About a month ago, Portland design and product agency Uncorked Studios, 3D software maker Autodesk Inc. and the accelerator Portland Incubator Experiment teamed up to launch PIE Shop.
The new venture aims to help startups make great stuff, from consumer internet of things products to business-to-business applications. The goal of PIE Shop is to counsel and help entrepreneurs best navigate the prototyping and manufacturing phases of their businesses.
Startups accepted to the program will have at their disposal: product experts from Autodesk, product development, strategy and design experts from Uncorked and mentorship and community connections from PIE. The program will be housed at the Autodesk office in the so-called Portland Innovation Quadrant, which includes partners such as Portland Community College, Oregon Health Science University, Portland State University and the Oregon Museum of Science and Industry.
The first cohort for the PIE project program is slated to start in May. Marcelino Alvarez, CEO of Uncorked Studios, sees an opportunity to help develop and nurture this ecosystem, and Crain’s asked him to expand on that effort.
Crain's: How would you describe the current state of Portland's connected devices/IoT efforts?
Alvarez: Portland’s history across a number of key industry verticals – semiconductor, software, shipping, product design, life sciences, apparel & outdoor – puts it in a unique position to develop the next generation of connected devices and products and services in IoT. Over the last few years, we’ve seen a number of entrants start to use this talent base to build companies, including companies like Rigado, IOTAS, and Circle. Each of those has impact across a number of industry verticals, and as such, the market is ripe for M&A opportunities.
Crain's: What do you see as the major barriers to entry as well as the aspect(s) that make it a possible global force in this area?
Alvarez: As we began talking to businesses in the Portland metro area, researching some of the concepts that would later gel into PIE Shop, two of the complaints we heard most often were around access to capital and low-run manufacturing.
The capital requirements for connected devices are different than a typical SAAS or product company, and as such, there’s more education required on both the investor and startup sides of the equation. Meanwhile, there’s a lot of value in getting insight faster, through low volume prototypes, and yet there are few organizations serving early stage companies.
Crain's: Tell me a bit about the genesis of the PIE shop, and what you aim to accomplish with it initially and perhaps moving forward a few years.
Alvarez: Uncorked Studios works with Fortune 500 companies as well as startups on product strategy, design, and development, and in that work, we recognized a vital gap existed between the initial concept phase of a product and how it would ultimately be brought to bear on the market.
We sought advice from a number of industries, including contract manufacturers, designers, technology companies, venture capital, apparel and outdoor, and life sciences to better understand where the gaps existed.
We came up with a hypothesis: a central hub for product innovation, located in Portland’s Central Eastside neighborhood, could draw both small and large organizations seeking to develop the next generation of products.
With Autodesk as one partner, we get access to its tools and technologies, crucial to aid in the design and manufacture of connected products. With the Portland Incubator Experiment (PIE) as our other partner, we can build upon a decade of community and ecosystem development, as well as the insights gleaned from running incubators in partnership with large organizations.
And by residing in Portland, we get access to a city who has committed to creating an Innovation Quadrant and seeks to ensure that its technology companies make diversity and inclusion a central tenet of their value system.
The best proof of this concept is shipping product. And we hope that the next wave of diverse product companies can learn from the pool of mentors, Autodesk product managers, venture capitalists and larger organizations who are committed to giving back to the Portland community.
Crain's: Who are some key IoT players already in the market in PDX and beyond, and why do you believe they are successful?
Alvarez: I think the most successful IoT players are solving real problems versus chasing hype. There are already too many cool prototypes pretending to be companies that somehow get funded by VCs or crowdfunding campaigns.
We believe that there’s tremendous value in starting with a solid problem statement, validating that through research, design sprints, and rapid prototyping, and then iterating until that problem statement is confirmed. There’s often too much pressure to either raise capital or set up a manufacturing line in Shenzen before the core product has been validated.
Once validated, a successful IoT company needs to have a business model to support the various aspects of its products. We’ve seen a number of successful hardware-as-a-service (HAAS?) companies that combine the sale of a product with a subscription fee, and a few of those have both enterprise and consumer-facing touch points. They’re not the simplest of business models, but when done properly, can generate revenue at each phase of growth.
Crain's: Where do you stand in the process of applications in the first month or so?
Alvarez: Early interest has been very strong. We’re still in the process of receiving applications here and haven’t begun reviewing them yet.
Crain's: Why is this an area that you wanted to help develop?
Alvarez: We believe that this is an expertise that can mutually benefit a number of organizations in Portland. From our perspective, as a product design studio, PIE Shop gives us an opportunity to build upon our knowledge and go beyond just providing services for our clients. We can help develop the Portland ecosystem, foster a new generation of startups, and develop relationships with new colleagues, clients, or collaborators.
IoT is one of those rare emergent technologies that pulls from a variety of industries, and so it can draw on a wide range of experiences. We believe that Portland is at its best when silos are broken and connections between different communities happen, so we believe that this is a unique moment in time that we can capitalize on.