SaaS Interviews with CEOs, Startups, Founders
1145 How Eero is Locking Down Distribution Channel for "Home Automation Wars" With $100m
12 Sep 2018
Chapter 1: What motivated Nick Weaver to start Eero?
Learn from people as quick as you can, figure out what motivates you and double down on that. He's done a lot, seen a lot at Menlo and other things he's done.
Back in 2014, launched Euro again, understanding that home and internet, this was a critical space, not only just as a product and delivering value in terms of high speeds throughout your entire house, but also an important distribution channel. as kind of the Internet of Things and especially the war for kind of home automation takes off.
He's positioning himself perfectly there, really controlling a nice distribution channel with millions of units installed. They have, he says specifically, a nice uptake in their digital service as well, which is much higher margin than the product and about $100 million in terms of dollars raised to grow this thing.
This is the Top Entrepreneurs Podcast, where founders share how they started their companies and got filthy rich or crash and burn. Each episode features revenue numbers, customer counts, and other insider information that creates business news headlines. We went from a couple of hundred thousand dollars to 2.7 million. I had no money when I started the company.
It was $160 million, which is the size of many IPOs.
We're a bit strapped. We have like 22,000 customers. With over 5 million downloads in a very short amount of time, major outlets like Inc. are calling us the fastest growing business show on iTunes. I'm your host, Nathan Latka, and here's today's episode. Hello, everybody. My guest today is Nick Weaver. He's the CEO and co-founder of a company called Eero.
Before this company, he worked at McKinsey & Company and then Memo Ventures, where he sourced investments in startups such as Betterment, Periscope, Ansible, and worked with portfolio companies like Uber, Dropcam, and Roku. Frustrated by the Wi-Fi solutions on the market and unable to find a better solution, he set out to build Eero with his co-founders, Amos and Nate.
Nick is originally from Chicago, graduated from Stanford with a BS in Management Science and Engineering, and currently lives in San Francisco with his wife. Nick, are you ready to take us to the top?
Awesome.
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Chapter 2: How does Eero's technology improve home Wi-Fi?
Yeah, we've raised about $100 million. Okay. And why? I mean, there's a hardware play here, so it seems obvious. But I mean, where is most of this money going? Where are you investing most of it?
Yeah. So building the product and the underlying technology, very, very expensive initially. So we spent a couple years building out the technology stack to make all this stuff work. Unlike some products, like say you're building a speaker, right? The duty cycle on a speaker in the home isn't 100% of the time, right? It's on sometimes, it's off others. The duty cycle is not that challenging.
When you look at the network, I mean, even when people aren't home, their networks are under constant use. All those other devices, whether it's a streaming stick or a camera or a speaker, sensors, everything your network's always being used. And so we had to, we had to spend a lot of time and resources making sure we had a, you know, absolute bulletproof product as we brought to market.
And then the big piece is, you know, growing sales and distribution. So there's marketing. We've experimented with a lot of different marketing formats. I mean, number one thing is to A, inform consumers that you can actually fix your internet connectivity problems. And then second is helping them discover the Eero brand.
Do you guys remember the last time you sat down for a meal with a friend or a business colleague and they pulled out two phones and put them on the table? Do you remember what you thought? Whenever I see this, I go, oh gosh, what a tool. But look, sometimes you can't blame these folks. They're trying to separate their personal lives and their business lives with two separate phones.
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With the Sideline app, it's easy to own a dedicated business number and still separate work and personal numbers, again, all on that single phone. You'll know when calls are for work or if they're personal. You can keep things private. And I love this part. You can text from these two separate numbers. So clients versus customers versus your own kind of personal friends. all from one phone.
You'll look more professional, you can automate texts whenever you're busy, and you can team up with others on your team to share responsibility for that one single phone number in case you're away or not available. Sideline comes with calling, texting, picture messaging, and more, giving you all the value of another phone without having to pay for an actual new phone.
Right now, you guys can download Sideline for iPhone or Android for a free seven-day trial. Or learn more at sideline.com forward slash trial. That's sideline.com forward slash trial. Now, there were some articles put out. I need a big interview with Fast Company in terms of the space where I think it was something like 50 percent of total sales in this market.
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Chapter 3: What challenges do internet service providers face in home connectivity?
Why couldn't you just leak a little hint? Give us a little bit. No, in all seriousness, congrats. It looks like a fun business you're building. It sounds like, I mean. What's interesting to me, too, the software side of this looks to me to be very high margin.
I can see you're leveraging these distribution channels to then go to 1Password and say, let us include a free subscription to you on the tool to expose your brand. And that's actually driving a real cost savings to the people that upgrade at $99 a year plan, right?
Yeah, what we're trying to do is basically curate the right sets of apps and experiences that people need in their homes. The first big push into Eero Plus was now that we've got people's homes connected, let's really focus on making sure they're safe. And it's been awesome to partner with folks like the team at 1Password, at EncryptMe, at Malwarebytes, and offer that as a comprehensive solution
um, to all of our customers.
Yep. What are you focused, like based off what you raised and what you do when you think about growing the company, um, what do you try and hit or what are you aiming for year over year? Are you following the kind of like got at least double or triple year over year, considering how much you've raised and what you're kind of the path you put the company on?
You know, it's, it's all, uh, um, you know, a balancing act. Like you're trying to balance margins. You're trying to balance growth. You're trying to balance, you know, uh, uh, strategic initiatives. So, um, there isn't like, you know, one, one guiding principle, like you have to double year over year, you have to triple year
Well, guys, this is good stuff. We're going to wrap up here in a second with Nick. As a follow-up episode, you might want to go listen to actually Marcin from Malware Rights who came on and shared they passed 3 million customers and 130 million bucks in ARR. And he references distribution channels like Euro in terms of what's driven a lot of his growth.
So Nick, let's wrap up now with the famous five. Number one, what's the last business book that you read?
You know, a little bit different than a business book, more of a like life book, but it's Man's Search for Meaning by Viktor Frankl.
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Chapter 4: How does Eero generate revenue and what services do they offer?
All right. What's the situation, Nick? Married, single, you have kids?
Married.
No kids. No kids. All right. And how old are you?
I'm 29. 29.
All right. Last question. What do you wish your 20-year-old self knew?
You know, just figure out what motivates you. Learn what that is as much as you can and, you know, meet as many smart and motivated people as you possibly can.
Guys, there you have it from Nick. Again, learn from people as quick as you can, figure out what motivates you and double down on that. He's done a lot, seen a lot at Menlo and other things he's done.
Back in 2014, launched Euro again, understanding that home and internet, this was a critical space, not only just as a product and delivering value in terms of high speeds throughout your entire house, but also an important distribution channel. as kind of the Internet of Things and especially the war for kind of home automation takes off.
He's positioning himself perfectly there, really controlling a nice distribution channel with millions of units installed. They have, he says specifically, a nice uptake in their digital service as well, which is much higher margin than the product and about $100 million in terms of dollars raised to grow this thing. Nick, thank you so much for taking us to the top.
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