How a Small Hardware Company Pivoted Into A Blockchain Success Storybr>
We’ve all heard stories of startups that pivoted to follow market opportunities, but few have journeys with as many serendipitous turns and that took them as far from the original destination as Zikto, the company I co-founded.
In 2015 we were a hardware company that created a wearable walking coach called Arki. Our initial Kickstarter campaign raised $160,000, but soon after, we had trouble maintaining momentum. Companies like Fitbit and Garmin were already well-established in the space, and smartphone makers were starting to incorporate pedometers into their handsets.
A rebrand to ‘Zikto Walk’ didn’t help with consumers, but there was interest elsewhere: We found that insurance and financial companies wanted to beat the actuarial tables with real, verifiable data about people’s lifestyles. It’s easy to report walking 10,000 steps in a journal. It’s nearly impossible to fake that with a wearable.
We decided to give it a shot in 2017 by teaming up with Kookmin Bank, one of Korea’s big three financial conglomerates, to bring real rewards to credit cardholders for logging data from their fitness trackers. More than 20,000 cardholders joined the program and we knew we were on to something big.
Around the same time we saw blockchain emerging as a way to incentivize people to share exactly the same kind of anonymized data insurers were willing to pay for. It was a perfect fit.
The most important virtues for a startup are being nimble and lean. It was a viable strategy because Zikto was still young. It required significant restructuring of the company, as many of the previous team members were focused on hardware devices. It was very difficult to start learning about an entirely new industry from scratch. Only a few original members remained by the time the pivot had turned a full 180°.
Getting initial buy-in from insurance companies was a challenge. These companies are usually traditional and slow moving. And in our home market of Korea, you can multiply those characteristics by two or three. Yet once they understood the opportunity, they were eager to adopt a solution that would solve a key problem for them: they lacked clear data on younger age groups, and Millennials don’t buy insurance as often as previous generations did.
Our traction for Insureum has been good. In May of this year, we had a token sale for ISR. It sold out during the pre-sale stage. Since spring, we’ve signed an MOU with AXA, were listed on the BitForex, CoinBene, CoinZest and BitSonic exchanges, and partnered with Hyundai Marine & Fire Insurance. We recently just announced post-ICO equity investments from BitForex and Bluechain.
None of the steps in the journey were optional. We never could have reached this point without creating our fitness tracker, nearly failing, finding salvation in the insurance industry and then, finally, linking to the blockchain by solving a real-world problem. The changes were totally unexpected, but in the end, our journey was far more interesting than the one we set out on.