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PCH talks with Jeffrey Powers, Co-Founder and CEO of

Occipital

Makers of Structure Sensor

Occipital is the maker of the Structure Sensor, which attaches to your iPad and allows you to 3D scan people and objects, create 3D maps of interior spaces and interact with mixed reality environments. After selling their first app, RedLaser, to eBay in 2010, the company launched their second app, 360 Panorama, and then the Structure Sensor in 2013 with a Kickstarter campaign. We sat down with co-founder and CEO Jeffrey Powers to discuss fundraising, scaling your team and the long-term benefits of Kickstarter.

What is Occipital?

Occipital is a company that is focused on applying computer vision technology to consumer applications in the long run. We’ve done this over time with things that are pure software and, more recently, we’ve moved into things that involve hardware. Our most recent major product is the Structure Sensor, which is a 3D-sensing device that allows you to turn a tablet into a three-dimensional capture device. You can use it to capture a model of an object, person, or an entire space, and you can also use it to interact spatially.

The type of computing that we think this technology is going to give way to, we call spatial computing. The idea is that your devices are going to become aware of your spatial surroundings and are going to be able to, for the first time, compute over those surroundings, be able to measure, understand, and interact with the physical things around you.

Today, you have a device like a smartphone, tablet, or a computer. They all have cameras, and they can all look at the world, but they don’t truly understand what they’re looking at. They aren’t building 3D models of that world like you and I are. When we are walking around, we’re creating models in our minds. We can understand the size of things. We can understand their shape. We can understand what they are semantically. But so far, the technology that we carry around isn’t capable of doing that. Occipital recently has been focused around bridging the gap between what we as humans can do spatially and with what our computers can do spatially. We’re creating a platform to let other developers come in and build some of the applications that are going to become possible as your devices start to understand physical space around you.

What’s your background?

Before Occipital, I was in graduate school at the University of Michigan and I was working on the beginnings of a PhD in artificial intelligence. In doing so, I started studying computer vision and got extremely excited about the potential for computer vision. I saw the gap between what was possible in the latest research and what we were using in everyday life. The gap was massive. This was jaw-dropping technology that until then, I had only really seen it in movies—sci-fi, and things like that. Like Terminator vision, or Iron Man vision. Technology where machines can actually see and understand the world. I realized it was becoming possible and I wanted to figure out how to have an impact in making that happen.

I made a choice between staying in grad school and trying to do some of it in research, or trying to start a company to go after it. I figured starting a company was something that I could do at that point in time, whereas I might not be able to do it later, because life would happen and there would be a lot of other constraints. That’s why I decided to start a company. I went directly from dropping out of my PhD program to bouncing around trying to figure out what I was going to do for a little while and then eventually starting Occipital.

What was the catalyst for leaving grad school to start the company?

One of the reasons that I decided to leave and do it was because I had been involved in a couple of entrepreneurial-related projects in school. There was a program there that was called Grants for Research on Collaborative Spaces, which was a really great program at the University of Michigan. They brought together a bunch of students from different disciplines to work together to create projects that were entrepreneurial in nature. You are actually creating the beginnings of a company or a product. You could get a sense of what it was like to create a team and build something.

But the other thing that was interesting was that through interacting with those other people—some of whom were significantly older than I was, and more experienced, and who had come back to school after years of being in industry—was that no one really knew what they were doing. And to me, that was really encouraging because I didn’t know what I was doing either. Once I realized I was on the same playing field, I thought I maybe had a shot to start my own thing.

What made you guys want to go from developing software into actually making a device?

We were engineers at heart—I was an electrical engineer. To me, whether it was hardware or whether it was software wasn’t as big of a leap as it might be to other people because we were just engineers solving technical problems. We had built stuff in the past, physical stuff, and we knew it wasn’t as mysterious as it might seem to some people who don’t have any experience with building physical hardware. That was one reason that we weren’t as afraid of hardware.

I would say the reason we ultimately decided to build hardware started with the Microsoft Kinect. A lot of people experienced the Kinect and saw inspiring videos showing the potential of giving devices the ability to see in 3D. That’s really what the Kinect was capable of. Once you got past the idea that the Kinect was a gesture device that watched a person dance around and you realize that it was actually a fundamentally new input technology, your mind starts to go to, “How could we use this in other ways?” And because I was excited about reconstructing the world in 3D and the Kinect was the kind of device that enabled this, there was this urge to bring this technology to 3D reconstruction, in particular, mobile 3D reconstruction. How could you take this big thing that was attached to a television, and how could you put it into, or on the back of, a mobile device that you could carry around with you?

We quickly decided that this was the right way to bring 3D reconstruction to an everyday consumer. The things that had been done prior were very laborious or required a lot of skill. If you wanted to capture 3D from the real world you had to know how to capture a set of discrete photos from a whole bunch of different vantage points with a very high-end camera and know exactly what you’re doing. But when you have 3D-sensing on a mobile device, you can actually bring the user experience to something that you could hand to a kid with no training, and give them feedback as they are capturing the world in realtime.

We knew that eventually, somehow, somebody was going to figure out how to put this on to mobile devices. First tablets and then phones and eventually things we’re wearing. We didn’t want to be left in the dust when that happens. We created Occipital to make an impact, and to be at the forefront. By building hardware, we could actually leapfrog many others, and skate to where the puck is going. Ultimately, we built hardware so we could build the future that we wanted to build, rather than being stuck accepting what was available on current devices.

“Ultimately, we built hardware so we could build the future that we wanted to build, rather than being stuck accepting what was available on current devices.”

What residual impact do you think doing a Kickstarter campaign had versus other ways of launching?

I think doing a crowdfunding campaign like Kickstarter can have a kind of residual halo effect, if you do it right. You get this group of people that are your supporters on Kickstarter and they’re always excited. They’re eager and willing to test everything that you launch. They get the word out to other people out of their own enthusiasm. They’re this extended team in a way. You get that if you use Kickstarter, but I don’t think you get that to the same extent if you just make your product available for pre-order or if you just go directly to selling.

It also gives your product added legitimacy after you’ve launched it. This can backfire if you have an unsuccessful Kickstarter campaign. You’ve got to be careful and only launch things on Kickstarter when you think they’ll do well on Kickstarter. When somebody’s looking at your product in the future, they can see that a lot of other people believed in it. And it must be a legitimate product.

As an aside, I’m a huge fan of actually charging for products. Everybody seems to be trying to make everything free, especially in the software world, partly because we’ve been forced to. But the problem with that is you don’t get feedback on whether you’ve actually created something of value. You can easily get millions of users to download something that’s free, but in six months, they’re gone completely. Whereas, if you get someone to actually pay for something, you have a much better test of whether you’ve created value.

“But the problem is the things that investors get excited about are not, in my experience, the same things that the rest of the world is going to get excited about.”

What do you think entrepreneurs who have existing companies need to think about when they’re raising money from VCs?

You have to keep in mind that investors are a slightly different audience than consumers. If you’re like me, you’ve spent a lot of energy thinking about your end-users and what you need to say and show them, which is usually a more limited worldview. It’s just what they need to understand in the most clear way possible. But then you get to an investor audience, it’s a different because investors—especially if you’re trying to raise a bigger round—want you to paint a big picture of the future. They want to hear a far-reaching vision that’s really exciting and goes way beyond what you’re currently shipping to consumers.

It’s a very different audience. The thing you need to keep in mind is that all your communications, and your marketing and everything that you’re saying to the world is probably not the exact same set of stuff that you need to say to your investors. You really have to set aside time to get back to the roots of what are you really doing longer-term. That’s the story you need to tell the investors. If it’s your first funding round, then great, because that’s probably what you’re thinking about all the time. But if it’s your second round, this skill might have weakened if you hadn’t used it. You have to remember, “We need the elevator pitch, and we need the grand vision that goes beyond what we’re talking about day-to-day.” You actually need to stop focusing on day-to-day company operations and focus on fundraising. If you don’t do that, if you try to do it at the same time, you’ll probably fail or not have a very good outcome.

Another factor is that even when you’re fundraising, you are competing. You’re competing for the hearts and minds of those investors who are also looking at other companies in your space. Make sure that you have a story that positions yourself well versus them. It’s easy to forget that they are probably talking to your competitors. But when you remember that, it can potentially change the way you approach your fundraising.

Do you think it’s a good thing that it forces entrepreneurs to think in this long term mindset?

I’m a little bit more on the camp of “it sucks, but you have to do it.” There is a small element of it that is helpful. It does force you to focus a little bit. But the problem is the things that investors get excited about are not, in my experience, the same things that the rest of the world is going to get excited about. It’d be good to get more time to think high level about where you’re going with the company, to think about your elevator pitch to the world, and your long-term product roadmap that you really want to build. After you’ve been through a number of pitches, there’s diminishing returns in the value you get from investor discussions, and you really just want to get back to building a company and products.

What do you think is the biggest thing that you, as an entrepreneur, had to overcome?

One of the biggest challenges to overcome is figuring out how to go from an extremely small team that is 100% synchronized on absolutely everything and is working on a single top priority at any given time, to a company that is working on several things at the same time. That was a huge challenge for us. And I won’t even say that we’ve totally figured it out, but I think we’ve gotten way better at it because for any impactful company, you actually have to do a whole bunch at the same time.

Occipital isn’t just a project anymore where we’re building a proof of concept. We’re actually building an organism that has a bunch of different facets, and each one needs to continue pushing forward in parallel. They have to do this while maintaining good quality and with people remaining really excited about what they’re doing, and people who all feel like they’re working on important things. You have to make it clear that all of these frontiers are important. To do that is a challenge because it requires you to go from a zero structure organization to one that has some structure and has a bunch of people empowered to push forward on those fronts with high quality. Building that out was huge challenge for us coming from our roots of putting 100% of our brainpower on whatever the most urgent thing was at any given time.

We’ve grown our team to 25 now, almost evenly split between our office in San Francisco, CA and our office in Boulder, Colorado.

“What happens when you build something that starts to succeed is you start to get crushed under the weight of your own success. ”

What is the best piece of advice you’ve ever been given on entrepreneurship or otherwise?

One really good piece of advice I got is related to negotiations. Manu Kumar, one of our board members, gave us advice before he was our board member which seems very obvious in retrospect: if you’re involved in some negotiation with multiple other parties—whether it’s with partners, investors, or acquirers—try to keep everyone in lockstep. If you don’t, then the first party will be at the goal line ready to do a deal with you, when the other guys are still at the starting gate.

When they’re out of sync, you’re either going to really frustrate the first party that reaches a decision, or you’re going to miss out on the opportunity to potentially work with the other guys. You have to keep everyone in lockstep. That was a piece of advice that’s paid off numerous times. What means in practice is, in some cases, slowing down certain conversations and speeding up other ones so that they end up at the same point at the same time.

What is the worst piece of advice you’ve ever gotten?

Early on, when we were building RedLaser, we were given advice to stop working on it. The advice was basically, “This barcode thing is fine, but whatever, you guys have a bigger future, and you should just stop working on that and focus on a bunch of quick-hit computer vision apps.” If we had done that, we would’ve likely missed the chance to sell RedLaser, which was an important success that gave us the credibility to build bigger things.

This advice was from a trusted friend, someone who we still trust today. But sometimes people don’t see things through the same lens that you do. Sometimes this outside perspective is incredibly valuable, and sometimes it can steer you in the wrong direction. You’ve got to take into account where the advice is coming from, and what biases that person might have.

What’s your current state of mind?

Pumped up

What is your idea of misery?

Regressions

What is your greatest fear?

Moving too slow

What is your greatest extravagance?

Rent in San Francisco

Which words or phrases do you most overuse?

“Awesome”

Which living person do you most admire?

Elon Musk

What is your most treasured possession?

My home-built computers

If you were to die and come back as another person, who would it be?

Sir Isaac Newton

What is your greatest regret?

Not taking enough vacations

What do you consider the most over-rated virtue?

Patience

What’s next for Occipital?

What I’m really excited about is relieving a lot of the pressure on our team. We have an amazing team of people that have worked really hard to get to where we are right now. What happens when you build something that starts to succeed is you start to get crushed under the weight of your own success. You have a lot of inquiries from the outside world. Everybody wants to work with you in one way or another, but how many of those are actually real opportunities? You also have a lot of technical debt that you need to pay back; you’ve taken some shortcuts to get your thing out there to the world.

What I’m excited about now is we actually have the resources to start to architect a team that takes the pressure off of our current team so that everybody can get back to what they’re really excited about: building the future of spatial computing. We’re getting the team to get back to that by putting in place a broader team architecture so we can support the success that we have had so far as we really look forward to the future.

The other part of it is being able to take on some new initiatives that we’ve really been frustrated that we haven’t been able to take on. Without getting into a lot of details, there’re a lot of areas in computer vision that we want to push forward on and we want to push forward faster. With the bigger team, we’ll be able to do that. There are also areas in hardware that we’re excited about that we want to move forward faster on. We’re going to be doing new things. We’re going to be taking on new projects that will ultimately lead to new products of Occipital to allow us to capitalize on a lot of the foundation that we’ve laid—that is, the Structure Sensor and the SDK that goes along with it. There’s a whole lot that can be built on top of that platform that has not been done yet.

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