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the emergency doesn’t require paramedics, and a 911 call can end up being expensive if they break down the front door. OnKol co-founder Marc Cayle, who previously ran three Milwaukee-area franchises of in-home senior healthcare provider Comfort Keepers, encountered elderly patients who had fallen and lay on the floor for more than a day. They held an emergency alert device in their hand, but didn’t press the button because they didn’t want to make a fuss, he says.
“If an ambulance arrives and the door is locked, they’re going to kick the door down; they have to, actually,” Jacobs says. “The elderly know this, and they’re basically like, ‘We’re not going to create a ruckus. I’m not dead; I’ve just fallen down.’”
OnKol isn’t the only company that has created technology for remotely monitoring seniors. Others in the market include Lively and BeClose, which also offer wireless activity sensors and wearable alert devices. And GrandCare Systems, based in nearby West Bend, WI, offers a system that works with various Bluetooth devices and handles many of the same tasks that OnKol does. GrandCare sells a base device for $699, plus a $50 monthly subscription fee.
OnKol, which just recently began marketing its device, will start selling the system next year for a much cheaper price: $299 for the base station and pendant, plus a $29 monthly fee. OnKol plans to begin selling its device on its website and through electronics stores, cellular carriers, and home healthcare organizations. Eventually, it hopes to strike deals with other companies that would use OnKol’s technology but sell products under their own brand names, Jacobs says.
OnKol raised $2.4 million from Milwaukee-based Capital Midwest Fund to develop its system. The startup is trying to raise another $1 million this year from local investors to allow it to begin production, Capital Midwest general partner Dan Einhorn says. After the product hits shelves next year, OnKol will try to raise a “much larger round” from investors nationwide, Einhorn says.
“We want to raise enough money to get enough runway to get initial sales out, get the product in customers’ hands, show a product that works,” Einhorn says. “We believe that’s going to expand the valuation of the company.”
OnKol plans to market the device as a tool for families to “stay connected,” rather than an Internet of things gadget, Jacobs says. “The idea is this is not a medical device, it’s not an emergency device—it’s a family communications device,” he says.
On the technology side, OnKol has made several decisions to boost its chances in the market. The company’s base device connects to the Internet via a cellular signal, not WiFi, which means seniors don’t have to deal with WiFi routers. Meanwhile, cellular carriers get an opportunity to capture revenue from a demographic they have largely struggled to reach, Jacobs says. (The $29 monthly fee will cover the wireless data plan.)
User data gets sent directly from the OnKol base station to family members’ devices, and the company won’t store any data on its servers unless a customer requests it. That’s a positive for families, but an even bigger plus for potential manufacturing partners: not having the data flow through OnKol’s cloud software removes a “tremendous liability” and worries about the privacy of health information, Jacobs says.
“The likelihood of a data breach, at least being our problem, is extremely low, unless someone can figure out a way to hack into thousands of these devices at once,” Jacobs says.
The company was founded in February 2013, after Capital Midwest agreed to invest. Jacobs, a Wisconsin native and experienced technology executive living in the Boston area, was brought on to run the company as a condition of Capital Midwest’s investment. His resume includes executive roles with Insight (NASDAQ: NSIT) and Level 3 Communications (NYSE: LVLT), as well as running tech incubator Rebar Foundry in Norwood, MA, which involved serving as interim CEO for the startups.
“I really liked what the team was doing when we were doing the due diligence, but it was clear there was a need at the top for someone with experience,” Einhorn says. “This company clearly had a really good idea, but it needed someone to take it to the next level.”
Jacobs still lives in Boston with his family and flies to Milwaukee during the week to work on OnKol, which operates in downtown co-working space 96square.
It’s easier to get a hardware startup off the ground now than it was five or 10 years ago, Rosenbloom says, thanks to more widely available 3D printers that can quickly build a prototype and increased early-stage financing options, like crowdfunding campaigns. But hardware is still more difficult than software companies.
“Hardware companies have the word ‘hard’ in them for a reason,” says Rosenbloom, who started two such companies. “It’s not just bits and bytes; it’s atoms.”
Smart device companies also need to continuously churn out timely and useful software updates, he adds: “Most of the stuff today, hardware is really a delivery vehicle, but it’s the software they’re delivering.”
It’s easy to see why OnKol might be better off operating in Boston or Silicon Valley, which have larger concentrations of Internet of things startups and more funding options. But Einhorn says he is committed to keeping OnKol in Wisconsin. “I have no plans to move this company,” Einhorn says. “Our fund is really committed to the Midwest.”
And Jacobs thinks Milwaukee has the ingredients for a successful Internet of things ecosystem, including a solid talent pool and the presence of high-tech manufacturers like Rockwell Automation (NYSE: ROK) and Johnson Controls (NYSE: JCI).
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