Saturday, 19 September 2015

How we accidentally stumbled upon building an office swipecard system for around a 60th of their retail price.

This post is a continuation of how we addressed the issue that hoteliers had with the hardware design used in our digital check-in/digital key solution. We had only found 5 locks on the market that could interface with our solution, and all the hoteliers we spoke to told us they didn't like any of them. So we had set ourselves a mission to build one they would like. Little did we know at the time, that by solving this problem, we stumbled upon building a typical office swipecard system for around a 60th of their retail price.

In August 2013, we got accepted into an accelerator program in the USA - this was the first opportunity we had in one and half years to address the hardware problem - we finally had some money to spend on electronic engineers from the accelerator stipend. We had failed to raise capital in Australia, but we were in America now - it was a fresh start for us - we even registered a US company too to reflect our new exciting chapter for our start-up. We were most excited about finally engaging some electrical engineers to address the hardware design problem in our system - you see we were software engineers - we had designed apps, software, modules, and interfaces, but we had never designed or programmed Circuit Boards, or built mechanical systems.

The accelerator program organisers introduced us to some electronic engineers, and the first thing we tackled was incorporating Near Field Communications (NFC) into our product offering. By incorporating NFC into our product offering, it meant we could do away with a numberpad on the lock - which the hoteliers didn't want - they foresaw security problems with this. We quickly learned that NFC in our product mix could also help us create a product that would not only be useful in hotels, but it could also be useful for offices and Universities too. As we built the NFC features into our digital check-in product offering, we also learnt that we had sort of accidentally built all the features of an office keycard system at the same time. And we learnt that this office keycard system we had built was cheap too - actually about 60 times cheaper than an office keycard system.

The offices where we were doing the accelerator in had just paid $20,000 for a swipecard system to be installed on 3 exterior doors. Yes, 3 doors for $20,000 - that is $6,666 per door. In Australia we had seen similar systems installed for around $2000-$5000 per door. We were having trouble selling a similar system to hotels for $399 per door, and offices in USA were paying over $6000 per door for swipecard access control. Mind blown!

And there were also limitations with this new office swipecard system too in the accelerator building. The company that sold the locks had limited the number of swipecards that could be distributed to the office workers, so the teams in the accelerator were only distributed with 2 cards per team - which made access a bit difficult for teams of 3 or 4. If new keycards needed to be generated and distributed, or existing cards access had to be revoked, the responsibility was placed on one administrator in the accelerator office, or the access control company themselves - with more fees involved.

Now that wasn't the worst part of the $6,666 per door swipecard access control system which we had stumbled upon building for around $100 in parts. The worst part was that the swipecard locks were limited to the exterior doors due to the expensive costs involved. That meant anyone could roam about the building unchecked once inside, and access any other office or room at anytime. With over 100 people working out of the accelerator building, although they all seemed like a trustworthy bunch, if you left any expensive equipment or smartphones on the desks, at anytime unsupervised or overnight, then there was no guarantee that it would be there in the morning. It wasn't the workers that we didn't trust - the offices were also regularly used for after hours functions and events, with sometimes parties of over 200 people held in the offices a few nights a week.

Further, by having no swipecard locks on internal doors, it made booking meeting rooms a nuisance too. Projector equipment could not be stored, and to book the rooms, you physically had to visit the front reception desk and fill in your name by pen in a booking book. The reception desk wasn't always occupied, so you couldn't simply ring up at anytime and expect to get a meeting room booked. This made it very difficult to meet with potential investors and VC's associated with the accelerator program.


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