Ukrainian startup in Silicon Valley: a baby monitor for animals

Three Ukrainians amazed Americans with a miracle invention for pet owners. The idea for the Petcube gadget was born three years ago in a Kyiv apartment, which was systematically destroyed by a dog left alone. A year later, the startup raised $250 in crowdfunding, and most recently another million dollars in funding. The Forum understood how young people managed to create from scratch a popular gadget and achieve success in Silicon Valley.

Petcube is a pet video camera that can be controlled via an application on a mobile phone. The device also allows you to talk and play with the animal using the built-in laser pointer.

In the 2013 year Petcube collected over $ 250 000 on the Kickstarter crowdfunding platform, becoming the most successful animal project. The platform works in this way: people transfer a certain amount of money that goes to the production of a product, and for this the ready device will be the first to receive it at a significant discount. Through Kickstarter, more than 1700 people have transferred money for making animal cameras.

The invention is highly appreciated at the expert level. Petcube was recognized as the best Ukrainian startup 2013 of the year according to the online magazine AIN.ua. In 2014, the prestigious European startup competition Europas named the project the best hardware start-up in Europe.

Ukrainian businessmen have received huge credibility from the American media. Forbes He wrote about the success of the project on Kіckstarter and the prospects of communication between pet owners through the social network Petcube. On pages Wall Street Journal emphasized that the invention of Ukrainians will help to make happy pets, which due to the lack of communication with people can fall into depression. Mashable website noticed on the initiative of Ukrainians to help animal shelters in California.

Device Sales

At the end of 2014, customers were able to pick up the Petcube cameras. First of all, they received exactly those users who financed the production of cameras through Kickstarter. The first batch was sold before Christmas, the cameras from the second batch were already on their way to the new owners.

Petcube does not tell how many gadgets have already been sold, citing commercial secrets. However, they clarify that they sold more than they sent to the people who supported them on Kickstarter.

The company sells its products through Amazon.com and its own website with delivery to the States, Canada, UK, Australia and Japan. Soon they plan to start selling in regular stores.

Petcube costs 199 dollars. In the network, you can buy simple webcams for animals much cheaper (some cost about 40 dollars), however, they are inferior in functionality to Petcube: they do not have a laser pointer, there is no possibility to talk to an animal, post photos on a social network. So the developers of Petcube are confident that they have no competitors.

The average Petcube rating on Amazon.com is 3,5 from 5. Feedback is generally positive.

“A fantastic toy for all cat and dog lovers. I look at my babies all the time. #happypetparent. Note: The audio is not very good,” writes Kamie_Boston.

“I was not happy with the way the power cable connected to the back wall of the cube. My cat has disconnected it many times just by walking around it,” notes user K. Brucker. “But while it’s charged, it’s very fun to play with the cube.” I showed it to my friends at the bar and it was a lot of fun."

The dog is not eaten
The history of this startup began in an ordinary Kiev high-rise building. Dog Rocky still could not get used to the new apartment, which was removed IT pros Alexander Neskin and his girlfriend. Rocky continuously barked and ruthlessly tore upholstered furniture to shreds as soon as he was alone at home. The girl was nervous, the neighbors threatened to complain to the police, Alexander thought.

It is unlikely that he shouted "Eureka!" When he connected the camera, two servomotors, allowing it to rotate, and the laser pointer with which he loved to play Rocky.

The result was a small robot on three legs, wrapped with colored wires. The dog could now be watched and played with it by moving the laser.

Alexander gave access to the interface to his friends. Having played with Rocky, they wanted a similar robot and themselves. Thus was born the idea of ​​the Retcube.

Alexander Neskin at that time worked in the digital agency Prodigy with two friends - Yaroslav Azhnyuk and Andrey Klen. Once at a party, a mutual friend suggested that they unite - to create a common business and make a mass consumption product from Retcube. So there was a company Retcube Inc. Alexander Neskin became technical director, Andrew Klen - creative, and Yaroslav Azhnyuk - CEO.

Andrew Maple, Alexander Neskin, Yaroslav Azhnyuk. Photo from Facebook by Alexander Neskin

Where is the money

For more than a year, Ukrainians invested their own funds in the development of the invention. It took about $40 thousand. Having entered one of the largest crowdfunding platforms Kickstarter in 2013, three Ukrainians raised $251 - at that time this was a record for a Ukrainian startup. Eight months later, it was beaten by another Ukrainian startup - the multifunctional diode display La Metric, which managed to raise $000 thousand on the same platform.

Feeling a lack of experience in working on a hardware product, three young entrepreneurs have applied to participate in different acceleration programs. In August, 2014 was invited for four months to the business accelerator in Shenzhen, China. They were taught how to choose a contractor, to establish production, to find markets and partners. In the accelerator, Alexander, Yaroslav and Andrey not only received the help of mentors, advisers and experts, but also attracted $ 70 000 dollars to their project. For $ 25, 000 was given by two investment companies, SOSventures and HAXLR8R. Another $ 20 000 came from the then angelic investor, and now the managing director of the Boston Incubator TechStars Seeds Dukach.

“At the very end of this program we spent two weeks in San Francisco. We had the last money left on our card that we received in China. We removed them and gave the team members a salary. Literally the next day we received money from Kickstarter - it could not have come at a better time,” recalls Petcube CEO Yaroslav Azhnyuk, who now works in the company’s office in San Francisco.

Yaroslav Azhnyuk. Photo by Julia Bunyak

Now Petcube went into mass production and, as Azhnyuk stresses, began to generate income, but not yet profit.

To increase sales in the US and other countries, Ukrainians in the spring of 2015 have attracted 1,1 million dollars in investments.

AVentures Capital and Almaz Capital received money from venture capital funds with the participation of SOSVentures, co-founder of Mint.com, David Michaels, and Nick Belogorsky, former head of the antivirus Facebook division.

Passed through copper pipes
Petcube is assembled at a factory in Shenzhen. Yaroslav Azhnyuk tells how at first they tried to find an opportunity to produce the product in their homeland - Ukraine. They searched for almost a year, but never found it.

Not everything went smoothly in China either. Alexander Neskin, who controls the production process of Petcube, went to Shenzhen for two months, and had to stay for seven. With a special nervous thrill, he recalls Sunday, when, after lengthy preparation for the launch of the assembly line, a letter of apology came from the manufacturer: the factory director was arrested, the expensive metal molds were confiscated for debt, you need to wait another month. Neskin had to start all over again.

The contractors who manufactured the aluminum cases also changed more than once. Somehow, the third contractor in a row brought a new batch of buildings with defects. “When you run your finger along the edge, you feel how the aluminum cuts the pad of your finger like a sheet of paper. Incorrect technology, the milling shape shifted, and, as a result, in some places 0.5 mm turned into the tip of the blade. The Chinese contractor says: “Well, we thought this was a product for animals, so we didn’t worry too much,” says Alexander Neskin.

Corps made a new one.

The creative director of Petcube, Andrey Klen, who is responsible for the design and operational processes in the company, even derived his own humorous and realistic communication formula with Chinese contractors:

“On the assembly line, workers understand only two languages: Chinese and the language of the big red arrows in the assembly instructions.”

Despite all the difficulties, in the fall of the 2014 of the year, the Petcube cameras finally went on sale.
“If we don’t know what we have to overcome, we can achieve much more,” Neskin now notes in a Socratic manner, who in China experienced not only delays in production and multiple changes in contractors, but also pneumonia.
Now, having gone through Chinese mass production of copper pipes, the 26-year-old Ukrainian shares his experience with start-up entrepreneurs on his blog.

“Today’s entrepreneur is a boxer who does not have money for a piece of meat, who has to enter the ring with a strong opponent. The only chance of victory and a way out of this vicious circle is to fight with clenched teeth.”

Unplowed field
From the very beginning, Ukrainians set themselves the goal of entering the global market. Petcube's main office is located in San Francisco. The USA, with its high purchasing power, the absence of language and legislative barriers and openness to innovation, was the best fit. And most importantly, Americans are madly in love with their cats and dogs and are willing to spend considerable sums on them.

The founders of Petcube often cite a joke that America has more pets than children. The statistics are on their side: 319 of millions of Americans live with almost 400 of millions of pets, albeit with fish and various reptiles.

Over the past year, US residents have, in general, spent billions of dollars on animals 58,

reported in the annual report of the American Pet Products Association. About 14 billion from this amount was spent on accessories. At the same time, there has never been a single significant technological invention in this niche.

So, in front of the Ukrainian team there is an untapped field of work. The goal of the guys is to build a digital era brand for pet owners. And only one camera, he is not limited.

Petcube generates content, allowing you to take photos of pets and upload them in the same mobile application. In fact, they create an Instagram like this for animals. Yaroslav Azhnyuk admits that every night before going to bed he looks through the tape of the social network created by them with touching photographs of animals - for him this is the best meditative practice after a hard day’s work.

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