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#38 Ruben Bonet: the unknown deep tech going from Spanish uni spin-off to >$200m total sales
Co-founder & CEO of Fractus (deep tech building antennas with >$200m+ total sales, invested by Apax Partners); Founding Partner at ABAC Nest (VC arm of ABAC, PE with >€600m AUM)
We are Pol Fañanás and Gerard García, two friends passionate about tech, startups, and VC, getting views from exceptional people doing interesting things and sharing it for free with those who lack access. Thanks for reading!
Ruben Bonet is the Co-Founder & CEO of Fractus, deep tech company licensing antenna technology for telecommunication networks and for wireless devices such as smartphones and IoT, backed by investors like Apax Partners (global leading private equity firm with >$70bn AUM). Fractus has >$200m total sales, customers like Samsung, LG or Motorola, and its antennas are present in >10bn devices.
He is also a Founding Partner of Abac Nest, Spanish early stage VC linked to Abac Capital (private equity firm with >€600m AUM). Additionally, he is an Entrepreneur In Residence at IESE Business School.
Ruben holds an IESE MBA as well as a degree in Telecommunications Engineering from the Universitat Politècnica de Catalunya.
In his free time, Rubén has finished two times the legendary Marathon Des Sables (250km running race on the Sahara desert with food self-sufficiency), completed 10 70.3 Ironmans, and The New York and Berlin marathons.
Index
1️⃣ What is Fractus and why is it important?
2️⃣ Journey from university spin-off to >$200m sales
3️⃣ Must have skills for deep tech entrepreneurs
4️⃣ Biggest challenges faced and leadership advice to navigate them
5️⃣ How to win in big enterprise sales
6️⃣ Product playbook in highly technical industries
7️⃣ Essentials of building a great team
8️⃣ Is deep tech really a spot of exceptional opportunities?
9️⃣ What is your added value as a VC investor with a technical founder edge?
🔟 Mindset hacks useful for founders coming from competing in multiple Ironmans and Marathon des Sables
1️⃣ What is Fractus and why is it important?
Fractus is a deep tech company building antennas which built something unique and relevant in a very hard industry that is the backbone of the current modern society, while going through all the stages (both good and bad) a company can go through.
It was one of the first ever successful deep tech spin off in the Spanish and probably European ecosystem - which taken into account the high mortality rate of this type of endeavours, is remarkable.
From a product point of view, the company is focused on building antenna technology that is critical for telecom networks, smartphones, IOT devices, etc. Probably ca. 10bn smartphones have Fractus technology right now.
Pre-Fractus, companies designed way more limited antennas for only 1 frequency (or singleband). With Fractus we were able to make the multiband vision a reality, a unique insight that acted as catalyst helping enable mainstream use of the previously mentioned devices.
2️⃣ Journey from university spin-off to >€200m sales
Carlos Puente (Fractus’ co-founder and original CTO) and I met at UPC while we were both classmates studying telecom engineering. Eventually he pursued a PhD in Antennas, I followed a more business-like career, and one day we met, shared some ideas about the Antennas’ research, and we agreed there could be an opportunity interesting enough to try and build a company.
The spin-off process wasn’t really structured at all, it was more about two friends and classmates, one more focused on product and the other more focused on going to the market and building a company, trying to be entrepreneurs and learning as they go. UPC gave Carlos the opportunity to be a founder without losing his placement as professor and also allowed us to build out a private company out of the research with a revenue share type of agreement, so we did it.
Our idea? The world of mobile phones was ready to explode and this brought relevant challenges to the technology of that specific period in time. If that happened (and as we saw it, it was already starting to happen), new challenges would come and the big industry players were not ready to face them. Why? Because all their business was based on different and very inflexible approaches - their inertia was blinding them.
However, I want to make clear that it is not like Fractus brought a crazy global disruption to the world. We just simply saw a wave coming, bet on it, positioned ourselves well and took advantage of a unique insight. And from there, we built product complexity on top of the initial relatively simple idea (e.g. multiband antennas, smartphone integrations, 2g, 3g, 4, 5g, etc).
Additionally, it was very important not only focusing on a great product development but actually being able to find product-market fit (a priority we had from the very beginning and unfortunately a commercial angle that sometimes is too uncommon in deep tech). So we managed to get as much meetings as we could with big customers, demoed our new antennas non-stop, and worked hard on providing crystal clear competitive advantages versus current comparable solutions. By doing so, after more than a year of planting seeds, we were lucky and detected that Telefonica could be open to use a new local supplier. I still remember the 1st purchase order received via fax, 1000 antennas for €1m.
From there on however, we still had lots of work to do. We worked on upselling in that account navigating different levels of management in Telefonica. Also, we build up our production capabilities in order to have more scale up potential. And finally, after a bunch of meetings, our technology ended up gaining more recognition and this helped us follow a product-led go to market where our own product was the marketing we needed in order to connect with new potential customers.
Once we were able to demonstrate the unique value proposition of our antennas, the positive impact on the perception of Fractus by the industry composed gradually. We went from a very personalized B2B sales targeting quick wins with attractive customers that showed how our solution worked, to a more standard productization angle able to grow our sales exponentially.
3️⃣ Must have skills for deep tech entrepreneurs
Technology knowledge. Understanding your technology in and out, while having the skills to make your vision real through execution.
Team building. Being aware of where you are good at (which in deep tech tends to be product related) and where are your flaws, while consequently attracting the necessary high quality talent and taking care of them (specially, not only focusing on technical resources while underestimating the importance of other complementary profiles).
B2B sales. True comprehension of how the sales process works in big corporations and what do you have to do to take care of the most important relationships thus ensuring account maintenance and ideally growth too.
Future vision. I think in deep tech, failure can result in superior damage since pivoting is more difficult once you are committed into a specific path. So it is very important to be able to see what will happen to the technology and the market 4-5 years in the future. Evidently no one can see the future, but a good deep tech entrepreneur should be able to have a solid thought process regarding what could happen tomorrow.
4️⃣ Biggest challenges faced and leadership advice to navigate them
Evolving with the company. Probably one of the most important elements that I saw as a founder of a scale up is that it is one story being a couple of friends starting a fun project, and it is a whole other thing to lead a >50 employees international company with a bunch of important companies and solid investors. If you want to create all the value possible, you must evolve with the company professionally and personally.
New tech requiring customer evangelization. We found quite a few mental barriers with potential customers at the beginning when trying to sell our new type of antenna. Don’t disrespect the doubts. Listen, empathize, and proof your value with prototypes and scientific documents. Show that you understand the customer need and that you are really ready to solve it.
Fighting fierce gatekeepers in legacy industries. When trying to introduce new disruptive tech into a bigger market, we fought against the opposition of bigger older incumbents. Sometimes you have to accept there would be fierce gatekeepers and just embrace the fight. Sometimes it is needed to be somewhat overconfident, disrespectful, and irreverent. Do not ask for permission. Push forward. For instance I remember competitors copying our tech and we as Fractus fighting them legally and winning. Or big incumbents talking us down and then seeing their sales director leaving and coming with us.
Protecting healthy independence. Other of the challenges we faced is the influence of relevant potential partners in our independence. I know there are different views regarding this, but I believe you have to be very careful with partners/investors that have other interests beyond the purely financial ones. They can end up being not aligned with you, and the adventure of an entrepreneur is so long and hard … the last thing you need is noise. We have investors and did some key strategic partnerships (e.g. Siemens, Ficosa, etc), but always took care of our independence and that served us good.
Market discovery when doing new things. In early stage deep tech knowing the details of your target market can be very difficult, and we were not an exception. Fractus struggled with this at the beginning. But we built a portfolio of market opportunities (e.g. at one moment in time we even had up to 10 different P&Ls), we filtered where we saw the most attainable value as fast as we could, get rid of what wasn’t working quickly, and doubled down resource allocation on a few of our strongest use cases.
5️⃣ How to win in deep tech B2B sales
Technical capabilities. Deep tech solutions can bring with them quite a big amount of technical complexity. The triggers of sales growth are usually hidden somewhere in the intersection of these technicalities and the customer needs.
Demonstration. When selling new stuff, I believe some entrepreneurs tend to misunderstand the concept of evangelization. Does story telling play a role? Of course. But ultimately, demonstrate your product in a real use case linked to the customer needs and be able to prove differential added value.
Big targets. If your company allows it, go big. Outstanding deep tech breakthroughs
Navigation. In deep tech related B2B sales, specially if we are talking about selling to enterprise/big accounts, you must learn how to navigate the sales process of the target customer. Some key factors of this navigation can be: customer strategic priorities, leadership culture, politics of their buying process, key decision makers in different levels (leadership, business, product), etc.
6️⃣ Product playbook in highly technical industries
IP. In highly technical and product-driven industries, the defensibility of your solution is not like the plain vanilla “digital” type of thing. Incredibly important to consider a sound Intellectual Property (IP) strategy to ensure that you are able to capture ownership and consequently value. By securing your technology/science, you build competitive advantage, encourage collaboration, accelerate commercialization, and increase the attractiveness towards investors and acquirers.
Continuous evolution. Never stop pushing towards product development innovation. In industries of this sort, your value proposition strongly depends on always being on the cutting edge from a product perspective.
Technical awareness. I know I’ve mentioned this a few times already, but it is simply a huge must to have a very in depth knowledge of all the technical elements you are building. Deep tech solutions can bring with them quite a big amount of technical complexity and the triggers of success usually are hidden in it.
7️⃣ Essentials of building a great team
Talking about building teams in deep tech, I’d like to highlight:
Product edge as core. In deep tech you need this from the get go. The technical angle has to be the foundation of the team.
Commercial element. Surrounding the team with people capable of bringing the innovation to market is one of the most important priorities regarding hiring. Business development, sales, marketing - you name it. A common flaw in great technical founders is that there is a tendency to believe that because you had a breakthrough in a lab the product is going to sell itself, so there is less effort and respect put on the relevance of sales talent.
Hiring for today and tomorrow. In cutting edge technology and science, things can evolve so fast that you should be hiring for the current state of the company but also thinking about the skills you will need in the next steps that you expect to pursue.
Quick changes. If for whatever reason some hiring is not working properly, change it fast.
Strong complementary leadership. Maybe a bit repetitive so sorry for that, but the leadership team is absolutely key. When I mention surrounding technical founders with diverse profiles I’m not only talking about this old school concept of “mere employees” but about providing valuable responsabilities and ownerships to key people that results in a positive sum. Great integration and motivation, good
8️⃣ Is deep tech really a spot for exceptional opportunities?
Tech and science renaissance. Right now, we are lucky to be living through a moment of multiple technological and scientific breakthroughs in multiple fields that can be encapsulated into the “deep tech” category (e.g. from AI research to bio innovation). This reality is very unique and can fundamentally reshape industries and create entirely new ones, consequently unlocking a lot of value.
Global challenges. Whilst it seem we are creating exciting new game-changing stuff (or close to), at the same time during this period we are also facing some of the most relevant global problems we have seen in decades as society. Climate change, geopolitical shifts, international conflicts, new health-related issues, etc. The bad part of this is obvious, nobody wants more problems if they can choose to avoid them. However the positive part is that this type of global pressure felt by the whole humanity, tend to push entrepreneurs to contribute to meaningful change through proper solutions that offer avenues for tackling these complex issues.
Exponential opportunity. At the end of the day, when you go beyond the digital copycat and operate in the realm of the cutting edge of what’s possible, if you are able to navigate the difficulties what waits for you is unparalleled growth opportunity. We are not talking about incremental optimizations but about a new golden era of deep tech with exponential potential to provide great societal benefit and substantial returns.
9️⃣ What is your real differential edge as a VC investor with technical founder background?
Translation from vision to execution. I believe that as an entrepreneur with real experience from the early stages to the late scale up period, you end up building a stronger capability of being able to go from understanding market abstractions and conceptualizing solutions, to actually knowing how to translate that vision into the dirty technical and commercial execution required in the daily activity.
Operational hands-on experience. Strongly related to the previous bullet. It is very different to be someone who does picking and from there tries to provide advice, rather than someone who has spent decades navigating the challenges of building from zero and scaling a company with skin in the game and all the eggs in one basket. Learning by doing instead of by just observing helps you get stronger in providing more valuable strategic insights - ingredient that in early stage can have major impact.
Cultural alignment. Perhaps this is partially subjective, but in former I see more understanding of the importance of stuff that usually investors underestimate (at least in real life, beyond their PR). Things such as empathy, patience, focus, long-term view, etc. This may seem as not critical, but when tough times come, and they will come, you realize this details influence the accompaniment and support that the founders receive. Thus impacting their results in some way or another.
🔟 Mindset hacks useful for founders, coming from competing in multiple Ironmans and Marathon des Sables
It will be a very long race and you will face bad moments where you will need to withstand suffering.
But if you do things the right way in the good and bad moments, ultimately on the long term you will achieve your goal. The results you get are based on the work you put in. Luck exists, but your effort and resilience can reduce its effect.
It is very important to internalize that there is a correlation between hardwork and results, even whilst at the same time pain and bad things are somewhat unavoidable.
Big thanks Rubén for sharing your views with us!
Big thanks to you, reader, for your time and interest!
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