Sunday, May 14, 2017

Recent Investments in Consumer Ultrasound

Earlier this month a consumer ultrasound company received a large series B funding round, taking in a further $23m to bring their haul to around $40m in total. It wasn't uBeam, it was UltraHaptics in the UK, who are using ultrasound to induce sensations and feelings at a distance (Haptics means 'relating to the sense of touch'). Think touching a 'key' on your phone when the screen vibrates or there's a buzz, even though it's not feeling like a key, the presence of some form of feedback tricks your brain and lets you know something has happened.  

It's likely a good complement to AR/VR and while it won't ever feel like solid objects or real things, the fact that there can be some form of feedback is a huge benefit. Imagine feeling something on your fingers as you touch a virtual keyboard, or sensations on other parts of your body as signals to interact with the virtual world around you. 

From the UltraHaptics pictures, it looks like they are using Murata MA40S4S car parking sensors (at least that's what they show), just many of them together in a square array (it's what's under his hands, just in front of the laptop). These are commercial off-the-shelf parts, and not ideal for a phased array, but unlike uBeam who also appear to be using them, are unlikely to be working at a power level where this becomes a safety issue. An array like this can be controlled to send beams in directions controlled digitally, but also as a receiver to allow imaging of the surroundings.

UltraHaptics seems to be working with the automotive industry according to the TechCrunch article, which surprised me, as there are fewer options within the car for that kind of feedback. What there is more demand for is sensing, both of passenger location within the car, and sensing close in around the car at low speed such as during parking. Other sensing systems such as LIDAR aren't always best close in, at a few meters or less, and ultrasound can do that job - essentially it's a high-fidelity version of the reverse sensors many cars have these days. I do wonder if they've found that there's another more lucrative application for their technology.

Another company in the ultrasound haptics space is Emerge, based in LA, and they have to be pleased that large investments are going into this space. Interestingly, Emerge has been on uBeam's radar, with rumours of a 'Cease and Desist' being sent their way for having the audacity to hire an engineer previously employed at uBeam (one wonders if the other 19 or so companies now employing the entire first group of uBeam engineers will also receive such letters). It's hilarious that anyone would be naive enough to think in California that a non-compete or restrictive practice could be placed on the employment of any engineer, and might indicate some desperation on their part. With Energous covering the IP space in wireless power (RF and ultrasound) as well as multiple applications such as communications, apparently few uBeam patents in the pipeline, and Emerge and UltraHaptics cleaning up in the haptics and possibly imaging spaces, that there is anywhere for uBeam to pivot to if (when?) the wireless power market proves unattainable.

Overall, I'm glad to see investment in this area - there are challenges for these companies but definitely some interesting opportunities - but also that there are engineering companies out there just quietly getting on with the job of building technology and delivering products.

Saturday, May 6, 2017

Raising Capital for a Startup: Convertible Debt

You have an idea, it's awesome and will change the world, something like a juicer or a toaster oven. Right now only you can see the potential, and you just need some funding to get started. You can use savings, but ultimately anything that's going to be amazing needs cash either to scale, or to get to market quicker - how do you raise that money? 

You can go to a bank for a loan, but they'll ask about sales, revenue, and profit, and seeing as you have none, they won't talk to you. So instead you go to an angel  (a rich individual or small group of rich individuals) or VC company, and offer them equity (shares) in your company in return for the money - but you still don't have anything, so how can they value your company to determine how much stock they should own? It's a large and expensive exercise to work that out (and you have no money to pay that with), at the end of which you may not think it's fair or viable for your needs.  

So with no revenue, product, idea of actual value, how can you reasonably raise money? A common way this is done is Convertible Debt. Convertible Debt is a hybrid between a loan (debt) and equity (shares) that tries to keep things simple in terms of the paperwork to get going, and puts off the tricky bit about valuation until later when there's more information to base that on.

Here's how Convertible Debt works - the company and investor agree on an investment amount, say $100,000, which the company will use to further the business/product. This is usually after a few rounds of meetings and presentations, where the founder has shown a basic pitch deck, presented a plan and a vision, and been vetted to some degree by the investor. Each Convertible Debt note can be different, I'm presenting a common version, but expect every one to have its own idiosyncrasies.

This money is given as a loan, same as with a bank loan, complete with an interest rate and repayment period - for example it might be at 3% interest, with a 2 year repayment timeframe. At the end of those two years the debt, along with interest (which has been accumulating all that time), is to be repaid in full. There are no debt payments made during that time, unlike a regular bank loan. 

That's pretty straightforward for a loan, but there's the equity part - if there is a "funding event" at some point in that 2 years (usually defined as a certain total amount of money raised) then the loan converts instead to equity (shares). Basically it starts as debt, then converts to equity, hence convertible debt.

How does the 'convertible' part happen? At some point a valuation of the company can be performed - but here the company has (say) 2 years of work behind it, perhaps a product prototype or early customers, and the VC firm putting in the Series A money (sometimes called "institutional money") has the capability and reputation to place that value on the company.

So, let's say that $100,000 of Convertible Debt was put into a company that a VC later values at $10,000,000 pre-money, puts in $2,000,000 for a $12,000,000 post valuation - that converts based on the pre-money valuation (usually, but not always) so those original investors get around 1% ($100k/$10m, ignoring interest) of the $12m company. They gained about 20% ($120k) on a pretty risky bet over 2 years, so it's a decent return but not earth shattering considering they basically made the company possible, were likely to lose everything, and the VC now has ~17%. 

This is a little unfair to the original investor, so this is why there is also a "discount" or "kicker" in the Convertible Debt agreement, where there is a discount on the price, often around 20%, so they get a bit more. With a 20% discount, they'd be getting 1.25% of the company ($100k/$8m) - now they've made a 50% return in value which is better, but still not that great, especially when that money isn't liquid and they still have the risk of future rounds of funding and it all going wrong. If the company happens to go stellar with that initial money, say a $100m valuation, then the investor gets an even smaller % of the company - that's a great deal for the founders and VCs!

Sophisticated investors in Convertible Debt often ask for a cap on the note (since it's debt, the term 'note' is often used for Convertible Debt). In the case above, they might have a note with a cap of $2m - in that case if the valuation goes over $2m at the Series A, the conversion of debt to equity is calculated at the cap - so it's ~5% ($100k/$2m) and now they've got a (paper) 500% gain, which will make them much happier. (Whether cap and discount both apply is down to the details of the note, sometimes it's just one of them).

So Convertible Debt has the benefits of keeping things simple in the legal papers (it can be done in a couple of pages), puts off the tricky aspect of valuing a company, and allows for the upside of equity in a growing company if things should take off. This is why Convertible Debt is a common financing vehicle early in a company, often in what's called the 'Seed Round'. 

What are typical terms? Usually these notes are for amounts in the $10k or $100k ranges (by definition it's a small company trying to prove things out, with a 'non-institutional investor'), but sometimes go into the millions. Interest rates are usually nominal, say 1 to 5%. The discount is also variable, but 15 to 30% is not uncommon. The term is a bit trickier, how long to make that? Well, you need to be actually able to do something with the money, and then with your new prototype or product go to a VC and the process of raising a Series A. Conventional wisdom tells you that if all goes great, a Series A raise takes 3 months, and it generally doesn't go well so assume it's 6 months. Basically, however long it's going to take you to get to something worthwhile, plus 6 months, is how long you want. For example, if you think it's going to be 9 months to a year to get to prototype, don't make your note term shorter than 18 months, and you probably want to give a little headroom in there for things going wrong. I've rarely seen a single year as a term, but I'm more a hardware person and those projects take longer, with the bulk in the 18 month to 2 year range - longer than that is rare as running a company for 3 years on convertible can be tough. Terms can also be conditional - that is they change with certain events - for example the discount may increase at certain points during the term of the note, starting say at 15% on a two year note and increasing by 2.5% each year. A founder may offer these terms to entice the investor to give a longer term, or the investor may want to encourage alacrity on the part of the company.

Most times both investor and company assume that it will be a clear situation of successful funding and conversion, or that the company has gone under, but if it's in limbo or limping along as often happens, things can be uncertain. What happens if things go wrong?

The most common way is for the term to expire and there to have been no funding event - the investor is due the loan back with interest, but no institutional investor agrees the company is worth funding, and we assume there is no money in the company to repay it. What happens then is the same as with any debt - debtor must come to an agreement with lender as to next steps, and this could be anything from bankruptcy to a renegotiation of the debt. With smaller amounts, both sides might just ignore it and pretend it didn't happen, with legal costs likely to outweight the investment amount, but the larger the amount the more an agreement needs to happen. Bankruptcy doesn't make sense, usually, as driving the company under ensures no chance of future success, and they are unlikely to have significant assets to liquidate to pay the investor back. It makes more sense for the two parties to come to an agreement, for example extending the term for another year while increasing the discount by 10%, and so it's usually recommended that if money isn't already in, start talking to your Convertible Debt note holders at least 3 months prior to term about what happens next.

Regardless, any institutional investor coming in for a Series A will want that paperwork cleared up before their money goes in, as they don't want a lawsuit or trouble later on.  This leads to some interesting situations where the Convertible Debt investor can start to demand beneficial terms from the company and hold up the Series A, or the company can demand the note holder give concessions like the discount rate or they won't go ahead (it's a "give me what I want or I shoot my company" tactic but I've seen it work). In those cases, it's down to bad blood between Convertible Debt investor and founder, and if it wasn't before it certainly is after.

One interesting permutation I've never seen play out is if a company does a convertible note between institutional rounds - for example between Series A and B when there was an original valuation and equity investors. It's odd, but it does happen, as LA Business Journal's Garrett Reim notes this is a route uBeam opted to follow when they took an (up to) $15m Convertible Debt round in July 2015 after a ~$10m Series A in summer 2014. This leads to a lot of possible weirdness that may or may not occur depending on how uBeam's fundraising for their Series B (which they must be deep into, now nearly 2 years from last fundraise) plays out.

First weirdness is that the Series A VC investors, who all get Preferred Stock that guarantees them paid out first from any money, are very unusually in the queue behind the convertible debt for being repaid, as debt always takes priority in any liquidation. This puts the lead investor in the position of desperately wanting a conversion from debt to Common Stock so they can take priority again.

Next is that the convertible round size was likely based on the then valuation of the company, with the expectation it would rise in the time between loan origination and maturity. If the situation arises where the Series B is a down round (lower valuation) than the Series A, or even similar, then the Convertible Debt investors will end up taking a huge % of the company even before the shares of the new Series B investor dilute the company further.

Lastly is that if the company had a valuation prior to the Convertible Debt investment, then there is the assumption that there is actually some value there, be it product, customers, IP like patents, or even remaining cash in the bank from the original Series A. A Convertible Debt investor at the note maturity may decide that liquidation is the best outcome for them, especially if they can get paid off first (perhaps they know the company has more cash in the bank than they are owed), and they do not think the company has much of a future. This can lead to an acrimonious situation as the investor plays 'hardball' with the company - that's not going to happen at the $100k level, but go past $1m and things are different. An element of that played out with Theranos when one of their investors, PFM, sued for their $96m investment back claiming fraud, when they know Theranos had $200m in the bank - basically taking the money before lawsuits and time removed the potential for any return.

Overall, Convertible Debt is a well understood way of raising money in the very early stages of a company, with simple terms and paperwork, but it can lead to some very difficult situations should it not convert at the end of the term.  There are other options and variations, such as SAFE, but in the interests of simplicity, I'm focusing just on that.

Saturday, April 29, 2017

Energous Challenge uBeam in the Ultrasound Wireless Power Space

Finally, I get to write an post containing two of my favorite wireless power transfer companies, uBeam (which I've written about here, here, and here), and Energous (which I've covered here, here, here, and here). Now I could make a joke about "Red Shirts vs Stormtroopers" here, but that analogy isn't correct, as despite what I believe about Energous' ability to deliver on the at-distance wireless power transfer they claim, as a company Energous has been run well and it seems they know how to 'play the game'. (I don't have to like what someone is doing to see how well they do it, for those about to criticize.)

As I occasionally look through the IP portfolio for various companies, discussing them with like-minded people, this weekend we noticed something interesting in Energous' applications for patents - while they are extremely prolific in their patents applications, it seems they are now generating IP in wireless transmission of power via sound, which is uBeam's stated goal. Energous are known for claiming an RF based power transmission method, but now it seems they are making sure they have a wider technology portfolio.

As the EEV Blog's uBeam FAQ clearly points out, the basis for ultrasound wireless power transfer is covered in Charych's 2003 patent for BC Systems - System and method for wireless electrical power transmission (US6798716) - but if uBeam has been stating publicly or to investors that uBeam owns the wireless power via sound IP portfolio entirely, thus locking out any potential competitors or rivals, that's no longer the case as Energous is applying for, and being granted, multiple patents covering wireless charging with sound. This puts them in direct competition with uBeam.



This is likely not an exhaustive list and I'll update over time. The primary author, founder and CTO Michael Leabman has been a very prolific inventor here, and you can see a list of many of his patent applications and awards here. It seems most of these sound related ones were filed in 2013, over a year prior to uBeam's major Series A funding in 2014. These are now only beginning to be issued as patents, as it typically takes 3 to 4 years from filing to being granted, which implies that many of those currently listed as 'Application' may be on the verge of becoming 'Granted'. If so, it won't be long before Energous' IP portfolio in ultrasound rivals uBeam, with a further extensive range in the RF space.

Also interesting are some of Energous' patents that don't specifically state 'sound', but simply talk about focusing waves and energy - making it equally applicable to both RF and acoustic waves (the equations governing both are between similar and identical, the same basic physics applies to both). It seems they've been doing this since at least 2015, with patent applications such as:

"Embodiments disclosed herein may generate and transmit power waves that, as result of their physical waveform characteristics (e.g., frequency, amplitude, phase, gain, direction), converge at a predetermined location in a transmission field to generate a pocket of energy. Receivers associated with an electronic device being powered by the wireless charging system, may extract energy from these pockets of energy and then convert that energy into usable electric power for the electronic device associated with a receiver. The pockets of energy may manifest as a three-dimensional field (e.g., transmission field) where energy may be harvested by a receiver positioned within or nearby the pocket of energy."

As you can see from this, Energous have been careful to ensure their patent applies to all forms of energy, not specifically RF - this wording could equally apply to acoustic energy as well. They have multiple other such applications such as:

Systems and methods of object detection in wireless power charging systems US20170077764 A1 which states video images will be captured and processed to ensure correct targeting of wireless power, Methodology for multiple pocket-forming  US20160241044 A1 covering charging multiple receivers from a single transmitter for any energy type, Systems and Methods for Real Time or Near Real Time Communications Between Electronic Devices which covers feedback between transmitter and receiver via any means, Systems and methods for nullifying energy levels for wireless power transmission waves that covers minimizing energy in the non-targeted areas for safety,  Systems and Methods for Identifying Sensitive Objects in a Wireless Charging Transmission Field for realising someone or something is in a wireless power field and dealing with that safely, and Systems and Methods for Generating and Transmitting Wireless Power Transmission Waves which basically covers everything in wireless power transfer.

I could go on about all the specific applications they are patenting, such as using TVs or other electronics to transmit, identify receivers, communications, charge healthcare products, identify valid receivers (hardware DRM) - basically covering absolutely everything in wireless power transfer including, it seems, ultrasound wireless power transfer. You can search in the link above and find a comprehensive list - it's quite impressive.

Does this mean Energous are going to be sending power via ultrasound? In my opinion, absolutely not - in fact I don't think they will be producing consumer devices in the multi-meter range, faster than a wire, multiple device, efficient, and cheap methods people might imagine - but they are cleverly expanding their portfolio to literally own the entire wireless power transfer space. This could be used both defensively, and offensively, and in the hands of a $300 million market cap company with resources, can be a terrifying thing for a smaller company looking to break in, and makes them a more attractive purchase or licensing deal recipient for a larger company. 

In the end, I wouldn't be surprised to see Energous make most of their money from licensing deals on individual patents, and never actually release a product like originally claimed. Smart strategy on their part, licensing money is pure profit, hardware is, well, hard.

What does this mean for uBeam? The first thing is to look at their public patent portfolio (both application and granted) - which you can see here. It's a much less extensive list, and something I was surprised/shocked to see is that the latest filings such as Performance adjustment for wireless power transfer devices are from my time at the company, and I left in 2015 - in fact I'm one of the inventors on many of the recent filings, and in some cases, such as the one listed above, every single one of the inventors has left the company. Now it could be that many are filed and simply not published for the public to see, or that the company is pursuing a trade secrets rather than patent approach (would be 'unusual' for a  hardware company in my opinion, but possible), but it's not nearly the in-depth and broad range of patents that you see with Energous. Further, the uBeam patents don't seem to cover Energous' applications and fields, while Energous cover uBeam's.

It would be interesting to know how a company plans to defend its patents, both in prosecution to the patent office and in court during litigation when they don't have the inventors on staff anymore, and in some cases there is clearly a poor relationship between the company and the former employee/inventor (looking at no-one in particular ;) ).

I would expect this to be quite troubling to uBeam, as a startup - especially one with no product, licensing deals, or third party evaluation/demo - is heavily reliant upon its IP portfolio for valuation purposes, and to have to defend patents, or work to nullify others, is an expensive legal proposition. 

What should also be considered is the effect on potential investors, as uBeam discloses to them during any fundraising that they do have competition in the IP space, from a company with apparently a similar or larger portfolio, that is larger and more significantly funded such as Energous. Since the last publicly stated fundraising round for uBeam was in July 2015, it's entirely possible that fundraising is going on right now.

Overall, it's a tremendously interesting development, and one I'm looking forward to seeing how uBeam respond to this aggressive encroachment by Energous.

Friday, April 28, 2017

Energous' Mid-Sized Watt Up Transmitter - Can It Get FCC Approval?

Reader Lord Stately-Wayne Manor asked me in comments on the last uBeam article:

Would you be willing to give your opinion on whether or not Energous will get FCC approval on their mid range soon? The CEO believes they have a clear path to approval and expects it to happen well before the end of this year. Any thoughts would be appreciated.

In brief - I don't think Energous mid/full range products as stated by the company will be able to be approved by the FCC in any manner, those that could be approved will emit such a low amount of power that they will not charge at any rate practical for consumer devices like phones. Any such approval would require a rewrite of existing regulations, and while I wouldn't put it past the current FCC to do stupid anti-consumer things, the fact that it would simply wreck any current WiFi signals and equipment means there is a massive, entrenched, business interest in making sure that does not happen.

As for the more detailed discussion, including some nerdy stuff since you literally can't analyze the situation without maths/physics/numbers/engineering:

I'll start by saying that the CEO of Energous has made a lot of claims over the years as to outcomes and timelines that are not met - the product promised is always some ways out, on the order of a year. Some call this the "Time to Carrot", which constantly moves forward and you never, ever get the carrot. Here in 2014 is him saying 2015 delivery. You may know of other companies that have promised deliveries of consumer product "by the end of the year" since, say, 2011, that have never materialized.

WATT started with a "full sized transmitter" which was the "~4m, multiple devices, multi-watt" version that no-one could explain with physics without cooking anyone around it. They claimed:

The strength of the charging drops off rapidly with distance; at the moment, 15 feet is the maximum range of the transmitter. At 5 feet, your gadget (actually, four of them at once) can receive a maximum of 4 watts. At 10 feet, it gets 2 watts; at 15 feet, 1 watt.

Which is a "holy crap 20W received we're going to get cooked" statement and had many eyebrows raised in "basic laws of physics" type ways. Quick question - what were uBeam's publicly stated specs before, and after, this announcement by Energous in early 2015?

Eventually Energous announced a 'mini' which at most emitted 300mW when in contact, so basically >10x worse charge rates and less useful than the already available Qi methods, along with a 'soon' medium and full sized which allowed time to carrot to remain at 18 months or so. Such a low charge rate and in-contact requirement, so it could be FCC approved, and allowed claims of "FCC Approval for Energous", but a pointless product.

Now Rizzone stated back in March 2017 he was confident over FCC approval. However - Energous' own filings with the FCC prove they can't get licensed under Part 18, read to the end where they literally say the rules have to change: 

Energous requests OET to interpret its ISM rules to enable WPT AAD conforming devices that satisfy the criteria specified in this Petition to qualify as Part 18 ISM... However, this can only happen if OET adopts a process that enables equipment manufacturers to secure equipment authorization.

How can the CEO argue it's coming when they admit that it can't be approved under current rules? Doesn't make sense to me, so let's dig more.

How about approval under Part 15 instead of Part 18? Part 15 is for "Low Power" so a problem there I think. In these FCC documents you will see that the FCC limit the 5.8GHz band that Energous use to 1W total if spread spectrum - take efficiency etc into account and you are looking at very long charge times (a couple of days to charge your phone if lucky?). If not spread spectrum then it's P=0.3e^2 where E is listed as 0.05 V/m so that's no more than 0.75mW, or to translate to practical implementation - it would take six months or more to charge your phone at 100% efficiency. I can't find the link but I believe Energous state their method is not spread spectrum, so that tells you how useful their method could be under Part 15.

So, basically, unless they either get the FCC to change the rules, in opposition to a vast entrenched business interest and wreck WiFi for everyone, or reduce their power output to the point where it is an utterly pointless product, then I just don't see FCC approval for their devices.

This doesn't even begin to cover the issues of safety or practicality of beamforming to a fine focus with your array is not much bigger than your wavelength. I go into lots of nerdy depth with it here.

One last piece of advice, and it comes from Warren Buffet - Don't invest in companies whose product you can't understand. If the engineers are arguing about the basics of the product working and laws of physics are being called into question, then just run...

Thursday, March 16, 2017

Science Makes America Great, and President Trump's Budget Aims to Destroy It

President Trump's first budget proposal is calling for dramatic cuts to many agencies, including the National Institutes of Health (NIH), one of the leading funders of research in the USA - the NIH would face around a $6 billion cut (~20%). The NIH is the largest funder of medical research in the world, and back much of the medical research in universities and labs around the country. Many of the medications and treatments used today had their start in NIH grants, and key research leads to entire industries, such as what arose from the Human Genome Project. The NIH have a nice list of the value they add to society, the economy, and our lives, here.

In large part it's the Research and Development funding from the US federal government that makes the USA the global leader in technology. Studies demonstrate that funding at the R&D level result in up to $8.38 of economic activity 8 years later for each $1 invested - infrastructure debt, that supposedly we'll find $1 trillion for under the mattress, would be expected to show around $1.92 return per dollar within a few years, and about $3.21 over 20 years

By a factor of 3 or more, spending on basic R&D returns huge economic benefits to the country compared to infrastructure, and it's simply short sighted to cut. (Of course a functional infrastructure is also needed, hard to drive to your research lab without roads! But it's not a binary either/or choice - and 'infrastructure' like a pointless/counterproductive border wall will cost more than is saved with the NIH cuts) This has been something that every administration for over 40 years has recognised, and can be seen in data collected by the American Association for the Advancement of Science.

The Clinton years saw a massive rise in NIH spending, and we're reaping the benefit of that investment now. Even in the Bush through Obama years, while NIH remained flat (barring the ARRA boost), other agencies saw an increase. The cuts in the Trump budget are unprecedented in the last half century.

The smartest students from around the world come to US universities to study, both as undergraduates and researchers - and the US gains the best and the brightest of the rest of the world, and without paying the cost of raising those people. It's a huge net positive for the country, especially when those people stay, become citizens, and have children, as people tend to do when they are welcomed and given a chance to contribute. Those children of immigrants themselves are typically far more likely to contribute to the advancement of the country in science. Consider this statement from a Forbes article on immigrants:

A new study from the National Foundation for American Policy found a remarkable 83% (33 of 40) of the finalists of the 2016 Intel Science Talent Search were the children of immigrants. ... In fact, 75% – 30 out of 40 – of the finalists had parents who worked in America on H-1B visas and later became green card holders and U.S. citizens. That compares to seven children who had both parents born in the United States.

So this science spending results in economic returns of at least a factor of 8 within 8 years, and encourages smart, law abiding, company founding, job creating immigrants to come to the USA, have children who are then the most driven of their generation, will improve society and the economy decades from now, and make sure we can all retire well in a booming economy. Why would you destroy that?

Well allow me to answer that. It could be you are:

A) Ridiculously stupid and short sighted, utterly unaware, and uncaring, of the consequences
B) An idealogical zealot intent on destroying goverment at any cost
C) Racist and want to discourage immigration
D) Intent on damaging the tech industry out of spite
E) An agent of a foreign power intent on destroying the long term effectiveness of your enemy
F) All of the above

Given this current administration, it's 'F', with each person in it more of one of those than the other. Bannon and Miller are simply white supremacists and want to end all immigration, legal or not, to the country - they've literally said "legal immigration is the real problem". The tech industry has been vocal in its opposition to the Executive Order that has now been rejected by the courts twice, and by cutting science funding it harms them, despite the negative consequences to the country - a price the likes of Bannon would pay given he doesn't like the race of many Silicon Valley company CEOs. Price, as head of Health and Human Services, is a member of a group that is anti-vaccine - which is one of the greatest success stories in saving lives and health in the 20th Century. The President shrugged his shoulders last week claiming "Nobody knew that healthcare could be so complicated", which even for Donald Trump manages to rank as one of the dumbest things he's ever said (despite the pretty stiff competition). 

And then there's the 'agent of a foreign power' - Vladimir Putin must be giving himself a hernia from laughing so much at the self inflicted damage the USA (and the UK with Brexit) are inflicting on themselves. There's no proof it's a direct agent doing this, but "useful idiots" helped into positions of power are achieving what Russia and other unfriendly nations can only dream of.

While the administration has to get this budget through Congress (Republican controlled and so far they seem unwilling to stand up to even the most ridiculous of his behaviours, even when he literally fabricates a felony perpetrated by his predecessor.) but the President has lost on pretty much everything he's pushed as signature policies over the last 2 months (still waiting to be "so sick of winning"). Hopefully the worst of this will be stopped, but will only happen if Congress sees their own hides, or money to their constituencies, threatened. Sadly, 'upset scientists' is not a key demographic - at least not yet - and regardless of what happens here, it's clear that the President and his administration are intent on gutting one of the great American success stories of the last half century.

Science is global, it doesn't care about national boundaries, and published research is by definition known to all, not restricted to a few. Scientists want to educate children to be knowledgeable, thoughtful, inquisitive, and also work with the best and the brightest wherever they are, whatever their gender, religion, race, or country of origin. It's what's raised our life expectancy, our quality of life, our productivity, and our opportunities, and been part of what has kept the USA as a global leader. And all these things are antithetical to a group of people mired in the past, who are wanting to divide us based on religion and race, and destroy one of the most critical things that Made America Great.

What can we do? It's important that those who will vote on this budget know these cuts are counter productive. Call your House and Senate representatives, let them know this can't be allowed to pass in the budget. Make no mistake, there's no sense or logic in these cuts, and the country will be damaged because of them - and for the people proposing this, that's seemingly the intent.

Thursday, March 2, 2017

Another One Bites the Dust

Hot on the heels of uBeam's apparent demo of a phone screen turning on, it seems there's been a change at the company. Their COO appears to have departed and become the EVP of Operations at Fitbit. Stunning that a C-level exec would leave when the company is on the verge of greatness, especially an Operations person who is not so much R&D but very much product delivery, exactly what you need when looking to transition to a new phase of growth. Here is one of the announcements of his joining the company from 18 months ago, along with then CFO Monica Hushen (who left the company last year).

Devine was one of the three executives, along with Taffler and Chandler, mentioned by name by the lead investor in his defence of uBeam in May last year as being key in the company's progress. All three have since left the company.

Per LinkedIn, this leaves Larry Pendergrass as the sole executive with significant industry experience. He joined last September, announced here.

Friday, February 3, 2017

uBeam - Still All Sizzle?

An eventful day yesterday on the uBeam front, with Meredith Perry finally giving a demo of uBeam technology and showing it charging a phone at the Upfront Summit - well more precisely showing a big box and then a light on a phone coming on if it was put in front of it. Essentially a slightly more glitzy version of the "All Things D" demo done in 2011, showing what 6 years and $25 million gets you.

From what we see here, in my opinion, is proof that you can take a non-technical audience and baffle them with bullshit - if you want to know that the phone is charging, you need to do more than turn a screen on. Perhaps there is more not seen here, I'm just going on the info that's public, but you need to show voltage, current (at both transmitter and receiver to get efficiency), and the phone sitting in front of that panel for several minutes and see the actual charge level increase over time. But that isn't what they showed - and if it isn't, please enlighten me and tell me what is the difference between what's shown in that video, and what was shown at All Things D 6 years ago.

It seems at least some are not convinced and there are journalists taking a sceptical view, such as Axios (albeit promoted with a tweet that is more sensational than what was shown and the content of the article, and sadly is all that is quoted by most)

This is a science project that is clearly progressing, but not nearly finished yet.

Pretty faint praise after $25 million. There was also this interesting statement:

we're told Perry picked that particular Android for the demo because of its highly-visible charging icon

Why would that be mentioned so specifically by the company, and why does it make me raise an eyebrow?

Now, let's be clear, no-one ever said that transmitting power via ultrasound is impossible, of course it's possible - but is there a way to do so in a safe, efficient, and cost effective manner? That's the challenge, and in any practical sense it had never been shown publicly. In my opinion, it still hasn't. All that has been shown is a screen lighting up.

I'm sure uBeam now have potential funders lining up outside willing to throw money at them, based on this, even though nothing was really shown. And if I'm wrong about that, tell me what was shown that proves it works. What's the charge rate? How long to charge a phone? What is the efficiency? How does this line up with "4 meters, any angle, multiple devices, faster than a wire" touted before? Is it a safe and legal level? (OSHA now seems to have gone back to a 115 dB limit, not the 145 dB from a few years ago, I certainly hope there's no-one in the way of that beam, or there are any grating lobes giving the audience a facefull.)

Now the fact the phone charge indicator comes on proves they are charging at a minimum of 500mW (around 5 volts at 100 mA) needed on the USB port, which is awesome as that's enough to at least trickle charge a phone over about 10 hours. Or does it? Potentially you could access the Qi chipset on the phone to show the charging light when at <500 mW, or other similar bypassing of standard input methods, but in the end there's no way to know without looking at actual charge rate - which isn't shown in any form. If it works so well, I'm surprised those numbers aren't released - "more than 500mW" is a very straightforward statement to make. Or leave the phone in front of the transmitter and see it gaining battery level during the talk. But that would be too easy.

And at what efficiency? At 30% end-to-end it's incredible, at 1% it's very difficult to justify, at <1% it's ridiculous. We don't know those numbers.

How many devices can this charge at a time? What does the system cost? Can it track the phone? What happens at an angle? Was the beam always on, or did it switch on when it saw the phone? What were the safety measures to stop an always on-beam being pointed at someone accidentally? If this is the best case demo today, why were some people saying they had seen a similar working demo years ago? Weren't they moving to production 18 months ago? All questions still unanswered.

I'm really sad, of course, for the senior staff who just left the company over the last couple of months, and what I guess is the closure of the San Jose office (or that's how it appears if you check the LinkedIn profiles). Amazing they would leave just on the verge of a breakthrough like this, but more fool them I guess, what do they know? Passing by on the billions... 

Overall, with a skeptical eye, there's nothing new here. IMO, no significant new information, nothing to show commercial success or capability, and no path to a realistic product. But it won't stop investors from piling in without doing significant due diligence (investors, feel free to call me and prove me wrong), and it won't convince anyone with one iota of technical capability that there's more there than they thought a week ago. More of the same, move along.

For those of you with a technical bent, I'm including a more detailed analysis from what I saw in that demo below. Anyone non-technical, you may want to stop now.

Taking a technical look at what's there and bearing in mind this is with a lot of assumptions - the video shows an array that seems to be made up of a (approx) 30 by 30 collection of circular transmitters, and given what I see on stage it's about a 30 by 30 cm panel, so each is a 1 cm diameter cylinder. Very much like the Murata MA40S4S used in car parking sensors and available off the shelf at around $3 each in bulk. Of course they couldn't use them because that would be a $2700 transmitter BOM component right there, but let's use them as a starting point.

Assume 40 kHz, and let's say we can drive much harder because why not, something like 6 times more (120 volts p-p, or approx 16 dB in sound pressure) to be generous so that's 120 + 16 = 136 dB sound pressure level. They are circular, so we lose 2 dB from area, that's 134 dB out, across a 0.09 m2, and at that level that means a peak pressure of 180 Pa and about 37 W/m2 or actual 3.35 W transmitted. Incidentally the capacitance of those devices at 2550 pF means (at P=nCV2f) gives 1.3 kW (900 * 2550e-12 * 120 * 120 * 40e3) so right there is around 0.25% efficient on transmit at best, along with a one bar electric fire. A few million people doing this every day means GW more generation capacity, so I hope I'm wrong or we better start building some power stations. (updated efficiency numbers below - a bit better than here, but still pretty awful).

As a side note, those values of amplitude, if I'm in the right ballpark, may avoid the worst effects of acoustic nonlinearity in the distances shown, but in my opinion (and that of physics), would result in nonlinearity if you tried to increase from there, decreasing efficiency considerably.

Now at 1 to 2 m distance you're probably looking at around 3dB loss in the air (pretty low, yay, but still 50% efficiency), so saying you get all of that power at the phone (about 5 by 10 cm) you'd have an focus gain of around 18 times (25 dB), so now we're at 156 dB (wow, that's loud). Now we convert back to electricity, let's say 30% efficient there (massively higher than the Murata MA40S4S), and around 90% on some awesome conversion electronics, it's about 27% conversion efficiency, and you now get to 450 mW to the battery which is almost enough to charge it. Let's go with that - yay we're charging a phone in about 11 hours. If I'm assuming low numbers, then divide that by about 5 to get a 5% overall rate and 90mW, maybe enough to turn on the charging light (and about 2 days to charge your phone, if you don't move it)

At what efficiency? 0.25% at transmitter (I'm ignoring some losses here, but they're minor in comparison to that capacitive loss), a further 50% in the air, and 27% at the receiver, and you've got 0.034% efficiency. (As noted earlier, not including non-linearity). At 12 c/kWh, that's $2 to charge your phone. Ouch. OK, I'm being mean, let's say it's 10x more efficient, it's 20 cents to charge your phone, only $70 per year done every day, still an ouch. And you can heat your room at the same time with a kW scale transmitter, that costs $7500 because of the high BOM and doesn't make you feel so bad about having spent $1500 on a toaster oven.

As an added note from the original post, I noticed on a Twitter feed that some there indicate that the transmitter seemed to be covered by some form of fabric, which looking again at the video you can see is there. This does not mean that ultrasound can pass through clothing, as was previously claimed, but a thin membrane that is significantly smaller than a wavelength and is of a low enough impedance material will not be 'seen' by the ultrasound, for example a mylar film on the order of 10s microns compared to around 8mm wavelength in air at 40 kHz will likely have a minimal effect. Just as with the membranes or meshes used on car parking sensors like the Murata mentioned above... 

I'll add to this as I have time to do so, and check my calcs for any mistakes. Comments welcome on why I'm wrong, and just a disgruntled former employee :)

Edit: Just an update to some of my numbers here. Looking at the Murata data sheet is seems that SPL was measured at 30cm, not at the source, so some modification needed to the calcs. Using Murata's published factors, a further ~10dB needs applied for the diffraction and absorption (BTW that's quite a good document on how those transducers work), so they could be producing as much as 130 dB at source, so I can reduce the applied voltage by a factor of around 3 to around 40 volts, and does reduce the capacitive loss to around 130 W for 3.35 W acoustic transmitted, meaning 2.5% efficiency in that portion of the calculation, so it's overall 0.34% efficient at best, not 0.034%. Yes, that means the sound field could be of greater intensity and higher power, however that would start to push it into the nonlinear regime, and also you'd then be beaming very high sound levels at that cameraman and of course they totally considered safety in this demo...

Interestingly, this means those Murata's can put out over the 115dB level mandated by OSHA, however I'd note that a) the Murata operate at a duty cycle of about 0.4% or less (20 cycle bursts until return signal at up to around 2 m, another good link on car parking sensors), and b) there is a single transmitter, that is as loud as it will get, and decay rapidly after that - unlike a phased array for power which operates at a 100% duty cycle and uses antenna gain to amplify the sound by a factor of several hundred.

Saturday, January 28, 2017

Right vs Wrong

It's not about Right vs Left anymore.

It's about Right vs Wrong.

Old labels, old enmities over the trivial that we could afford when times were easy, don't apply anymore.

Everyone who knows right from wrong has to work together no matter what tribe we used to think we belonged to. 

We can't be divided, we have to stand up for the weakest and easiest targets, no exceptions.

Support those who stand for what's right, condemn those who promote and enable what's wrong. 

There's no hiding anymore, no more abdication of responsibility. This is where we learn who we really are. Don't disappoint your children.

Friday, January 20, 2017

Tuesday, January 17, 2017

How Do These Keep Becoming Things?

Two weeks ago the Consumer Electronics Show (CES) gave its yearly insight into the tech we'll all be getting to buy in the coming months and years. Companies reveal major products like cool new TVs with more pixels and better colours, the latest phones, new processors and things we actually use - and then there are the more bizarre things which continue to show that for every joke idea an engineer can come up with, there's a marketing manager who is dumb enough to run with it.

This year had a high bar to try to beat the previous competition, with the likes of Juicero and the June Oven, but the tech world rose to the challenge and brought us toothbrushes with AI, mirrors to tell you that you are not the fairest of them all, and my favorite being the smart hairbrush to help you brush better. All these paled in my reaction, however, to the incredible wonder that was forwarded to me today - Moodo, the smart home fragrance box.

Moodo is an electronic air freshener, programmable with a variety of scents, and you can even create your own scent with it and then share with others. Who wouldn't want to create their own 'Gardens of Isphahan' or 'Cozzzy' scents and share them? It's an amazing package, and only took three years from concept to delivery (well, promised delivery), where you just pop your Keurig style pods in (yay for the consumable business model!), and use the wifi connection to your smartphone app (of course) to dial in the aroma of your dreams from anywhere! Who wouldn't want one?

Now, at least they aren't asking for $700 or $1500 for it, the Indiegogo campaign seems to have it listed around $230 retail for each unit (only moderately outrageous but still pretty expensive for an air freshener), but only $140 or so if you are an Indiegogo 'early bird'. It's the $20 per set of four fragrances for the consumables where the money likely is, following the printer model of giving the printer itself away at cost or small profit, but charging heavily for the ink. Except a printer is actually useful.

Normally I'd say I can see the pitch to the VCs, who really weren't paying attention to the product but saw the consumable sales, the hockey stick revenue growth, and the smartphone/wifi/app nature of it and the cheque was written - but in this case it may not be so ridiculous. The parent company seems to be Agan Aroma/ADAMA Agricultural Solutions which produce chemicals and components for the fragrance industry, and so if they can sell their products direct to consumers at whatever x000% markup compared to industrial purchasers then it's a good deal. So this is something that really seems like a pointless product, but you can understand why the company pursued it. What I can't understand though, is why a company that supposedly has between 1000 and 5000 employees (according to LinkedIn) would use an Indiegogo campaign to get $50,000 of funding to promote it? Seems an odd mix of approaches, and I don't follow the combination of bootstrapping and larger company product promoter. I'll keep following the Indiegogo numbers, as of now 44 people have put in $8,726, let's see if it hits the goal by the end of the month.

Before I leave this topic, there's an update to the Juicero story from the first "How is this a Thing?" Fortune reports that Juicero's new CEO has slashed the price on their product from $700 to $400, after he remembered his Economics 101 class where someone said that you sell slightly more of a useless thing at $400 than at $700. Or was it that you take a loss on each but then make it up in volume? Still, I laughed at the report saying:

Dunn and his team made the decision to cut the cost now after running a test on Black Friday. They priced the machine for less than $400 and doubled their current number of users in one day.

Great, you went from 1 unit sold to 2, (though maybe that was the new CEO's granny feeling sorry for him). Still, you have to wonder about the journalist who didn't follow up on this obvious statement and ask "How many have you sold in total then?". Even if they got a "Can't release sales figures" answer, it takes it from a marketing piece to something more akin to journalism. Come on reporters, how can you build credibility if you can't even take a swing at softballs like that?

Consider the Lily

Once again there's a ton to write about - Brexit, Theranos, Energous, Erin Griffith's article on Ethics in Silicon Valley, and recent developments with uBeam, but a combination of work plus, hunting for a house, buying a house, getting contractors in, and moving, are eating up all my time. Hopefully next month things will be a little more settled and I'll be back to writing more like a post a week.

In the meantime, I wanted to cover the startup story of the moment, Lily Robotics. Lily is a drone company, promising a simple to use drone (throw it in the air, that's it), that follows you and uses a superb camera to take great videos and stills without a controller - ideal for sports enthusiasts to create videos of themselves doing cool stuff. It looks fantastic, with great demo videos and a strong demand. They raised $1 million in seed funding in mid-2014, and then in mid-2015 started taking pre-orders following some amazing videos and marketing - its pre-order list reached 60,000, at over $500 each, for around $34 million in pre-sales. At the end of 2015 they then raised a further $14 million in VC (no surprises - who wouldn't invest with pre-orders like that!)

Units were supposed to ship to customers in Feb 2016, but that was delayed until summer 2016 - no surprises as hardware is hard, give the newbies a break. Then it was delayed again, this time until December 2016 (time-to-carrot of around 6 months), but once again that date came and went, until suddenly last week they simply closed down with a message to their pre-customers that they were sorry, they couldn't manage to make it, but refunds were on offer. A sad tale, a startup that bit off more than it could chew, and ultimately had to close but sought to return the money to the customers and make them right. Sad until it became public that the same day they shut down, they were sued by the San Francisco DA for misleading business practices and false advertising.

I'll leave the other details to The Register, sUAS News, and the EEV Blog, and hone in on a couple of the most interesting points in this case. Remember that one of the key parts of fundraising is to get VCs to think that there are huge numbers of customers out there for your product, and so once you have 'traction', that they want to invest (de-risked is a term used, others simply wonder why you need a VC once you have customers and profits). If you plan on 'hacking' the system to get the VC money, then you aim to get customers - but what if you have no product to sell? Then go with pre-orders! Show the customer an imaginary future product you plan to make, play up the 'plucky little startup' card, and before you know it you've got $34m in sales and VC's knocking down your door, giving you all the money and time you need to make the product and get it to your customer.

That would be the (mostly) legal way to do it, tell pre-customers it's a planned product, tell them what you are showing them is "hoped for" or "aspirational" and do your best to hit it. Or you could simply show them a faked demo and video and hope you've got time to make it a reality by the date delivery is due - 'fake it til you make it' - and this is what the SFDA is claiming Lily did. In effect, it's a variation on what it appears Theranos and others did, except faking the demos to customers, not to investors (who are still likely defrauded, if this is true).

The customers were led to believe the company had more than it did through their promotional video of the Lily in action, however all was not what it seemed. From the SFDA complaint:

Lily Robotics did not have a single Lily Camera prototype that had all of the features advertised in the Promotional Video. Instead, its co-founders Balaresque and Bradlow, who were present during the filming, brought several prototypes to use during the filming. Some, which looked good on the outside but were not fully functional, were used only for “beauty shots.” Others had some functionality but did not look like the product being advertised. Some were able to film video but even those were merely Lily Camera prototypes with GoPro-branded cameras mounted on them.

This is an important point as it highlights something I've seen happen and I think is more prevalent than most want to believe - showing mockups as working devices, claiming many features and achievements in the product, yet not revealing that not only are they not currently available simultaneously in the same product, but that they may even be mutually exclusive. The analogy would be to claim that your company's new aircraft can fly at 90,000 feet, at Mach 1, with a range of 5000 miles, carrying a 100,000 lb load and leading people to believe it can do all at the same time, when that is impossible. It can be done to investors, though they should have the resources and experience to vet such claims, so let's do it to consumers instead - they're gullible and good natured, let's fleece them! 

Of course, I'm being cruel to Lily here, founders never think like that. They're all starry-eyed idealists just looking to follow their dreams and change the world, at worst you can say they are true-believers who wanted to make it all happen, but their reach exceeded their grasp. Let's forgive them, they tried and failed, but at least they tried. 

And then you read excerpts of emails from a Lily founder talking about their demo video:

Are you sure that the GoPro lens does not create a unique deformation/pattern on the image? I am worried that a lens geek could study our images up close and detect the unique GoPro lens footprint. But I am just speculating here: I don’t know much about lenses but I think we should be extremely careful if we decide to lie publicly.

The founder was worried that smart people would find out the demo was faked, and explicitly and in writing admits that they know they are lying. It's the equivalent of being found at the murder scene, covered in blood and carrying an axe, with a signed letter about how you have to be careful if you decide to kill someone with an axe. Despite knowing it was lying and fraudulent, they decided to go ahead with it anyway. Why? Because the funding 'game' is structured to incentivize exaggeration, fabrication, and lying, and to punish honesty. Honesty doesn't get you funded, lying does. When there's millions of dollars at stake (amounts that people kill for), why wouldn't someone tell a few lies, especially when if they succeed, no-one will ever know? And that part is critical - they didn't think they'd get caught, and why would they? How many startup founders have you heard of going to jail for this kind of thing?

A further question that springs to mind is why the VC firm that invested after the pre-sales didn't spot this during their due diligence. Surely they learned that the promo video didn't match what was shown? If they didn't, they were either lied to and also defrauded, or it smacks of incompetence if they missed it. If they did find it, then it's even worse, because they're then complicit in the deception. Faced with being labelled incompetent, fraudsters, or themselves defrauded, I wonder how long before the VC in question joins in the complaint against Lily and sues.

Which then brings the next question - who gets paid back first? Normally in liquidation the VCs get pain off first (preferred stock), but if there is debt then that has to be paid first. In suing to get back their $15m the VCs will have to wait behind the customers' $34m of refunds (who themselves are behind a $4m bank loan) - thus surprising the investors that for once, they aren't at the front of the line. This is something I expect we'll see more of later this year, from companies where debt and convertible debt are sitting ahead of the institutional investors. It will be interesting to see how the VC community reacts to these new circumstances, and how they explain it to their LPs.

As for the customers and their refunds? Apparently there is over $25m in the company accounts, with the accounts now frozen other than to pay employees and debts, so once there is at least a chance customers will get some money back. Glad to see consumer protections working, while we still have them that is...