Conversation with Thomas Nicholls
Good day, and welcome to the first 2021 edition of our digital industry leadership series. To kick this year off I’m pleased to host Thomas Nicholls, the founder and managing partner of One20, a company providing startup marketing advisory service. Thomas Nicholls is an experienced and recognized digital marketing leader and public speaker on IoT and AI solutions for industry, as executive vice-president of communications at Sigfox, Thomas co-invented the term LPWA, or low power wide area, and played a strategic role in building the founding eco-systems for a low power IoT connectivity, and the first large scale deployments. As CMO of the company such as Delair and Alteia, Thomas led the marketing strategy for start-ups driving the industry’s use of drones, machine-learning solutions to extract business insights for companies across a wide range of industries.
Thomas, welcome to our digital industry leadership podcast.
Thank you so much, Ken, I’m excited to be here, and thanks for the honor of being the first guest in 2021.
Yeah, let’s just say, we should have done this a long time ago because you and I have known each other since, as we were talking just before the podcast, 2013, which seems like ages ago! But I always love having worked with people and then of course doing the research for these podcasts, because you realize how much deeper experienced bases are, and overall experiences are in that. So, I always like to start off in terms of understanding what I like to call the red thread of your digital industry leadership journey.
Yes, so that’s a good and not necessarily easy question Ken, so thanks for starting off with that! I started out my career as a software engineer, so I actually started out building solutions, technology solutions, and then I sort of transitioned into more building brands and building businesses. I think the red thread on all of that has really been my passion for technology and how technology is being used.
As I mentioned earlier, we first met in 2013, and as I remember it was the… I want to call Sigfox, I think you said it was the first-anniversary event in Paris, which is an absolutely wonderful location, and you had a wonderful venue for that. As I remember it was you and good old Ludovic Le Moan the CEO of the company on the stage at the time, talking about their initial deployments of low-power wide-area through France. The audience will know Sigfox was an early global leader in IoT.
So, what were some of the key trends that you saw emerging over your five years leading marketing for them?
It was five years you say, and it’s true that it was five years, but to be honest, looking back at it, it seems like it was 20-25 years! So much happened both at the company and the industry. I think that it's important, and of course, we don’t look or sound like we’re that old Ken, but I think it’s important for the listeners to know that we’ve all been through a lot, us dinosaurs who were there from the very early days, and back when we started Sigfox there wasn’t anything called the IoT, there might have been some RFID guys talking about IoT, but it was really machine to machine and really sort of a techy area without a lot of media attention or anything.
So, actually, the first stage of Sigfox and the first challenge for me was figuring out how to build a brand and drive demand for a solution that didn’t have a category, we simply didn’t exist as such because no-one really understood what the heck we were talking about when we said, ‘A new connectivity solution, it’s low power, you will see and enable a lot of new business cases,’ and it was really a pain in the behind to have to spend so much energy on having people understand the category, instead of actually promoting what it was that we were doing. So, that was a bit of a struggle, but I found the solution for that, I think people who have been in this industry for a while know one of my friends very well, it’s a gentleman from England called Jim Morrish, who around the same time as we started Sigfox him and his friend Matt, Matt Hatton, had just started Machina Research, and Machina Research was an analyst firm, and it was really really early days for those guys.
So, I had some very good discussions with Jim, but he didn’t really have any data that was interesting for me. But I came up with the idea of tasking Jim with the assignment to create the category, I said, ‘Jim, I’m spending too much time on this, you need to help me on this. Can you come up with a name?’ Because I’m a vendor and I cannot create the name, it will never be accepted if it’s a vendor that creates the category, right. Jim accepted the challenge and threw some names, we threw some ideas back and forth and he ended up suggesting LPWA or LPWAN, and that’s actually how the name was created. So, Jim should get all the credit for actually creating the name, but it was the discussions between us that ended up creating that category, and that was sort of the beginning of the next big phase of the IoT and LPWAN.
We spent a lot of time Ken together back in those days, we met at trade shows while we were flying all over the world, and at Sigfox we raised $300 million, we hired I don’t know how many people, the whole industry was buzzing and IoT hardware start-ups left and right, and software startups left and right, and it was really-really an exciting era. Then I think, and Ken we can discuss this, but my sort of way of seeing it is, we then got to the point where everyone understood the sort of realities that were there, that it’s all about finding ROI for customers, and at the end of the day we had been spending a lot of time building technology, and that was needed, but the next step was really to figure out how we could drive actual demand and find ROI for solutions based on these technologies.
So, that was sort of the final stage for me at Sigfox which was all about saying, ‘Okay, we’ve got the technology, we’ve got the early adopters starting to use the technologies, but how do we find a good product-market fit, and how do we scale that?’
And you know, I guess talking about taking the technologies and moving solutions, in 2017 you moved over to Delair as Chief Marketing Officer, and helping the company really pivot from manufacturing drones to providing a platform to ingest and analyze geospatial data. Tell us a bit about what motivated you to make this move, and how that worked out.
I spent as you said five years at Sigfox, which again felt more like 20 years considering everything we got done, but I ended up in the executive team of a company that had grown tremendously, we’re more than 300 employees starting from scratch, and it was five intense years. So, for me I found myself spending a lot of time on I would say running the business, internal operational activities, and again going back to your initial question Ken, and my initial answer, I think what drives me really is a passion for building things, building solutions, building businesses. So, for me, it was sort of a natural time to find a new challenge.
I knew the guys from Delair because we had actually been pitching, I’d been pitching Sigfox when they had been pitching Delair to some of the same customers. So, it’s interesting because when people hear about a drone company, they don’t naturally make the link between IoT and drones, but what’s important to understand is that drones such as the drones that Delair is producing is basically flying sensors, so it is very much industrial IoT. Delair, manufacture sort of larger drones that are equipped with cameras or the types, it could be LiDAR sensors or other sensors, and they collect a lot of data from the physical world that is then analyzed in order to create business insight for the users – the company using it.
So, it was very exciting for me because Delair was at a stage that was very similar to the beginning of Sigfox, but in a very-very similar space still within the industrial IoT, so for me, it was very obvious that I could add a lot of value through my experience to the Delair team.
You know, it’s interesting when I look – I like the way that you portrayed a drone as a flying sensor platform in that, and when I look across your experience space both providing a needed infrastructure in the form of low power wide area communications and then full solution sets; you’ve got almost between the two of them a decade of what I consider to be really cutting-edge leading experience in the IoT. With that perspective what has been some of your greatest learnings about this industry, we like to call IoT?
I would say… what happened at Delair which is what I think probably a lot of your listeners are with an IoT or AI companies, and a lot of them will probably recognize what happened at a company such as Delair, which was that they were focused on I would say the lower levels of the value chain, understood in the sense that they were focusing on collecting data initially. Whereas, very quickly they discovered that actually there was a lot more value to extract from analyzing that data, taking the raw data on what’s happening in the physical world, transforming it into business insights using machine learning famously called AI, to analyze that data. In the case of Delair, it would be computer vision-based machine learning to organize the data around physical assets that the companies operate, in order to provide insights.
I think that generally as a trend within the IoT industry, and I think you would agree Ken, the number of companies that even had a name that included IoT that have migrated over to using AI or machine-learning instead of IoT is tremendous because all of these companies understand that they need to focus, and they need to focus on where they deliver value. Doing large volume hardware in the case of Delair was difficult because of the drone legislation which doesn’t evolve that quickly, but generally speaking, doing large volume for IoT sensors is a complicated area, but there is a lot of immediate value to bring by analyzing that data.
So, that was a very long answer, but to cut it short there’s a need to focus and I’m seeing a lot of both startups, but also innovation initiatives in large organizations that simply lack focus. They tend to get lost in technological discussion; they tend to get lost in not experimenting with the right things. What they need to focus on is getting to the value of course and getting to value very often can be distilled to finding the product-market fit. So, they need to build a learning organization which is focused on finding and validating a product-market fit before starting to scale that, instead of trying to implement a lot of advanced means of operating their business, which is really only interesting when you have something to scale. So, the first thing to do is to focus, find your product-market fit before you start scaling.
All of this sounds like a great intro… I guess all of this has converged into you creating One20 this year. So, tell us a little bit about what One20 is and how it operates.
Yes, so if there’s one thing I’ve learned it is that we always have new things to learn, so I would say what really motivated me to create One20 is the fact that I want to bring my experience, I want to bring my failures, my successes to companies. And I think that if I go out and take another job as a CMO or a similar position, then I will learn from what I see in that specific context. I think that there’s a way to create even more value by having an activity where you see many more projects, you see many more industries, you see many more ways of approaching things, of testing things, of learning things, and by creating One20 I offer my experience as a service either directly by personally getting involved as an adviser or coach, for a start-up or another organization looking into IoT and AI, but it can also be teaming up with other experts through my network in order to address more complex projects. But it’s really about adding the experience to the younger projects so that they can avoid some of the mistakes that I have maybe been through, or that I have seen elsewhere so that I can help them focus their energy and their resources and become more efficient and grow quicker.
Given your experience, accelerating I guess both founding and accelerating these companies, what’s the game plan you traditionally follow when you engage with a company, and what results can that company expect to get from engaging you?
Yes, I think the key value and I think that why One20 works are because I’m from the world of startup, so I know what it’s like, I know what is needed, I know what is not needed. So, the way that I approach things is that I only engage with clients, with companies, when I’m 100 percent convinced that I can deliver value and that I can do so efficiently. Just like my advice to other startups would be to be focused, and focus on ROI and product-market fit, the same goes for my activities at One20. So, I engage in discussions with potential clients, sometimes I come to the conclusion that I don’t think that they should engage with me to do projects, so I might help them in another way, and sometimes I see that I actually can deliver some value. So, then what I’ll do is I’ll spend some time with those companies making if very-very clear what the objectives of the project are, and that’s very very important. I’m someone who is very data-driven, very objective-driven, and again that goes back to my own time as CMO in startups, no-one wants to waste their time, especially not startups.
So, this is all about having a very-very clear objective, making it very-very clear what to expect so that I know exactly what needs to be delivered, and so that the company I’m working with knows what to expect, and then we can measure how well we’re performing. It might sound very basic, but I...
can tell you the number of companies I’ve worked with myself as a CMO in startups, they didn’t have an engagement model that was really adapted to startups, it’s just really a pain in the behind because you waste energy, and you waste resources. I don’t really want to get into that, so I’m very-very focused on delivering value, so customer that engage with me will get an honest answer about whether or not I believe I can help them, and if I believe I can help them it’s because I’m 100 percent convinced that I can, and then I’ll openly present what I believe is the best solutions for them, whether that is me directly working with them, whether it’s putting them in contact with other people, whether it is building a team to help them, whatever it takes to help them grow basically.
So, going back to your value proposition then, this is more marketing advisory or fractional CMO? How would you categorize exactly the value proposition?
Yes, so my sweet spot is definitely everything that evolves around marketing personally. I have to honestly say that I do talk to a lot of companies that have challenges that might go beyond a traditional definition of marketing, say fundraising or other types of growth needs, and in those cases, I can often still help in some cases simply through my network, in other cases, it will be me teaming up with people with other specific and required skills, but that can be through sort of project-based audits, due diligence, it can be objective-based projects, or it can be as what you referred as fractional CMO, basically being there as a sort of part-time CMO, but someone’s who’s experienced for a company that might not be ready to actually integrate that sort of profile directly in that company, for financial reasons or for any other reason.
Well, you certainly convinced us because Momenta recently hired you to work in one of our eco-systems company, Oden. So, what’s their value proposition, how are you engaging with them?
Oden is a manufacturing analytics SaaS platform. So, what that means is that their solution aggregates all the data from manufacturing machines and workflows, all of the raw data from these machines, and then it analyses that data using machine learning to really extract actionable insights that manufacturers can use to improve performance or improve quality. So, for instance, reduce the scrap rate; so you know manufacturers that produce a lot of volumes, will, of course, have products with defects, and that happens to everyone, so one of the big challenges is how do we reduce the rate of defects, and using the Oden solution, that’s the definition of machine learning, but Oden have enough experience to have done this for quite a few customers, so they can extremely quickly give insights and say, ‘This is what you need to be doing in order to reduce defects, or simply improve throughput within manufacturing.’
I think Oden, going back to our previous discussion, is a perfect example of, first of all, a company that has evolved, they’ve been really a learning organization where their initial way of approaching things didn’t work out, so they’ve adapted, they’ve been through some pivots, and they’ve now found the sweet spot where they have product-market fit, so they know that they have a return on investment, they can do repeatable sales and they deliver value extremely quickly to their customers. It’s one of those ML or AI-based solutions that really deliver a return on investment.
Frankly speaking, I think that Oden, Alteia, and there are many others out there, but those companies really serve as examples and as enablers for other actors because solutions such as Oden that is adopted by a large manufacturer will very-very quickly deliver value and return on investment, which will help evangelize around the efficiency of that sort of solution, which will pave the way I think for a lot of other innovative solutions. So, Oden has definitely figured out how to go about doing that, and it’s an exciting team as well based out of New York City.
Yes, and certainly a non-strategy space where Momenta likes to operate at the intersection of the digital and manufacturing industry. I know you’ve been active in your community of Toulouse, France, to co-develop what I think they’re calling IoT Valley now. Tell us a little bit about your work there.
One of – or maybe two key challenges when it comes to collecting data from the physical world and analyzing it, so IoT and AI, is that the larger enterprises are obviously realizing that there’s a lot of potential from using these technologies and these solutions, but it’s not necessarily easy to figure out how to approach that; what do you make? What do you buy? If you buy it how do you buy it? I mean a large enterprise working with for instance a startup is not necessarily a match made in heaven if it’s not managed correctly. So, if you want to develop and if you want to accelerate the market and the adoption of IoT and AI solutions you need to help the large corporate enterprises.
So, that’s one of the things that the IoT valley focuses on. The IoT valley specifically is focused on the French market, but they go out and they work with large accounts and they help them identify areas within their business where they can innovate things to IoT and/or AI solutions. So, once they’ve identified those sweet spots and there’s a common understanding of if there’s a solution to address that specific problem or opportunity what would it look like? Once that is done the IoT value, they will go out and will try to identify whether there’s an existing startup that addresses that specific problem or opportunity. If there is, they will try to set up a relationship between the startup and the enterprise, and they will facilitate the integration of the solutions from the startup, which can then in some cases go even further to an acquisition or investment.
If there isn’t a start-up that addresses that, the IoT valley will go out and build a startup to address that specific need for the large enterprise because that’s the challenge for the startups very often, it is to find the launching customer, so who are those big enterprises that will go in and invest as a customer, in a solution from a start-up. So, if you build a startup, sort of reverse engineer the creation of a startup, you have a need from a large enterprise account, so you know that you have a launching customer, and then you go out and you build a startup. The large corporate don’t necessarily need to as such invest in the company if they don’t want to, in some cases they do, but the simple fact of them being a launching customer obviously bootstraps the creation process of a startup.
The IoT valley was something that was started around the same time actually as Sigfox, because we identified this need for facilitating the understanding of the potential of IoT and AI amongst corporate accounts, and the need for launching customers for all of these startups. Today there are at least more than 40 startups that have been launched by the IoT valley, with launching customers, so big corporate accounts and a lot of corporate accounts, even some of them have gone all the way to actually opening physical offices in the buildings of the IoT Valley. So really a successful endeavor and I’m not operationally involved in the project any longer, but it’s an exciting project and I think that anything that can be created around the world to help facilitate the adoption of these exciting solutions is something that I’m at least passionate about.
I know, it’s a great way to give back and I’m impressed with the foresight of the region there to support that capability for its startups, which is great.
Kind of rounding all of this out, given your own success in startups, and certainly your perspective across startups, if you had to do it all over again what advice would you offer to an aspiring entrepreneur getting ready to kick-off a startup?
I’m trying to avoid cliches and really speak to my own experience, I would say that when I meet a startup that I didn’t know before and I start to look into what they do, I would say that I’m probably not exaggerating if I say that 90 percent of the times that happens when I ask the startup, ‘What is your offer, and explain your product-market fit. So, what’s your value proposition and which customers are you addressing?’ which should be pretty simple questions, right? I do actually always get answers so that’s the good news, the bad news is that if I then ask them, ‘So, can you name the customers you have that you have found that value proposition?’ then what very-very often happens and I think it’s by far most of the start-ups I talk to they will have customers, but they always have excuses for why the customers they have don’t actually fit into that specific definition they just gave me. It’s quite funny and it might sound surprising for people who are not in this world if they are start-ups or IoT AI experts listening, and I know you have many listeners, I mean I am sure they will recognize that finding the product-market fit is something that is difficult, it requires a lot of focus.
So, a young entrepreneur within the IoT and AI space I would say, do yourself a favor, don’t start implementing a lot of advanced tooling or initiatives just to try to desperately get whatever customer wants to throw money at; invest in finding and experimenting with a product-market fit because I can promise you, you won’t get it right in the first go. But continue learning, find the product-market fit, because it’s not before you’ve found that, that you have something that you can scale, and if you don’t do it – if you are like most people you will crash if you are like some people you will actually for unknown reasons manage to raise some money, and then you’ll start to have investors who will ask for this proof of your product-market fit. Then all of a sudden you don’t only have to answer to your own wallet and your own investments in your company, but you all of a sudden have investors that want to try to understand when they’ll get a return on investment. You need to be able to prove that, although you might not have thousands of customers yet if you can tell them and show and prove that you have your value proposition, your target audience well defined, and you actually have proof that you can execute on that, and the only thing you need to do is scale, then you’re at a very very good place.
Find your product-market fit and scale the heck out of it!!
I fully agree with the way you tell the story though, I’ve seen too many companies – and we invest in them, so we see as well, typically you see it around the ratio of non-recurring engineering to ARR or Annual Recurring Revenue.
And so, ‘We’re a recurring revenue company,’ they will say, but the majority of the revenues are coming in from non-recurring sources which means projects, right? And yes, there’s a lot to be said for learning and ranging, and finding where you really fit, but it is… you said earlier, it’s that hyper-focus that ultimately you need to be able to get to because you have to scale something that’s replicable, and I’ve seen too many companies try to scale a broad thesis if you will, which is very difficult to do, as they say, ‘Boiling the ocean.’ So, all great insights there Thomas.
So, in closing…
Sorry for interrupting but if I can just shamelessly again plug one of our joint partners, Oden. I think if we use them as an example, because a lot of IoT companies will be doing stuff with machine learning, and AI and a lot of companies are sorts of specific within the world of AI and machine learning; figure out very early on whether you want to be an NRE or services company, or if you want to build a scalable SaaS kind of company which Oden had done which is very critical if you want to scale your business understand what can scale. You need to have something that can scale otherwise it will be a very-very complicated journey. So, that’s just another lesson learned and a piece of advice.
Yes, good example there. So, in closing can you provide recommendations of people, books, or resources that inspire you and which you’d like to share with the audience?
I actually read a lot, I don’t read that many marketing books because I think that it’s a lot of pages, very often you have these very long books with very simple messages. I actually get most of I would say marketing and innovation and information through discussions with people that are smarter than I am, or people who have done things that I have not done myself. So, I would say invest time in building up a network, doing some ping-pong with other people, throw your ideas out there and talk to people about how they approach things. I think that is very often more rewarding. I have read the traditional marketing bibles and all of that, but I would say invest more in actually building a good network of people, it could be investors, it can be advisers, it can be simply other people who do things differently, I think that’s worth it.
And then if there’s one thing I can recommend about books, and I’ve just thought about that actually, I read a book recently called ‘Why we sleep’, and it's most definitely not a book about how to optimize your marketing initiatives, on the contrary! But I would definitely recommend everyone to read the book, ‘Why we sleep’ because I think there’s great importance in having a life that is good and finding energy by having a healthy life. I’ve seen too many entrepreneurs who have run themselves down, I think that is very dangerous, I think it’s important not to forget that you’re a human being, and as human beings, we might see ourselves as being very advanced, but not that long ago we were hunters and gatherers, we are biologically built as beings that need sleep, that should get some exercise.
So, if you want to be performant then do not only focus on reading and learning about how to optimize your time and be more efficient, think about your body as well, and make sure that you are ready to perform when needed.
Good advice, especially for the majority of us that are either working from home, sheltering in place, etc., etc. living that virtual lifestyle. So, it’s so much easier to remain in a rhythm when you have a commute either way and the standard meal patterns, it’s much more difficult when your whole day revolves around one room!
Definitely, definitely agree.
So, Thomas thank you for spending the time with us and sharing these great insights.
Thank you so much, Ken, it was exciting to be a part of it, so thanks a lot.
Sure. So, this has been Thomas Nicholls the founder and managing partner of One20, I’ll call it a digital marketing advisory to put a product-market fit on it. Thank you for listening, and please join us next week for the next episode of our digital industry leadership series. Thank you and have a great day.