Matthias Eckert, CFO of Linked Things Inc., tells us about the IoT solutions for emerging markets from emerging markets.
First of all, how are you and your family doing in these COVID-19 times?
Matthias Eckert: Thank you, by the time of writing, we are all well. We caught Covid in October 2020, and we regard ourselves as lucky to have put it behind us without any bad consequences. We had only mild symptoms and were through with it in about two weeks. We have adjusted quite well to online working, but probably so because we were already used to working a lot from home.
Tell us about you, your career, how you joined Linked Things.
Matthias Eckert: I’m a finance guy and worked in banks and fund management before joining Linked Things. I really enjoy working with a real-world, tangible product and seeing how it makes the lives of our customers easier. Sophia Hasnain, the founder and engineering nerd who founded the company in 2016, had been a friend since 2003. It was easy to start talking, but it took a bit of convincing to join. Sophia heads all engineering and development, and she had already built a good technical team in Karachi, plus she had started to sell. That made the decision easier. Linked Things is now in its fifth year of business, we have established a holding company in the US, and we are discussing with people in Silicon Valley about how to grow internationally.
How does Linked Things innovate?
Matthias Eckert: We really take our cues from customers and figure out what they need. This happens in extensive discussions and field visits to their premises, factories, and offices. We don’t only talk to managers but also to the foremen in warehouses, the workers in fields, and the machine attendants in process industries. The bottom-up review usually shows that the needs are well understood but that finding a solution is difficult. A lot of large international companies sell solutions that will address a certain special issue that they have acquired knowledge of, but they don’t make an effort to customize either the size or the complexity to their clients. A lot of complexity is technically necessary but not helpful when expected to be addressed by users. The monitoring and control interfaces have to be user-friendly in an intuitive way, and we have gone some way to addressing this.
Of course, we look around what the competition is doing, but our first concern is always how to make a technical solution attractive to our customers.
How does the coronavirus pandemic affect your business finances?
Matthias Eckert: Yes, of course. We had four months with dramatically reduced revenues and had to rely on our shareholders to keep us afloat and meet payroll. Sales activities slowed down, mostly because people at customers’ offices or plants had started to work from home. In some cases, people had changed because they had been sent home for a while. In Pakistan, it is relatively easy to send people home and ask them to come back at a later date. The problem might rather be that the really good ones probably found different jobs in the meantime.
Did you have to make difficult choices regarding human resources, and what are the lessons learned?
Matthias Eckert: I felt the decision was not so difficult because our financial indicators told us quickly what needed to be done, but we had to make a few tough calls. As soon as we knew what was going on, we called all-hands meetings, and we told everyone what would be happening. We announced that we would cut salaries for a few months. At the time, we were in the middle of a delivery, so we did need people. In the end, we had to actually reduce salaries only for two months and even then, we were able to pay slightly more than we had initially planned. The landlords of our offices were extremely helpful, and we are grateful for their rent moratorium and all the good spirits in which they helped us along. Even a few customers agreed to accelerate payments. Altogether, I think we were treated well, and we are going to be keen to pass on the good vibes.
How did your customer relationship management evolve? Do you use any specific tools to be efficient?
Matthias Eckert: We already talk and communicate with our customers quite extensively. We were quick in letting them know what was going on, even if some of them were trying to be more secretive. I think it has helped us to cement our relationships and to show that we can be relied on, especially in difficult circumstances. So, it didn’t really change, but at times the frequency of communications increased, and the message was sometimes not about their particular technical issue but more about general interactions and mutual information.
Did you benefit from any government grants, and did that help keep your business afloat?
Matthias Eckert: There were no government grants or assistance in Pakistan. The whole situation, however, seems to have changed perceptions of what is required to address many issues, including the fight to mitigate the effects of climate change. Many commentators have described how the Covid crisis has accelerated things that had been planned for a while. In our case, the adoption of air quality monitoring became a case in point. We had been pitching it for a while, and people were sympathetic but wanted to make it part of some long-term strategies. When the correlation between bad air and the susceptibility of people to contract Covid or any other infectious disease became better known, we had more customers coming forward to order sooner rather than wait.
Your final thoughts?
Matthias Eckert: All in all, I think we managed reasonably well during the Covid crisis, and we are looking forward to continuing some of the practices, like working from home and communicating very directly with staff.
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