Bassam Jalgha and Hassane Slaibi are co-founders at Band Industries, a music tech start-up out of Beirut, Lebanon. The company’s flagship is Roadie, an award-winning digital tuner that allows users to tune stringed instruments automatically, and with precision. Negotiating unique challenges due to ongoing political and economic instability in Lebanon, Jalgha and Slaibi were enabled to launch Roadie when their 2013 Kickstarter campaign raised triple its stated goal. Band Industries are also one of the first start-ups to benefit from UK Lebanon Tech Hub, an incubator programme run jointly by the British embassy in Beirut and Lebanon’s Central Bank. The company has experienced steady growth since day dot and fields most of its sales in the US and online. Roadie has become known as a quality tool and Jalgha and Slaibi are now working to expand into the European market. Sarah interviewed them for Zenith magazine. Here’s the transcript.
How did you come to start Band Industries?
B: We were playing music together in a band, in university, but we were also engineers. In the band I had a lot of issues because I play a traditional instrument called the oud. It’s a 12-string instrument, it’s super hard to tune. I was spending most of the time tuning my instrument and it was very hectic and tough. The idea came to my mind, why not create a device that would actually help tuning string instruments, and allow musicians of guitars to change tuning often? I started working on the early prototypes of the device around 2009, and then I joined a competition in Qatar called Stars of Science. It is basically a reality TV show where you develop a product during three months and then pitch it to a jury. I moved to Qatar for three months and I was able to win the competition, first prize.
When I came back I talked to Hassane about joining me, and it was a great match, because he had recently finished his research in audio engineering in Australia. He came back to Lebanon and we decided to join hands. We combined both of our knowledge in audio engineering and computer science, and my knowledge in control engineering and mechanic engineering. We spent about two years developing the prototype and perfecting it. Once we had a minimum viable product that worked according to our specifications, that is when we decided to join an accelerator programme that’s based in Shenzhen, the manufacturing heart of China. The accelerator programme is called HAX Accelerator. We got accepted and we moved to China for four months, where we developed further the product, and made connections with factories and suppliers and did a lot of iterations and testing and prototyping. That was in late 2013, and at the end of 2013 we decided to launch on Kickstarter.
H: That was really exciting for us, that we kind of married all our skills and passions – for music, for robotics, from Bassam’s side. He liked to build a lot of small machines and robots and I like to process my friends’ voices and change them and play around with audio, and this kind of was a perfect match for both of us. We got to a point where we had a pretty nice-looking product, that worked. Still needed some tweaks, but we knew we could build a perfect product, and we can actually perfectly tune any musical instrument that’s similar to a guitar. Whether it’s electric, acoustic, classical, ukelele, banjo, you name it. We got to a point also where we realised that manufacturing is very, very costly. It was going to cost us about USD 60,000 to manufacture the first batch. We didn’t have the money to do it, so crowdfunding was a perfect match for us.
The campaign was really viral. In the month-and-a-half length of the campaign we raised three times the amount that we needed, about USD 180,000. Which was a really great experience as well, knowing that something we’d been working on for three years was something that actually has demand, and people liked our work. And they really needed this product. After Kickstarter ended in 2014, Bassam went back to China and I went back to Lebanon to work with the technical team on finishing the product, on building the whole technology – whether it’s mobile apps, or the manufacturing – and after about nine months, in September 2014, we shipped our first manufacturing batch to all our Kickstarter backers, and we started taking orders on our website. Everybody who paid USD 79 on Kickstarter got a tuner, we gave a 20% discount. Now Roadie sells for USD 99, or €99.
What are some of the challenges you came up against setting up as a tech start-up in Beirut?
B: The scene has changed a lot in the past five years, when it comes to start-ups. When I first started I was by myself, before Hassane joined me, and doing your own thing in Lebanon was not really common. I had struggled a lot, when people asked me, What do you do for a living? Everybody would look at me weird, because it’s standard here that you get a decent job, you get a decent living, you get married early on, you have kids and all that stuff. But things have changed tremendously, and more and more focus has been given to start-ups and now there’s a lot of support. There’s a lot of co-working places, there’s a couple of accelerators that were started and a few venture capital funds that also have started. But when it comes to hardware, and developing hardware in Lebanon, this was really, really tough. For many reasons, but mainly because there was no access to prototyping tools a few years ago. It was very hard to have access also to components and all of that. Developing the early prototypes was kind of hectic.
So yeah, the industry is weak, the technical knowhow is weak, and it is something that we’re trying to challenge and we’ve been trying to challenge in the past five years. We couldn’t find the right technical support, in terms of developing the product, and taking it to the next step. That is why we decided to move operations to China. Once we did that, our development increased exponentially, and we were able to move much faster in the development process. Now what we’re trying to do is bring back all this experience that we got in developing our first product, and we’re going to use it again to develop the second product. It’s going to be much faster for us. But also we’re bringing it back home to Lebanon to share it. We have a lot of access to fresh graduates in Lebanon. A lot of the fresh university graduates tend to leave the country. We’re trying to get them hooked up in Lebanon, keep them here, get them interested in either developing their own start-ups, or to join already existing start-ups like ours and share the experience that we already gained, and other start-ups already gained, with them, so that the culture and the mindset would develop further.
I believe that is happening. The situation doesn’t help much, with all the political issues and problems we have, and also all the everyday living issues that other countries don’t face. For example, in Lebanon we have electricity that cuts off often. We have bad internet infrastructure. But all of that is not stopping us from innovating and from developing further, and aiming to improve the status quo. I guess I’m positive in that sense.
H: I totally agree and I think the culture is one of the main hurdles that I’ve felt. Building your own company is like a rollercoaster. You have a good day and then you have a bad day. And on your bad day it really helps if there are other start-ups around, who understand how you’re feeling, and maybe can help you out with a tip, or with just a nice word. This is something I really like about Silicon Valley. Whoever you meet is either working in a start-up or has started his own company recently. That type of culture is really helpful and encouraging. This is something we’ve been seeing growing more and more in Lebanon. Beirut, the city, is growing younger and you see a lot of young founders.
So it’s important for you both to be based in Beirut, and to be helping to build the tech community there?
B: One of the main reasons we want to stay here is, yeah like we said we want to give back to the community, we want to help out – find new job opportunities, get new talent to stay in Lebanon, and help out as much as we can. But also, there is pretty good talent here. And there are not many start-ups around, so we have a competitive edge. Whatever we do also will have a positive impact on society. That is why we like being in Beirut. So far we’re planning to stay here. But now we’re considering ourselves a global company. We do our operations and manufacturing in China, we have our sales team in the US and we’re moving also to the UK now. We only have research and development in Beirut. And we like that – considering ourselves a global company instead of being located in one spot.
Having the hub in your hometown, and looking outward as well.
B: Exactly. It’s not only about Lebanon as a country, it’s more about the society and the community and the people around. That is what we really care about.
You said internet access is a bit dicey infrastructure-wise. What are some other challenges you might come up against, operating in tech?
B: The country has been going through political instability for a while. Life is moving on, and we’ve kind of got used to the situation the way it is. We had civil war for about 20 years, that ended in the 90s. Both me and Hassane were born during the war. We are a post-war generation. The 90s was a time where the country was flourishing and things were happening. But there was more focus on financial growth and all of that, and in the late periods there was a lot of corruption. This corruption led to the situation where the infrastructure is not really great. And the services, for example electricity, the internet and basic living services that you take for granted wherever you are living around the world, they’re poorly available in Lebanon. That is a big problem for start-ups. It is a big common issue that we have, being based in Lebanon. We tried to overcome this by helping each other out as a community.
One simple example is that rent is expensive in Beirut. If you want to rent a physical space in Beirut, maybe you won’t be able to afford it – especially if you’re not making any revenue yet. There are a lot of co-working spaces that started off because of that. Also, these co-working spaces have the power to get better internet. If you bundle multiple start-ups together then you can afford to improve your internet and all of that, instead of being on your own. I think, in a sense the lack of infrastructure and the increase of problems will lead to a better community along the line, because people will come together and help each other out. That is what I see is happening right now in Beirut. We’re excited about this aspect.
And it’s not really bad. We are able to do development in Beirut, we are able to do business, we are able to do everything really. The only thing that would actually stop us is war. If war breaks out then there’s a big issue. Thankfully, in the past three years that we’ve been in operation, nothing major happened, but we’re constantly worried and thinking and planning ahead, because of that. The country is bordered by Syria, and also in the South is bordered by Israel, and we’re at war with Israel. Geographically we’re surrounded by problems.
And you’re like, We’re just trying to make music, man!
B: Exactly. We’re just trying to make music, have fun, have a beer. Enjoy our time, develop our product.
I guess that’s also a good reason, or motivation to have bases in other countries. In theory you’d be able to continue to run as a company if something did happen.
B: Exactly, and that is actually why we’re focussing on making the company a global company, instead of putting all our assets in one location, which is Beirut.
Do you think political instability is something that start-ups in the MENA region have to consider generally, as just a reality of life?
B: I think that it is characteristic of Lebanon only. The situation in Syria is totally different of course, it’s a different scale of problem that they have over there. But before the war, I think Syria were having a lot of development. They had the first hackerspace in Syria before we actually had the hackerspace in Beirut. Interesting stuff was happening there. Now the landscape has changed a lot. But I don’t think it’s truthful to generalise and say the entire region has issues or bad infrastructure. On the contrary, I think a lot of things are happening. Jordan is doing really well in terms of start-ups and start-up community and culture. They have a lot of success stories. You can see a lot of start-ups based in Dubai – the Gulf is doing pretty well. Egypt also is doing great. Egypt had, and still is having instability, but it’s different. It’s not like ours. We also hear about a lot of start-ups coming out from Morocco, and they’re doing an amazing job.
H: I actually wanted to look at the other side of the coin also, at the market here in the region. A lot of the start-ups here are basically copycats of start-ups that made it globally, or in the US, and they’re trying to implement the same model in the MENA region, with some tweak. The region is less stable than the States, or Europe, at least in terms of wars and stuff like that. So developing for the local market is slightly risky. But if you look at the opportunity there, you have about 200 million Arabic-speaking people, who don’t necessarily have huge access to a lot of the technologies that are present in Europe and the States. This is why you see some companies grow, and exit. We’ve seen a few pretty cool exits, that basically exactly go hand-in-hand with that idea. Copying something, revising it, localising it, and getting acquired by a bigger company.
Copycats aren’t necessarily the most innovative start-ups. But they can be, in solving specific local problems. Like payments, in our case, or shipping. We don’t have very good electricity, or internet. So solving those hurdles and building a company like Uber in the region is already pretty impressive. If you’re building something for the global market there is way more potential there. We built Roadie. The local market is really small, but our market is really worldwide. Everybody’s playing guitars. And this makes our company very scalable. We can basically scale to reach the whole music industry. If you’re building something that’s local, you are bound by the 200 million people who speak your language, and scaling above that is not going to happen. This poses the scalability problem. But still I personally think that this is a very viable thing, and that even proven models outside are less risky, because they’re proven already. That’s another huge advantage also in investing or in starting a company that exists elsewhere.
Can you provide a bit of information about the company’s growth?
H: Since we launched we’ve seen an average of about 14-15% growth month to month. It fluctuates with the seasonality of everything, but this is the general trend.
B: For our start-up it’s slightly different than for software and services start-ups. Cashflow is really a big issue. If we don’t have the cash, we cannot produce the product, and we cannot deliver it. We cannot sell it. We can only produce small quantities in production, we cannot have a big quantity of production, because we are bound by this cashflow problem. That’s why it’s slightly tricky for us to expand globally quickly. We actually prefer this, and it’s better for us to grow as much as our capacity allows. Bit by bit, and limiting our growth so that we can actually make it happen. You hear a lot about Kickstarter campaigns, and other campaigns that blow their goal and they raise millions and millions of dollars, but then they get into a lot of problems in production, and in quality control and delivering the product on time.
Getting ahead of yourself, and not being able to keep up when it takes off. Are you looking for further investment to grow further? Would you want to be bought by a bigger company?
H: So far we have been bootstrapping and sustaining the company through Roadie Tuner sales – we were happy to see demand grow quickly enough to make this possible. Of course, we are open to investment opportunities that would speed up our growth and let us deliver faster on our product roadmap. I can’t go into detail yet, but we have some really exciting things lined up in 2016.
Do you have advice for other start-ups?
H: I think one important piece of advice for hardware start-ups is to have a minimum viable product before they launch. Being lean is very trendy right now, and it’s very easy to read The Lean Startup and be like, Oh hey, I have an idea, let me put it out there. On Kickstarter, and just start selling it. Having a minimum viable product is very important, in terms of founder confidence. We’ve heard stories, and we know one start-up that had to return their crowdfunding money to their backers, and that felt really bad. So that’s my piece of advice.
B: I always say this, but if we were able to do it – me and Hassane – then anybody can actually do it. No matter what the challenges are, and no matter what the problems are, you can always get your idea out there and make it happen. Just be consistent, and nothing really would stop you.
Bassam Jalgha and Hassane Slaibi are Directors at Band Industries, the producers of Roadie Tuner. Find them at Roadietuner.com.
Sarah Illingworth is a freelance journalist and Editor at Impolitikal. She has an MSc in Poverty & Development from the University of Manchester. Read more by Sarah.