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When Will Consumer Robotics Reach The “iPhone Moment”?

Recently I attended the west coast premiere of General Magic.  It’s a documentary movie about the rise and fall of a startup building one of the first PDAs in the early 1990′s.  Similar to Apple’s Newton and predating the PalmPilot, General Magic incorporated all of the key ideas of today’s modern smartphone into a single product long before the technologies (for both the device and the networks) were ready to support a great user experience.

Unfortunately, General Magic’s product failed - the price was way too high, wireless networks were in their relative infancy, and the device was slow.  It took about 13 years for the underlying technologies to mature enough for Apple to release their first iPhone.  And (not coincidentally) many of the same engineers at General Magic played key roles in bringing the iPhone and Android smartphones to market.

I think consumer robotics is roughly 10-15 years away from a major iPhone-like moment.  That moment is when robotics platforms can provide useful functionality in typical homes.  There are some great efforts underway right now, like Misty Robotics, which by analogy is probably closer to the original PalmPilot than the Apple II.  However, the truly breakthrough products will need to be able to climb stairs, open doors, have great battery life, and grab the proverbial “beer from the refrigerator” for consumers.

On individual technology dimensions, amazing progress is being made.  You’ve probably seen the infamous Boston Dynamics videos showing robots climbing stairs and opening doors.  Perception and grasping technologies are advancing quickly, as shown recently by demos like this one from OpenAI.  But each still has limitations that keep them from being incorporated into a consumer-friendly general purpose robot.  Cost, size and power need to improve dramatically - which 15 years of Moore’s Law advances in semiconductor technology should solve - in order to advance to the level of consumer robotics functionality, price and usability that consumers will want in their lives.  But when they come together, a huge new platform wave for applications, similar to the iPhone’s, will emerge.

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Looking for an Emerging Platforms Associate at Shasta Ventures

Recently we announced a search for three new investment associates at Shasta Ventures.  One of the key hires we’re looking for is someone who would like to help us find the most exciting new opportunities in Emerging Platforms: robotics, space, AR/VR, and the connected home.  Shasta Ventures has built a strong portfolio in emerging technologies with early investments in companies like Fetch Robotics, Accion Systems, Survios, Nest Labs, and Vector Launch Systems.  We’re looking for someone who is equally passionate about finding and helping to build the next great technology platforms after mobile.

Ideally, this person would have a relevant technical background and product experience - such as a mechanical engineering degree and 3-6 years working in robotics, space, or the connected home.  If you’re interested, or know someone who would be a good fit, reach out to anyone you know on the Shasta Ventures team, or find someone we know in common for a warm introduction.  We’re eager to hear from you!

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Noon Time!

Earlier today, Noon Home came out of stealth mode and launched the best, most capable home lighting switch available anywhere in the world at any price.

First and foremost, Noon works as a switch - to turn on the lights, you press it, and to turn off the lights, you do the same thing.  Everyone in the world has been trained to toggle light switches on and off since the moments we each grew tall enough to reach a switch.  Touching a switch will be something billions of people continue to do every day for decades and decades to come.  It’s an overlooked, daily ritual baked into our psyches.

Now, for the first time, there’s magic available inside a switch.  The Noon switch has an OLED display, incorporates capacitive touch, has a powerful processor, and includes WiFi and Bluetooth.  As you might imagine, the capabilities announced today (bulb detection, eliminating buzzing and popping on dimmed bulbs, room occupancy detection, other AI features) are only a fraction of what’s coming through powerful software updates, web services, and natural partnerships with other devices.

If you read about the product elsewhere, did you notice that it’s modular and can be easily popped in and out of its base?  Did you notice that it doesn’t need special house wiring or an external controller?

We’ve been fortunate to work with this company since their earliest days.  Annie Cheung and Will Lark, two of the co-founders, are particularly talented and well on their way to becoming future Silicon Valley superstars.  Their creativity and attention to detail in product design laid the groundwork for an exciting company.  It’s also been a distinct pleasure to work with Phil Liang on the board, as well as with many of the people I loved working with in the earliest days of Nest Labs.

When it comes to unloved, overlooked home electronics, we think there are only a handful of interesting categories.  Noon is about to turn the home lighting category upside down the same way Nest did with thermostats, and Eero did with WiFi.

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Why We Invested in (our second) Rocket Company

My first full-time job was in the space business.  In 1992, I had just earned my master’s degree in mechanical engineering from the Georgia Institute of Technology, and moved to a suburb of Philadelphia to work at the Astro Space division of General Electric (now part of Lockheed Martin).

I worked on two satellites – Echostar, and AsiaSat-2.  Both were direct broadcast satellites, meaning that they were designed for broadcasting digital television signals from geostationary orbit.  Geostationary orbit is a circular path around the earth about 22,000 miles high where a spacecraft appears to stay in the same spot in the sky because it revolves around the earth once every 24 hours.

As an integration and test engineer, I learned everything about the satellites:  how they work, how they were designed, how they were built, how they were launched, and how they were operated in-orbit.  The technology was fascinating, and I learned everything I could, including taking graduate-level classes in space mission design and orbital mechanics.

But after a few years, I realized that the industry was stagnant.  Space technologies were stuck in the 60′s and 70′s, largely developed during the glory days of the Apollo moon program.  Engineers and the large defense contractors weren’t ready to try anything new.  The prospect of spending most of the next 20 years of my life working my way up through a bureaucracy and filing Engineering Change Notices (ECNs) terrified me - so I pivoted my career trajectory to Silicon Valley, where in the mid-90′s it was clear the Internet was about to change everything.  So I left Martin Marietta, and came out to San Francisco in 1996 to surf the Internet wave.

About five years ago I started to look at the space industry again.  To my delight, 20 years of semiconductor advances due to Moore’s Law changed everything.  Missions that used to require school-bus-sized satellites, could now be performed with toaster-sized satellites.  Companies like Planet Labs, which takes pictures of the earth with shoebox-sized spacecraft, were newly possible by leveraging the latest smartphone technologies.  A whole series of space-based communications platforms finally make financial sense, when delivered with modern networking silicon.

Oddly, the missing link became launch capacity.  Even SpaceX’s Falcon 9 is a huge rocket, and doesn’t make commercial sense for launching these new, micro-sized satellites, unless you piggyback with a bigger payload or bundle together a bunch of microsats.  But the problem is, every small satellite maker has different needs.  The market for individually launching these “toaster-sized” spacecraft had been overlooked - hence Shasta’s enthusiasm for Vector.  As you can read about in this Bloomberg article from earlier today, Vector is building small launch vehicles, that can fit into a standard shipping container, and can launch a microsat into Low Earth Orbit for about $1.5 million per launch.  That’s a revolutionary capability and price point.

Vector’s CEO, Jim Cantrell, had heard about my space background and asked a mutual friend, Jana Messerschmidt, for an introduction.  I’m glad Jana made that connection!  Over the next few months, I met more of Vector’s core team, including John Garvey, Shaun Coleman, and Ken Sunshine.  This team is built of a special combination of maverick space industry veterans and young talent.  Together with my colleagues at Shasta, we became extremely enthusiastic about the team, and their mission to revolutionize access to space for microsats - and we wanted to be a part of it.

Today, Vector represents Shasta’s third investment in the emerging space industry.  We were seed investors in Spire, which is building a constellation of satellites for tracking ships, jets, and weather.  Last year, we invested in Accion, a Boston-based company building ultra-high efficiency rockets for in-space propulsion.  Vector is the perfect complement to Spire and Accion, and we’re on the lookout for more interesting startups in this category as part of our focus on emerging platforms.

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Why is a 1994 Ford F-250 a Great Product?

Often people ask me about what I drive.  I have a bunch of cars, which include two Subarus, a BMW M3, an 18-year old Land Cruiser, and a Miata that I race in the SCCA.  But probably my favorite vehicle of all arrived several weeks ago - a 1994 Ford F-250 pickup truck.

What do I like about it?  It’s one of the best products Detroit has ever built.

It doesn’t have cupholders.  It has a single cloth bench seat with three seatbelts on it - for the driver, and two passengers.  There is no crew cab.  The windows roll up and down.  The steering wheel is fixed and doesn’t have an airbag.  It has an enormous 7.3l turbo-diesel engine and a manual stick-shift transmission, as well as four wheel drive.  The pickup bed is a full eight feet long.  You can see a hitch receiver at the back - this drivetrain enables massive towing capacity.  It only has 210 horsepower but generates 425 lb-ft of torque at just 2,000 rpm.  Overall, it achieves around 20 mpg (yes, it’s probably not that great for the environment, but this was designed over two decades ago).  Together with a dual fuel tank (you can see two fuel filler doors, one on either side of the back left wheel), it has a range of 500 miles or more.

So given all of that, why do I think it’s one of the best products ever built by Detroit?

Great products serve their purpose well.  The purpose of this truck is to haul stuff.  And it can do it for a long time.  This truck has 180,000 miles on it, and this powertrain/chassis combination regularly lasts to 400,000 miles or more.

1994 was the launch year for a line of turbocharged truck engines - the Power Stroke engines - that has been hugely successful for Ford Motor Company.  This line of engines has grown for over 20 years due to it’s combination of power, fuel economy, and durability, while also meeting increasingly strict emission regulations.  This truck was the first manifestation of that line of engines, in a remarkably pure form.

Furthermore, despite the lack of power windows, cupholders, and airbags, it does have one major safety feature:  anti-lock brakes (ABS).  In an unloaded pickup truck, the rear wheels can lock up easily under heavy braking - it’s a lot more important to avoid hitting stuff, than to have an airbag protecting a driver who decided not to wear his seat belt.

Just like a sports car, this is a single-purpose machine.  It’s just that the single purpose is about moving stuff, not speed and handling.

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I Almost Feel Sorry for United

United’s recent handling of the forced disembarkation of a passenger in Chicago will go down in history as a textbook example of the power of social media.

The only company I’ve ever publicly complained about on a regular basis is United.  I fly over 100,000 miles per year on United, and I have traveled well over one million lifetime miles on the airline.  I’ve met hundreds and hundreds of crews.  It’s great set of individuals, but I’m convinced that United’s senior management has led to a customer culture at United that is far inferior to competitors such as Alaska, Southwest, and the soon-to-disappear Virgin America brand.

How so?  Look at refund policies.  Look at how they handle canceled flights.  Look at whether their on-board WiFi actually works.  I’ve never had a Southwest, Alaska or Virgin flight delayed on arrival by a moveable gate without an operator – but I remember dozens and dozens of United flights where the gate agent was nowhere to be found.  Rainy day on the west coast?  Somehow the other airlines handle “weather delays” better than United.  And I never check baggage with United unless I have no choice.  At SFO, waiting for United luggage easily adds an hour to your trip.  Or how about flights that have been canceled because the crew “went illegal” and couldn’t crew a flight due to too many hours worked, because United’s scheduling algorithms called things a bit too close?

Earlier tonight I was on a flight back to SFO from Houston with two of my kids.  Before we left the gate, the captain invited them into the cockpit for pictures.  My children were thrilled to sit in the pilot and co-pilot seats!  I took a picture and posted it on Instagram and Facebook.  The flight crew was picture-perfect on every dimension.  Friendly, thoughtful and engaging.  I felt like I was on Virgin America, Alaska, or Southwest.  Nice work, I thought.  Impressive.

Within minutes, I received my first comment from a friend on Facebook:  “… before they were dragged kicking and screaming, from the cockpit.”  That was the first response; not one congratulating the airline.  Not one saying “wow, that’s awesome!”  That reflects a lot of frustration that’s been building up for years.  I can’t quantify it, but it’s real and it’s got to be affecting United’s bottom line.

I almost felt sorry for United at that moment.  A culture of treating passengers badly on balance – relative to their key competiiors – has created a tinderbox enabling a huge groundswell of negative emotion to ignite a raging firestorm of anger.  Just search “@United” on Twitter to see for yourself.  The social media reaction is off the charts.

United management should look at this to understand the difference between a strong social media team, and a weak one.  Or at least the difference between a social media team that’s empowered, and one that’s hobbled.

Using NPS, this was quite predictable.  I actually talked about this about two years ago, as you can see here.  As a manager, you’re missing critically important items when your NPS trails your competitors by 40-50 points.  Just look at Southwest’s NPS of 62 versus United’s 10.  Do you think United’s forced disembarkation have been news if it happened on Southwest?  Or better yet, would it have happened at all?  In a customer service organization, a terrible Net Promoter Score is a disaster waiting to happen.

United’s behavior finally tapped into a deep well of repressed emotion that management needs to answer for.  This isn’t a matter of “unions versus management.”  It’s just poor senior management.  They’ve let things fester for years, in terms of how they treat their customers, and finally they’re paying the price.

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Why Shasta Invested in an Estonian Starship

Earlier today, Starship Technologies announced Shasta’s investment as part of a $17 million round.  It’s the first time I’ve led a Shasta investment outside of the U.S., and all of us at Shasta are thrilled to be working with the Starship team.

I’ve been interested in robotics for years and previously led Shasta’s seed investments in Fetch Robotics and Airware.  Quadrotor drones are perfect for surveying and gathering data, but I’m skeptical that flying robots will work well for delivering physical goods.  On the other hand, I'm convinced that ground-based autonomous transport - both for passengers, as well as for freight - are the mass-market answer.  Energy requirements are far lower, and the technologies are much easier to implement - especially from an operational point of view (not even considering onerous FAA regulations of the skies).

Why use a Honda Civic to deliver a pizza, when you could use something a lot smaller, cheaper, and with far lower energy requirements?

I started actively looking around for entrepreneurs solving the local delivery problem.  Several friends suggested Starship to me, one of whom introduced me to Allan Martinson, their COO (in the picture below, at Shasta’s San Francisco offices).

Since they’re based in Estonia and I’m based in San Francisco, we had a video call to e-meet each other last summer.  The technology was interesting, but what impressed me was their focus on go-to-market strategy.  They’ve built hundreds of prototypes and have been testing their units, at scale, in the field, with relevant operational pilots on a financial shoestring.

I was sufficiently impressed to fly to Talinn, Estonia, to meet the technical team and see their robots in action.  We also learned about their operational secret sauce, which I can’t talk about.  Suffice it to say that their system is oriented around making the unit economics work as soon as possible.  This focus on unit economics - backed up by a scrappy, results-focused engineering team - is why we invested in Starship.

One last note.  Allan and I didn’t decide to wear matching clothes for this picture.  It just happened.

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Is Fitness a Killer App for VR?

I was taken by a recent VR article titled “30 Days of Raw Data Fitness Challenge” - the author created her own fitness challenge for her husband, where he had to play Survios’ Raw Data on an HTC Vive system every day for 20 minutes for 30 days, and wear a fitness tracker while he played.  The result?  He lost five pounds.

As part of our VR lab at Shasta, we’ve introduced over 100 people to the HTC Vive VR system for the first time.  We’ve found that we have to regularly replace the headset foam.  Why?  Because people become so active, moving around in the VR experiences, that they start to sweat.  Over and over and over again.  It will be interesting to see where developers take this.

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Privacy & Hacking Aren’t the Real Long-Term Issues for Consumer IoT

I wonder if they’ve started to write business school case studies on the Samsung Galaxy Note 7.  I can’t think of another consumer device, short of cigarettes, that’s received so much public notoriety as something that could kill you or the people around you.  Like cigarettes, a significant minority of Galaxy Note 7 owners is still holding on (about 7% of the devices still haven’t been turned in).

Have you seen the YouTube footage of a Grand Theft Auto mod where you can use Galaxy Note 7′s as grenades?  If you’ve flown anywhere in the world over the last three months, you’ve heard the announcements.  It was shocking enough to hear a mainstream Samsung product called out by name - but then it became a federal crime to even bring one onto a plane.  It’s an utter disaster, to say the least, for Samsung’s brand.

I’m particularly intrigued by the implications for connected hardware going forward.  To enforce this ban, T-Mobile recently sent remote kill codes to the remaining Galaxy Note 7′s on their network, in the form of updated code that prevents the devices from charging.  As announced recently, all of the major carriers plan to follow suit in the next few weeks, following deactivation updates in New Zealand, Australia, and Canada.  Verizon was initially a holdout, but decided to join in as well.

This an interesting milestone for connected devices - clearly Samsung and the carriers are justified in killing the devices over the network.  But where does it stop?  What will happen when refrigerators, that use outdated CFC’s are connected to the network, and new government standards mandate their deactivation?  Or if they’re now longer up to current energy efficiency standards?  Should they be deactivated remotely?

What about any other appliance?  What about cars?  What about absolutely anything in our lives that uses electricity?  Your thermostat?  Your door locks?

Who decides how to set these enforcement policies for devices?  Forget about hacking, and forget about privacy considerations for a moment.  Think about what happens when future governments decide what’s appropriate use for the physical devices in our lives.  That’s going to be the real social battlefield for connected consumer hardware.

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Why We Led Survios’ Series A Years Ago.

Where were you on March 27, 2014? I was in San Francisco, on a very steep street, walking into a nondescript blue apartment building.

Arriving in a basement studio apartment high in the hills south of downtown San Francisco, at 492 Clipper Street, I donned a backpack and a 3-D printed, ill-fitting head-mounted display.  I looked like a leading character out of the original Ghostbusters movie.

Nathan Burba and James Iliff shared a wireless demo of “Zombies on the Holodeck”, an early VR first-person shooter where you fight off a zombie onslaught.  I was blown away by their early demo, and called my partners to insist that they drop everything to meet these founders and try their demo later that day.  I’m glad they did.

Less than two weeks later, I met with Nate and James at Lupa, a restaurant not far from our demo location in Noe.  On behalf of Shasta Ventures, I presented them with a term sheet to lead a Series A investment in their company, Survios.  To celebrate, we ordered a bottle of wine.  The waiter’s response?  He carded Nate and James.  (...are you guys even 21?)  Their response?  Yes ... and yes, we’d love to work with Shasta.

I had done a lot of diligence before that meeting, but I have to admit that I wasn’t entirely sure if they were 21.

Since then, I’ve loved working with this team.  They were the earliest pioneers of “room-scale” VR ... long before anyone had heard of HTC’s Vive.  There was also a major pivot, and many technical challenges.  To the team’s credit, they’ve thrived despite these challenges.  Just a few months ago, they had the first “million-dollar-gross” revenue month in VR.  And they have some big news to report tomorrow.

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Where Do Magical Hardware Experiences Come From?

No matter where you live, or who you are, everyone gets excited when they see a rainbow.  Why?  Because rainbows create emotionally appealing connections between the real world and the clouds.

Great hardware products leverage that same concept of cloud connectivity to the real world we all live in.  Companies like Eero use the cloud to make their products better on every dimension: performance, features, and security.

Over the last year, Eero has been collecting the world’s largest network topology dataset in real time.  This allows them to rapidly test and fix interoperability issues, and inform Eero’s routing algorithms.  Every Eero network learns and adjusts to perform against its local environment.  Every Eero adapts to things like walls, furniture and interference.  This is how network effects develop in hardware.  More homes and happy users, leads to more consumers interested in the product, and then those customers buy hardware that further accelerates the overall performance gains of every other Eero user.  Mining and learning from customer data was a key factor in Eero’s recent software release that increased the speeds of existing Eero routers dramatically.  As Ars Technica put it, “Eero [used the world’s] “largest consumer mesh network dataset” to boost Wi-Fi performance.”

Equally interesting is how cloud connectivity allows Eero to add key features over time.  Recently, every existing Eero user received an update that adds Alexa integration, the ability to find a lost iPhone in your home, on top of advanced parental controls that were rolled out (for free) over the summer.  Can you think of many products that get this much better, for free, after you buy them?  That’s the magic of cloud-based software updates.

Finally, think about security.  A recent well-known, huge, and recent internet attack that was based on Internet of Things devices was based on devices that didn’t receive regular security updates.  Great cloud-connected hardware devices like Eero receive regular software updates to close any potential security holes.  When’s the last time you updated the firmware on your non-Eero WiFi router?  Hackers are always looking for vulnerabilities on old devices.

The very best hardware companies understand the power of cloud connectivity.  That’s why they build strong, positive bonds with their customers and users.  After purchase, the products get better and better with time, not worse.  This is why the best hardware companies are the ones that leverage cloud connectivity, build network effects, and deliver experiences that lead to customer love.  Just like rainbows.

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Is VR the Next 3-D TV?  Yes and No.

I remember many years ago when people in the electronics industry were convinced that 3-D TV was going to be the next big thing in consumer technology.  Obviously, in retrospect, it wasn’t.

Now people are using 3-D TV as an analogy to explain why people won’t care about VR:

is the VR hype justified, or just another 3-D TV?

Remember 3-D TV?  Why 2016 Won’t be the Year of VR

I always felt that 3-D TV didn’t deliver value to consumers.  It actually made the experience of watching TV worse.  Not only were glasses required, it changed the character of a movie by allowing the viewer to wander in three dimensions around a scene, not just two.  Good moviemakers control focal plane and framing, and 3-D takes away from that.  When you’re immersed in a TV show or a movie, you’re already mentally in a 3-D world.  Adding physical 3-D to the viewing experience only complicated everything, instead of making it simpler.

If you’ve only tried a seated Oculus or GearVR experience, then the “VR is just like 3-D TV” analogy is a reasonable one (by seated, I mean fixed in one place, whether sitting or standing).  But the analogy completely falls apart if you try the “room-scale” HTC/Valve Vive VR system.  When you hold controllers that accurately represent your hands’ positions in virtual reality - as well as a system that allows you to physically walk around - the entire experience goes from being a fun science experiment (like 3-D TV) to an utterly compelling, immersive consumer experience.

I’ve seen the difference first-hand at Shasta Ventures.  We’ve set up a VR lab at our San Francisco offices, where we introduce first-timers to Oculus and to the HTC Vive.  The response to the seated Oculus setup?  “That’s kinda neat.”  The response to the HTC Vive?  “Wow.  Wow.  Wow.”

Of course, the HTC Vive’s “room-scale VR” is only compelling with the right software - software and content that makes the most of positioning technology.  The right software allows for exploration and expression, not just consumption.  Pure seated “consumptive” experiences are better suited to traditional TV screens - they’re just a one-time parlor trick in VR.  They’re a lot like 3-D TV.  It’s a unique new experience, but they make the experience worse, not better.  If it made movies better, people would be wearing GearVR to watch movies on plane flights rather than their iPads.

But TV screens can’t recreate truly interactive, expressive experiences the same way that “room-scale VR” can.  Put differently, exploration and shooter games in VR, where you move your arms and walk around are compelling.  Seated “movie playback” experiences, where you’re trapped reliving someone else’s experiences, are neat demos but about as compelling as 3-D TV.

Don’t believe me?  That’s probably because you haven’t tried a game like Survios’ “Raw Data” on an HTC Vive yet.  We’ve put dozens of people into the Vive system at Shasta, and now I wish my kids weren’t in that group.  My 11 and 12 year old kids keep begging me to use the Vive again and again.  (They’ve tried Oculus and GearVR and couldn’t care less)

Summary?  Is seated VR like 3-D TV?  Yes, it’s a fair analogy.  But “room-scale”, or active VR?  Absolutely not.  “Room-scale VR” is the next big platform, and it’s arriving faster than most people realize.

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Tattoos & Recommendation Engines

Recently, Pinterest started sending me a lot of tattoo recommendations - here’s the latest:

This was the second tattoo recommendation email that was sent to me on Saturday alone.  I’ve probably gotten over a hundred from Pinterest over the last several months.

If you know me well, you understand that I’m one of the least likely people in the world to ever get a tattoo.  I don’t have anything against tattoos - just that they’re not for me.

As you might imagine, I was a bit surprised to start getting these recommendations.  I discovered that one of my early pins, which I posted back in 2010, has been re-pinned over 600 times:

From what I can tell, the vast majority of those “re-pins” were to “tattoo ideas” boards.  Hence Pinterest made the intuitive, automated, algorithmic leap to “Rob is interested in tattoos.”

When automated recommendations are bad enough, they'll turn users away from a service.  Especially for me, now that I’m getting tattoo recommendations from Pinterest several times a week now.  The only reason I haven’t turned those notifications off from Pinterest is that I’m amused and interested to follow the natural progression of Pinterest’s future recommendations.

On one hand, I guess I could look at this situation and think “here’s a perfect example of where automated recommendation engines don’t work.”  On the other hand, given that this is one of my favorite signs in the world, maybe Pinterest is telling me I should seriously consider my first tattoo.

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Our Investment in Pearl

Over three years ago, Matt Rogers introduced me to Bryson Gardner, a former colleague of his at Apple.  Bryson had recently left Apple, and since we share a love for cars, we started to compare notes on the automotive industry.

Together with some of his former colleagues, Bryson started to think about ways to solve the technology problem facing cars today – key technologies are advancing so fast that new cars are often obsolete as soon as they’re released.  When Bryson and his ex-Apple co-founders shared their vision for aftermarket connected products that would improve the driving experience of any car on the road today, Shasta jumped at the chance to lead the Series A round at Pearl.

Pearl’s first product is a wireless backup camera that can be installed in minutes on any car or truck.  It uses your smartphone as a screen, connects to your car with a wireless hub, and includes a license plate frame with a hidden solar array for power and two high-quality HD cameras.  You can see how it works here:

So what’s interesting about a backup camera?  Backup cameras go a long ways towards preventing hundreds of deaths each year (and nearly 15,000 injuries) when cars are backed up - not to mention the countless collisions with fixed and moving objects.  Using modern algorithms and processing power, and twin cameras with nearly 180 degree fields of view, Pearl’s camera can see around corners and provide advanced warnings about what’s in a vehicle’s path.

Unlike standard backup cameras, Pearl’s will get better and better with time.  Since it’s an Internet-connected product, Pearl will push regular software updates to their devices that will make them easier to use and better and better at detecting obstacles and helping drivers back up safely.  Unlike your traditional car where the tech feels obsolete as soon as you buy it, Pearl gets better and better with time.

All of us at Shasta are thrilled to be working with Pearl founders Bryson Gardner, Brian Sander, and Joseph Fisher as they ship their first product and build an exciting connected hardware company in the automotive market.

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Zen and the Art of Connected Hardware

There’s a classic novel that’s dwelled, unread, on my bookshelf for nearly 30 years.  Last weekend, I finally got around to finishing it.  Using a backroads trip from midwestern America to San Francisco as a vehicle for philosophical discussion, Zen and the Art of Motorcycle Maintenance explores the idea of quality, and how people interact with technology - using the lens of motorcycle technology.

Here’s one of my favorite quotes from the book:

“That's all the motorcycle is, a system of concepts worked out in steel. There's no part in it, no shape in it, that is not out of someone's mind.”

Connected hardware is a lot like the motorcycle at the center of Robert Pirsig’s book.  Most people use connected devices without having any idea how they work.  But there is a sense among those users of what differentiates high quality connected devices (like Nest, Eero and Sonos) from low quality devices.  The feel, the responsiveness, the interfaces in high quality devices create strong positive emotional bonds with users.  Low quality devices frustrate users.

Like a well-designed motorcycle, high-quality connected hardware is created by the minds of great designers and entrepreneurs.  Every single part of a great device springs from creativity and genius.

“Steel can be any shape you want if you are skilled enough, and any shape but the one you want if you are not.”

Great devices are the manifestation of the skilled people that created them - they don’t just “happen.”  I spend my days looking for those geniuses, helping them, and encouraging them not to compromise their dreams of building quality products.  Even if it means a higher price point.  Even if it means delayed product launch dates.  Give up on quality, and you give up on the soul of your company.  Be the entrepreneur that never sacrifices quality.

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Watch the Costs of Business Inputs, Not Late-Stage Valuations

Everywhere I’ve traveled over the last few weeks, everyone asks me the same question: What’s going on with valuations in Silicon Valley?  (and has the bubble burst?)

I think this is the wrong question to ask.  The fact is, later-stage private valuations don’t really mean that much.  There’s no liquidity, and often ratchets (terms that allow valuations to be changed later) are involved but not disclosed to the public.

The bigger question is whether the costs of “business inputs” are going to decline anytime soon.  Rents, salaries, and all of the other costs of doing business continue to soar in Silicon Valley.  Competition between startups for talent is as intense as ever.  Until these factors start to abate, I don’t think we’re anywhere near the end of the cycle.

[280vc]

“CES is cool again”

After I got back into the office after attending this year’s Consumer Electronics Show, this was the first thing one of my partners had to say to me at our weekly Monday meeting.  I couldn’t agree more.

Over a third of the show was represented by startups - companies that have been in business for less than ten years.  Just a few years ago, the automotive floor at CES was a backwater filled with aftermarket stereos; this year, every major automaker showcased their latest autonomous vehicles.  Drones, VR, wearables and home automation trumped big screen televisions.

What’s next?  Watch for an even stronger robotics presence at the 2017 CES.  Two early robotics categories include drones and cars, and it’s very early days for both.