FF 011 'The Savviest Investors Don't Ask What If' with Ben Nader, CEO & Founder @ Butterfleye

In this episode of the 20 minutes VC, host Harry Stebbings interviews Ben Nader, CEO and co-founder of Butterfly, a smart home security camera that distinguishes itself with its ability to discern what to record. Born in the Middle East and an immigrant to the U.S., Nader's background in electrical engineering and product management led him to address personal frustrations with existing market products by creating Butterfly. He shares insights on the importance of hiring the right team, the benefits of launching on crowdfunding platforms like Indiegogo, and the significance of focusing on a few key features for product differentiation. Nader also discusses the value of targeted user feedback, his fundraising journey, including a successful campaign on Indiegogo and attracting investors like Jason Calacanis, and his vision for Butterfly's future as a trusted consumer brand.

• Ben Nader is the CEO and co-founder of Butterfly, a company that produces a home security camera.
• Butterfly's camera is designed to be intelligent, learning what not to record, which differentiates it from other products.
• The product is likened to a combination of Google, Nest, and Dropcam.
• Butterfly has prominent investors including Brad Feld and Jason Calicanis.
• There is a current campaign for Butterfly on Indiegogo.

"And today we have the fantastic Ben Nader, CEO and cofounder at Butterfly, the home security camera that can learn what not to record."

This quote introduces Ben Nader and the unique selling proposition of Butterfly's home security camera.

• Ben Nader was born in the Middle East and immigrated to the United States during his high school years.
• He studied electrical engineering due to his interest in gadgets, electronics, and building things.
• Ben's career began in hardware and electrical engineering and later transitioned to business and product management.
• An internship in college sparked his interest in cameras and videos, leading to a ten-year career around camera and video technology.
• He worked for Texas Instruments, managing their video chips product line before starting Butterfly.

"I studied electrical engineering ever since I was a little kid. I loved the gadgets and electronics and building things."

Ben Nader explains his long-standing interest in electrical engineering, which paved the way for his career and eventual founding of Butterfly.

• Ben Nader's motivation to become an entrepreneur stemmed from personal frustrations with existing market products.
• He identified shortcomings in home security devices while trying to find a simple solution to monitor his bicycles in his garage.
• These experiences influenced the design decisions and features of Butterfly's product.

"But the idea on butterfly and how it all started was really as a series of frustration, personal frustration, and shortcomings of the products I bought in the market."

This quote highlights Ben Nader's personal experiences that led to the creation of Butterfly, addressing gaps he found in the market.

• The design process began with identifying a personal problem and conducting market research.
• Ben Nader realized others faced similar issues and saw an opportunity to create a solution.
• He transitioned from the corporate world to entrepreneurship to dedicate himself fully to developing Butterfly.
• Recruiting talented individuals to complement his skills was a crucial step, especially in areas like product design.

"So it all started from a personal problem and buying everything in the market and nothing working solved your problem."

Ben Nader describes the starting point of Butterfly's product design, rooted in solving a personal problem that was not addressed by existing solutions.

• Ben Nader built his team using a combination of networking, recommendations, and online platforms.
• Living in the Bay Area provided a network of entrepreneurs and industry experts.
• Recommendations from friends and colleagues were instrumental in finding team members.
• Online resources such as AngelList and LinkedIn were also utilized in the hiring process.

"A little bit of everything, yes. So it did help that I lived in Bay Area for six, seven years and just living in city or around the city and being with other entrepreneurs, or having finding roommates throughout the years through friends of friends."

This quote explains the multifaceted approach Ben Nader took to build his team, leveraging his network and online tools.

• The transcript does not provide a complete response to this point, as Speaker B's answer is cut off.

"So now we have the product. How does butterfly differentiate itself from other people i"

This incomplete quote suggests that the conversation was about to address how Butterfly's product stands out from competitors, but the response is not included in the transcript.## Differentiation of Butterfly Camera

• Butterfly camera is designed to move away from passive 24/7 surveillance to a smart camera system.
• ABR technology enables the camera to analyze content and make decisions based on what it sees.
• The camera can distinguish between humans, pets, and inanimate objects, and adjust recording accordingly.
• Privacy is considered by not recording recognized homeowners.
• The camera behaves differently based on the content it detects, only recording important events.

"The idea and the core fundamental differentiation with our product is this patent pending technology we call ABR."

ABR (Activity Based Recording) is a technology that allows the Butterfly camera to intelligently analyze the footage and make decisions on what to record, differentiating it from traditional cameras that record continuously.

• The Butterfly camera addresses the lack of battery-operated surveillance cameras in the market.
• The need arose from the inconvenience of setting up cameras in areas without power outlets.
• The design allows for flexibility in placement and a significant battery life.

"Why don't nobody has made a surveillance camera battery operated?"

Ben Nader identifies a gap in the market for surveillance cameras that are battery operated, which led to the development of the Butterfly camera to address this specific need.

• Butterfly camera features automatic built-in storage as an alternative to relying on constant internet streaming.
• The camera can decide to upload videos to the cloud or keep them locally based on the reliability of the internet connection.
• This feature ensures footage is preserved even when connectivity issues arise.

"Wouldn't it be smart if the camera had built in a storage and it could decide between, depending on its Internet connection, between uploading the videos to a cloud storage or uploading videos or keeping videos locally and making a decision on what to do depending on whenever the Internet comes available."

The camera's ability to choose where to store footage based on internet connectivity is a key feature that provides reliability and flexibility in data management.

• Ben Nader believes that one or two standout features are sufficient to differentiate a product and enhance consumer experience.
• The focus should be on solving consumer problems and significantly improving the user experience in specific areas.
• The belief in needing to be ten times better is challenged by the practical observation of customer behavior and feedback.

"I think it's really one or two features at the end of it that's going to matter."

This quote highlights the realization that a few well-executed features can be more impactful than numerous differentiating factors when it comes to consumer adoption and satisfaction.

• Ben Nader prefers targeted feedback from a controlled group of about 100 individuals.
• A small, well-understood demographic can provide meaningful insights quickly.
• After receiving feedback from 3 to 5 people within the target group, common issues and opinions become clear.

"After three to five, somewhere between three to five people, I didn't need to do anymore."

The effectiveness of receiving feedback from a small, targeted group is emphasized, indicating that a larger sample size may not yield additional insights.

• Indiegogo has been instrumental in acquiring the first customers for the Butterfly camera.
• Crowdfunding platforms like Indiegogo and Kickstarter are valuable for reaching early adopters.
• Early adopters from these platforms contribute to the final product development, especially in software iteration.

"So Indiegogo has been amazing."

Ben Nader endorses Indiegogo as an effective platform for launching new products and engaging with early adopters who are crucial in shaping the final aspects of the product.## Choice of Crowdfunding Platform

• Ben Nader discusses the reasons for choosing Indiegogo over Kickstarter for their crowdfunding campaign.
• Geographical proximity and personal collaboration with the Indiegogo team influenced the decision.
• The team felt a closer working relationship with Indiegogo due to face-to-face interactions.

"We went with Indiegogo because we're based in San Francisco. Indiegogo team was based in San Francisco and we just felt a little bit more closer working collaboration with them."

The quote explains the rationale behind choosing Indiegogo for the crowdfunding campaign, emphasizing the advantage of being in the same city as the platform's team, which facilitated closer collaboration.

• Preparation is highlighted as the key to the campaign's success.
• The team worked extensively, including long hours in the weeks leading up to the campaign launch.
• The importance of having a marketing strategy, building an email list, social media presence, and a clear message in the video and on the campaign page is underscored.

"Preparation is the number one key."

Ben Nader credits meticulous preparation as the primary reason for the campaign's success, indicating that it was not a matter of chance but the result of dedicated effort and strategy.

• Ben Nader describes meeting Jason Calcanis through the AngelList platform.
• The fundraising process involved Jason's team reaching out to Ben, leading to multiple meetings and the formation of a successful partnership.
• Ben Nader values Jason's guidance and availability as the most significant benefits of their collaboration.

"Jason is awesome. I think the world's most helpful Angela master is a fantastic and a very appropriate title for him."

This quote expresses Ben Nader's appreciation for Jason Calcanis, emphasizing his helpfulness and the positive impact he has had as an angel investor.

• Reflecting on the fundraising experience, Ben Nader acknowledges that he has learned a great deal.
• He notes that the best angel investors focus on the founder and the team's ability to execute rather than getting bogged down in product details or hypothetical scenarios.
• Ben Nader advises against engaging with investors who focus excessively on "what if" questions and values investors who are interested in the business case and vision.

"One of my radar detectors for a bad angel investor, if you will, is if they're asking me as a founder, too many what if this, what if that."

This quote highlights Ben Nader's perspective on red flags when dealing with potential angel investors, suggesting that a focus on hypotheticals is not as valuable as an interest in the founder's vision and execution capabilities.## Attracting Investors and Visibility

• Ben Nader emphasizes the importance of not being in stealth mode for consumer-facing startups.
• He recommends using platforms like AngelList to share details and images of what the startup is building.
• Butterfly got featured on AngelList, which helped gain traction and attract individual investors.
• Ben Nader used his corporate contacts to secure initial funding and invested his own savings into Butterfly.

"Don't be in a stealth mode. Nobody's going to find out about you. You should talk about your idea and you should have a presence on Angeles."

This quote highlights the strategy of gaining visibility to attract investors, suggesting that startups should openly share their ideas and progress on platforms like AngelList to get noticed and funded.

• Ben Nader started Butterfly by investing his own money, highlighting the challenges of securing funding.
• He used his savings to fund the company, demonstrating commitment and belief in his venture.
• The initial funding round included contributions from friends and executives from his corporate network.

"The very first investor of Butterfly, it was myself. I put myself, my own savings in there."

Ben Nader's personal investment signifies the initial financial sacrifice and risk entrepreneurs often take when starting their own companies, serving as a testament to their dedication.

• Ben Nader's favorite book is "The Alchemist" by Paulo Coelho.
• He finds inspiration in the book's message about perseverance and the significance of difficult times in the pursuit of goals.

"It changed my mindset that when things get really hard, it's a really good thing. It means you're that much closer to your end goal."

This quote illustrates the impact that "The Alchemist" had on Ben Nader's perspective on challenges, encouraging perseverance and reframing difficulties as indicators of proximity to success.

• Ben Nader looks up to Travis Kalanick of Uber and Brian Chesky of Airbnb for their ability to achieve massive growth and adoption.
• He also mentions traditional inspirations like Steve Jobs.

"Guys like Travis Kleenek at Uber, the consumer electronic guys have been able to take a simple idea and have a massive, massive growth and show massive worldwide adoption of people want this."

The quote acknowledges the success of consumer electronics entrepreneurs who have managed to scale simple ideas into globally adopted products, serving as inspiration for Ben Nader's own entrepreneurial aspirations.

• Ben Nader regularly reads content from Jason and Brad Feld, finding their insights incredibly useful for founders.

"Brad Feld is. Brad Feld is."

The repetition emphasizes the significance of Brad Feld's content to Ben Nader, suggesting that Feld's advice and perspectives are particularly valuable to him as a founder.

• A memorable moment for Ben Nader was representing Butterfly with its own booth at the Consumer Electronics Show (CES).

"The butterfly is now present on the show floor of the biggest electronics show in the world."

This quote reflects a milestone for Butterfly, marking its presence among major brands at a significant industry event, which was a proud achievement for Ben Nader and his team.

• Ben Nader finds Asana, Sunrise, and the Calm meditation app indispensable for his daily routine.
• He credits the Calm app with improving his productivity by dedicating time to meditation each day.

"I feel like the days I give up ten minutes to do that I get more done throughout the day."

Ben Nader's experience with the Calm app demonstrates the benefits of incorporating meditation into a daily routine, suggesting that taking time for mindfulness can enhance overall productivity.

• Ben Nader hopes to build Butterfly into a recognized consumer brand with a range of products and services for smart homes and businesses.
• He aspires to achieve a level of brand trust and recognition similar to GoPro and Beats by Dre.

"I hope to build to a brand that's similar to what GoPro or guys on beats by Dre have done."

The quote conveys Ben Nader's ambition for Butterfly to become a trusted and well-known consumer brand, drawing parallels with other successful companies in the consumer electronics space.

• The podcast concludes with an adage about the importance of hiring quality people and a promotion for Hiring Screen.

"So the whole ethos of your business is centered around what type of level people you hire."

This quote underscores the belief that the success of a business is greatly influenced by the caliber of its employees, suggesting that hiring top-tier talent is crucial for a company's ethos and achievements.