Founders Talk – Episode #64

Building a hardware/software product company

featuring Colin Billings

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Colin Billings is the founder and CEO of Orro where they’ve built the first truly intelligent home lighting system. It knows when you’re in the room, and adjusts the lights automatically for you. But Colin’s path to starting this company wasn’t a straight line. Like most innovative products, Orro has an interesting beginning — after-all, they’re going up against the giants.

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  • Orro - the first truly intelligent home lighting system
  • f.lux

Transcript

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Orro was from the onset never really thought of as starting a company. For many companies - and I think Orro is one of them - it came from just a series of experiences, and probably also a series of relationships that got us to where we are today. For me, that first experience was struggling with sleep. This was back in 2014, I was having a real difficult time with sleep; it was a busy time at work with Stitcher, and I just couldn’t get myself to sleep at night.

I remember those days as sort of constantly getting Amazon boxes, because I was buying every sleep aid you could possibly get on Amazon, whether it was blackout shades, white noise machines, melatonin pills, new pillows… And on an off-chance, a friend recommended an application for my computer called Flux; it adjusts the brightness and the color temperature of your screen, depending on where you are in the world and the time of day. I didn’t know why it would work, or if it would work, but I was willing to try anything. I installed it on my computers, and then within about seven days I was sleeping better.

Going from getting a few hours of sleep at night to getting a nice solid set of hours, which for anybody who’s doing startups is five or six hours, but at least they were peaceful amounts of sleep, and I could go to sleep when I wanted to.

So that was the first experience for me. I had no idea why it worked, but I had this sort of sparkle of something around lighting and whatever Flux was doing actually really helping me sleep better.

Fast-forward about six months, we finished the sale of Stitcher to Deezer, the French music company. I decided to take some time off, because I’d been working at Stitcher about seven years… And as I had a bit more free time, my curiosity from what Flux was doing just got the best of me. I started reading the Flux website, finding out that there was this relationship between light and our bodies, and not believing it, so trying to find scientific truths, and figuring out what the community had learned about that.

[00:03:57.00] What I found was relatively hidden from mainstream view there had been a lot of work that’s been done by the scientific community on how our bodies are immensely dependent on the way we are exposed to light throughout the day. That link makes a lot of sense.

To take a step back, the human body is the product of about 3,5 billion years of evolution on the planet Earth, all of which during the Earth was orbiting the Sun and creating regular periods of light and dark… So our bodies have evolved to really rely on the natural rhythms of light that are a result of that, and only in the last 100 years had artificial light come onto the scene, and certainly brought an immense amount of helpful things, but was clearly adding to disruption of our biological ecosystem, our homeostasis, and in particular sleep.

That was the first inkling to me that lighting was extremely important. Of course, I’ve been a photographer, I’ve done a lot of things in my life that sort of helped me understand that light is a really powerful component of our experiences, it matters in literally every moment of our lives, but I didn’t understand how much it affected us in ways that might not be perceptible to our minds, but actually to our bodies.

At that point I started thinking about “How would I do Flux for my house?”

[laughs] Yeah…

I had time, you know? I needed a hobby or something to keep the days busy and finish my reading… And I thought for certain, I guess as everybody who does these things, that there are smart bulbs, and smart switches, and other things out there in the world of time that I should be able to go Best Buy or go to Amazon and buy a bunch of these, and then I could string them together, write a little code, do a couple different things to get my lights to be softer in the morning, bright throughout the day, dim in the evenings, and really provide what was a plug and play experience on my computer for the lights in my home.

That was the first foray into smart lighting, or connected lighting, whatever people wanna call it, and it was also sort of an immediate experience of pain. Light bulbs turn off when you turn the light switch off, so smart bulbs become dumb instantaneously. I had to control all these different apps, they were really slow… And that was really where I learned how much was yet to be done in lighting in our homes, relative to how much they could improve our lives.

So the core of Orro as a product is a hardware device, a switch. Not lighting. And software, obviously.

I think that the Orro switch is the core ingredient to Orro. The Orro switch is a switch like no other; it’s got four sensors, a microprocessor, touchscreen, Wi-Fi, Bluetooth… It’s got more in common with a smartphone than it does with a light switch, but that is all really in service of experiences in our homes that that should be helpful to us, and help us live our lives with our loved ones in ways that we want, rather than thinking about managing our home.

In the case of lighting, that’s one thing that you manage every day. The average person will touch a light switch about 50 times a day. That’s because light is not evenly distributed throughout the day, and you do different things… And if you really step back and think about how often you’re adjusting your lights, you’re doing it all the time.

The light switch as a product, it has to take care of its job, number one, first and foremost, and that’s why we focused on lighting. And with Orro today, you essentially plug the Orro switch into the wall, you use it for a couple days, and it will learn what your preferences for lighting are at different moments and different activities, and automatically turn the lights on when you enter the room, to the right level, and off when you leave, so you never have to think about your lights again. But that is really the first step for us… Because no one cares about a device in your home that does something else other than lighting, if it is also a light switch and does a bad job at it.

[00:08:24.19] How good do you think you would be at describing a circadian rhythm?

Pretty good. I mean, I’m not a scientist, but the –

Just for listeners to catch up. I wanna zoom back to what you’ve just described with your experiences and relationships, but then more importantly the scientific side of things. I think as human beings we realize there’s lots of science that goes into our body. Obviously, we’ve got a very complex brain, trillions of neuro-connections, all these different things; you see the world via light that goes from – I don’t really know how to describe light, but the way your brain perceives that, there’s lots of really interesting things that go into just being a human being, and being able to see the world through eyeballs… And how that then affects us via light, as you mentioned - all of humanity, all of its time, but only in the last 100 years was artificial light introduced… And that disrupted this constant flow, what we call a circadian rhythm, which as you’d mentioned is our adaptation to light entering the world. You know, if you go into a dark room, you don’t know where you’re at, right? You need light as a human being to navigate the world… So we just take it for granted, you know what I mean?

Absolutely. I can talk quite a bit about it, but I can also share with you a number of places that people could go read… But the semi-pro version of circadian lighting - I think it starts with first understanding the role of sleep in our bodies. Our lives are spent on cycling between an awake period and a sleep period; and the sleep period is immensely important.

I was recently reading a book by this gentleman whose last name is Walker, who just released a very popular book on sleep… And I thought the way that he referred to sleep is pretty interesting. He called sleep the only reason why we don’t die.

I could agree with that. Gosh…

What I take from that is that sleep is an immensely important regenerative state for our body. While we’re sleeping – you know, the car is in the garage, but the engine is still running. Your body is doing all types of things; your mind is making memories, it’s allowing stress hormones to relax so your cells aren’t going haywire constantly… This period of sleep that you get in the evenings or whenever you happen to get it is what allows our body to sort of regroup itself.

I think they even have studies now - or at least they don’t study this, but they’ve documented where if you don’t sleep for six or seven days, people just die. This is a thing that’s really important for us.

How our body goes into the sleep phase is really where the connection with light occurs. As I said, the Earth is orbiting the Sun at a regular cycle, and there’s light photons that are emitted by the Sun, reach our bodies, and they help maintain what is called the circadian rhythm, which is our hormonal balance that helps regulate our body’s movement from awake cycle to sleep cycle, and back again.

[00:11:52.10] Underlying that transition is really two hormones that are critically important. One is called cortisol, which is a low-level stress hormone; sort of the baby brother of adrenaline. Another one is something people probably commonly connect with sleep - melatonin. Those things work in a really interesting way, which is when you experience blue light, or what was traditionally sunlight, your body starts to produce cortisol. Cortisol increases your respiration, heart rate, neural activity… All of this starts to wake your body up. That was evolutionarily important, because during the day you needed to go out as a human - or cells, even way back before we had human species - and use the day for evolutionary reproductive reasons.

Cortisol is stimulated by things that appear like sunlight, and is really important for you to keep your energy up and your focus up, and really to go about your wake cycle. But cortisol has this interesting behavior, which is when your body is producing cortisol, it’s not producing melatonin. So if you need to go to sleep, melatonin is the critical hormone that you need dominating your body. It’s the gatekeeper or the starting gun for sleep, if you will.

If your body is being stimulated by stress, or experiencing light and producing cortisol, it is by definition not producing melatonin. It’s delaying the onset of melatonin. So as you get into the evenings, in the pre-artificial light phase you have a sunset; the sunset, would be actually the absence of light, which it has been determined what melatonin is triggered by. So not just the absence of blue spectrum light, but actually the absence of all light together. If you have to have light, not having blue spectrum light in the evenings is good, because it’s not stimulating as much cortisol, and therefore letting your melatonin begin to be produced.

As you go into your evening, this is why the National Sleep Foundation and everybody else recommends to dim your lights before you go to bed. That’s not just to get you calm, it’s actually to calm your body… Because as you remove light from your environment in the evenings, you allow your body to begin producing melatonin, which means that your body can actually enter into a sleep phase when it’s sufficiently calmed down and you’re able to calm your mind as well and get to sleep.

How familiar do you think the general public is? Let’s say everyday consumers, and even knowledge workers. A lot of us work from home these days; it’s becoming more and more common to have distributed teams, or have headquarters in New York and San Francisco and have team members throughout the entire world. Not that that’s crucial to this question, but I’m curious what your thoughts are around how aware we are of light impacting those two particular hormones - cortisol and melatonin - to essentially… I mean, those are the core hormones that our brain triggers to our body to secrete/emit to generate certain desires - one is awakeness and one is sleepness, or sleep times, or just calm times, so to speak. How aware do you think people are, based on your knowledge with this company, and building this product? Are just everyday people aware of this phenomenon that makes up everyday life?

I think we’re reaching the place where the slope of awareness becomes much higher. I wouldn’t say that everybody understands it, but I would actually say that most people are having experiences that are proving it out in their daily lives.

Flux eventually underwrote the introduction of things like Night Shift on iPhone, and I think there was an app called Twilight, and now it’s actually built into the operating system on Android, that essentially does this around the light on our devices, and in particular our smartphones.

[00:16:02.06] I wouldn’t say 100% of people know about those features, but I would say that 100% of people that I’ve ever told “Hey, turn on Night Shift on your iPhone” and then come back to them 4-5 days later and say “Hey, what do you think?”, they’re like “Oh my god, I can’t believe I was not using this before. I’m always gonna use it.”

I think that there are ways that this - in particular the devices we use every day - is really starting to become a more common experience. I also think that the movement towards wellness or health is really driving awareness as well.

For a long time health was all about nutrition and exercise. In the last 3-5 years health has become nutrition, exercise and sleep. So if you’re really working on your sleep and you quickly find your way to “How can I do things that help promote my sleep?”, and of that, at the top of list (probably position one or position two) is now your light exposure.

If you find somebody with the same focus and intention on their sleep patterns as they are on their work patterns or their success, you’re probably gonna find a version of a super-human, whether it’s mentally or physically. Because the greatest athletes, the greatest minds tend to have serious intention when it comes to rest, generally.

Yeah. When you look at professional athletes, if you look Dave Asprey and people that have been for a long time categorized as looking for peak performance, they’ve had very definite sleep programs in their daily routine. And optimizing or improving sleep, and doing everything they can within reason to get to better sleep has been a high priority for them.

I think that part of what we saw with Orro was that that is about the norm. More people want a set-it-and-forget-it experience, and they want to be able to have the benefits with as little investment as possible, as most consumers do… And one of the reasons why we designed Orro to be the way it is today is that we wanted it to just sort of seamlessly happen in your background. Just like turning on Night Shift for your phone.

So would you say that as we peel back the layers to what you’ve been doing with Orro, that you’re not simply creating - as I generalized it earlier - a switch, just a switch for the wall and some software? This is really capitalizing on a movement, as you’ve mentioned, of wellness, and desire for wellness, or for peak performance, or for those who are – I think this day and age, with the advent of Instagram, and just the fact that we are so well-connected these days, that people are more and more aware of our health and wellness than we had ever been before. One, we’re hyper-connected to the point that we can transfer and share knowledge around everything from diets to sleep patterns, to lighting, as you’re involved in… But is it safe to say that you’re more than just simply a hardware/software company, and a company that cares about lighting? It’s more than that for you? How would you describe it?

I would say that lighting and how it connects to our health and wellness was for many of us at Orro our entrance into lighting. I would say that that is a core part of what we do for your home on a daily basis; lighting matters everyday. But as all things do, once you start building things, you realize that there’s more to the picture than you maybe initially thought. And for us, that sort of “more to the picture” came into realizing the import of the location of the light switch in your home, and actually helping you with things that both include all the lighting throughout your day, but many other things that you do at home.

[00:20:05.02] I think it’s safe to say that lighting is job number one for our light switch, and that’s why we are the best one at doing that. It’s the first reason that you are gonna think about getting some type of improved product for your home. But after you have an Orro switch in a room in your home or in a couple rooms in your house, there’s actually quite a bit more that the Orro system can do for you… And that’s really about software.

I would say our ambition is to help people live better lives at home. Lighting is a core aspect of that, but there are many other things, including not having to carry and be connected to your cell phone constantly, that Orro enables for you, and that will also help improve your life.

What is it that made you make this – and I’m just assuming this, because every business has to start somewhere, but… You’ve got a business-to-consumer relationship at this point, and you’re mentioning connected homes… That seems like the – not so much the easy win, because I don’t wanna dumb down what you’re doing, but that there’s other opportunities in enterprise and in industrial spaces, or I’m thinking like museums; I’m sure they already have things like this, but… Beyond just the home. Why did you laser-focus on the home, versus commercial applications? Or have you? Or are you just starting somewhere?

We’re just starting somewhere. There are light switches in every building, in almost every room across the planet. If you take a step back and get away from the specific product experience, what an Orro does is upgrade a junction box where a traditional light switch was normally placed, with a device that’s incredibly capable. It’s got sensors that understand occupancy and presence in rooms, and the types of activities there; it has interfaces, including microphones, a speaker, and a touchscreen. It has connectivity, so it can connect that room to other things… And it has its own processor, so a distributed intelligence at the edge there as well.

We actually see and have heard from a number of people about how they can use the Orro as a platform for other types of experiences that they’re looking to bring it. One example a little bit away from the lighting side is that as people in our population grow older, there’s more and more places that are there to help, and they’re not full-time-managed nursing homes, but they’re places where older individuals can go live and be in a community… But one aspect of what they have to do every day is make sure that their community is healthy and that the people are alright. They do that today by sending a person around to check in with their residents every day.

If you had a home that actually knew you were moving and knew that those patterns are matching regular patterns that you had done before when you were healthy, they would actually not have to go in there and check on you, and let you have a peaceful day. That’s just one example of how sensors and connectivity in the light switch location has a lot of other interesting applications.

Break

[00:23:23.28]

Let’s break down the project itself then, because I’m looking at it and I’m discovering more and more as I peel back the layers. You compared it to a smartphone, and it’s basically an installed smartphone (for a lack of better terms) into where you typically would have a light switch. It’s common size, but a portion of that is a touchscreen, and that screen can literally be just like your iPhone or Android phone or any other smartphone that has an infinite display option, like whatever you program it to display, it displays… Is that an easy way to describe the aesthetics of an Orro?

Yes, the screen on the front is about the size of two smart watches. It’s a small display, but it’s an incredibly useful one, and it’s extremely dynamic. One of the things that Steve Jobs said when he was introducing an iPhone - I happened to listen to that maybe a couple months ago, and I saw something incredibly insightful there - was that not every application requires the same interface. And that’s what moving from a physical keyboard to touchscreen-enabled - you could have very different experiences, depending on the use case or the task that a person was trying to complete.

When we think about light switches, light switches live in your home for 10, 20 years, and it was important for us that this switch that you buy today remains incredibly relevant 10 years for now, and the way you do that is with a screen as an interface. Also, I think we’ll see a lot more of the home moved towards some component of voice control or voice interaction, so that’s why we have microphones and speakers.

But if you look at the Orro switch, the Orro switch looks like a light switch. It’s a seamless replacement. You can buy one and put it on the middle of your triple-gang light switch, or faceplate. It’s really easy to get started… But if you were to look at the insides, it looks way more like an iPhone, or top of the line Android phone. It’s got a dual core, almost a gigahertz of processing inside of it, it’s got flash, it’s got memory… It is a phone in a different form factor.

Wow. So that’s the part I didn’t get to dig into yet - and maybe consumers don’t care, but that there is what hackers or the curious folks that listen to this show care about. Do you share that information on the Orro website at all, by any chance? The details behind the specs of it.

The exact specs of every single in there is not on the website just yet, but it’s definitely something that people have been asking about, so we’re planning on putting it up.

Right. I almost think it’s almost like an iPhone; you’d even capitalize on the experience of buying an iPhone, or an Android, or any smartphone out there – not to just choose Apple products. But they don’t just say “Here’s the phone”, they say “Here’s the phone with a certain type of DPI display” or the advent of Retina was a big deal to smartphones, and also different things inside of it technology-wise… But you said before that consumers who were wanting potentially the experience you’re trying to drive with Orro is that they want a somewhat hands-off, hands-free, automated process, right?

That’s right. And I think that there are –

You’ve gotta find the balance in there as a product developer.

Correct. I think that there’s – well, one is that you have to get your product out in the world, and once you have your product out in the world, you have a set of feedback, whether it’s the thing that controls the decision-making or not, that you can then start to use to prioritize how you’re going to build your product beyond where it is today. That’s what we’ve been doing this past year.

[00:27:55.17] To just give you a sense of how an Orro switch will evolve over time, I think standing on the idea of what smartphones had been for us, and then applying that to the home is the way to do that. We transitioned from much less capable mobile phones - whether that was a Treo, or a Blackberry, or for me it one of those old Nokia brick phones - to the smartphone. That transition has largely defined all aspects of our experiences over the last decade.

I would totally agree with that. I think the smartphone – we were talking even in the pre-call, with your experience at Stitcher, how that has affected podcasts. So in the same way that the advent of smartphones and the ubiquity of them in people’s hands have totally changed the world of podcasting… It would be the same way that this could apply to the home.

That’s right. I think what we resulted with from the smartphone was really not even a phone anymore. It was a computing platform that allowed us to start to connect, and now connect with anything that we want or need outside of the home. That’s because the smartphone’s in our pocket constantly when we’re outside of the house… And back to the thread about realizing you’re building something different sort of mid-stream, than you thought you were in the beginning, what we realized is that inside the home, the smartphone is failing as the platform for computing.

Yes, it sure is. Yeah.

There are structural reasons, like you have to charge your phone. You have to put it on a charger. Or for social or psychological reasons you wanna put your phone down. So there’s things that are connected to your phone that you wanna get away from, or you wanna focus on being with the people that you love while you’re at home.

So the phone comes out of our pocket and goes onto a table, our bed, or wherever you put it when you come home, and the thing that doesn’t stop when you do that is your desire or interest in connecting with a certain set of things that really make your life at home better. And so the gap there is I think the gap that Orro ultimately comes to fill for you after it’s taken care of your light. That interest and need for that I think is shown by things like smart speakers. One in two American households is gonna have a smart speaker by the end of this year. At least that’s what the analysts say, whether you believe them or not.

It’s cool to have a smart speaker, but there has to be another reason for it having that type of penetration. And when you step back and you think “I can do most of the things that I do with an Echo or a Google Home speaker on my phone, then there’s a reason why that speaker or that place for connectivity, connection and interaction is having so much interest.

You can go get your phone off of the charger, go to your timer app, set a timer for two minutes, and run your timer on your phone. You can totally do that. There’s totally a way to do it, right? But it’s just infinitely easier to be standing in any room that you’re in and say “Hey, Alexa, set a timer for two minutes.” That ease in convenience sort of demonstrates the power of convenience or ease that it has for people.

We think that smart speakers are super-interesting. Actually, Orro can serve as a replacement for a smart speaker in rooms where you don’t wanna have a speaker itself. It’s got two microphones, a speaker, an internet connection, it has Alexa built in… You can really do the same thing that you can do with a smart speaker, other than playing music, with the Orro switch. But then ultimately, you wanna compare the transition that we had with the mobile phone to what a potential transition would look like in the home. You need the right sensors, you need the ubiquity across the home, you need power, because these devices need to be on… You need an interface or something that is easy for people to interact with in the ways that they want to, and can evolve as experiences demand it. We actually think that the light switch as a location is the thing that has the brightest future for that in the home.

[00:32:30.21] Yeah. It’s interesting to think about that, because I’m a fan of smart things, and I’ve got a plan to start to integrate some of this stuff, so one of my next things on my list to do is a Leviton Universal Dimmer. But that thing in comparison to, say, the direction Orro is taking, is like night and day. You’ve got this sort of dumb analog switch that connects to my home network, and then I’ve got, say, a smart hub or something like that that connects elsewhere, and therefore I can begin to control these things with my iPhone, or other devices, or whatever… But I would so much rather – and I guess it depends on the application in each room, but at a $200 price tag for an Orro, versus say… I think Leviton is maybe in the $100 range. So you’re talking about double the price, but you’re getting what seems to me as like a smartphone in your wall.

And I may not need a smartphone, but what I need is a never-ending, infinite interface that can be anything I want it to be. And so this display for you begins to become available in most of the core areas in somebody’s home. The next thing is like, are we moving towards, say, a home operating system? It feels like we’re moving there; things are there. You’ve got platforms like smart things, you’ve got HomeKit for Apple devices, you’ve got Alexa and voice control, but there hasn’t seemed to be an establishment of like “Put this device next to your router, on your connected interface, and then now put Orros around the house.” Is that the direction we’re going, or am I crazy thinking that that’s the better way to go? Because I want a brain for my home.

Orro is like a brain for every room in your house.

I mean, it’s eyes, ears and a brain. You put an Orro switch in the room where you spend a lot of time. We see people put three or four of them across the home in the major rooms… And the first thing that happens is you never think about your lights again within about a week, where controlling 90%of all of your lighting changes in those rooms, and we’re making three times as many lighting changes you would normally make; so we’re actually doing a better job of lighting than you would have done on your own.

But then with that you have – now think of it if there’s a microprocessor, there’s a hardware platform for software that now lives in every room that an Orro is in, and the question becomes how that integrates with the other things that are interesting to you in your home.

If you have a smart doorbell, if you have one of these video doorbells from Ring, or August, or otherwise, when someone rings your doorbell, what happens? You get a notification on your phone. But actually, Orro has a screen, it has an internet connection, and it knows what room you’re in.

That’s interesting, because it has a presence awareness.

Yes, and it actually shows you that feed of what’s going on on your doorbell, and it has a small interface for push-to-talk, or unlock the door if you have an automated door lock of some kind… You really start to pull the necessary pieces of those controls and interactions off of that.

Or say you wanna drop in from your bedroom to the kitchen to ask when breakfast is gonna be ready. Microphone, speaker - you can just intercom from one Orro switch to the other. There are really all the ingredients you need for a much more capable home, improved by the fact that it understands how you use your house. I think that’s where over the long-term we’re starting to connect not just the things that you do manually, but the things that you do regularly based on patterns, and have them actually happen for you… And then provide that layer that is the actual manual controls via the screen, or otherwise.

[00:36:20.21] The one thing to point out that I think hopefully is one thing that we’re interested in advocating for through our products and the ways that we go is that things like smart things and a lot of these other connected home platforms - they’re actually cloud architectures. So you have really naive controls or sensors that live in your home, and they require talking to the cloud to figure out “Hey, what does this mean?”

Right. This is smart edge devices then.

Yeah. With Orro, all of that happens locally in your home.

And that’s why you need – because my next question is like “Why do you need to have so much power in the individual switches?” and now it makes a bit more sense. Help me unravel that, because that’s a big part of the privacy issues that people have with “Oh my gosh, tell me one more connected device I can put on my wall”, or whatever… Where then the concerns begins to – once you know so much about my personal circadian rhythm, my conditions of lighting and/or all the other things, the Orro will begin to allow me to operate my home and not have the concern obviously of where that data is going… Which history has shown we’ve had many data breaches, we’ve even had acquisitions that turned bad, or just a lot of the stuff in the news with Facebook, with how things are being used, and just different concerns… People are more and more - especially in the United States - hyper-aware of privacy concerns when it comes to adding one more smart device into my house.

We believe that that is a choice you shouldn’t have to make. Orro really only uses the cloud for two things. One is to set up your device and make sure that it’s an authentic Orro device, and get everything set up with your home, and getting that registered and activated. And then, if you want to, you can use the phone to connect to your Orros, which is to control them remote. Everything else happens on the switch. And we actually hope that that vein is really what becomes the main path for people with connections.

So all the storage of data that it collects or needs to store - because there’s gonna be some things accumulated, that you learn; so in order to learn about me and my patterns or my lighting conditions, you’re gonna need to store that data somewhere. So that data lives locally, not in the cloud.

Correct. It’s a distributed system. I can lock into my home today and rip the router out, and my lights will do exactly the same thing that they’ve always done, and they’ll continue to learn about me.

Really? Interesting. So Wi-Fi is optional. Necessary, but optional.

It adds additional functionality. If you wanna talk to Alexa, you obviously need to talk to Alexa’s cloud and you need an internet connection to do that. But let’s talk about voice assistance for a second… I’m trying to think – the last time I looked, you could run a local voice assistant on 250 megs, and recognize 50 commands before a speaker.

If you have three or four Orros in your home, you have as much processing power as your laptop, and now all of a sudden your house is just smart in and of itself, and then the question is what you can localize on the device or the system of devices that is helpful. And the more and more you localize it on the edge, the more and more private the system becomes.

Break

[00:39:46.27]

We talked knee-deep about product, and I love this conversation. It would not be a true Founders Talk episode if we did not dig into “My gosh, how in the world did you do this?” Because I’m thinking like, okay – and I don’t wanna assume what your independent wealth is like, or lack thereof, but you went from VP of Product at Stitcher, from what I understand you were there from the beginning to the end (in terms of the acquisition, not the end of the company, because it’s still there).

You talked about your sleep patterns, you learned about Flux, all this good stuff… How in the world did you create a hardware company and a software company in one? Orro is that; you’re now building a platform, these screens - there’s lots of technology. You went from VP of Product to Founder and CEO of Orro - how did you do that? How did you really learn how to build this company? …that’s probably the easiest way. Where do we begin to talk about building this company? The capital requirements, you’d mentioned the experiences in relationships earlier on in the conversation, how that was crucial… Can you unravel that for me?

Yeah… Through a lot of wounds is how you build a company.

Okay… Share the wounds, share the wounds.

I think resilience is the most important thing. It was particularly important for me, because I was a first-time hardware founder, it was my first hardware company, so it was an entirely new realm from Stitcher, which was software, and mobile apps, and content.

I think the way that I went about approaching the early days at Orro came from a lot of the things I learned at helping to build Stitcher, which was you need to get as far as you possibly can with the least amount of help at every stage.

Raising money – there’s all kinds of talk about “There’s lots of money out there”, and all these other things, but I think that there’s early money, but then it’s hard to get the real money that you need to actually take it to the next level. For us at Orro, we did that early on by trying to bootstrap everything we could. Our first prototype was built with me paying out of pocket to a few engineers that did things that I couldn’t get them to do for free.

Working for free, trying to just get to a place where we could understand what was possible in terms of the lighting aspect, because a light switch is nothing if it doesn’t do lighting very well. That led us to I think essentially demonstrate capability, which is the first part of early money - “Is this people’s idea good?”, which is not that hard to come up with a good idea.

I think the thing people look a lot more closely at is “Are these the right people to do this? Can they do this?” We basically ate very little in terms of what we were paying ourselves to get to “Look, we can do this!” That was three of us in the early days, and we got to our first tiny check (relatively to these days) with those $500,000, led by Jerry Yang, a former founder of Yahoo!. I think he believed our story, and he looked at us and said “These guys are credible enough to get to the next step. Let’s see what they can do with a small check.”

[00:44:15.09] The hope for us was always to try to take the least amount of money that we needed to, at fair valuations, because I had had a number of friends over the time that had been fortunate enough to raise really big rounds at very high valuations, and sort of become an albatross downstream. Big checks mean big expectations, and I think it’s always better to under-promise and over-deliver. Or promise something realistic, that has a legitimate rationale for getting you to the next step of building your company. For us, that first check was like “We’re gonna build the first real prototype for Orro.” It’s not gonna be hobby parts, and other things; we’re gonna build something that actually can get installed in the walls, and can show you what it’s like to walk around your house and have your lights automatically be adjusted for you by a switch that’s smarter than anything that’s ever existed before. That was what we did for the remainder of 2016. We did that in the late 2015, and we did that for a year.

It’s always tough as a CEO to look around and know that you’re just being the cheapest person on the planet, but we put every dollar that we had into advancing the product, which was gonna be our company. We had six engineers at this point, and we had sort of a private goal of “Before we commit our lives to this for the next X number of years, we’ve gotta believe that this is a thing that people care about. That if you have something like Orro in your home, that you’re gonna care about that enough to buy more, or tell your friends”, and it’s not just a product that people like to have, but once you have it, you sort of have to have it. So that was really the second phase. We did that on, like I said, a very small amount of money. Then ultimately we got to the stage where we had done that and we were out trying to raise money. This was the tail end of the halo of Kickstarter.

In the early days of Kickstarter you could put up a video on Kickstarter that was basically renderings of a hardware product, and you would raise a couple million dollars. That quickly went by the wayside, as people realized that those companies were not really companies. There were multiple high profile failures of people that just failed to ship their products, or misrepresented where they were in their product development phase… And I think investors at the time – they’re always hungry for as much information as they possibly can get, and had used Kickstarter as a signal of early demand… They had sort of stopped making investment based on “Hey, you had a successful Kickstarter. We’re gonna give you a lot of money, so you can go out and fulfill that interest.”

In the last 2016 period it was just a super tough time to start a hardware company for a series A round, and I was a first-time leader of a hardware company, so I was of course learning something immensely new every day, and I had to make sure that I was showing what I had learned when I talked to people… And it was just really difficult raising that round. I think that the climate was tough for hardware, and you know some parts for me and you just have to keep going out every day until you find 2, 3, 4 people that actually believe what you’re saying.

I think early on most of these hardware companies are built on being able to communicate a vision, telling the story of where you’re gonna be, and then backing that up with as much proof as you can have based on the effort that you spend.

[00:48:12.01] It’s really interesting to think about that from that perspective, that you’re a first-time hardware founder… I’m not very familiar with the climate of 2016, what makes it a difficult year for, or a different time period for creating a hardware company, but I’m kind of curious when you zoom back… As you look over the last couple of years, you’re a month into a launch, roughly 5-6 months of a beta period with – I’m not even sure how big the beta group was… A couple years with some version of it in your home, or others’ homes who trust you enough to say “Hey, if you put this device in your wall, it probably won’t catch fire, and it will actually be pretty smart, and we’ll eventually build a company around it.”

You’re at a point now where you can look back, given (as you’d mentioned) the bruises, the scars, the wounds… What are some of the core lessons learned, that got you through this period to today? …which still isn’t “success.” I assume it’s gonna be, because I love the direction you’re going, but it’s still yet to be proven, right? You’re a month into a launch, with a great future ahead of you… What lessons are core to you that you’ve learned, that you can share with other founders who are listening to this right now?

I think that there are two that I continue to remind myself to live up to. One is put every dollar you possibly can into making whatever it is that you’re building better. That comes at investing in your team, that comes in investing in learning, that comes in investing in everything that it takes for you to get your product to a place where people love it. Everything else is just, in my opinion, window dressing.

When I look back - we started in the front of my apartment, then we moved to a garage, and then only when we had more people, and could use the bathrooms, and fit in the garage, that we moved out of the garage. You just have to run as lean as you possibly can. I call that learning to be like a cockroach; there’s lots of famous posts out there about “You’re dead until you’re not” and all these other things, and I those things are really, really true.

The leaner you can keep it, the longer you can go, the more you can learn you can learn, the more you can build… And high brain companies that wanna try to compete on salary, and try to have fancy perks - they’re just gonna burn that up faster, and that by definition means you’re gonna have less progress the next time you’re in need of raising capital. So make sure you’re really careful about every way you spend your money.

The second is that you can build a really great culture and team just by putting effort in that, and that will come back to help you. Every time we took longer to ship our product, as most hardware companies do - all types of other things where there are different levels of adversity along the way, and the only way we as a company could have possibly gotten through that is if we had a strong sense of team, and people believed in the future. I think that those two relate in some ways.

We’ve never competed on salary, we’ve been extremely fair and transparent about how we did salary. We said “Look, we have to get to the next stage before we can be competing with the major technology companies.” If that’s not something that works for a person who’s gonna join our team, then they’re probably not gonna be a good addition to the overall culture. And that hurts a lot.

[00:52:02.02] Right. That right there alone is an intense lesson… Not that you choose people based on what they can accept because everyone needs to sacrifice coming into a team – it’s being able to be wise enough, and maybe even patient enough to allow team members to join or depart as those particular conditions change… Because not everybody has the same financial constraints or dreams that you may have. They may not have the same level of thick skin, or resilience, or determination, or drive, or even belief in the future. A characteristic of common founders is being a visionary. You’re able to in your mind see the future of this company and the product, whereas somebody else is more like “You know what, I’m just here to do the machine learning part of this, or the hardware parts of it. I’m really invested in the company, but I don’t see your full vision.” But being wise enough and patient enough to allow team members to join or leave based on that condition is pretty crucial to me. That speaks well to me in particular.

Yeah. I mean, every day I’m not hiring someone means another day that your product is not getting built in the way that you want it to; or you’re not developing the company in the same way, and it’s extremely painful to know that you’ve got timelines, and you have places you wanna get to, but you don’t yet have the team that can help you get there. It makes it very alluring to start chasing people that come in your door and are interested in working with your team for reasons that I think ultimately would be a drag later on.

I can’t say that it’s always worked out. We’re now almost three years old; there’s definitely been some stories of it not going as well as we had hoped, but what we do have is an understanding of why we’re doing it this way, and that we are all gonna work as hard as we possibly can, and bring in the right people when our ways to them being interested in us as well.

Since we’re talking about visionary and future, let’s go ahead and turn to the future then. What’s on the horizon for you? I know you’re a month into our official launch. People can actually go to getorro.com, and I believe they can get the Orro switch. $199 price tag. Shipping is free. I’m not trying to sell it for you, I’m just stating the facts here… They can go buy it today. You’re a month in. What’s on the horizon that not many people – I guess maybe most of what’s on the horizon is unknown to the greater consumer base, but what’s on the horizon for you that’s not really well known, that you can share today, that gets people excited about where you’re trying to go?

I think the next sort of major chapter in Orro is going to be making the things in your home that are already smart easier to use, in that they’re more accessible all throughout your house, and then actually making them smarter. So really opening up what an Orro switch learns and understands about how you and your family use your home, so that all the things that you already have or may have down the line can be as smart as possible with that information.

For example, today if you buy a connected thermostat like Nest or Ecobee, they don’t really understand how you use the rooms in your house, and as a result their algorithms for controlling your heating and cooling are limited based on where that thermostat is. We hope to be able to actually help them understand “These rooms are used at this time”, and even though that’s before maybe the thermostat sees you walk by, that it should be heating/warming your room in the winter months earlier than it otherwise would… So really starting to bring that vision of the nervous system of your home into reality with more and more integrations.

[00:56:10.02] I guess one last question to close with – I think my opening question was “You’re going against the giants.” We didn’t really describe the giants, but just as a founder, how have you been able to persevere given the Levitons and all the other existing hardware giants that just gobble you up, as Mr. Wonderful might say on Shark Tank. How are you able to operate every day with some level of sanity, thinking that GE or all the other giants I don’t even know could just – what makes you keep going?

I think that there are three parts. One, I think a company as long as it has a unique mission, should always have a reason for it to distance, and right now I don’t think there’s any company that’s out there that really has an honest and credible ability to say that they care about helping you live at home better. If it’s Amazon, they wanna sell you things; if it’s Google, they want to sell your information to somebody else to sell you things. We don’t have that interest, so I think that we will always be able to make decisions in betterance of your experience, not in “How do we get more information about you that helps us in parts of our business that right now are more important?”

Two is that because we’re an independent company, there are things that we can do that other large companies would never think of doing. I don’t think you’re gonna see Apple do integrations with Ring. You shouldn’t have to pick your smart home products and the things that are helping make your home life better based on which company you have allegiances to, or you already have the most number of products. So if we focus on making the product as best as it can be for the people that use it, there’s a set of things that we can do that the large companies can’t do.

And then the last one that helps me rest a little bit safer at night, which I don’t think is something that startups will ever really ever use as a sword, is that we’re creating IP all along the way, so we’ve definitely done our work there to make sure that if and when necessary, we have some protection.

So “Don’t follow me, because I’ve got patents on this stuff” is what you’re saying. Or intellectual property. “Don’t go to war with me, because we’ve pioneered this.”

I think we were the first to realize the potential of the light switch - the location and the value of it. We’ve been working on that for a long time, and we’re far ahead of a lot of other folks. I really sort of say that patents are a protection, they’re not a way to actively defend…

Yeah, they’re not prevention; it’s just early warning signs. It’s almost like territory. “Hey, this is our territory. Come if you want, but there could be a war to ensue if so.”

Yeah. And as a small startup, you don’t have the resources to go to war with a large firm over IP; you just have the protection that creates pause.

So if that gives us enough buffer to keep executing, that’s all I need.

Good deal. Colin, good luck to you on your future iterations. I’m a fan definitely of the direction you’re going. I think even this conversation with you helps solidify my feelings… And I think that this is a super-interesting conversation to have. We did not go nearly as deep as I wanted on some of your scars and your struggles; we talked a lot about product, but that’s fun, too. Thank you so much for your time today on this show.

Thank you for having me. I would love to keep it going.

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