The contech space is experiencing rapid growth, but scaling hardware companies in traditional industries presents unique challenges. Through our conversation with Troy Demmer, co-founder of Gecko Robotics, I gained valuable insights into successfully scaling a contech company from initial prototype to market leadership.
Finding the Right First Customer
One of the most crucial early decisions is identifying the right first customer. As Troy emphasised, you need a co-development partner who understands they’re getting involved with emerging technology. This partner should be forward-thinking enough to weather the inevitable early failures and iterations while maintaining trust in the long-term vision.
In Gecko’s case, they found this partner in a power plant manager who gave them unprecedented access to test and refine their robotics solution. This relationship provided the essential feedback loop needed to develop a truly useful product. However, Troy noted that they always ensured customers had “skin in the game” – there were no free demos. This approach helped set proper expectations and established the professional standards necessary when working with critical infrastructure.
In this episode of BitBuilders, Troy Demmer, co-founder of Gecko Robotics, shares his journey from healthcare to robotics, the challenges of building hardware startups, and how Gecko is transforming infrastructure maintenance for both the private and public sector.
The Service-First Approach
A fascinating strategic choice Gecko made was leading with services rather than product sales. While this meant long days in challenging environments wearing protective gear and steel-toed boots, it allowed them to deeply understand their customers’ problems and rapidly iterate their solution. This “painful” approach, as Troy described it, enabled them to improve their robotics platform through about ten iterations in their first six to seven years.
This service-first model contrasts with companies that try to sell hardware products directly to end customers or service providers. The latter approach often struggles with technology adoption because it lacks the tight feedback loop between product development and real-world use.
Manufacturing and Fleet Management
One surprising insight is that successful contech companies don’t necessarily need massive manufacturing scale. Gecko maintains a relatively small fleet of 50-100 robots across two to three SKUs. This is possible because they sell outcomes rather than units – their robots are tools to capture data and create workflows that give customers decision-making advantages.
This outcome-based model provides valuable flexibility in managing manufacturing and deployment. Companies can fine-tune their fleet size based on demand and even strategically manage their backlog rather than rushing to scale production capacity.
However, Troy emphasised a critical lesson about manufacturing: supply chain resilience is essential. With thousands of components sourced globally, having redundancy and avoiding single points of failure is crucial. This became particularly evident during COVID-19 when chip shortages affected their operations.
Public Sector Opportunities and Challenges
An often-overlooked growth avenue for contech companies is the public sector. Gecko’s experience with the U.S. military, particularly the Air Force and Navy, offers valuable lessons. They began this journey through innovative acquisition programs like AFWERX’s Open Topic, which allowed them to propose solutions rather than respond to rigid requirements lists.
However, working with the public sector requires significant adaptation. Troy highlighted the importance of understanding the three-legged stool of government contracting: the user, the buyer, and the beneficiary are often different entities with distinct needs and priorities. Moreover, success often requires working with Congress years in advance to ensure appropriate funding.
Key Considerations for Scaling
Based on Troy’s experiences, here are several critical considerations for contech companies looking to scale:
1. Customer Selection: Choose early customers who can tolerate iteration and failure while maintaining a commitment to the long-term vision.
2. Business Model: Consider a service-first approach to accelerate learning and product development, even if it seems less scalable initially.
3. Team Building: Find “maniacs” – deeply committed individuals who can lead complex deployments and manage multi-stakeholder relationships.
4. Manufacturing Strategy: Focus on outcomes rather than unit sales, and build supply chain resilience from the start.
5. Market Expansion: Consider public sector opportunities, but be prepared for longer sales cycles and more complex stakeholder management.
The Final Word
Troy’s most important advice for founders in the built world? “Compress that feedback cycle, figure out who your customers are, and be totally radically prioritized to solving their problem. Sometimes you have to do things that don’t feel like they’re going to scale in hardware. Lean into that. Embrace that.”
This wisdom encapsulates the core challenge and opportunity in contech: success often requires choosing the harder, seemingly less scalable path initially to build something truly valuable for customers. By focusing intensely on solving real problems and maintaining close customer relationships, contech companies can build the foundation for sustainable growth, even in the face of challenging market conditions and complex stakeholder environments.
