When Ben Biron and Jonathan Ofir served in the Israeli military a few years ago, they learned a startling statistic from their commander, the head of the safety unit: among military deaths, more Israelis die in accidents--many of them alcohol-related--than in combat.
Five days after being released from the military in 2011, Biron started college in the U.S., and says he was still thinking about what he could do about drunk driving.
It's a sobering issue on campus, too. "You know, people get crazy," says Biron, 23, from his dorm room at Wingate University in Wingate, North Carolina, where he is a junior. "A lot of my friends drink and drive."
Biron and Ofir, 24, who is now in school at IDC Herzliya in Israel, decided to create the Alcohoot breathalyzer device, which wirelessly connects to a smartphone and mobile app. With it, you can test your blood alcohol level--using your personal height, weight, age, and gender--and then, if needed, order a taxi, or find open restaurants nearby.
Not only does Alcohoot fill a need--close to 30 people die in car crashes that involve an alcohol-impaired driver every day in the U.S., and the annual cost is more than $51 billion--the breathalyzer market is also poised to grow quickly. While it totaled $285 million in 2011, WinterGreen Research expects it to reach $3.2 billion in just five years, due in large part to new technologies to analyze breath for health care diagnosis.
Six months ago, Biron and Ofir raised $100,000 from Caleb Koeppel, a New York real estate mogul, who along with a partner, also owns a Five Guys Burgers and Fries franchise in Canada. (His son Max Koeppel is now Alcohoot's third partner, and its CFO.) Rabbi Avraham Berkowitz, a director for the Global Chabad Development fund, met Biron and Ofir at an event hosted by the Kairos Society, which supports young entrepreneurs, and introduced them to Koeppel.
Now they're looking to raise another $1.5 million, at a pre-money $4.5 million valuation, so they can manufacture the product.
Still, at this point, Alcohoot hasn't made any money yet. The original Alcohoot smartphone breathalyzer was made with a less-expensive semiconductor alcohol sensor, as a prototype to prove the concept. Then, Biron and Ofir did deeper research and development, and updated the breathalyzer with a more robust fuel cell alcohol sensor that can last twice as long.
The company got a provisional patent on the technology that transmits information from the breathalyzer to a smartphone. It was invented by Alcohoot's two in-house engineers who are based in Israel.
What's the roadmap from here? Biron says they will finish manufacturing the updated breathalyzer by mid-April, file an application to the Food and Drug Administration, and then with approval, ideally start selling through the company website--to consumers--by the summer. While the mobile app is free, the price for the breathalyzer will be $90. Biron estimates they'll sell 10,000 Alcohoot units by the end of the year, bringing 2013 revenue to just under $100,000.
Eventually, Biron envisions tacking on enhanced software options, like finger or face recognition, as well as partnerships with companies like Uber (for taxi rides) or Yelp (for restaurant recommendations). Both could offer addition revenue streams.
How will Alcohoot get consumers to buy what has otherwise been primilarily a law-enforcement tool? Biron says he wants to change the police-officer image of the breathalyzer and make it into an essential element of a responsible-yet-fun young person's lifestyle. Existing breathalyzer makers--Biron says none have yet made a smartphone version available to the market, though they are trying--are backed by executives who are in their 50s or 60s, with technology that has stayed the same for 20 or 30 years, and don't understand the young market.
He keeps most details about the marketing plan private. "That's all I think about," says Biron, "I'm a marketing major."