When I last spoke to Dan Eisenhardt his company was busy supplying ski shops with high-tech goggles. Several months later, the Vancouver-based startup is on the verge of becoming a supplier to NASA. My, how time flies.
Is it a done deal? No, but Recon Instruments announced on June 3 that its Android-powered heads-up display (HUD) technology, MOD Live, has been selected for testing by NASA for its next generation space suits, and that’s a big deal.
RI will be working with Honeywell, which is leading the suit avionics (the electrical and electronic devices that assist flight) and software development, to test its software application at what’s called Desert RATS (Research and Technology Studies) in September. Now entering its 14th year, Desert RATS is an annual three-week event where new space technology is field-tested in the Arizona desert.
Daryl Schuck, principal engineer of human space systems at Honeywell, says he contacted RI in the fall of 2010 after stumbling by chance on a mention of RI’s tech in Popular Mechanics magazine. Honeywell spoke to NASA who agreed to invite RI to participate.
Schuck says it’s too early to say RI is guaranteed the job, “but it’s conceivable that if their technology shows promise and we bike out to the next steps, they could become a supplier. … It’s the requirements [for the suit technology] we’re trying to develop right now and that’s what the current tests are helping with.”
There’s potentially a lot of money at stake. Schuck says Honeywell and several other companies won a NASA contract worth between US$750 million to $1 billion to design and build the space suit (which is composed of many more parts than just suit avionics). Recon Instruments now has a chance to get a chunk of that.
But Eisenhardt says the endorsement, not money, is the big pay-off. “We’re not going to be making a lot of money in the space suit segment in the future. The volume is just not big enough. … I see it more as a blue stamp of who we are as a company and that we’re not just a gadget for different sports applications. We actually have very solid technology that is being considered by serious companies out there for other applications.”
While he won’t divulge details, Eisenhardt says the privately-held company has in the past fielded interested investment and acquisition calls from “many players.” So it’s not an unreasonable bet that a win at Desert RATS may push RI’s star even higher. (Also of interest, when asked if any of those players have been Canadian, Eisenhardt declined to answer but did not deny it outright.)
“We’re still growing and trying to find our feet so we haven’t at all followed up on any of that,” says Eisenhardt.
And growth has been brisk by a number of measures. To support the addition to a previously exclusive B-to-B model of a B-to-C model—comprising sales and customer service, but also Android development—staff has increased this year to 40 from just under 30 at the end of 2010. Eisenhardt says the 5-year-old company did well into seven figures in sales for 2010 and is forecasting a 400%-600% increase for 2011. Besides its main line of business, which continues to be its HUD hardware that “snap fits” to existing ski goggles, RI also has other revenue streams including: app sales (for custom software running on MOD Live), consulting fees from prototyping and R&D work for its partners, and royalties from its partners.
If that sounds like RI is well positioned for growth then the only stumbling block might be how it manages its channel relationships—especially because the company isn’t directly consumer facing. For example, if a consumer walks into a store and buys a pair of third-party-branded goggles featuring its HUD tech and they don’t work, who takes the heat and whose reputation is in jeopardy? The branded manufacturer or RI? And just as importantly, who’s paying for it?
Eisenhardt says it’s definitely a challenge. “We spend a lot of time with our partners solving this,” he explains. “There’s a lot of education, handholding and collaboration with us, our partners and their retailers. So on the packaging of their goggles it’s very clear what they’re purchasing—it says ‘Recon Ready’ on there and shows you how you get the system. Many of our retailers as well will carry our system in the shop and we’re educating all of the staff out there on the floor so they know how to sell this.”
To further help, RI’s tech support solution is a combination of in-house and third-party, but Eisenhardt is careful to point out that even third-party support uses RI’s own QA process, rather than something off-the-shelf (which can make for an inconsistent consumer experience).
So this young, promising company seems to be keeping all its ducks in a row, which begs the question: when can everyone else get in on this action? Answer: “not yet.” Going public or accepting an acquisition deal isn’t in the works.
“We’ve got some great angels backing us and we’re doing well, so we’ll strive foremost to grow our business and make sure we can keep growing,” says Eisenhardt. “That’s our focus right now. We don’t have any active exit initiatives at this stage.”