Coverage by Bhat Dittakavi of Variance.AI on “Storytelling” by Raj Naravati of Hug Innovations on 12th November 2017 at T-HUB
Raj Naravati
What motivated me to start HUG?
College graduates have less to lose and more to gain. Experienced senior professionals like me have a lot to lose.
I was COO of a company Cigniti and we took it from $22MM to $75MM. I left the career just out of emotion. I was connected to Nirbhaya incident of 2012, every single action since then I tried to assess how we make sure next woman doesn’t go through such hardship.
The beginning
I started the firm with a philanthropic note in the business of woman safety. I was in USA working full time as a professional too. Then things weren’t moving. I made a call in 2014 to call professional career quits.
We created the product called iRaksha platform with SOS and friends and family get life tracking URL. We even showed the map with nearest emergency centres and called them up too. It also alerts another hug smart user nearby. Connecting all the hug members was our goal. Our notification would be read by our phone and it raises an amber alert. We put an IVR telecom system also for false alarms.
First question: What do I tell people? You are not safe is negative to say. In 2015, we did reverse brain storming and we wanted to give hope and positivity. We bumped into the name hug, a purest form of emotions between any two relations. Innovations represents technology and passion.
Next question: It is not that safety is a day to day use case. Then how do we ensure they wear it everyday? We started adding all the features to make it more interesting: steps, heart rate monitoring and do on.
Then the crucial one: Who are we targeting? We did surveys of 18-24 age groups and the surprise is they don’t use our product as they are experimental and probably overconfident. After the product was built we started learning target consumer behavior and psychology. Too late. Another lesson.
I know the spirit of Mumbai and after train blast every single person picks up the same train and sane route to work. They live with hope they won’t be next. Then how can we sell fear and that wasn’t even our approach anyway.
Then we figured gesture will make them interested. How many of you wear a seat belt in local roads? How about back seat? We want to give safety technology where you may be able to use only one hand. Gesture in any orientation shall work. We started building a whole gesture platform. We filed a patent and 9 more to go.
What did it take?
I don’t have manufacturing background. We didn’t have that many platforms then. People told me to go to China and get it done. When people came to know Hyderabad is pearl city and people sent them to old city where they get conned by the fake pears. I went through the same. Every single person in China teaches me different things and language was a barrier. I had a translator. I was paying him $3000 per month to find that factory and help me with communiction. This guy gives two lines of translation for 25 minutes of Chinese talk. My knowledge of hardware was different. I designed a device that has SIM card, GPS, Bluetooth and 7 days of battery power. It means  5 antennas and five screens and my prototype was too big and complicated.
We went ahead with a kickstarter and outsourced it. I hired a design team. Now I know bang design is very good. I had a Chinese company and another one. They did their prototype and the first test of pressing a button led to button pressed completely inside.
I have taken short cuts and it killed money and time and I didn’t get it right. Then I decided to go directly to manufacturer and I made six trips to foxconn and convinced them to make 3000 pieces of hardware. Big turning point. Investors say hardware doesn’t happen from India and even if you succeeded you can’t scale. To address these concerns of investors, I picked Foxconn.
I came from corporate background. When I became a COO of a large company, I was used to talk in millions not less. That was my game. I thought money would come in order. I went to all big corporate connections and sought $10 million for 15% dilution when I had no product in hand. I burnt all my trump cards for 6 months to understand no one was interested. They only asked “do you have a Startup success! Your corporate story is nullified.” Next struggle is about not having cofounders. Then they say build just a platform why do you want hardware. They were against hardware. All see risk with hardware and device.
A Silicon Valley will throe millions for an idea and in India it would be opposite. Lots of entrepreneurs think Angel or families are safest option. If the VCs are not ready to put the money, I have friends and families to trust me. I had to guts and I sold this Vision to 39 out of 60. They collectively gave $1.4M. Then series A happened. We were looking for half a million and went to guardian angel round and raised $5 million. No platform is small or big. Never know where your next big check will come from.
CEO has dual role: Vision, technology, markrting and all is one side and selling is the other side. Steve Jobs was the number one sale guy in the world. I had depression cycles. Look at Jeff Bezos and Amazon today. They started 20 years ago and last six years they turned profitable. He will be world’s richest man. He sold his vision and passion for 20 long years. Believe in your product and don’t give up. Stay hungry and be persistent. Don’t be a quitter. Learn to survive in the game.
I want to fight and make it big.
Today I have $5 million that has come in my way. Nothing is signed yet and let the first check come. Having big money leads to big responsibility. Investors expect to me rapidly grow. Consumers or B2C is achallenge. I switched my game to B2B. Euro Kids came through.
Sales Story of Euro Kids
EuroKids was looking for a kids tracker with safety feature. I didn’t have safety featurr. They know and they had enough people from China and elsewhere and they are matured ones. I noticed the meeting was going nowhere. I opened up and searched kids trackers. I told him these are designs and I can procure and give. We both were honest to admit we were searching in aliexpress. This data remains in China servers. Once the device leaves a factory no support exists. Who does after sales is another question. I asked the CEO “Euro Kids risk their brand with a Chinese product?”. That single statement made him realised that he risked his brand by putting into unknown brand. I offered device replacement guarantee for first year. I signed up a context for 15000 units in December 2016 with a delivery date of 3 months. We did deliver by March 15th 15000 buddy trackers.
Our positioning: we have devices that we sell as brands. First of it kind Fitness band. KTR peeeonally launched it.
Today we can recognise 15 gestures. We went to open up as open developer platform. I can fly a drone and let developers build their own apps. We went to be App Store in the IOT world.


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