Like most technologists, Lari Numminen and Jukka Kekäläinen founded their company called Zilta with the aim of making people’s lives better through software. In Zilta’s case, the two founders wanted to solve the problem of making smartphones easily accessible for people who were not technically savvy. To that end, they created an Android app that acted as a beginner’s home screen, with clear easy access to the essentials—but they soon ran into a problem. Their app couldn't solve all of Android's user-unfriendliness. So the pair decided to enter the hardware business and bring a Zilta smartphone to life.
Here's why they rejected the major smartphone platforms—and how they sourced their own hardware to improve upon them.
“There is a learning curve adopting new technology, and we're not making things any easier by making things like smartphones so complex,” says Lari Numminen, when I ask him what’s the matter with the current state of the smartphone. “Both the last two smartphones I owned came with over 35 pre-installed apps all clamoring for the user’s attention. In reality, we only use a handful of apps on a regular basis, and many of us outside of the tech circles don't actively go out and look for new ones.”
Zilta aims to tackle this complexity problem when it goes on sale to the public later this year. It’s a smartphone that a non-technically inclined user can understand how to use in a matter of seconds. It does this via a simplified OS built on top of Android 4.4 that divides the home screen into six tiles, five of which are the main apps people use—email, photos, contacts, a web browser, and messages (the sixth tile takes users to additional apps and settings).
If that home screen sounds a bit familiar it’s because Numminen and Kekäläinen turned to the past to be inspired to find the solution to what a large group of smartphone users want today.
“One of our role models is the old Nokia phones from the '90s that only did a handful of things, but they did them very well,” Numminen says. “In fact, quite a few people use their classic Nokia phones today.”
“We had a rough idea of how our smartphone should look and feel like,” says Artem Klimkin, marketing manager of Zilta, who along with Numminen, Kekäläinen, and four other members including two Android developers, one UX designer, and a product designer, comprise the entire Zilta team. “When you look at it, the working principle of our device is entirely built around the law of the vital few (aka the Pareto principle), where the majority of the effects comes from the fewest causes. This is the reason Zilta’s home display has only six buttons, which users can configure to suit 80% of their demands.”
Ironically, the team behind Zilta never dreamed of creating a smartphone at first. When they first conceived of Zilta it was only meant to be one of the hundreds of thousands of apps on the Google Play store, though one which was solving a major Android issue.
“The initial idea was to build an app that made Android easier to use and see what happens,” says Numminen. “We started off with a small number of installs in our first week in Google Play and a lot of encouragement from a couple of forums we wrote on. Over time, the number grew to about 10,000 installs from 185 countries.”
During that beta period, however, Numminen and his team discovered a lot they never expected. For starters they assumed their Zilta app would be most used by seniors like their parents—and they also assumed that there was no need to simplify smartphones for people under 50.
“We started off specifically focusing on ‘smartphones for seniors’ but over time we realized that wasn't the right strategy,” says Numminen. “We saw that our average user base was younger than we expected: 55-64-year-olds. But also, it simply isn't sensible to define your product by demographics. We've seen totally net-native 90-year-olds and almost totally computer illiterate younger people.”
But more importantly than discovering it was fruitless to code for demographics, the Zilta team discovered that their app was never going to reach the majority of the users it was designed to help the most.
“While we got good early traction in terms of downloads,” Numminen says, “everyone we talked to in person as potential customers told us they don't download apps at all; they buy phones with all the basic apps installed.”
If that was the case, what was a startup with an app that could help make smartphones easier to use for millions of people to do if those millions would never download an app on the smartphone they just bought?
The answer, Numminen decided, was that they were going to have to make their own smartphone.
But it wasn’t only the unwillingness of their target users to download apps that is the reason Zilta got into the hardware game. “[Another] major reason why we decided to move from apps to hardware was because our initial beta testers were simply using the wrong smartphones,” Numminen says. “We saw quite a few initial testers with either complicated high-end expensive devices or then ones that had big flaws, such as inadequate amounts of RAM memory. When all phones look the same in the store, who is going to tell a first-time buyer over the age of 60 which phone is right for them?”
Most software startups would probably jump ship to another project upon the realization that for in order to get their app into the hands of those it would help most their startup would need to supply both the software and the device it runs on. But for Numminen and the Zilta team it was the next logical step—and an achievable one, they believed, because of the state of the smartphone market.
“Smartphone hardware itself is becoming commoditized. The big question is what you do with it,” says Numminen. “An analogy I found is that around 1922 Ford's Model T had over 60% market share of cars sold in the U.S. after it had revolutionized the manufacturing process. A couple of years later there were 109 different car brands, as every one sought to differentiate. We think something similar is happening with smartphones, and every week we read about new brands like Oppo, OnePlus One, et cetera.”
Since the Zilta team had created their custom OS (which runs on top of Android 4.4 KitKat) they knew better than any what hardware requirements would be the best for their OS and their users' needs. They decided on a five-inch screen with a MediaTek MTK 6582 chipset, a quadcore 1.3 GHz processor, 1GB RAM, 4GB ROM, and a 1800 mAh battery battery so the phone was both power efficient and powerful enough. They topped the Zilta off with a 5MP rear and 2MP front camera and dual SIM cards.
But as a group of software developers who had bootstrapped Zilta so far they had neither the resources, experience, or money of a company like, say, Apple, which could build its own manufacturing plant and production lines. This meant that these first-time hardware vendors would need to rely on existing manufacturing outlets to bring Zilta to market.
“Once we had made decisions on the hardware specifications we started to think who could manufacture it,” says Jukka Kekäläinen, the lead developer and cofounder of Zilta. “We learned about OEM (original equipment manufacturer) and ODM (original design manufacturer). We knew we needed to find an ODM factory that could manufacture and customize the phone according to our specifications.”
Like many startups that are entering the hardware game, the first source that came into Kekäläinen’s mind was alibaba.com. Kekäläinen also did some Googling and found a similar site called dhgate.com. Both sites are massive wholesale operations similar to eBay where you can buy everything from Steve Jobs dolls to intricate computer components custom ordered through various factories’ storefronts.
“I gathered a list of about 15 factories from web searches and accounts that sell phones through these sites and started contacting them with emails,” Kekäläinen says. “The pivotal number [to look out for] is a ‘minimum quantity order,’ which meant how large was the batch they would sell. We got a reasonable response from about a 10 of those factories on the list and the minimum order was typically from 2,000 to 10,000 units, which would be a huge financial commitment for a small company like us. There were also two factories that could deliver a minimum quantity of 300 or 500, but the quality of the sample photos weren't that convincing.”
Before committing to a relatively large order from one of these factories, Kekäläinen decided to order two phones from the factories as test units as a precaution—and it’s a good thing he did. The phones he ordered as sample units were flagged by Ireland’s import office as counterfeit.
“It was just a horrible experience to a comical proportions,” he says. “It took about a month [to get the samples] and, once the Irish customs had red flagged them, the notion, ‘Where's our counterfeit phones’ became a running joke at the office.”
In the end, they decided to go a different route. Kekäläinen contacted a local importer who already had over a decade of experience sourcing through companies that had established relationships with reputable factories in Shenzhen.
“He found an ODM factory that could manufacture the phone according to our specifications and got a sample from their existing model,” Kekäläinen says. “We benchmarked the hardware and the quality was even higher than we expected.”
For startups going down the similar route of sourcing factories in China to make their hardware products Kekäläinen does note that it is possible to find a cheaper deal by contacting these factories directly, but he recommends startups spend the extra money and go through an established supply chain expert who has existing contacts in China, lest their first batch of hardware gets detained at customs for breaking copyright laws.
Now that Zilta has managed to source the right factory and received prototype units of their first smartphone, they are just finishing making tweaks to the software and finalizing the hardware before the Zilta phone goes on sale to the public for €139 (about $189USD) this December.
But though the coding and hardware is nearing completion the seven member team has to worry about something software developers have long taken for granted: distribution. After all, there is no Google Play or Apple App Store where their hardware can be stored and immediately distributed for a 30% cut.
“We will handle distribution ourselves, but we're also talking with potential supply chain partners,” Numminen says. “To start with, we will ship to Ireland and handle the logistics from here ourselves. For the moment, we only take pre-orders in the European Union, so we treat it as a common market. As things progress, we would naturally like to revisit other international opportunities, but for a small team, we're fully focused on delivering on our first batch by Christmas.”
As for other startups that may want to make the jump to hardware, Numminen says it’s not as daunting as it at first seems. The trick is to do your research and don’t rush into any manufacturing agreements without checking out the product first. Numminen points to companies like Fairphone, which crowdfunded its initial batch of ethically sourced phones, and Jolla, which raised funding to produce its own line of smartphones as examples that demonstrate that it is easier than ever for software developers to produce hardware in today’s age.
“We've never made or considered making hardware before,” he says. “But we do think that the barriers to getting started are falling. Designing or combining hardware and software is easier than it ever has been.”