How Sirqul CEO Robert Frederick grew Sirqul to $3.6M revenue and 15 customers in 2018.

hello everyone my guest today is robert frederick he's the founder and ceo of a company called circle and has been focused on connected communities of devices people and businesses back since 1993. he was inspired by the balanced future potential of smart connected devices and leveraged this passion to attend mit to work on projects in the mit media lab and to join one of the first startups focused on standards that would be later called bluetooth in the late 90s the startups licensed product devicetalk.com was a central server running intelligent agents that used event-based logic to complete actions on behalf of its users via simple commands and conditional triggers all right robert are you ready to take us to the top oh yeah sure good all right tell us tell us about obviously impressive background tell us about your current venture what is circle and how do you make money oh well uh circle is a middleware solution it's a platform a sas platform if you know what that means and we license our technology we license uh templates that leverage that technology uh across multiple verticals uh automotive smart buildings uh retail uh healthcare and uh of course developer services like sdks and apis so that others can actually benefit and uh generate their own uh solutions on top and your pureplace sas or is there a pay as you go a professional conserva service component actually we we're one of the few that has uh our license pay-as-you-go as well as we have hardware components that people purchase and license uh and or lease from us uh over the course of multiple years so uh we we tend to be in multiple sort of areas not just a single you know uh particularly robert if you were to break down the revenue streams is caught north of 80 percent coming from sas or is it more diverse than that it's more split up more so uh when it comes to revenue it's a combination of uh sas as well as so what's the hardware i'm curious what the split is oh it's it's probably around 70 30. okay um when it comes to software uh to 30 percent harder um if that makes sense it does make sense there's a lot of companies you know era which is kind of you know a wi-fi inside the house there's a lot of companies you know purple wi-fi which there's a hardware component they have to sell them that locks in the subscription fee are using the same economics in other words the hardware is really an important piece for retention well it's it's kind of different um can i uh sort of explain a little bit about what the hardware does yeah of course back so we actually have patented hardware with multiple radios inside of it and those radios when you place the devices in in the right configuration around a room or a space hallways whatever a stadium a hotel a casino a hospital you name it a retail store it can actually determine down to i call it show or we call it shoulder to shoulder accuracy of where everyone in that particular building is located or where the devices are in that building and then we historically can show and in real time where someone's going where someone's dwelling let's say like the they're staying at the in a line at the grocery store so go open up another point of sale there i call it the uh i guess you could call it a big box retailer problem where you know someone's roving roaming around the store looking for staff well our system notifies staff in real time where to go got it i'm looking at your website as we're chatting here you've you've taken this technology and it sounds like you have many different use cases one of them is you know called a casino in vegas right and and or maybe watching flows inside a grocery store or even cars and smart mapping right how do you how do you how do you pick a focus or can you do all these things at once with the technology and is that the right business strategy so one of the things that you kind of missed or uh on the background which is kind of fun uh is i actually was at mit i did have a startup that startup was acquired by amazon um devicetalk.com uh became uh amazon anywhere amazon anywhere had a mission and that missions focus or the focus of that mission was make it possible for anything anyone anywhere at any time on any device to be able to access information uh from amazon services that turned into uh multiple different groups but the one that i'm responsible for and the one where you can you know look me up and what i'm known for is amazon web services so uh talk about a sas solution and coming up with the strategy for uh one of the most successful sas uh offerings uh out there um i was on the original team i'm taking that same concepts those same uh capabilities and um we're getting developers to adopt uh customers startups fortune 500s fortune 100s to adopt our technology across many different verticals just like we had adoption within the first few years of aws does that make sense of course it makes sense but i would argue also i mean did aws have a hardware component that made up 30 of the revenue no they did not yes i mean you certainly learned a lot doing that it's a very successful sas company but i mean what you're doing now you're leveraging totally new tech that you you know maybe from mit right i mean so yeah so look i mean there are the kindles and there are the uh echoes and there are the fire tvs and uh and you are talking to someone who anticipated that actually happening uh so in our in as an argument uh and in defense yeah basically robert sorry i'm not i'm not trying to disqualify everything you've done what i'm trying to do is focus on the last 10 minutes kind of where i drill deep on right and i want to focus on circle so so for someone listening right now i look i think i get it because i've read their website in my research and put it together but for someone listening right now when they think about what circle does how should they think about how it impacts them when they're in the sands in vegas sure no problem so what we would be able to do is to give uh using a little bit of ai a little bit of machine learning uh the devices are uh basically our toe in the door they're the ones that are sending the data into the uh the back end of the of the system of the services is that locked in from the consumer or you do that automatically we we do that without even having uh a need to opt in it's sort of like uh radio surveillance yeah you know what i mean like um that's why our system is unique um because you're on the tech but it's like it's radio waves or something like that right yes exactly it's radio waves are leaking from your device in your pocket and we're able to detect that we don't know that it's you yep but we know that there's someone standing there does that make sense or the phone's like resting on a table at the blackjack table it could be the uh the earbuds that are in your ear it doesn't have to be the phone right so the idea or a badge or um your uh your key card whatever it is that's leaky and then we fingerprint that device and then we use that information in real time uh to create triggers and notifications to staff to build reports to uh generate uh data that would allow our customers to enhance and create these really engaging experiences does that make sense it does robert let me pull that forward one degree and then i want to move back to more of your story here so if you capture my leaky iphone when i'm sitting at the blackjack table at the sands and you know that you've been capturing that leaky signal for over two and a half hours you know i'm potentially pretty addicted to that blackjack table and that you should have the waitress come give me another rum and coke because i'm gonna be there they'll keep me there another two and a half hours that kind of perfect okay good am i higher i'm hired you are you're you're more technical than you think on a on a business point of view um now apply that to a stadium now apply that to a hospital you know like someone hasn't moved for a period of time um and you actually need to trigger someone to go check on them yep uh apply that to you know all of these different use cases and uh to go back to the circle side you know by being able to have the back end capability to do this analysis to do these predictions to create these customizations and these really engaging experiences then the different devices that are being built both by our company and other companies can be installed into a vehicle they could be installed into a home they could be installed into a condo or into a stadium an arena or a a big box retailer does that make sense it does let me show i think we now have a great idea example of kind of what the tech does let's shift real quick to get in the business history so starting first i believe you're very much in the enterprise space but i want to confirm that what's the average customer paying you per month i'm guessing it's thousands if not hundreds of thousands yeah uh it depends on uh the average customer can be anywhere from tens of thousands a month to we've had uh hundreds of thousands as well okay and why would someone pay 20 grand versus 100 grand it's like number of captured leaky devices per month or what's the metric it's the usage of the servers the number of service servers that are needed in order to license and i do want to basically say uh there is a difference we are unique one more time because we...