Father-son entrepreneurs sign multi-million deal with Bosch
A father-son startup has signed a four-year contract to supply thousands of touchscreens to the German multinational Bosch for the US market.
Jason Mackie (the father) says the four-year deal is worth millions a year for their company, Eight Development. And that could increase if it's expanded to include Bosch's operations in Europe, which is on the cards.
Liam Mackie (the son) says Bosch has guaranteed it will buy a set number of the pair’s touchscreens each year, giving it a solid pipeline.
This is a story of a tiny Kiwi outfit identifying a problem for a multinational, solving it, then parlaying that experience to tap new markets.
NBR first came across the Auckland-based Mackies in 2014.
Jason Mackie was running Connect Security Products (CSP), the sole importer and distributor of Bosch Access, Fire, and Intrusion products into New Zealand.
But the security hardware business wasn’t quite as good as it had been. With its old-school keypad controllers, Bosch had not kept pace with competitors who had adopted touchscreens.
The result: Bosch suffered what Mr Mackie calls a “significant reduction of market share” across New Zealand and Australia.
The German company thought touchscreen controls would not take off internationally. Jason thought from his first-hand experience that it would.
He discussed the problem with his then 23-year-old son Liam, who had worked for Vodafone and online payment outfit DPS, and whose team had recently placed third in the Enterprise Angels' Tauranga Startup Weekend competition.
Liam was already working on a smart home system in his spare time. He quickly adapted that to a concept product that he developed further with his friends Tom Tiang and Jon Ngo into "TouchOne." Eight Development was formed to commercialise the technology.
One of Eight's touchscreens connected to Google Home and Amazon Alexa units. Eight is expanding from touchscreens to integrating voice commands for smart speakers.
At the time, the pair were looking for capital to fund their dream.
They found it, in part from Reid Thurlow, a Kiwi expatriate who is based in Hong Kong. The international financier also sits on Eight’s board.
Eight won some business with Bosch’s Australian division over the past couple of years but it’s the new four-year contract with Bosch in the US that will see things really take off.
In the interim, Bosch security products in the US have added a touchscreen. But the new model from Eight that will replace it is much thinner, sports a capacitive touchscreen (more response than the older resistive technology used by Bosch today) and, crucially, its software interface can be updated over-the-air by wi-fi and the internet.
The Auckland startup now has 10 staff.
The Eight crew’s skills are heavily centred on software development and designing interfaces (using Java and an Android variant) and designing circuit boards.
For the industrial design of its touchscreens, the startup has partnered with another Auckland company, Globex, which creates 3D-printed mockups.
A mockup is then taken to Eight’s manufacturing partner in China where a prototype then, ultimately, production units are raised (like others who have manufactured in the region, Eight has found quality control is key; two staff work on the ground in China to independently monitor production. Another is being added).
The final product is then boxed up and delivered to Bosch.
Jason Mackie says Eight makes a loss but will move into the black as it delivers on its four-year contract for Bosch in the US.
Inside Eight's office in Newmarket, Auckland.
He adds that the company is fully funded for the US contract. There are no plans to capital raise, though it could be considered if Bosch ups the order, or more work otherwise comes in that requires rapid expansion.
Despite its close ties, Eight is not bound to Bosch. It’s free to sign deals with other manufacturers.
Both Mackies emphasise that Eight is not a security alarm touchscreen outfit. They see themselves as an “interface company.”
At their office Eight touchscreens are linked to smart speakers from Amazon and Google, allowing them to develop voice controls as well.
This isn’t just experimentation. The voice-control work has led to a second major contract (which the client isn’t quite ready to publicly announce – but watch this space).
The Mackies see huge potential across the board as the rise of the internet of things (IoT) dramatically increases the need to easily control all types of gadgets.
Can’t multinationals like Bosch do for themselves?
Jason Mackie says Bosch is a brilliant engineering company but doesn’t have expertise in the fast-moving field of interfaces. It’s easier and cheaper to leave it to a nimble contractor.
And what’s it like working with a family member, especially in such an intense atmosphere as a startup?
“Liam has his ups and downs, probably more than me,” says Jason Mackie.
“But we have some clear guidelines. For example, we don’t talk shop after a certain time of the day. Personally. I think I’m very lucky to be able to work with my son. It’s something that not a lot of people get to do.”
All content copyright NBR. Do not reproduce in any form without permission, even if you have a paid subscription