Building Traxyl’s Two-Track Business Model: Why This Deep Tech Startup Chose a Hybrid Approach
When you’re revolutionizing how fiber optic cables are installed, convincing the market is just as challenging as developing the technology. In a recent episode of Category Visionaries, Traxyl CEO Daniel Turner revealed how his company built a dual-track business model to solve this challenge.
The Evolution of the Model
After years of experimenting with different approaches, Traxyl landed on a hybrid strategy. As Daniel explained, “Part of our company has to install fiber cable and be the installer and educate the market and do demos and provide that first install for companies before they can understand how it works. And then the other part of the company will be the manufacturer of the equipment and provide the equipment, the training and the materials to make it all work.”
Track One: Service Provider
The service provider track emerged from the need to prove their technology’s viability. Daniel’s team found that seeing was believing: “We’ve actually done a lot of installations for a variety of customers. A lot of them are on military bases. So Air Force customers and army corps of engineers we’re working with.”
This hands-on approach has led to successful implementations across diverse environments. “We did a project with an Internet service provider that’s providing high speed Internet to like 36 apartment buildings. And they used our technique to cross the drive aisle in four locations. That installation has been up and running now four years,” Daniel shared.
Track Two: Equipment Manufacturer
The manufacturing track focuses on scaling through equipment sales and leasing. “We finally landed on the printer ink bottle where we said, wait a minute, let’s build the machines that automate this installation process. We call it the tractor. Let’s build these machines and provide them to companies that are already installing fiber cables through other means,” Daniel explained.
Balancing Education and Scale
The dual-track approach helps Traxyl balance market education with growth. As Daniel noted, “The government right now is doing well to help derisk the technology and really find good use cases for it and help evolve the machines that are installing the technology. But certainly the commercial market is where the engine is going to kick in, and we’ll see a lot of scale at that point.”
Why the Hybrid Model Works
Several factors make this dual approach effective:
- Market Education: Installation services prove the technology works
- Revenue Generation: Service work provides immediate income
- Product Development: Direct installation experience informs equipment design
- Credibility Building: Successful installations support equipment sales
Lessons for Deep Tech Founders
Traxyl’s experience offers valuable insights for founders bringing innovative technologies to market:
- Demonstrate value through direct service before scaling through products
- Use service delivery to gather feedback and improve the product
- Build credibility in controlled environments before broader market expansion
- Balance short-term revenue with long-term scalability
The Path to Scale
The hybrid approach positions Traxyl for broader market impact. Looking ahead, Daniel envisions “Having fiber tracks almost like a new standard way of delivering fiber where all the installers know about it. Designers can plan for it in their network designs, and it just sort of just becomes another way to do something that is so simple and so well understood by the world.”
For deep tech founders, Traxyl’s dual-track strategy demonstrates how combining service delivery with product development can create a path to market for revolutionary technologies. Sometimes, the best way to scale isn’t choosing between service and product – it’s finding ways to make them work together.