Start-Up University: Nucleus
Yonatan Frankel, founder and CEO of Nucleus: The Smart Home Wireless Intercom, received a BA in computer science from Yeshiva University, semicha from RIETS, and a Juris Doctorate from Harvard Law School. He didn’t expect to start his own company until he came up with the idea. Two years ago, while renovating his house in Philadelphia, he was looking for an intercom system to be able to keep track of his three rambunctious sons as they run around the house and to let them know when it’s time for dinner. He was surprised when he was quoted a steep price of $5,000 for the “old, beige, ugly analog” intercom systems. He looked everywhere for a wireless intercom system, but the search proved futile, so he decided to take on the task of making his own, realizing there was a real market for it and that this was an amazing opportunity. He knew the basic components his idea would need—a Wi-Fi chip, a wide angle camera, and an affordable price, so he just jumped in. And on the day that I spoke to him, two years after the idea was born, he told me that he had just received a picture of his first product coming off the production line in China, ready to be shipped. Families across the United States have already reserved thousands of Nucleus intercoms, which are set to be released this summer (available for sale in Lowe’s and on Amazon).
The Nucleus intercom elevates the standard household intercom system to a whole new level, but at an affordable price. Not only can you talk to anyone in any room in your house—with a wide-angle camera to capture the entire room—but now you can talk to your family in another state and even country. Frankel told me that at the click of a button, within 200 milliseconds, he can talk to his mother in New York or his grandmother in Toronto. The intercom can also integrate with other house-connected devices, serve as a baby monitor, and keep an eye on your house when you're away. There is also an option to answer calls without lifting a finger—and a way to silence it when you need peace and quiet.
To turn his idea into a reality, Frankel initially invested a good amount of his own money hiring development firms and freelancers to develop a prototype. The result was “ugly hardware with barely-functioning software.” But he used this rudimentary model to win over his first round of investors—friends and family. With these funds, he was able to improve his technology, which led to even more money—what Frankel described as a “virtuous cycle” (as opposed to the alternative, a “vicious cycle”).
Frankel’s next step was to build his team, which he began by bringing his friend, Isaac Levy, aboard as the second cofounder. Levy was one of the software architects behind Google Hangout and introduced the WebRTC (Real-Time Communications) software to the Nucleus intercom. In their first official round of funding, Nucleus raised $3.37 million, including from Foxconn Technology Group, which manufactures Apple’s iPhones. As the product developed and more funds were raised, he expanded and improved his team, most notably with the addition of Morley Ivers as the third cofounder. Ivers specializes in business development—he helps develop rapid growth organizations and worked to create partnerships for Nucleus. Frankel also added some junior engineers to his team. While the company is based in Philadelphia, which currently has a relatively small technology scene, most of his team is based in New York, with some in Israel and Mexico, using Google Hangouts and, yes, the Nucleus intercom, as platforms for company meetings.
Frankel emphasized to me that there are two things to look for when building your team: trust and diversity. Starting off with his friend, Levy, was a good first step, because, in Frankel’s opinion, when you have a shared culture and background with someone, there is a sense of trust, which creates a strong foundation on which to build a company. Trust in this situation was a two-way street—Frankel trusted that Levy would bring solid technical and software advancements to the company and Levy, who left a dependable, paying job to join Nucleus, trusted that Frankel’s idea would succeed. With a diversified staff, on the other hand, comes a diverse range of ideas and approaches to problems that will inevitably arise, which is an important factor in innovation.
One of the great things about founding a startup—and Frankel pointed out that there are many—is being able to explore a new territory. His BA in Computer Science helped Frankel talk to his engineers and understand them on a basic level and his Harvard Law education helped him understand the legality of the process. Prior to this venture, he worked as a legal intern for Weiss Asset Management, a developer for JPMorganChase, and a management consultant for Boston Consulting Group. All of these jobs provided invaluable experience and prepared him for various aspects of starting Nucleus, but every day he goes to work, he learns something new. Another amazing benefit of working for yourself is being able to make your schedule around your family and your life. Frankel told me that he was able to bring his sons to school the morning that we spoke and wasn’t late for work.
Frankel expressed his excitement to talk to me about his company, because he wants to encourage as many YU students as he can to pursue entrepreneurship. One message Frankel especially wanted conveyed to Yeshiva University students was that if you have an idea, just go for it. Frankel never thought about starting a company until he had the idea dropped in his lap. He believes that if you’re competent enough to get into a good program, be it law or medical school, or a programming job, then you’re competent enough to start your own company. He believes people otherwise talented shouldn’t be afraid to take the path less travelled for fear of earning a steady living—the chances of someone being successful in a startup are roughly the same as following the safe path, if they are motivated to put in the requisite work.