Intrusion Detection Startup: No Revenue, No Shipping Products, $6 Million Valuation (Korner)

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Brian Rhodes
•Aug 11, 2014
IPVMU Certified

They claim their idea is the 'World's Simplest and Most Affordable' Intrusion Alarm System, but at this point, that's all it is: an idea.

Korner recently held a successful crowdfunding campaign that committed over $400k for an alarm system that will cost endusers ~$100 to install and about $35/year to monitor.

Now the company is trying to raise millions more in a subsequent campaign, while still months away from shipping any product. In an 'invite-only' fundable.com campaign, the company is trying to attract another round of private investment.

The 'pre-money valuation' of $6,000,000 caught our eye:

Keep in mind, this is a valuation for a company that has not produced any hardware and shipped no product.

Some point to this as just another example of the VC tech-investment bubble that currently is poised to rupture.

In any case, what is your take on this?

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Brian Rhodes
•Aug 11, 2014
IPVMU Certified

I think that many in the tech startup world dramatically whiff when estimating the difficulty of producing physical products.

Manufacturing, from production tooling to quality control to raw materials/ component supplier management is a huge undertaking. Look at any number of startups to see evidence of this - Lockitron, for example - where the idea is solid, but turning that idea into a merchantable product is fraught with headaches from outside impacts. Ultimately, if execution is poor, this might turn a great idea into junk.*

In many cases, this aspect of the startup is just assumed to turn a satisfactory result. Investors and companies alike seem to over simplify the effort here, and then miss every shipping date they set due to 'unforeseen problems'.

My head may be full of billion dollar ideas, but if I cannot make them reality, are they really worth a billion dollars?

*I know nothing about any specific difficulties with Korner.

TM
Timothy Mc Pheron
•Aug 12, 2014

Who decided the startup was worth $6,000,00.00?

JH
John Honovich
•Aug 12, 2014
IPVM
In reply to Timothy Mc Pheron

That's what they are asking for.

I think they will get it, given the state of startup market today.

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