I've known Stefan for the best part of a decade. We were both flogging communications software back then, introduced by a mutual friend at PwC, and then lost touch for years. When I left Sideways 6 I set myself a hundred meetings with interesting people, and Stefan was one of them. He came to the retreat. I've since put a small amount of money into FLOWBIO, so read all of this knowing I'm not neutral.
FLOWBIO is a sensor that clips onto a heart-rate strap and measures how much sweat you lose and how much sodium is in it. Six years in the making, five of them on the hardware. Roughly 65% of sales now come through bike shops and specialist retailers, with the website picking up the rest. That surprised me, and it's most of why I wanted to write this one up.
Below are the nine things I took from the conversation. Most of them are Stefan's rules. A couple are mine, reading between the lines.
01Hardware is hard for everyone, so stop treating that as news
Stefan's first point is almost rude: you're not special. Everyone building hardware is getting punched in the face ten times a day, his phrase, including the people he competes with. He and Miranda at Nix, a rival sweat sensor, catch up once or twice a year to compare bruises. He says they're founders first and competitors second, and that he chooses to do business that way.
The bit I found more useful is what sits on the other side of that. If you actually deliver the thing, and it works, and it stands up to the scientists, you've built a moat a software company can't buy. Five of FLOWBIO's six years went on the hardware for exactly that reason. His line for the pitch deck: what's the cost of not doing the hard thing?
02The bike shop is your sales team
FLOWBIO started, like most VC-backed consumer things, assuming direct to consumer. VCs like margin and DTC has margin. Then Bruce Smith, who founded Hydrow, told him the only reason Hydrow survived the post-Peloton crash was a relationship with Best Buy. Stefan changed course.
Today 65% of the business is B2B: independent bike shops, Sigma Sports, the specialist retailers who already have the customer in the door. Each shop buys 10 to 50 units. Ten units a month across a hundred shops is a thousand units a month, which is not nothing for a company that makes one product.
The logic underneath it is education. Sweat sensing wasn't a category until FLOWBIO and Nix made it one. If you're the only person in the world explaining it, that's a three to five year job. A hundred shop assistants explaining it for you is faster and, oddly, cheaper.
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