Barak Maoz, CEO at Light Blue Optics
Cambridge touch technology business Light Blue Optics has bounced back with a new product two years after deciding to pivot and 10 years since spinning out of Cambridge University, courtesy a major deal with transatlantic world leader Promethean.
LBO exited the university’s engineering department in January 2004 to develop miniature laser projectors and became a money-raising machine, hauling in more than $50 million including one of the largest early stage rounds ever seen in the European electronics sector.
CES 10 delegates were wowed by the demos but LBO failed to gain sufficient commercial traction – so it pivoted around the touch technology IP it had developed.
1. What was the main reason behind the pivot two years ago?
LBO initially aspired to develop miniature low power projectors to be used as accessories in mobile applications. After seven years of hard work, the market for such products still did not take off. In addition, the first generation projectors did not meet what was considered to be minimum acceptable performance. The cost of developing the next generation projectors was going to be high and the risk of not meeting acceptable performance, significant. Couple that with low certainty that a market will exist even if an excellent product will be developed and you can understand why the board and the share holders decided to take a fresh view at the whole business plan.
2. Are you confident that the new generation technology is the commercial holy grail LBO was seeking?
Andy Grove has already said that only the paranoid survive. I am a big believer in Andy’s wisdom and as such, am trying to stay away from being overly confident in our ability to reach and keep the holy grail. I will be quite satisfied if we can continue to grow a profitable business, delight our customers, employees and shareholders and continue to develop new technologies and products based on solid strategy and healthy paranoia.
The ethos we are trying to build LBO around is that of validation. We seek confidence through validation of assumptions and the only validations we take seriously are those that come from global, market leading customers, preferably by way of joint projects and launched products. Our current technology is embedded software powering interactive whiteboards and other interactive large format displays. We are constantly checking our assumptions regarding the suitability of this technology. We know that it will only take us so far and part of our strategic activity is to forever look for the next technology, products and partnerships that will help us survive and thrive.
3. Are you targeting any specific markets with the new tech and if so please outline which in particular?
Our current business model is to partner with global, market leading companies that supply systems and solutions around interactive large format displays. Our customers sell those systems to different market segments such as education, training, corporate boardrooms, government, information kiosks and digital signage.
Because our software resides at the very root of the systems, we can support our customers in a straight forward way. The customisation is largely addressed by our partners through their industrial design of the displays and systems, and through the user interface software which they are responsible for. Our greatest contribution to one market or the other is in the implementation of the appropriate feature set, which we define together with our customers.
4. Do you have the capability to develop new technology or at least upgraded versions of the newly launched product?
Absolutely. Our customers are large, global, market leading companies. They would hardly partner with us had they not been sure of our ability to continue and support them in production. Our current business model is to offer second line support. Our support and maintenance policy includes the usual bug repairs, small improvements and from time to time new features as required by and agreed with our customers.
Our company is organised appropriately and our field support group is both experienced and growing. At the same time, our advanced development group is busy developing future technologies and algorithms, and our engineering group is working with our partners on taking near-term products to market, typically through joint development projects.
5. Who apart from Promethean are you working with?
All our customers and partners are global players who are leaders in their fields. We are bound by non-disclosure agreements and cannot disclose their names but as more of them get to market with products utilising our technology, I am sure the relationships will become known. I am excited by the range of different products and user experiences that our customers are able to develop using the same core LBO technology.
6. You seem to have extremely loyal investors. How important has that been during the pivoting/new product development period?
As you may know, I have been a venture capital partner for many years before becoming the CEO of Light Blue Optics. I have also taken other companies through turnarounds as a CEO. Based on my experience, it is my opinion that the support of the shareholders and the board is the most important element in the success of any pivot or turnaround.
The level of complexity the CEO is faced with is so high and the need to move fast and decisively is so urgent that it cannot be done without the loyalty and support of the investors and directors. LBO is very lucky to have a group of highly capable investor directors who get along with each other and with the management team in complete harmony. The trust in the board room is phenomenal and I do not hesitate to say that the overall experience is rewarding, and is in large part responsible for the success of the pivot so far.
7. The technology would appear to have global capabilities but are any territories particularly important to your sales & marketing proposition?
Look around – touch is the interface of choice today. It’s a transformative technology, enabling manufacturers to create new products and revitalise existing products by integrating a touch interface. As such, our customer base is truly international. This is why we believe it is important for us to maintain our technology and sales office in Silicon Valley and a business development presence in Japan and Korea in addition to the Cambridge UK headquarters.
8. How many people are working for LBO at present and would you envisage having to scale headcount going forward? If so how significantly?
As LBO continues to transform itself from a hardware-focused group to a software company, we find that flexibility is important and our staffing needs, dynamic. We therefore maintain a mix of full time employees, contractors, consultants and part time employees. At any given time there are between 20 and 28 people working for LBO and in 2014, this number will grow moderately. In 2014, we see the need for more testing and quality assurance work and we are gearing up for it. Our hiring approach is to let revenue dictate the level of staffing. We pace hiring until revenue exceeds predetermined levels. Our existing staff agrees with this approach, even if at times it requires them to burn the midnight oil in the office. The bottom line is that we are grateful to see our success is making itself known. It helps us attract new, excellent people and retain our outstanding existing staff.
9. How important is Cambridge in the strategy going forward?
Cambridge is the best known cluster of hi-tech companies in the UK. The university produces outstanding technologists. The Cambridge-based infrastructure such as lawyers, accountants, angel groups, venture funds, serial entrepreneurs and experienced managers create a support system for young technology companies that is second to none in the UK. Our Silicon Valley office benefits from similar factors in the US and we consider both our locations to be strong strategic assets.
10. If you were granted three wishes to underpin the long-term success of LBO what would they be?
Surprisingly, we already got our three wishes. We have fantastic people in and around LBO, great customers and a very valuable technology. Let this never change.