this a CapEx plays, is this an OpEx play, is it fixed costs versus variable costs for the client? Clients also have CapEx budgets. So, maybe just asking them a bit of money for your device upfront and then following recurrent revenues is the way to go. Because that little bit of money for your device for the customer, it is peanuts. But for the startup, it's huge, because it's a cash injection. So that are the things that we do in the third component of the accelerator journey.

So these three customer focus, product prototype focus, and business model focus are the three aspects we typically go through in an accelerator journey. To your point, you mentioned most of the accelerators are three months, ours is six months. Why six months? Because hard tech is not more difficult or easier than Soft tech. No, it takes more time. It takes more time to do your prototyping.

I was talking yesterday to another startup, and he was doing some blockchain stuff, as well as hard tech. And he was saying, in my blockchain, I can do a new release in a matter of hours. It doesn't work in hard tech. It takes a long time in order to do new releases of your hardware. So it's more time consuming, very simple, and capital intensive. So we take six months for that journey. And at the end of the six months, basically, each of these startups will be able to really be able to talk about their business, what the problem is, what the solution is, what the opportunity is, how much money they will be able to make, and what to ask is in terms of money they need in order to further scale up their business.

And you mentioned what happens after the six months? Well, Erik, it was great to have you for these six months in our accelerator, but you don't have to go. Typically, they say, Erik, it was great working with you and now it's up to you. No, we say Erik, you can stay with us for another 18 months.

So we have the six months program and the 18 months follow-up. So, a total of two years, 24 months, where you can stay at our facility and where we will help you and support you. We have mentors throughout this whole journey. Of course, they will focus a lot on that first six months during the program, mentoring and helping and guiding you what to do and what not to do making you reflect on the things you need to think about. But also after that, they will still be in it. I mean, they are all passionate people of this industry.

Erik: I mean, I know a lot of accelerator programs, and I think this is structured quite differently than the vast majority. Although I do also know of other hardware accelerators that I think are still not structured with this longevity of the relationship. So ideally, a company is graduating here with then a clear business model and target customer, hopefully, also it’s an indication that the customer is willing to buy so that they can take that together with the well documented product plan that you'd help them to create and go to investors and say, we know how to build this at scale at a reasonable cost and we have customers that want to buy it, so please finance us, and they can then move on to the next stage of their development.

Where is this today? Is the accelerator still in planning today? Or have you already launched and I'm just missing it on the website right now?

Thierry: That's actually good feedback, you should be able to see it. So we have the mhHubchicago.com website, which is the regular website for mHub and its members and its ecosystem. We also have as a dependent of that the mhubaccelerator.com. So that's one word, mhubaccelerator.com which is focusing on the program that I just mentioned. You will find more details about our program over there. You will also find the link to click on to apply to the program, so applications are actually open. We open applications like a month ago, and we will still be ready to accept applications still the end of the year. Meaning that early next year, we will do the selection.

We only have positions for 10 startups in the cohort. Today, we already have many, many, many more applications than the 10. But I still encourage people to apply to the accelerator. So we will need to do some selection early next year from the X amount to the 10. This means, in practical terms, that the six month journey will start somewhere in the spring of next year. So I think March, April, May, I mean, that timeframe, the applications are open, that's a given. You can apply.

The actual start date of the accelerator will depend on so many things. And especially on the COVID crisis that we are currently experiencing, we want to make sure that whomever is selected in the cohort, that they feel safe and comfortable coming to Chicago, I can tell you that mHub itself has never been close, I would say, because it was also deemed an essential services. At the peak of the first wave, March, April, May, we had people working 24/7 producing PPE equipment for the health care professionals. We really showed what we can do. We not only produce but we also design new things in a very agile and fast manner.

But this being said, what I wanted to say is that today we have our members physically present at mHub. We are strictly following all guidelines and follow strict rules inside the facility with masks and social distancing. Because our members feel comfortable and safe working there, in order to do what they need to do. So I think the start of the six month journey will be spring, but the fixed date, you're not going to hear that for me for now, we want to make sure that all the startups that come and join the accelerator will feel good about it.

Erik: But now I'm looking at the mhubaccelerator.com, so I see a couple figures here. So 130k invested, 75k in cash, and then 55 in services programming hardware, and then you take up a 5% equity. I think 130k is a bit higher than your typical accelerator. But I suppose in this case, for good reason, because of the expensive development and also the six month duration. And 5% seems actually very reasonable. I would expect it to be maybe a bit higher for the investment.

Thierry: I think yes, you're right, this is reasonable, you get the 75k cash that each startup can use for its business purposes. And then you have another 60 or so equivalent goods and services, the workshops we do, the prototyping, the basket with components that you will be able to use to do your prototype and so forth, as well as the fact that you get the membership for a full two years. And even that I think is an underestimation. So I think you get much more than the 130k. And that 4% or 5% stake is I think, very reasonable. I've seen other accelerators for shorter durations and similar or less amount of money at higher equity stakes.

Erik: They feel like 7%, 8% is quite typical. It's the feeling like let's get as high as we can in the single digits. So you're in the Industrial Internet of Things is going to be the first batch. I see here you have a bit of a timeline, so second is medical and health tech, then smart mobility. Then fourth is clean energy tech. Fifth is smart homes, buildings and city. And number six is communication technology. Is this really the order? Are you going to see like every six months rolling out one of these new batches? Or are these priorities but maybe not with a clear timeline behind them?

Thierry: Well, I would say that the timeline, the desire we have is that every six months we will have a new batch. I can already tell you, we have actually the applications open for the industrial IoT now. The next one will be for sure medical devices, and then likely smart mobility. The order of the orders, it really depends. We want to have corporate partners that work with us in each of the cohorts. So for example, for this cohort on industrial IoT, we have Avnet and Panduit, that are corporate partners. For the next cohort, we already have Baxter as the corporate partner. So we want to lock in some of these corporate partners before we launched the cohort so we will see how that evolves. And that will determine what will be the next kind of cohort. But the idea is still to have every six month applications opening up for the next cohort.

So when I was mentioning industrial IoT open today, and likely the six month journey to start in the spring, the spring time would roughly be the opening up of applications for the medical device cohort so that we can then have the applications open, the selection, and then six months later the actual cohort start.

Erik: If you'd like to get involved in one of the future cohorts, then reach out to mHub and you have the opportunity then to be one of the lead partners there. Thierry, are there any important topics that we haven't touched on yet?

Thierry: I think the topic of the cohort, the industrial IoT is definitely very, very relevant. If you look at the manufacturing landscape, lately, we've all seen the impact of the current crisis. We know that there is now a strong drive from manufacturers as well as supply chain to make these more resilient. And I think that resiliency for one thing can be achieved by distributing your manufacturing as well as a supply chain.

We know that in countries such as the US but also in Europe, a lot of manufacturing has moved away because of cost reasons. But I think we are now at that Confluence point where people see the need for having some local manufacturing capability in order to make global supply chains more resilient.

And two, and that comes back to my initial start of the conversation, which is about digital technologies. Digital technologies, such as Internet of Things industrial IoT, digital twin technology, the clouds, all of that has come to a level of maturity that now implementations are real. And remember, we also mentioned the system aspect when we say Internet of Things, or Industrial Internet of Things, it's not just these devices, it's an end-to-end system.

And that's where our corporate partners Avnet and Panduit can also help, because even a company like Avnet, which is focusing on components, is looking at the whole end-to-end system. It's not just the devices is the connectivity of these devices to an edge or end or a cloud. It's the whole data aspects of what is the right data? How much data is it real time?
 It's also about the security of that end-to-end solution.

And so what we are seeing at the confluence of manufacturing needing resilience, and then technologies being able to do what needs to be done. I think startups and corporations, when working together can really drive innovation. And that's what we try to achieve within this accelerator to bring these two parties together, because they can help each other. Corporate partners, and corporations tell me, oh, we want to do this, but to my earlier points, I mean, they are structured in such a way that they have to follow processes. So it's very difficult for them to be lean and agile as startups are doing. And that's where I think bringing the corporates and the startup together bring that experience, expertise, and know-how of how manufacturing works and what is needed, what the pain points are, on the one hand, and the startups and that agility that innovation drive together is like the good ingredients for a great cocktail.

Erik: I think the timing for startups in the industrial IOT space, especially around applications is really perfect right now. There's enough core technology that's reached a level of maturity that it's really feasible now to build solutions, reasonable costs that can be then deployed into the market, where maybe in the past 10 years, we're really still building out some of the infrastructure.

And, yeah, I really wish that you are highly successful, and then scale because I think the US needs 100 mHubs, I mean, really, the scale of the potential here is enormous. But I do, Thierry, wish you the best in this first batch and then in continuing to grow the program. For everybody who's listening, again, the website here is mhubaccelerator.com. So that's for the accelerator. Tnd then for the facility at large is mHubchicago.com.

And then, Thierry, let's say, we certainly have some startups in among our audience, but I think more realistically, the folks that are listening are going to be coming from the corporate side. So what's the best way to reach out is it is also through your website? Or is there any particular contact email or other channel that you prefer?

Thierry: Well, they can reach out through the website or they can just use my name and email address, which is Thierry, Thierry@mhubchicago.com. That is Thierry@mhubchicago.com. I'm happy to chat with both startups as well as corporations to give some more details if needed.

EriK Terry, thank you so much for taking the time to speak with us today.

Thierry: Well, Erik, thanks. The pleasure was mine. It was great talking to you. Thanks so much.

Erik: Thanks for tuning in to another edition of the industrial IoT spotlight. Don't forget to follow us on Twitter at IotoneHQ, and to check out our database of case studies on IoTONE.com. If you have unique insight or a project deployment story to share, we'd love to feature you on a future edition. Write us at erik.walenza@IoTone.com.

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