NFCKEY will change your understanding of everyday life
Introduction to the company and answers to 9 key questions for any startup.
What’s the idea? What are the differences from competitors? What is the market and people’s attitude towards this? What was CustDev like? How does the technology work? What are the key benefits? What were the difficulties? Why do you think that you will succeed? And the most important thing: “How will this change people’s lives?”
Let’s start with a brief introduction:
NFCKEY is a startup of 8 people who are developing a smart lock system. The basis of the technology lies in the name itself – NFC. The locks are opened by the phone in the same way as Apple Pay or Google Pay worked with payment terminals: attach and pay, no internet or connection needed.
This method of opening is the most important distinguishing feature. We concentrate on a certain technology, bring it to the ideal, create a castle that is minimalistic and beautiful without unnecessary clutter and functions that are practically not used. Everything is simple, reliable, safe and fast.
But let’s go in order of questions:
What’s the point? What’s the problem here?
How is it different from competitors? There are a million Chinese analogues…
What is the market situation in this area?
Why did you feel that you could find an island in this ocean?
How does the technology work and how does it all work? This can be easily hacked…
What about logistics? How will you produce?
What difficulties have already arisen, and how are you dealing with them?
Why do you think that you are not one of the 90% of startups that fail in the first 3 years?
How will NFCKEY change people’s daily lives?
What’s the point? What’s the problem here?
Let’s start with the problems:
Inconvenient keys. Not only do you need to carry them with you everywhere, which is extremely problematic in warm weather, but in addition to this, they can be forgotten, lost, or stolen and the keyhole will have to be replaced. We conducted a survey, the results of which are presented in the picture; it is small, but overall it gives an understanding of people’s lives. Security also suffers because of this. Once you have the keys, you can make a duplicate and return the original. After this, the attacker has the opportunity to get into your apartment without giving you cause for concern.
Handing over the keys. Keys always exist in limited quantities, and their transfer requires personal presence, which brings its own inconvenience. It is always dangerous to trust a child with keys – they will lose it, break it, steal it, or take it away. Nowadays, many children already have a telephone in 1st or 2nd grade. And even if the phone is stolen, you won’t be able to open the door, since this requires unlocking the device.
Difficulty opening. Firstly, it takes time to open the door with a key. A little, but still not 1-2 seconds. Secondly, there are doors that are quite difficult to open, which, for example, will be a problem for children or the elderly.
Have you ever thought: “Did I forget to lock the apartment?” For example, I have it all the time, which is very annoying and only adds to the inconvenience. In the case of our technology, closure occurs automatically.
Breakage is a common problem. In general, even dirt on the key may prevent you from opening the door without difficulty. There will be no such problems with the phone, and since the mechanism is automatic, it is impossible to break it. It will work exactly as long as it is intended for its service life.
Let’s move on to the essence of the idea and technology:
All interaction takes place via a phone with NFC. Now even Xiaomi has NFC for 8-10k rubles. Apple has it since the iPhone 6s, that is, since 2015. It’s important that you don’t need internet or a Bluetooth connection to login.
Virtually unlimited number of users (there is a subscription limit, I will discuss them in detail in the next article: why they are needed and why it was done this way. This is a separate big topic). Access can be provided remotely from anywhere in the world.
Your phone is always with you. You don’t need a key, you don’t need a key fob, you don’t need complicated manipulations. You just open the app and touch your phone to your lock – then everything happens automatically for you, almost instantly, just like with Google Pay or Apple Pay.
Safety. All data is encrypted, and you cannot access the application until you unlock your phone. Losing your phone is a possible scenario, but in the modern world it is a very big disaster from all sides in addition to entering the apartment. In this case, we offer two options if you live alone or there is no one in the house:
1. Ask any neighbor to log into your account from their phone and open it (no matter how you look at it, you won’t be able to do this with a key or key fob). Then gain access to the lock on the spot.
2. There will be a keyhole for emergency entry. It is better to keep the key to it in a place outside the apartment (in the car, in a secret pocket of a backpack, etc.).
You can’t reflash the tag – she is protected. The lock will be equipped with an alarm in case of a direct break-in attempt. Hacking through the network is impossible, since the lock does not have an Internet connection.
The lock is battery operated, and since energy consumption occurs only when opened, on average you need to change them once a year. Moreover, in the event of a power outage, it will operate normally.
How is it different from competitors? There are a million Chinese analogues…
The most interesting question for people who have no idea how there can be anything in Russia other than resale and copying. I answer for all such skeptics: our technology is completely Russian, not using or copying any Chinese development (only the purchase of some parts for production). And the only thing that our product has in common with locks from China is the electromechanical method of opening the door.
Let’s break this block into 3 parts:
Chinese analogues
It is important to understand that all Chinese versions are the same thing in a different wrapper. In 95% of cases these are locks like those in the pictures:
That is, the lock (no matter mortise or overhead) in most cases has the following functions:
Passcode
Fingerprint
Tyua app
Keychain and RFID tag
Let’s figure out the password code. It works in two modes:
1. Safe – first you enter 5 random numbers, which the application will show, after 5 of your own numbers and then again 5 random numbers.
2. Insecure but fast – just enter your passcode.
As you can understand, the first option is extremely long and is rather needed simply so that people can be let in this way without giving them the keys. The second option is more convenient, but in this scenario, after 3-4 months of constantly entering a password, any schoolchild will be able to open your door.
In our lock, a password code is not needed in principle. Everything happens through the phone without any physical interactions. It’s faster, more convenient, more reliable and you don’t need to remember anything. And access can be transferred through the application at any distance, and a person, also touching the phone, will be able to open the door.
Fingerprint is extremely convenient for personal use, but absolutely not suitable for rental, especially for short-term. Plus, issuing any remote access using a fingerprint is impossible. A person’s presence is required to add it to the database.
If a lock with a passcode and paired with a fingerprint is already good and solves most problems, but still not all. The issue of security is acute, there are a bunch of videos showing how it can be hacked using bugs and tricks at the level of 5 minutes.
Let’s consider the situation with convenience when our fingers are dirty, wet, sweaty, etc. A fairly common situation, although not permanent, but what do you think will happen if the finger is even slightly dirty or wet with a Chinese scanner in the lock, which costs 8k rubles? – that’s right, you’ll just rub your finger for about 5 minutes to enter the apartment, or try again to enter the password code.
In our technology, any physical hacking is impossible: An attempt to break the housing in which the NFC tag is located will trigger an alarm. However, it will not be possible to open the door, since it can only be opened by a signal from the tag, which can be given by a telephone that has access. Entry always occurs instantly and without any additional conditions other than access. But it is important to note that all locks on the market have one vulnerability – this is a hole for emergency opening of the lock. No matter how much we want, we can’t do without it. This is what gives you the opportunity not to lose access to the apartment under any circumstances: flooding, hitting the lock with a stun gun, vandalism, etc. Nowadays, a similar opening method is provided for both cheap representatives of the market and locks for 60,000-70,000 rubles+.
The tyua app is essentially a template, to which you can add any Chinese lock. It has several basic functions: adding users, managing the lock, issuing one-time access, an activity log for some models, and remote opening (if supported by the lock).
It’s great that at least this exists, but it’s clearly not the ultimate dream and the interface there matches everything Chinese: it’s extremely inconvenient for our average person. Many functions are not provided in principle, while the vast majority of manufacturers use tyua and do not have direct access to it. Because of this, it is simply impossible to introduce new functions or improve existing ones.
We also have an application developed by our programmers from scratch for Android and iOS. It has more than 20 features, and some of them are specially designed for landlords. Also, constant updates and improvements to all functions will be a stable advantage. In addition, an interface designed to suit the desires and needs of our user, technical support and many other goodies, which you can see on the website in the table of subscription rates.
The keychain actually has all the same disadvantages as keys. In some scenarios it’s better, in some it’s worse, there’s no point in stopping here for long.
Also, do not forget that there will never be a guarantee for such equipment from Aliexpress or outbid. In our case, we provide annual warranty support, and also provide the opportunity to subscribe to an extended warranty (something in the spirit of AppleCare, but cheaper and with a slightly different approach).
Korean analogues
Korea is China at maximum speed. You may not even be able to tell the manufacturers apart by appearance at first. But there are still differences, the main ones being the quality of assembly and parts, and often the presence of its own application.
Korea occupies a good position in the market, although many brands are slowly leaving, and you can forget about the guarantee. But you need to understand that prices for their locks start from 30,000 rubles.
Our solution will cost, according to preliminary estimates, from 100 to 150-175 dollars (from 9k to 15k rubles), which is 2-3 times less than its Korean counterparts. The question immediately arises: “Why? Cheap?”. Not at all, everything is explained simply: when other castles have 5-10 entry options, and basically everyone uses only 1-2, you simply overpay from 35 to 50% of the cost for marketing. It’s cool when there are as many as 10 entry options, right? In general, yes, but you will use 1-2 maximum. Our lock has only 2 entry options: by phone with NFC or using a key, as usual. ALL. You don’t have to come up with different usage scenarios, you don’t have to figure out: “how will this work?”, you don’t have to worry that if one method doesn’t work, then you need to know how another works and configure it in advance. That’s it. It’s elementary: you put your phone in and the door opens. There are no bugs, there is no complexity in the system – it’s one technology that has been polished to perfection. It’s simple, convenient and easy.
Otherwise, Korean options are more reliable and pleasant to use than Chinese locks. Yes, somewhere there will be more goodies, the work will be more stable, and there will be fewer bugs, but you pay $300+.
Aqara
I highlighted this company as a separate item, since it is a very large player in the market, which operates entirely officially in Russia. This is a Chinese company that is a leader in the field. And everything would be fine, but their best models are simply not imported into our country. They even have something similar to our technology in the USA and China at a price of $350, but in Russia this simply isn’t available (they say they have to give it a lift, but so far in current models the work via phone and NFC either works crookedly or doesn’t work at all – tests are needed here).
Otherwise, everything is the same as the others: 25,000-50,000 price, with a fingerprint, password and everything else that was discussed above. But there are also cool perks, like a connection with Alice. Full work with Homekit is also rare.
Everything is done efficiently and without any questions. Perhaps this is our most important and serious competitor, but we do not strive to take 100% of the market – this is impossible. This area is growing all the time, people are learning more about it, requests are increasing, while good options still cost from $300 (25,000 rubles+). Our solution is much cheaper and more accessible, and even with market leaders it does not have any significant drawbacks when used, but on the contrary, it has additional improvements and ideas tailored to our market and needs.
Sphere market
According to the company Statista, the volume of the global market for smart home devices in 2021 is about 6 trillion rubles, and by 2026 the figure could reach 15.3 trillion rubles. The growth rate of the smart product market in Russia reaches 20-30% annually. Such dynamics will allow the Russian market to show a threefold increase in monetary terms by 2026 – up to 180-200 billion rubles.
Today, the monetary volume of the smart locks segment in Russia is about 9 billion rubles; according to forecasts, in 5 years it will be able to show a threefold advantage and reach a value of 27 billion rubles. At the same time, the share of smart locks on the Russian market of our manufacturers is equal to 1%.
That is, the market is large, developing and far from the most crowded. According to our surveys, 70% either do not know about smart locks and their advantages, or have little idea what they are. Just think about it, 70% of people are not even aware of this possibility (and our survey was conducted among active Muscovites who are constantly in the information field, that is, general statistics for the country most likely have even higher percentages). These are all potential buyers. Remember how quickly telephone payment technology became the norm. Over the past year, the vast majority have completely abandoned cards and cash. We are the NFC payment terminal in the world of smart locks.
Why did you feel that you could find an island in this ocean?
The idea appeared in my first year of university. Then, of course, it seemed impossible to implement something like this. Over time, I gained experience as a manager, improved my IT skills, and met new, smart guys. And in my 3rd year I entered an entrepreneurial competition (more details in channel) where there was a huge number of experts and people who have experience in business. It was from them that we received very positive feedback about the idea and the idea as a whole. This motivated us to bring CustDev to travelers, hotel managers and landlords. ~80% of people were extremely positive about the idea. This made us understand that the solution was in demand and that many of those surveyed did not even know about similar locks and analogues. We literally opened up a new world for them.
It became clear that the niche is quite large, and the potential is huge, since doors are simply used everywhere, and phones with NFC have finally begun to appear even in the cheapest segments.
We also saw many problems with existing solutions, which are quite expensive. There were ideas on how to improve and change it. And with the situation in the world, when many brands simply left Russia, our position only became better.
How does the technology work and how does it all work? This can be easily hacked…
Of course, I can’t tell you the details of the technology or development. Large corporations can quickly take over all this, invest their multimillion-dollar budgets there and overtake us in development.
But let’s discuss the main things:
All data is encrypted. When you touch your phone to the lock, they exchange “password codes”, and if they are correct, an opening occurs.
When granting access to another person, he is given a “password code” for a limited time, after which the access is automatically revoked upon expiration.
Adding regular users follows a strict hierarchy. There is a division into roles that allow you to conveniently manage access to the device.
A notification about entry will be sent to all users of the castle who are allowed access. For this, of course, you need an Internet connection.
The castle itself does not have Internet access. Thanks to this solution, we were able to get rid of the vulnerabilities that are inevitable when connecting to the network. This limits some functions in the future, but for these applications different models of locks will be developed to suit all needs. Now such development will be very expensive for a startup. And according to our surveys, for the vast majority, the functions that our device provides will be enough for this price
We have thought through a huge amount of additional functionality in the subscription. For a small fee, you get those functions that locks even costing $300-400 don’t have. All this was achieved by shifting priorities to functions when using the lock, rather than to different ways of opening it.
Physically, no matter how broken the case is, the lock will not open.
The lock is always closed until power is supplied to it. So if there are problems with energy, the lock will be closed.
It is important to clarify that the technology is now being developed specifically for the personal use market and landlords. For hotels or large legal entities. persons, the system will be changed and modified to meet the needs of this area.
What about logistics? How will you produce?
This is one of the most pressing issues for us in the team at the moment. It is planned to take some parts from China, and produce some in Russia. This scheme was chosen due to the price and limited market for some parts in Russia. In general, you can find everything in Moscow, but the cost is simply inadequate, and you simply cannot buy it on a large scale. When buying in bulk, China allows you to greatly reduce the price without losing quality.
But at this stage it will not be possible to produce the entire lock in China; a lot of problems immediately arise due to the intermediary, all the registration and bureaucracy in general, which for small companies will ultimately be more expensive and riskier than if produced in Russia.
Since we are now at the stage of finalizing the product, we only have a plan and contacts that will help in the implementation of our production. This is generally one of the most difficult tasks of business, but we are already working on the foundation. As soon as we implement this part, I will definitely write an article about the path we had to take to reach stable production in Russia.
What difficulties have already arisen, and how are you dealing with them?
Difficulties are part of the path, not an obstacle. It is important to understand that without them there can be no success. And, of course, we already had a huge number of them. It makes no sense to discuss them all, but it’s worth highlighting the key ones.
Let’s start with the technical part: It just doesn’t happen in engineering, and we struggle with implementing every feature for quite some time. This is a difficult process that is exhausting, but when everything works out as planned, the whole team is happy for a week :). I think I will analyze some of the developments and progress in future articles.
It is also important to understand that if the drawings are incorrect or the modules interact incorrectly, you have to purchase everything again. At this stage, we spent 32,000 rubles for the entire period. These seem like impossibly small numbers, but when everyone works for free, development is not that expensive, especially if you find the right contacts and negotiate with people.
Next, let’s look at disputes and conflicts in the team. They happen naturally, albeit quite rarely. We look for compromises, work on ourselves and move forward. No irreparable things have happened yet; everyone treats each other with understanding. But it is important to consider that one conflict can disable the entire team, so this is always a big focus and my personal attention. I, as a manager, try to devote time to each team member and discuss all the intricacies of his work and wishes. So far it’s helping. I will describe this in more detail in future articles, since interaction with people is a separate topic, especially from the point of view of management. I would like to share my considerable experience in this matter.
Why do you think that you are not one of the 90% of startups that fail in the first 3 years?
I absolutely understand people’s skepticism. I was like that myself until I started doing this project. I found problems absolutely everywhere and drew difficulties where there were none at all. Why? Just fear. You are afraid to go differently from everyone else. This seems off-putting and has no chance of success. It seems that it is impossible to surpass competitors and occupy some market share, to design and create something generally beyond the bounds of reality, because who will work for free? Such thoughts went on endlessly until one day I decided to go to the competition. It was there that I saw charged people who told me that I was just a fierce skeptic who did not know how to believe, and that the most difficult thing was to start.
At this stage, we already have everything to avoid entering this 90%:
Clear business plan and strategy
Fully thought out USP
Complete market analysis
A mentor who has business experience
Necessary contacts and connections for project development
Prizes in competitions
Social networks that have an audience (albeit a small one for now)
A well-built core team that has been working together for more than six months
Implemented technologies that can already be used in the product
Website as a representative resource
A clear system of tasks and control in the team
Motivation of all participants
The only thing that is in the process is finance. But we are doing everything to get them, and it’s only a matter of time. Why? Because we have already won prizes at state competitions. competitions, which means we will definitely be able to do so in the future, we have everything for this. Our mentor is also working with investors, and at any moment this can play a role.
How will NFCKEY change people’s daily lives?
And finally, punchline question. If you still don’t understand how, then everything is simple: most people don’t even want to figure out how the lock works and whether it’s safe, much less pay money for it. In our case, we took and did what the iPhone did in its time: we changed the approach. Almost all technologies, which were used separately in the iPhone, had already been invented, he just made it all simple, convenient, easy and understandable. This is the main revolution of the iPhone – such technologies have become clear. After the release of the device, Apple still had a long way to achieve stunning success, since in 2007 the iPhone was not yet incredibly popular due to many problems. Nevertheless it was the company’s approach that changed the world and made a revolution.
We have changed our approach: We don’t put all the possible technologies into one device, but make the most convenient and reliable method as simple and understandable as possible. We added additional features that competitors do not have and which will improve the user experience. We will make the device accessible to most residents of large cities. You don’t need to pay the cost of your phone for the lock, you don’t need to understand how it works. You simply install and use. Your daily routine with keys will completely change to a pleasant interaction with new technologies, household things will change. Many people will pay attention to smart locks due to a change in approach in this area, a change in emphasis and priorities. Mass character is the reason for any revolution.
