I met with Elin Elkehag, founder of Stilla Motion at The Battery, a club for innovation and inspiration in San Francisco. The Battery is one of those places in Silicon Valley where start-up people and investors seem to meet as of coincidence just to chat.
After quickly checking the place out, while Elin at the same time said goodbye to a potential investor, we sat down in the lounge area and talked about what it’s like to start your first hardware company in the US.
About Stilla Motion
Elin launched her product, Stilla Motion a smart pocket-sized motion alarm earlier this year. The product is a small gadget, designed to give its user peace of mind as it keeps track of the motions of your valuable item (bag, stroller, wallet). When the item moves Stilla Motion sends an instant alarm to your phone or smartwatch. Most tracker devices on the market are triggered by distance, Stilla Motion is based on motion.
Elin came up with the idea of Stilla Motion in 2015 while learning how to code hardware. She gave herself 100 days to realise her project, an intense period of clay prototypes and demos. Elin emphasizes that she did not know how to technically build her product, so she had to try to figure it out. One of her biggest advantage was that she was physically in Silicon Valley and had a tremendous network surrounding her. Literally, she did what you are recommended to do when you are here, attend and participate in meetups, seminars, dinners and drinks and try to talk to the right people. Elin repeatedly comes back to how she always managed to meet that someone that could help her take her next step.
Legal learnings starting your company in the US
Today Stilla Motion, finds its home in more and more bags, strollers, etc. With this in mind we started to discuss Elin’s legal experiences of starting her first hardware business in the US. We know that the legal perspective is important when starting your business in the US, but to what extent is it true and how is it for a Scandinavian to enter this universe. Elin confirms that many Swedish companies here in America experience a more profound threat of being sued, and also a possibility to sue others that does not exist in the Swedish business DNA. Instead this is something you have to relate to, get used to and also manage with the best legal tools such as contracts, insurances, etc.
Like many foreign companies in the US, Stilla is incorporated in Delaware. Elin found out about the advantages of Delaware by reading online about setting up companies in the US and talking to likeminded. It took some time and costly errors for Stilla to find their “house” lawyer, which is an important player in the US business structure, but today Elin works with a local general lawyer with experience from the Nordics, it gives her a counterpart who knows about her background and mind-set. In addition to this she works with a specialised patent lawyer helping her with patent issues and another lawyer specialised in visa procedures and immigration law who helps her foreign employees. For most US companies it’s common to engage several lawyers, and firms, specializing in different legal areas. In Sweden companies tend to be more loyal to one lawyer or law firm.
When I ask Elin about when her lawyers have been the most critical for her company she brings up the partnership agreements. Elin’s advice to the community is to be less Swedish in these situations and really make sure that everything is well documented and, crisp clear for all involved parties. Elin equally emphasises that even if you have lawyers lifting all the heavy paperwork you as the company’s manager need to be very much involved as you have best knowledge of your product and its need. Also, you are the only one aware of your future plans and all need to go hand in hand with your past, current and future agreements and business strategy.
Since November you find Stilla Motion in AT&T stores, and I was curious to know how Elin proceeded to strike a deal with one of the largest, if not the largest, telecommunications company in the US. Her story is for me a typical Elin story, she simply walked into the flagship store in San Francisco last February with her prototype and talked to the salesperson in front of her. Luckily, the sales director was in the store the same day and found the product interesting. A few days later she nailed an oral agreement and AT&T wanted to have Stilla Motion in their stores on the condition that her product could deliver upon description. After that first step, a long technical process started. For example, to sell to AT&T she had to work with a distributor, so she had to put a distributor agreement in place. Also, AT&T conducts their own technical tests of the product, and there ware general criteria’s specific to AT&T to fulfil. In the end all succeeded, and Stilla had her first retail sales point in the US.
Over the past year I have met Elin on several occasions, and like all companies Stilla has had its ups and downs. So, I wanted to take the opportunity to ask what the major legal learning were, and what she would do different if she would do it again? The answer was clear, I would have been even clearer setting up my company structure and I would have spent some more time and money on administration to get everything right from start. It is a true challenge to start a hardware company and much more complex structurally than to set up and work with for example software solutions. Although it does not seem to bother Elin much. She finishes by underlining, I still have lots of business plans to realize with Stilla Motion and I’m definitely committed to make it succeed.
