Modzify’s 2013 investor presentation, created for the Duke Startup Challenge, proposes a hardware solution to what the founders perceived as a stagnation in smartphone innovation. The deck argues that while software apps have flourished, hardware functionality has remained static, limited primarily to GPS and front-facing cameras (Slide 7). To bridge this gap, Modzify designed the 'modzCase,' a $79.99 peripheral featuring a built-in battery, laser pointer, and call recorder (Slide 16). The strategy relied heavily on a multi-stage distribution model starting with crowdfunding to de-risk manufa…
Key takeaways
- The founders argue that the only truly innovative hardware additions to the iPhone between 2007 and 2013 were the front-facing camera and GPS (Slide 7).
- The team is composed of three Duke University engineering graduates with professional experience at General Motors and Deutsche Bank (Slide 4).
- Primary market research via a survey of 100 users claimed a 68% interest in call recording hardware and 77% interest in laser pointers (Slide 13).
- The 'modzCase' was priced at a target of $79.99, positioned as a premium alternative to standard battery cases from competitors like Incipio (Slide 16).
- The product intended to combine four distinct hardware features: a laser, a call recorder, a mouse, and a backup battery (Slide 16).
- Distribution was planned as a three-step process: Crowdfunding (Kickstarter/Indiegogo), followed by Amazon FBA, and finally retail at Target or Walmart (Slide 19).
- The presentation notes that Amazon's fulfillment plan would result in a net impact on margins of approximately 17% per unit (Slide 19).
- The deck lacks a specific funding 'Ask' slide, though it was prepared for a startup competition (Slide 1).
Executive Summary: The Hardware Gap
Modzify’s investor presentation, dated March 2013, was developed for the Duke Startup Challenge. The core thesis of the company is that smartphone hardware innovation has failed to keep pace with software. By positioning the smartphone as a platform that can be extended via physical 'modz,' the founders sought to capture a niche of power users who required specialized tools like laser pointers and hardware-level call recording. The deck is a classic example of the 'app-cessory' era of the early 2010s, where hardware startups attempted to solve software limitations through external peripherals.
Slide 1: Title and Context
The cover slide introduces the brand name 'Modzify' with the tagline 'Embrace the Impossible.' It establishes the context of the presentation as part of the Duke Startup Challenge in March 2013. The footer contains a standard confidentiality notice for Modzify LLC.
Slide 4: The Team
The team slide highlights a strong academic and professional pedigree. All three founders—Matthew Pleatman (CEO), Mike Qu (CFO), and Michael Feng (CTO)—hold degrees from Duke University’s Pratt School of Engineering. The professional backgrounds include 'Big Three' automotive experience (General Motors) and high-tier finance (Deutsche Bank). This slide aims to establish technical and fiscal credibility, though it lacks specific experience in consumer electronics manufacturing or supply chain management, which are critical for a hardware startup.
Slide 7: The Problem of Stagnant Innovation
Modzify uses a comparison between the iPhone 1 and the iPhone 5 to argue that hardware innovation has plateaued. The slide lists standard features (calls, messages, pictures) and notes that while these have become 'better' or 'faster,' the only 'truly innovative additions' in six years were the front-facing camera and GPS. This slide sets the stage for Modzify to position itself as the source of the next 'innovative' hardware leap.
Slide 10: The Solution – The modzCase
This slide illustrates the current market for 'satisfying wants' through internal apps and external cases. Modzify proposes a 'marriage of software and hardware' to expand functionality. The diagram suggests that Modzify sits at the intersection of these two categories, providing functionality that apps alone cannot achieve due to hardware limitations.
Slide 13: Market Validation and Consumer Desire
To prove demand, the founders cite a proprietary survey of over 100 smartphone users. The data claims 68% interest in call recording and 77% interest in laser pointer hardware. The slide also references comScore MobiLens research to estimate that a 42% penetration rate for wireless mice represents over 25 million users. The logic presented is that while these numbers might be too small for an OEM like Apple to integrate natively, they represent a significant 'gap' for a third-party accessory maker to fill.
Slide 16: Competitive Landscape
The competitive matrix compares the 'modzCase' to the Anker Astro, Incipio offGRID, and MiSuny iPower 4. Modzify highlights that while competitors offer battery life or solar charging, none offer the 'Other capabilities' of a laser, call recorder, and mouse. The target price is listed at $79.99, which is positioned as a mid-range price point despite offering significantly more features than the $69.99 Incipio case.
Slide 19: Distribution Channels
Crowdfunding: Using Kickstarter and Indiegogo to 'de-risk' the business and cover manufacturing costs. · Amazon: Utilizing 'Fulfillment by Amazon' (FBA) to handle logistics, with a noted 17% margin impact. · Online Storefront & Retail: Moving into direct sales and eventually brick-and-mortar stores like Best Buy, Target, and Walmart by Year 2.
Slide 22: Conclusion
The deck ends with a simple 'thank you' slide, repeating the logo and tagline. Notably, there is no slide detailing the specific amount of capital being raised or the intended use of funds, which is a common omission in competition-style decks versus true fundraising decks.
What Modzify Got Right
1. Clear Problem Identification: The comparison between the iPhone 1 and iPhone 5 (Slide 7) is a compelling visual way to argue that hardware had become iterative rather than revolutionary. It creates a logical 'why now' for a hardware peripheral company.
2. Defined Phased Distribution: The distribution slide (Slide 19) shows a realistic understanding of how a hardware startup scales. Starting with crowdfunding to avoid inventory risk is a standard and effective tactic for the 2013 era.
3. Credible Team: The combination of engineering degrees from a top-tier university and experience at a major manufacturer like GM (Slide 4) suggests the team has the technical foundation to build physical products.
What Is Missing From the Deck
1. The 'Ask': There is no mention of how much money Modzify is looking to raise or what milestones that money will achieve. Without this, the deck is a presentation of an idea rather than a business proposal.
2. Technical Feasibility: Hardware call recording on iOS has historically been difficult due to Apple's sandboxing and privacy restrictions. The deck does not explain how they bypass these software hurdles to enable hardware-level recording.
3. Manufacturing Partners: For a hardware company, 'who' is building the product is as important as 'what' is being built. The deck lacks any mention of prototype status or manufacturing relationships in China or elsewhere.
4. Unit Economics: While the deck mentions a $79.99 price point and a 17% Amazon fee, it does not provide the Bill of Materials (BOM) or the expected gross margins, which are vital for assessing a hardware business's viability.
Founder Takeaways: Lessons from Modzify
Avoid Feature Creep in V1: Modzify attempted to pack a battery, a laser, a recorder, and a mouse into a single case (Slide 16). For a seed-stage startup, manufacturing a device with four distinct hardware modules increases the risk of failure and complicates the supply chain. Founders should focus on the single most 'wanted' feature first.
Use Primary Research Wisely: While Modzify surveyed 100 people (Slide 13), 'interest' in a survey rarely translates to a 'willingness to pay.' Founders should supplement survey data with pre-order data or landing page conversion metrics to prove actual market demand.
Address Platform Risk: A business built entirely on the dimensions and software permissions of the iPhone faces extreme platform risk. If Apple changes the connector (as they did from 30-pin to Lightning) or the form factor, the entire inventory becomes obsolete. A modern deck should address how the company plans to mitigate this risk through rapid prototyping or multi-device compatibility.
Frequently asked questions
- What specific hardware features did Modzify plan to include?
- According to slide 16, the modzCase was designed to include a laser pointer, a call recorder, a wireless mouse function, and a backup battery that would double the iPhone's battery life. The founders believed these were 'wants' that large OEMs like Apple would not satisfy because they didn't meet a 70% market interest threshold for native implementation.
- Who were the founders of Modzify?
- The company was led by three Duke University alumni: Matthew Pleatman (CEO), who had experience at General Motors and previous startups; Mike Qu (CFO), who worked in investment banking at Deutsche Bank; and Michael Feng (CTO), a former race car vehicle engineer and GM associate engineer (Slide 4).
- How did Modzify plan to validate demand before manufacturing?
- Slide 19 outlines a strategy to use crowdfunding platforms like Kickstarter and Indiegogo. The goal was to 'de-risk' the business by demonstrating demand and covering the majority of manufacturing costs for the first production round before committing to larger inventory levels for Amazon or retail.
- What was the competitive advantage cited in the deck?
- Modzify positioned itself against battery-only cases like the Incipio offGRID and solar cases like the MiSuny iPower 4. Its primary advantage, as shown on slide 16, was the inclusion of 'Other capabilities' (laser, recorder, mouse) at a price point ($79.99) that was lower than some single-function solar competitors.
- What is missing from the Modzify pitch deck?
- The deck is missing several critical components for a standard VC pitch: a clear 'Ask' (how much money they are raising), a detailed financial projection, a technical breakdown of how the call recording would work (given iOS software restrictions), and a manufacturing/supply chain slide identifying specific partners.
