We need public high-risk funding to make tools for niche markets

February 24, 2017

Without a grant from the public foundation "Forebyggelsesfonden", our SmartMover wouldn't have been helping out 400 workers everyday. Now the foundation has closed, and we're super sad to see it go

 

Since our humble beginning in 2010 we've received multiple grants from the public foundation Forebyggelsesfonden to develop some of our tools. The foundation started with 3 billion DKK in 2007, and the goal was to keep workers from tough industries on the labor market and prevent them from being worn down. 400 mio. DKK was left in the foundation in 2016, but then it all of a sudden got closed.

 

We're obviously sad to see the it go, as it was part of our business. But more importantly it allowed us to developed tools that wouldn't have been made without public funding - tools that have bettered peoples working environment.

 

High-risk investments with low upside

But, you turn the tools you develop into a business, so why don't you just pay for the development yourself?

 

That's a great question, and the answer has to do with the complexity of innovation and the potential market for the tools.

 

Often the problem we solve are a fixed problem, that has been known for years but doesn't have an obvious solution. Because of that the innovation height is massive - it takes a lot of ideation, conceptualization and innovation to create a long term solution to the problem. Such innovation projects are a costly affairs, and as the result isn't always a perfect solution, the risk is high.

 

At the same time the tools we develop have a limited market. We always make sure the market potential is big enough to turn the tool into a viable business, but the limited market means the upside doesn't correspond with the high-risk investment - at least money-wise. Therefore manufacturers aren't willing to put down the investment, as the project might turn into nothing.

 

That is why we need those public funds for such high-risk projects.

 

Healthier workers benefit the society

SmartMover is one of the projects that has been born out of a grant of around 1 million DKK from Forebyggelsesfonden. The research and innovation for SmartMover ended up costing upwards of 2 million DKK, and it took a few years before it was ready for the market.

 

Today 400 SmartMovers are driving around building-sites helping workers carry loads of 250 kg of stone.

 


It's currently selling at a rate of around 250 a year, and after 5 years it's starting to be a profitable business. It has been a long term investment, and there's no doubt SmartMover would never have made it into reality on hardcore market terms - without the public funds for development.

 

We're not the right people to assess SmartMover's effect on society, but we know that 400 builders are daily spared from hauling 250 kg of stone by hand. And just by logical thinking that has to be a massive, positive impact on the wear and tear of those workers - meaning less days of and a longer and better working life.

 

SmartMover is just one of the projects the foundation started. And even though it is one of the success stories, it can't take a lot of those before the 1 million DKK from a public foundation is a good investment for the society?

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