Glove's off

Getting a Handle on Digitalization

SONY DSC
The gloves are off in the battle to get ahead in digitalization.
  • Why it matters

    Why it matters

    A product made by a German startup, ProGlove, could be the first harbinger of how wearables intersect with the digitalization of industry.

  • Facts

    Facts

    • ProGlove’s product is a wearable with built-in sensors and scanners.
    • The chief makers of scanners are Datalogic, Honeywell and Zebra but there are no comparable products so far on the market.
    • According to a study,  European companies will have to invest €90 billion annually over the next 15 years in order to play a leading role in digitalized industry.
  • Audio

    Audio

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Some people have a good idea, launch a company – and then look for money.

Thomas Kirchner and Paul Günther did it the other way round.

A brainwave won them $150,000 in a competition run by chip company Intel. “So we had to set up a firm for them to transfer the money to,” said Mr. Kirchner a year and a half later.

They called their new company ProGlove, initially consisting of four people, developing wearables for industry.

The start-up entrepreneurs fitted a working glove with sensors. It means production workers can scan components with a single thumb control.

It cut the time they need to check if they have taken the right screw off the shelf and fitted it in the right place. Up to now they needed to use a hand scanner, which only takes a few seconds each time – but over the course of a working day, takes up valuable man hours.

“Even as a young, small start-up, the team managed to work with major-league companies, creating added value.”

Michael Wieser, Investment manager

Today ProGlove is a model start-up in the digitalization of industry. Their idea is of interest not just to companies like BMW and Festo, which are currently testing the product. Even Chancellor Angela Merkel slipped on the glove at the last national IT summit, an annual event which promotes Germany as an IT location.

It’s also attracting awards: ProGlove has just been nominated for the final of the German start-up prize. It has already won the start-up prize sponsored by German business magazine Wirtschaftswoche.

But most importantly, it has secured its first real injection of finance: According to information obtained by Handelsblatt, investors include an IT company from Silicon Valley, a Family Office from the United States, and Bayern Kapital, a fund from LfA Förderbank Bayern, a regional bank in south Germany. So far, they have put a total of $2.2 million into the company.

Wearables have been in fashion for some time now, with consumers snapping up fitness armbands and computer watches.

Now ProGlove plans to bring this idea to industry.

The seeds of the idea came to Mr. Günther when he worked at carmaker BMW as a student. There, he saw how often production processes were repeated and realized how even a small improvement would be a huge benefit.

He went on to create the intelligent glove that can read and sense – a huge improvement on other products that are more improvised, on the market.

ProGlove’s product costs around €1,500 ($1,665) with all the accessories and is an integrated scanner which is easy to plug in and unplug.

The market potential is massive. According to a study by management consultants Roland Berger, European companies alone will have to invest €90 billion annually over the next 15 years, if they want to play a leading role when industry gets digital.

The intelligent gloves fit this concept like a glove.

On the one hand, robots are becoming increasingly mobile and can work alongside people. ProGlove, on the other hand, equips the human hand with technical abilities.

“In many ways, a robot’s arm is still not as effective as a human arm,” Mr. Kirchner said.

Experts are optimistic about the start-up’s chances.

“Robotic issues are currently all the rage with investors and industry, especially if they provide an interface with humans,” said Carsten Rudolph, chief executive of the BayStartUP network. The ease and naturalness of wearing the glove gave ProGlove a unique selling point, he said.

 

The founders proglove
You have to hand it to them… Source: ProGlove

 

What’s ahead for the glove is data collection capabilities. It will gather information from production processes which will help in documenting successive work procedures. “We want to move on from being a pure hardware firm to becoming a software specialist,” Mr. Kirchner said.

This combination could drive the company’s further development. While many start-ups manage to make an app, they struggle to create a working business model based on software solutions. For hardware manufacturers, it’s often tougher to secure the necessary capital, as risks are higher and growth speculation lower.

Good news for the glove: It is an “original approach to combine hardware and software to solve specific problems for workers in production and logistics,” said Marc-Olivier Lücke, partner of the investment company Atlantic Internet, when ProGlove won its prize from the business weekly Wirtschaftswoche.

The risk of such an obvious solution is that others will think up intelligent gloves too. For now, Honeywell and Zebra are the leading market players for hand scanners. ProGlove has taken out a number of patents, of course. “But we won’t know what they are worth until they’ve been challenged,” Mr. Kirchner said.

That’s why his start-up is keen to get a move on. They’ve already got a market and operation-friendly product and so far ProGlove has produced around 100 gloves manually. Demand from industry has been high – when the idea became known, nearly all the major carmakers knocked on the door.

Right now, there are 20 pilot projects in operation and the first 300 gloves produced by a contract manufacturer are due to be delivered in the next six weeks.

That should speed up the business process: according to the start-up’s owners, revenues should reach seven figures this year. ProGlove wants to make its product the industry standard in intelligent gloves so fast that the competition doesn’t even get a look-in.

They’re off to a good start, thanks to the fact that ProGlove’s entrepreneurs touched base with key industry players early on. “Even as a young, small start-up, the team managed to work with major-league companies, creating added value,” said Michael Wieser, investment manager at the High-Tech Founder Fun, speaking during the awards ceremony at the WirtschaftsWoche start-up prize night. Cooperation between start-ups and big companies was still difficult, he added.

And yet both sides benefit. Though they have good ideas, German companies are sometimes accused of slow implementation. Their engineers like to make sure that everything works perfectly, while their Asian and American competitors are often less fussy, launching products like cellphones at an early stage in a bid to grab market niches.

ProGlove is a fan of this latter path and takes a hands-on approach. “We want to be profitable,” Mr. Günther, “and show as soon as possible that it works.”

 

Handelslatt’s Axel Höpner runs the newspaper’s Munich office. To contact the author: hoepner@handelsblatt.com

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