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Santa Barbara startup to close crowdfunding’s missing link

By   /   Friday, April 3rd, 2015  /   Comments Off on Santa Barbara startup to close crowdfunding’s missing link

GroupGets is an online platform that hopes to democratize access to high-tech components.

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The engine behind the Tri-Counties’ growing community of tech entrepreneurs has been the learn-by-building ethos that runs along the Highway 101 corridor.

But what happens when the creativity of innovation outpaces purchasing power? High-tech components are still manufactured by the big dogs, who sell them in bulk amounts with a blue-chip price tag — an insurmountable obstacle for a startup that may only need a few units.

And while the crowdfunding sites’ final products are sold to help pool money for the projects and ventures themselves, makers are left in the cold when it comes to obtaining the supplies needed to make the product a reality.

So last September, local entrepreneur Ron Justin launched GroupGets, an online platform that hopes to democratize access to high-tech components. Justin landed on the idea when he needed some high-performance computer chips to realize a design.

“Timing was critical, we had to move fast, and the vendor would only sell them in $100,000 quantities,” he said. “I thought, ‘This service must exist.’ It’s a no-brainer for the modern Internet era, but I just really couldn’t find it.”

So he realized the real idea was to build that platform. The venture has brought in $250,000 in revenue during its first four months in operation with no marketing.

To build the website, Justin brought in Kurt Kiefer, who was working as an electrical engineer at another local company and had already collaborated with Justin on a few startups. Although the previous ventures hadn’t panned out, Justin knew he liked working with Kiefer and that “at some point we would come together again and hit on something,” Justin said.

Although Justin had planned to take out a second mortgage and offer Kiefer a salary, he liked the idea so much that he only requested to be made a partner. Together, they are fostering a community of makers, encouraging collaboration and responsible consumption through the site’s built-in forum.

“People are going to buy these things together, and they’re going to communicate about it, new ideas are going to form, and people can save a lot of time,” Justin said. “People can feel like they’re part of something bigger when they join and create a campaign, which is great.”

Overall, 30 public and private campaigns have been fully funded on the website, drawing in close to 800 participants. GroupGets’ first successful campaign was for Flir Systems’ Lepton Imager — manufactured in Goleta — which at the time was available only in $200,000 quantities. The campaign is also its most successful and is closing its sixth round, with more than 1,000 of Flir’s sensors shipped worldwide.

Although people could now acquire the Flir Lepton via GroupGets, specialized electronics and software are needed to run the component. So Sashi Ono, another local engineer Justin had worked with for more than a decade, was brought onto the team to build custom firmware that would make the product easy enough for a high school student to use.

“We created a board that makes it easier to plug the sensor into low-cost development systems, like the Raspberry Pi and Arduino that we now carry,” Justin said. “We cranked that out, Flir loved it, and it created this whole community of innovation.”

GroupGets has also worked with Asian manufactures such as Hamamatsu Photonics and LinkSprite Technologies, and is working to bring two new campaigns from U.S.-based startups online. One, from a photography company called StingRay Optics, will involve lenses, making it the platform’s first non-technological offering.

The website funds itself by taking a cut of a sale’s proceeds — advertised as 7 percent, but Justin said the team works with clients to find the right price point as it builds a user base. And, successful campaigns are sweetened with a cash-back reward doled out a month ahead of the closing date.

Justin said the service has attracted interest from a range of groups, from individual scientists to large companies.

“Sometimes we’re surprised like, ‘Wow, you guys are huge, you can’t get a few of these for free?’ They say, ‘Nope, they won’t give them to us,’ ” Justin said. “So we’re kind of helping out the whole spectrum.”

Next, the company will build out its marketing team and bring on development talent to add features and incorporate user feedback. But for now, GroupGets is itself a big fish in a small pond.

“So far, I still don’t see anybody doing what we’re doing, so hopefully we get to keep doing it,” Justin said.

Correction: A previous version of this article stated that GroupGets is based in Goleta. The company is based in Santa Barbara.

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