Broken iPhone? Call iCracked, the Aspiring “AAA of Smartphones”

11/28/12Follow @wroush

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construction firm and his mother was a “serial homemaker” who did everything from selling handbags to renting bouncy-houses for birthday parties. “It was in the blood that you were going to start a company,” Martin says.

Martin says that he, too, has broken a number of phones—“more than I can count on two hands,” he confesses. He and Forsythe, who had met through mutual campus friends, decided in late 2010 to start selling startup kits to students on various campuses, promising to help them set up local iPhone repair businesses. They posted ads on university job boards, and found 25 guys willing to pay them $250 to become iCracked franchisees, including training and parts, says Martin. He and Forsythe maxed out their credit cards buying the needed parts, and drove to the post office every day to ship them out.

The idea seemed promising, but the company’s first crop of technicians didn’t include a lot of aggressive businesspeople. “The thing about iPhone repair techs is, they are 90 percent technical, 9 percent managerial, and 1 percent entrepreneurial,” says Forsythe, drawing from a typology in Michael Gerber’s underground classic The E-Myth Revisited. “And being college students, they didn’t have this burning desire to put food on the table—they cared about beer money and having a summer job to get their parents off their backs.”

A DIY iPhone screen repair kit from iCracked

A DIY iPhone screen repair kit from iCracked

So the first big change for iCracked was to recruit a group of older technicians who wanted to make iPhone repair into a full-time job. The next was to move the company to the Bay Area, where the co-founders crashed for a couple of months in Martin’s brother’s apartment, then rented a five-bedroom house in Sunnyvale. “The conference room was the swing set in the back yard,” Forsythe says.

In October 2011, Martin came across a TechCrunch article about Y Combinator, the famed startup accelerator and investing operation in Mountain View, CA. It was the last day before applications were due for the YC’s Winter 2012 batch. “He was like, ‘YC is getting an application every minute. Let’s apply. What can go wrong?” Forsythe recalls.

Forsythe filled out the Y Combinator application, but he didn’t really think iCracked would get in. “We were getting a couple orders a day for DIY kits, and we were having a blast working and trying to trick people into becoming iTechs, but by no means had we arrived. It was really a fake-it-till-you-make-it type deal,” he says. The first version of the application essay got erased when Forsythe’s browser crashed, so he rewrote it—to good effect, as it turned out. “I think the only reason we got an interview was that I had to write it twice,” he says.

But getting into YC wasn’t a slam dunk. Martin and Forsythe missed their first scheduled Skype interview with the Y Combinator partners because they were in Asia buying parts and miscalculated the time difference between Hong Kong and Mountain View. When they finally got to YC’s office for their rescheduled interview, almost no one talked except YC co-founder Paul Graham. It turned out he was less interested in the iPhone repair business than in all the auxiliary services iCracked could wrap around it, such as insurance plans (of which more in a moment).

The startup ultimately won a berth at Y Combinator. The best thing about being in an accelerator, Forsythe says in retrospect, is that “it gives you an incredible excuse to do nothing but build your product for three months and really shut off the outside world, except for your users.”

The connections to YC’s huge network of investors and alumni companies were also invaluable, he says. But, crucially, it was also during the Y Combinator program that the company began a gradual transition from being a hardware company into something more like a … Next Page »

Wade Roush is a contributing editor at Xconomy. Follow @wroush

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  • David Overton

    Getting your iPhone screen replaced by anyone other than Apple voids its warranty. Shouldn’t this be mentioned in the article?

    • Jbattery

      Your warranty is void when you break your screen! Unless you have it covered under Applecare!

  • http://twitter.com/cheetahkayak cheetahkayak

    I used to work in an Apple Store. If you came in with anything done outside of Apple we could not touch it. The product is cheaper for a reason too. It is not the same high quality glass that Apple uses. BUYER BEWARE!

  • David

    “But in no way are we trying to step on Apple’s toes or take any market share from their repair operation,”

    Good luck with that.

    Apple will continue to make it harder to replicate their parts (as they did with the new Lightening® connectors). And for those who manage any measure of success in said replication, they can count on aggressive patent infringement lawsuits from Apple. Remember: A court has ruled that Apple “owns” the shape of a rectangle with rounded edges if it’s used on a mobile device. That ownership presumably extended to the glass as well.

    There shall be no profit-generating activity on any Apple device for which Apple does not take a sizable cut. Be careful guys.

  • Alison Brown

    Why would anyone pay $3/month AND a $50 deductible. You would have to break your phone again within 16 months for this to pay off at all. I would just take my chances. It doesn’t seem like a great deal. Better than typical extended warranties, true. But who gets those?

  • http://www.GooNex.us/ @@ GooNex.us + GoogleNex.us @@

    -
    afternic.com/domain/TabletsRepairs.com
    -

  • iphonesintocash

    Repairing iPhone is becoming much more difficult because Apple tries very hard to make it impossible to get into the phone and tinker with broken parts. It has been their motto since the early days of the company. Sometimes you are better off just selling your broken iPhone for cash.