Hello and welcome to a new episode of Welcome to Day One, the podcast for Aussie founders, startups & the organisations that support Australian entrepreneurship. Welcome to Day One is brought to you by the City of Newcastle’s brand new innovation platform, Newihub. Today on the show you’ll hear from Antony Martin the co-founder of Hone.
But first I’d like to tell you about another organisation that is helping startups succeed in our region. The City of Newcastle is a big supporter of entrepreneurship in our region and has recently launched a brand new digital hub called Newihub. Newihub is a growing and vibrant community of Newcastle’s startups & founders. It’s a central hub where you can learn about what’s going on in our ecosystem, with events, available jobs and other resources.
Today Hone has 13 full-time team members and a small team of casuals that come and go with big projects, with customers all around the world and right now they’re scaling up manufacturing of their device which will enter its first large runs this year in 2021. It’s been quite a journey so far. Now, let’s go back to day one, where this story begins…
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Adam: Hello and welcome to a new episode of Welcome to Day One, the podcast for Aussie founders, startups & the organisations that support Australian entrepreneurship. Welcome to Day One is brought to you by the City of Newcastle’s brand new innovation platform, Newihub. Today on the show you’ll hear from Antony Martin the co-founder of Hone. Antony: Hi, I’m Antony Martin, the CEO and co-founder of Hone. At Hone, we build portable handheld devices that replace the need to send samples away for, to labs to get tested. So with our device couples to your app and you can test any sample and get an instant result.
Adam: But first I’d like to tell you about another organisation that is helping startups succeed in our region. The City of Newcastle is a big supporter of entrepreneurship in our region and has recently launched a brand new digital hub called Newihub. Newihub is a growing and vibrant community of Newcastle’s startups & founders. It’s a central hub where you can learn about what’s going on in our ecosystem, with events, available jobs and other resources.
Today Hone has 13 full-time team members and a small team of casuals that come and go with big projects, with customers all around the world
Antony: We’ve got around 400 customers, some of those sort of large institutes down to individual farmers.
Adam: and right now they’re scaling up manufacturing of their device which will enter its first large runs this year in 2021. It’s been quite a journey so far. Now, let’s go back to day one, where this story begins…
Antony: So basically myself and my co-founder Will, we, signed up to do a PhD which is great and the professors sort of saw that like some nice cheap labour to go and do a lot of lab testing. So we were sent off into a field and we were supposed to do you know, thousands and thousands of lab tests.
And what we were trying to achieve was to breed a new type of crop that was really good for making bioethanol. And so we got sent off to go and measure these plants and figure out which ones were most easily broken down into ethanol.
And to do that, we needed to know, well, what’s the chemistry of that plant. What’s it made of, and part of that was looking at something called lignin which no one’s probably ever heard of, but it’s a, it’s something that makes it very difficult to break that plant down into ethanol and so we had to do a lab test for lignin and we had to do thousands of them.
And yeah, we decided, you know, that we didn’t want to spend three years doing this particular lab test for that and so we started exploring new ways of doing it and turns out using light, shining a light on the sample is it is a much faster and simpler way of testing for things.
Adam: Antony met Will at university, but Antony and Hone’s other cofounder, Jamie, go way back.
Antony: Jamie and I go way back to primary school enemies and high school friends.
We did all sorts of things. I could talk all day about all the things we’ve done, let’s see, in high school we started a woodworking business because my our other good friends, parents owned a woodworking shop and so we started making chess boards and guitar stands and putting them on consignment at the shopping centre and making a little bit of money. We spent all that money on it, but yeah, so that was fun. We built a wood-fired pizza oven on a trailer in uni and kind of, It was quite famous in Newcastle actually. Cause he lived up on the beach and we used to have these parties on the beach where we’d cook pizzas and people could pay whatever they wanted. And it wasn’t the most successful economically, but we made a lot of friends.
Adam: That entrepreneurial spirit had always been strong in Antony. Antony has toured the world in his band before starting Rapid Phenotyping that would eventually be called Hone, we’ll get to that part of the story later, but Antony told me that being a musician and playing in his band helped prepare him for the business world.
Antony: And I always think playing, when I was playing in the band that’s I always see that as my first startup, it was it’s all the same stuff you got to. You have to have some sort of creative aspect to it to create something new and you know, you go and record an album and all that. And you need to be able to market yourself and get people to be aware of what you do and you need to get interests from a financial perspective. You need to get record labels on board to fund it. And I guess all the aspects are exactly the same for me as a startup.
Adam: So back to the story of the thousands of lab tests that Antony and his lab partner Will were asked to do.
Antony: I guess the point of that story was that was our realization that the traditional way of doing lab testing was very slow, expensive, inconvenient and they had to be a better way to do that. And yeah. Rather than doing all that lab testing, we spent three years figuring out a better way to do it.
Adam: After completing their PhD, which is the research that would eventually be commercialised via Rapid Phenotyping and Hone, Antony didn’t pursue that technology straight away. They had lot’s of ideas, but they were lucky enough to get some funding through HMRI – The Hunter Medical Research Institute, to build a new type of microscope. A microscope that allows researchers to take lots of 2d images of say, a cancer biopsy and build a 3d model of it.
Yeah, there was a team of something like 10 people working on that.
Yeah, so we, we all worked in that team. And you know, we were very excited to get some funding to do that, and it was a pretty amazing opportunity could come straight out of a PhD and have our own lab, to doing our own project.
But the funding was limited and so we shared a wage between the three of us and my co-founder Jamie actually led a lot of that work on the microscope. And so we were looking for other ways to make some money and we thought well, we know about this better way of doing lab testing and we think other people need that.
Adam: Using their PhD research the team started looking around for ways to supplement their income.
We were really just trying to supplement our wage because we were running on nothing and yes because we knew that there were other labs around that needed or would benefit from doing this cheaper, faster method of testing. And we had some contacts there, we went and set up these consulting projects and got them to pay us to go and do this process for them.
So we, at that point we’d built no hardware. We were using some other big bench hardware that is made by other companies. And we were doing all the mathematics behind it very We were also physically going to these places and measuring samples, using this large spectrometer ourselves.
Adam: I think sometimes we can over complicate things in business. This is how Antony got started, he asked himself who do I know that might need what we have. He looked at his own network first.
Antony: I guess our very first customer was CSIRO.
We had connections at CSIRO having done my PhD half through CISRO and half at Newcastle. So we just went and asked the people we knew, you know, what other labs are there in CSIRO who’s working on this sort of stuff who needs to do a lot of lab testing and we got a few names, we went around and met them all and pitched, gave them a pitch and offered them a ridiculously low price.
The best example of this we got a project in the Philippines and we, they had 6,000 samples that were going to take them three to five years to measure them all in, in in a wet lab, we went over there with all this large, reasonably large equipment and doing things very manually.
We sat in a basement over there and scanned 6,000 samples. I think all of us at some point got food poisoning, it was horrible. In the space of two weeks, we delivered these 60,000 tests results which would have taken three or five of five years. So I think that was a good proof of concept, but it was also good proof to us that we didn’t ever want to do that again.
I think we were excited that it was a great experience for the customer, they got these results in, you know, unheard of time and way cheaper than, we should have charged them more.
But for us personally, we didn’t really want to do that again. And we knew that was not a scalable, scalable option. Yeah, so we went about finding some money to go and build our own hardware and our own software platform and make, turn it into something that we can sell to someone and I can do it all on their own.
Adam: Having decided they didn’t want to lug this big hardware around the team, while still working their day jobs, doing consulting on the side, set out to start their new company. But knowing they had a lot to learn along the way, started to build a network of advisors that could help them get started.
Antony: We were still 80% working on the microscope project and we were searching around for some funding to get the company off the ground. And in that process, we went and I guess we realized that we were pretty naive in terms of how to run a business. And so we set up, we got a bunch of mentors and we set up an advisory board and things like that. And that was super valuable. And even today, you know, we’ve got some of those people that still advise us and without them, we definitely wouldn’t be here.
I think both we’ve, we’re connected to, to to a few people that you know, I think it was lucky that we were in contact with some of these people already.
And then beyond that, we realized that we needed some advice. And I’d also say some of the government programs kind of forced us into that as well because we were lucky enough to get some government funding to do the first stages of it and with that, they give you an advisor.
Adam: That funding was through AusIndustry’s commercialisation Australia grant. And back in 2015/2016 there was a lot of new activity just getting started in Newcastle, which Antony and the team really benefited from.
Antony: So, you know, you had, we had a lot of people around us who were all working on creating this ecosystem and we were sort of in the middle of it all.
And we were probably like in some ways the poster boys of all that. And so. I think we were very lucky to get the benefits of other people, you know, a lot of activity trying to set up a scene and people were connecting us, and obviously, we also realize how helpful that was.
So, you know, in the process of looking for funding and getting some advisors around us, we were bouncing ideas off of people. And the idea kind of shaped up around what we were going to build.
And there was definitely a lot of input from our advisors and obviously, we were shaping that and you know, where that ended up was what is now quite obvious. We need to build a cheaper, more portable device and some software that goes with that. So people can use it themselves. And, you know, that’s what we shaped up and applied for funding and we were successful. And I guess that was where the journey of building hardware and software began.
Adam: They were off to a good start, with advisors around them, funding behind them and a great mission ahead of them. But a lesson was just around the corner.
Well, we tried to build a device that does everything and custom design every single part of that device and you know, at the same time build software that could be applied to all industries and I guess we didn’t even realize we were doing that. But we went down that path and we learned a lot and we built this amazing device that was incredibly complex. And during that process you know, we came to the realization that this isn’t actually scaleable.
With the funding we had, you know, building such a complex device with all custom parts and all the supply chains, that was just a mammoth task. That was, it was too much. So, yeah, so I think in hindsight, we would’ve focused down on a particular application and a simpler device earlier.
And that’s the very next thing the team did. They started to look around for an application of their technology that had a monetary transaction attached to it.
Antony: So, we started discovering that well, anywhere there’s a transaction is where we should focus. If you think about one of our applications now is grain testing. So farmers grow grain and they sell grain. So it’s a commodity. It gets traded. Every time he gets traded, you need to know the quality of that grain that comes from a lab test.
And you get paid off whatever quality it is. So different grades yeah. So the farmer really cares about that lab test result because it means dollars at the end of the day. And the person buying it really cares because they want to buy a high-quality product and they want to know what it is.
So we want to sell a device to lots of customers and we started realizing, well, who are our customers for them? At least initially, you know, farmers and agronomists and we’d talk to a lot of them.
I mean, the development of that device has been through a lot of different stages. So, well, I think one of the first people to really use that in an agricultural setting was one of our partners, AMPS Agribusiness, they’re a farming cooperative out in the Liverpool Plains.
And you know that we’re not farmers. We’ve got some insights into it, but working closely with these guys who know farming and you know, know agriculture that’s been super important and they took a risk with us by taking these devices and yeah, you know, all the feedback we’ve gotten, we built into every new iteration of the device.
Adam: Making the decision to focus on a niche market made things a lot easier for the team, they were able to talk to that market and learn what they really needed and build a device tailored for them. But it was around this time that they also realised that their newly defined market didn’t really ‘get’ Rapid Phenotyping. So it was time for a rebrand.
Antony: Every time you say rapid phenotyping, they say, what was that? And ask you to spell it. So it was the second we got out there and started talking to customers. It was that weren’t research institutes. It was pretty clear. We needed to rebrand.
Lots of names are thrown out there and it was quite a process to come down on Hone but the thinking behind it is and now that we have this name, it comes up all the time. It’s like everything we do is honing in on a better solution.
And I think this story shows how we’ve honed our approach and honed our solution and right down to the mathematics and how that works behind the technology. It’s a process of feeding in a lot of data. We use machine learning. And we’re honing that lab test result in until it really matches the gold standard lab technique.
So, you know, I think it’s turned out to be a pretty apt name. And yeah, I guess we’re happy with it. And then people can say it and you can type it.
And I think even our, our customers using our product, they’re trying to hone their decision-making process.
Adam: Antony and the team have worked very hard honing their offering from a device that did everything for everyone, to a clearly defined market.
Antony: So where are we at today, we’ve got 13 full-time staff.
We’ve got around 400 customers all around the world, the important thing is there, a lot of those are large organisations.
A lot of those sort of institutional or labs that are doing pilots with us. So we’ve got people in Europe, we’ve got people in Asia, in the US, so we’ve got the beginnings of all that, but in terms of, yeah, doing our sort of big rollout of our device, starting in Australia, and then we’ll go through these connections internationally.
We’re at the end of a journey of building this device and making it scalable.
So right now we’re scaling up our manufacturing on the device. And we’re doing our first large runs this year of this device. In many ways, it’s been four years, but it’s still early days and where we’re still at that stage of nailing one area, and that’s grain testing.
So that’s very exciting and there’s plenty of opportunities just in grain testing.
But, yeah, looking into the future and where I get really excited is we’re then able to go and roll that out in all these different industries.
I mean, we’ve got applications in wine testing and beer testing and tea, tree oil testing, cannabis, oil testing. We’ve long wanted to get back into medical testing. We’ve stayed clear of that because we better get it right on something that doesn’t hold someone’s life in the hands.
But you know, there’s some, there are lots of very exciting applications in medical testing. So these are all things we’ve explored and we’ve talked to people and, you know, amongst the broad experience we have in our team, we’ve sort of got that, got that knowledge of those industries.
But yeah, it’s just at this stage, it’s all about nailing one thing and proving the business model and then expanding from there. And that’s, I guess the five to 10-year plan.
That’s where it gets really exciting because we can, we’re starting to think about thousands of customers and getting, you know, every farmer using this device.
Adam: And to think it all started because Antony and Will didn’t want to have to do thousands of tests for their PhD research.
Antony: I guess it was we were trying to get an outcome, which was a better crop for producing bioethanol and along the way we found better tools for doing that. And that’s where we saw an opportunity, we thought, you know, measuring bioethanol crops is a very small niche, but this could easily be applied across all these industries, any type of lab testing.
Adam: I finished my interview with Antony, by asking him what advice he had for new founders.
Antony: Well hopefully the whole discussion we’ve has been little bits of advice, but I think you have to be somewhat naive to jump in and do it. Otherwise, you probably wouldn’t do it. I think you gotta have, you gotta have a big vision.
But you’ve got to break that down and start small and solve small steps of it at a time, to get to that big vision. Which is probably one of the key things I think we’ve learned. And yeah, I mean, you have to be passionate. You have to believe in what you’re doing and everything else will follow.
Well, I think it’s the same story. It’s you know, I think we’ve done a lot of things right. And we’ve made a lot of mistakes, but if you’re not making mistakes, you’re not learning anything.
I wouldn’t want to say that. I think those mistakes have all been part of a positive journey to learn these things. So I don’t think I’d do anything differently.
Adam: Thanks for listening to the story of Hone with Antony Martin.
The City of Newcastle’s Newihub is our major sponsor and I’d just like to take a second to express my gratitude for their support. Newihub is a great new initiative from the team at the City of Newcastle. It’s an online community to keep up to date with what’s happening in our region from an innovation perspective and a hub of great resources. I encourage you to check it out and sign up to be a member.
You can learn more by clicking the link in today’s episode notes at welcometodayone.com or by going to newihub.com.
This episode was produced & written by me, Adam Spencer, with audio editing by Natalie Holland.
Information about everything mentioned in this episode can be found on the show notes page at welcome to day one dot com.
Music by Lee Rosevere, full attribution on the welcome to day one website.
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I’m Adam Spencer, thanks for listening.