By 2011, Intellihot had clearly demonstrated that our product was different than anything else on the market. This caught the attention of one of the country’s largest water heating manufacturers, who were not known for being particularly innovative. We started a dialogue with them which occupied the bulk of our time for an entire year. This company had been around for over a hundred years, and they were a good company—but the more we got to know them, the more we realized there was no alignment with why Intellihot exists and what we were seeking to do.
The company’s intention was to bolt us onto their existing company as an innovative addition—and put strong boundaries around us. The contract they presented to us essentially stated that we could not do anything other than work on water heating—no experimenting with motorcycles, or robots, or intelligent machines. What this company didn’t understand is you can’t imagine new things in a vacuum. Innovation requires input from anywhere and everywhere.
It was clear this company would not help us make our vision come true—but before we could make the call, the decision was made for us. The company thought if they walked away from the deal, Intellihot would collapse, and they would be able to come in and buy us for cheap. This turned out to be a huge miscalculation on their part.
This company had been preventing us from going to market for nearly a year, so our funds were almost down to zero. For a moment, it looked like their prediction could come true—but fate has a funny way of turning things around. We learned that one of the largest trade shows, which was just a couple weeks away, had some cancelations—including an exhibitor in a prime spot. Within six weeks of the company pulling the plug on our deal, we managed to book one of the best spots at this trade show, showcasing one of the most innovative products at the show.
The big company was shocked. “We usually plan trade shows for six to eight months,” they said. “How did you pull this off in less than eight weeks?” The answer was simple: adversity had already taught us to reinvent ourselves so we knew how to pivot and move rapidly, and we were committed to staying true to ourselves and following our vision.
We received a great deal of attention at that first trade show, but we were still in a rough spot financially, so I turned to the path taken by so many startups before me: private investors.
The most important lesson I learned in our search for investors was to trust my gut instinct. As we started to pitch, investors would often tell us we needed to hire a new CEO, a new CFO, a marketing firm, this guy, that guy. Their view was the best person to take a company from zero to the first hundred is not the inventor; it must be a seasoned CEO.
This made no sense to us. Nobody knows more about their technology and their market, and nobody is going to put in more time and effort, than an entrepreneur. Investors can’t see this, because they tend to look at a macro level. They often don’t know the details of how the product or technology works, or what the market space is like for that exact product.
So, Siva and I shied away from taking any money from these investors and kept plowing forward with whatever cash we had. The one time I did not trust my gut and said yes to an investor I wasn’t sure about, it was a disaster! Thankfully, we were able to find investors who worked well with us and believed in our company, which allowed us to take Intellihot to the next level—while staying true to ourselves and our vision for the company.