07 Apr YBF Success Stories: How one simple change turned Streamgineer around
These days, disruption is everyone’s favourite buzzword. It holds promise of revolution, and huge spoils to whoever can successfully disrupt an incumbent industry. But some innovations are so disruptive that their biggest challenge is convincing customers of the product’s worth.
Enter Streamgineer, a SaaS company that automated the switchboard making process, traditionally error-riddled and performed by multiple engineers over multiple days, to be done error-free, in seconds.
Days to seconds, error-filled to perfect – it’s hard to believe it wasn’t snapped up industry-wide within a week of launching. Yet a lukewarm initial reception is exactly the response that Hugo Fernandez, Managing Director and co-Founder, encountered.
“The initial take up was extremely slow, as the industry was not willing to embrace such a disruptive technology” he explains.
As Hugo had learned from his previous career at an electrical distribution board manufacturing company, the switchboard industry is “very much set in their ways of doing things, with little to no desire to change.”
You would think that a demonstrably high ROI would sway bottom-line oriented engineering firms to adopt the software. Not so for Streamgineer. It wasn’t until Streamgineer’s second month of official operations that they landed their first customer.
Even after some initial adoption, it took a full business breakdown with YBF in 2014 to breathe life back into the business by adjusting the price-value match. Having successfully overcome its price-value mismatch, Streamgineer now occupies the number one position in the Australian automated distribution board configuration software market.
Developing a product as a semi-coding technical founder
It was in his previous career in a multinational automation company that Hugo first toyed with the concept underlying Streamgineer. The inspiration first came to him while working as a Test Engineer across the Dominican Republic and the US.
Like many entrepreneurs before him, Hugo found himself frustrated at the inefficiencies of the existing process, and the fact that despite their efforts to increase efficiency internally, his team “could never achieve the level of speed and accuracy that was demanded by our customers.”
But Hugo came to notice that despite the reconfiguration to company specifications, the testing machines were essentially the same. “I tinkered around with basic excel equations to drive the parameters of a configuration, without having to redesign everything every time”, he recounts. Later, Hugo joined a major switchboard manufacturer in Australia, and saw the same fundamental issue he had seen countless times before: they were re-engineering when they should have been reconfiguring.
Over time, Hugo continued to develop his fledgling idea, which others believed to be too difficult, complex and expensive to turn into a reality. He now believes that the main hurdle that prevented others from attempting to create a switchboard configurator like Streamgineer’s was that they believed the number of different variables and requirements for each customer meant that each required completely unique software each time.
On the flipside, software development companies often don’t have the in-house expertise for creating specialist, niche, electrical design software. Hugo points out that it was his unique position of having “the right balance of the electrical knowledge and the software knowledge to develop the software” that enabled him to see the solution that others couldn’t see.
However, he underlines that you don’t have to be a “coder” to be a good founder. For Hugo, being able to understand logic in code has been critical in Streamgineer’s success, as his ability to understand code “has helped me frame problems in pseudo-code and apply similar coding techniques to solve them.”
This opened the lines of communications with his co-Founder and CTO, Balu Gopinath, who took Hugo’s concept to reality. “His software development skills and foresight to sidestep development landmines really made the difference in us being able to achieve the development we set out to do,” Hugo acknowledges.
This isn’t to say that Hugo discounts the advantage his familiarity with coding gave him, proclaiming that “in general everyone would benefit from being able to understand logic in code, and the world would be better for it.”
Making the most of infrastructures and support
Before landing their first customer, Hugo noted the financial difficulties of bringing a startup to life in Australia, where capital is thin on the ground. After initially funding Streamgineer with his own money, Hugo was able to obtain a $50k government grant through Commercialisation Australia to help commercialise their prototype software. From there, the business grew and opened to begin accepting private investment for equity.
However, money alone doesn’t make success, and Hugo recognises this. Choosing the right investor for your business, rather than accepting whoever offers money, is critical, as they provide much needed support through a start-up’s initial phases of growth. Streamgineer’s initial investors “were very valuable, as they provided us with much needed contacts to reach more customers in a short amount of time.”
Similarly, your early customers can help unlock new opportunities. Like Equiem receiving support to expand internationally from their early customers, Streamgineer’s first customer has been an ongoing source of critical feedback and encouragement.
“They immediately recognised the value of our offering, and gave us important feedback to improve on our product and lift the standards of the switchboard industry,” Hugo credits. “To this day, there is not a week that goes by that we don’t touch base and discuss how we can continue to improve our product and, by extension, improve the industry.”
These key players and infrastructural tools helped drive adoption, which snowballed into the 112 high-value enterprise licenses and thousands of users that Streamgineer now manages. But this adoption would never have been able to occur without a major change in pricing.
YBF performs price-value CPR
Ultimately, your ability to access a network of receptive and like-minded people outside your industry is essential to refresh your perspective and discuss sensitive challenges in your business. This is a lesson Hugo stumbled upon when struggling with the maddening problem of Streamgineer’s initially slow uptake.
“We couldn’t understand why the industry was very slow in adopting our software and our sales were well below what we expected and needed,” he explains. But due to the sensitive nature of the discussions, he couldn’t broach the topic with anyone in his industry.
Caught between poor sales and an inability to ask for feedback, Hugo was struggling to see how the company could progress. It was during these dark days that he reached out to YBF for help in diagnosing the problem. Hugo sent a cold SOS email to YBF requesting feedback and help. It was here that the tide turned.
“YBF, to my surprise, took me under their wing… and began having one-on-one sessions with me, to try and figure out what was going on and how we can improve things.”
After days of puzzling, questioning, breaking down problems and mapping the business, YBF uncovered the core problem. “Our pricing structure really didn’t match the value that our software was providing,” explains Hugo. As a result, customers saw the software as an expensive tool for performing an existing process, rather than a long-term investment in automating a business function.
Having identified the problem, Streamgineer set about rectifying the mismatch of price and value. This was the business’ biggest turning point, where Hugo saw an immediate and incredibly large change in the uptake of their product, nabbing them licenses with the two largest switchboard distribution companies in Australia.
Coming back to YBF years later (2017), Hugo is re-engaging with the community to help other companies in achieving similar turnarounds. “YBF didn’t ask me for anything in return, and they didn’t need to help me,” he says. “They just did!”
Now in its fourth year since going to market, Streamgineer has stabilised from a rollercoaster past, to a market-dominating business with a promising future. From here, the business will be expanding its product offering into new markets, with new products in the testing phase now.
As the business matures, international expansion is appearing on Streamgineer’s agenda.
“Currently we are servicing New Zealand and Singapore and looking to further expand into Asia-Pacific,” explains Hugo. “But our most ambitious expansion will be into the European market.”
For expansion into Europe, sales partners and resellers will be critical for positioning the Streamgineer product among competitors in the single market. However, Hugo acknowledges the challenge this will create in having to part with the Streamgineer technology and open it up to third parties.
With their support base of investors, customers, and the YBF community in Australia, Streamgineer’s next steps will be formidable, as they are coming off a network of people invested in their long-term success, alongside their revolutionary product.
If you’d like to get in touch with Hugo, reach out to him on LinkedIn.