Canberra is home to an innovative company that has the potential to fundamentally change the test and measurement industry.
Liquid Instruments’ Moku:Lab product replaces 12 instruments in a lab with one single multifunctional device.
The spin-out from the Australian National University (ANU) has a unique approach that combines precision hardware with the versatility of software. It delivers solutions for professional scientists, engineers and students working in research and industrial labs across industries such as telecommunications, aerospace, defence and electronics manufacturing.
Moku:Lab provides the same functionality as tens of thousands of dollars’ worth of equipment but at a fraction of the cost offered by the well-established test and measurement hardware market.
The company was established in 2014 following decades of investment by the ANU and other funding agencies into developing the technology necessary to detect and measure minute gravitational waves.
CEO Professor Daniel Shaddock and a team of 11 ANU students and postdoctoral experimental physicists and engineers founded Liquid Instruments after developing technology for a new form of astronomy and for the Grace Follow-On project. This German NASA mission measures the Earth’s gravity and tries to map the melting of polar ice and changes in ground water.
The project was successful and, once it concluded, they could see the potential to take the technology that they had developed and apply it to something else.
As the technology was quite flexible, which it had to be for spaceflight, it could be used to replace a lot of conventional equipment with one piece. This had the potential to transform the way research is done.
Boasting some big-name customers, including NASA, Texas Instruments, Sandia National Laboratories, Apple and Nvidia, Liquid Instruments has attracted over $11 million investment from Anzu Partners, ANU Connect Ventures and Australian Capital Ventures Limited.
Harnessing networks to tap into global customers
According to Daniel, the Australian market is about 0.6% of the test and measurement industry. This meant that the team at Liquid Instruments knew from the outset that most of their customers were going to be overseas.
“Although we do have a good technology industry here and very good university research and development; really the bulk of our customers were always going to be overseas. So, we decided to set ourselves up in a way that we could really access them in the best possible way,” says Daniel.
“One of our co-founders had moved back to the US and she helped us get established in California. We began selling to our gravitational wave network of people and because we’ve got something that we would use, we thought it might be useful to them.
“Our team has a very high proportion of people who come from this space that would be users of our own products. They all come with their own very strong views about what they love about what we do and what they hate about existing equipment. I think that’s incredibly valuable when there’s a certain level of passion that comes with a team that are designing things that they love and who want to use this technology themselves. It also means we come at a lot of the problems from the user perspective, and think how can we make our user’s life easier, better and more enjoyable. With that approach, I think you come out with a very powerful, quality product that is loved by users.
“We didn’t really have a very strong knowledge of how to export. Originally, we thought we would put this thing up on the internet and people will give us their credit card numbers. That worked pretty well in Australia and in the US. It didn’t work so well in other countries. What we learned in selling to many different countries is that each one of those countries is a little bit different. We needed different techniques and different channels to sell into different countries.
“We ended up structuring the team to meet those needs. What we found is that selling into China and other areas of Asia is very much distributor focused and you really need to have a local person there that you can engage with.
“One of the great things about Australia is that we have a lot of international students and we are a very multicultural, diverse society. It’s actually quite easy for us to find people with connections into those cultures. Two people that we hired early on, one had worked in testing measurement in Japan and they’re still with us now, managing our distribution network in much of the world. The other is our Chinese representative who manages a network of distributors throughout China. They were a business student at the time.
“Engaging people from other countries means that you have a an immediate inside knowledge of the business culture but also the general culture, about how to interact with people and how to work with them.”
The impact of the COVID-19 pandemic
Daniel says that being based in Canberra they travel quite a bit to check in with their distributor network. However, now with the COVID-19 pandemic and travel restrictions they’ve been unable to do that.
“We still have those personal connections, but I think establishing them now would be quite difficult without being able to travel. Although the travel ban is a necessity and everybody realises that, we find it does add a little bit of extra friction to the process to support these networks when you don’t get a chance to meet up and interact socially. It turns out that it’s a very important thing for humans to like each other when they’re doing business,” says Daniel.
COVID-19 has also had an impact on the supply chain.
“We have to go overseas for some of the manufacturing for our prototypes and the shutdowns which have rippled through different countries at different times have been really challenging to deal with. When all these moving pieces have to come together at one time, it’s caused a significant delay for us. I think we’re through the worst of it though and we are looking forward to launching our new product early next year.”
Opportunities in remote working and education
One interesting opportunity brought about by the pandemic is the challenges around remote working and the opportunities around a ‘lab in a backpack’.
Daniel says the test and measure measurement market is a $10 billion market. It has been a well-established hardware market for the last 50 years. However, the approach being introduced by Liquid Instruments is enabling change.
“Instead of just a hardware market, it’s moving towards the software space. The hardware and the software have to work together and now that we have that in place it gives us a real advantage.
“While there are several companies that all have billion dollars revenue in this space, they are predominantly hardware-based companies. I think they will find it difficult to make this transition in the same way that conventional car companies are having trouble transitioning to electric vehicles in a competitive way. I think that because it’s in our DNA from the beginning and we’ve built our teams, our structures, and our systems with this in mind; it will put us in a very good position going forward. We are not having to completely change our company and our company culture to address this new approach, whereas I think a lot of the existing players who have been in the market for many decades will really struggle with that transition.
“Another one of the huge advantages that we have is that we are network enabled. Right from the beginning our system was designed with networking in mind and we are already fairly well set up to accommodate the shift to remote working. So, when people can’t go into their labs and they can’t check in on their testing, with our system they can.
“The same is true in the education space. Remote education is an enormous challenge and particularly for Australia, where education is our third biggest export market. Finding ways that we can enhance the remote learning experience helps us to support universities to maintain international students and that income stream.
“Our products are mainly used for teaching engineering courses. We’re already in about 15 different universities around the world and the opportunity is enormous. These universities are shutting down and sending students home and what they need is a lab in a backpack”.
Daniel says that plays to one of their major strengths, namely that they have put all this equipment into one tiny little box.
“The company was founded on the back of technology initially developed for spaceflight. Launching into space is one of the most violent things that any sensitive technology would have to go through. I think if we can figure out how to survive launch then we probably have a good shot at figuring out how to survive four years of being thrown around on a bus or tram in a student’s backpack,” says Daniel.
Liquid Instruments are working very hard to make sure they seize this opportunity not just for Australian universities, but universities in the US. They believe that India and China present massive market potential for the organisation.
For stories on this and more 2020 ACT Chief Minister’s Export Awards recipients at https://www.canberrabusiness.com/export-awards-2020/
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