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Wednesday, December 12, 2018

The Dreaded SSSS

Just an anecdote about security, or lack of it, on my recent transatlantic flight - no tech commentary today.


Those of you who pay attention to air travel security issues may have heard of 'SSSS' which is an acronym for Secondary Security Screening Selection - basically a higher level of security screening. On my recent return flight from London to Seattle, I was 'lucky' enough to get this on my boarding pass - it's literally marked SSSS as you can see above. Apparently it's when you do something suspicious such as buy a one-way ticket or pay in cash for your flight, neither of which applied here. There's also been complaints it's racially/ethnically biased, however I'm as white as you get, and also have gone through the additional checks to get Global Entry and Nexus, so it's likely just random in my case (we'll see next time I fly).

So what did this mean for the flight? Well there was absolutely no difference at the regular security checkpoint at Heathrow, but I went to the gate a few minutes earlier than normal and spoke to the security people there. They thanked me for coming a few minutes early rather than waiting for boarding, and took me to a small area behind the check-in desk. They checked my passport, and then had me take all electronics out of my carry-on (2 phones, a laptop, a USB hard drive). They checked one of the phones turned on, then swabbed down the electronics and all compartments of my carry-on, before putting it in the machines for explosives residue test. After that came up clear, they stamped my boarding pass, and told me to make sure I handed it to a gate agent at boarding rather than try to use the automated gates they have at Heathrow. I packed up, it had taken 3 or 4 minutes, and they were very polite and professional. At boarding, I handed my stamped pass to a gate agent who also thanked me for not trying to go through the automated gates, and it took a few extra seconds to check me through manually, and after that boarding was normal.

Where it got annoying was at my connection in the US, which was at Chicago O'Hare. As I had to change terminals to a domestic flight, I had to go through security again, and unlike normal, I now didn't have TSA-Pre on my boarding pass, which is the faster and less invasive security line - I tried to reprint my boarding pass in case it would be added when in the US, but no such luck, and I had to join the regular line. Wow, I had forgotten how bad that is. Long, slow, and full of people who don't travel enough to know what to do, along with everything having to come out the bag, and shoes and belts off. Recipe for disaster. I had 90 minutes to make my flight, and I got out of security at about the time boarding was supposed to close. 

I made it to the gate just as regular boarding ended and they were about to call standby, so pretty close to losing my seat. And here was where the most ridiculous thing happened. The guy in front of me tried to board, and his boarding pass kept getting rejected. After a minute of trying the gate agent looked at it and said "Sir, this is a boarding pass for yesterday", and the passenger looked at him with a straight face and just said "I missed that one so I want to take this one", and credit to the gate agent he just said "That's not how it works Sir" and led him over to the main checking desk. After that, I boarded normally and no hassle.

So, overall it really was not a major setback or exceptionally invasive, just frustrating I didn't get to use TSAPre, but after all that security let a man with a day old boarding pass through security all the way to the gate. Yay. I feel so much safer...

Saturday, December 8, 2018

Awards Lists: Media Shows How Valuable They Are


You've likely seen the various awards that go around being quoted by entrepreneurs like "Forbes 30 under 30" or similar and thought "wow, that person must be amazing to have been given such a sought after and presitgious award, they don't just get handed out to anyone...". Well, I'm here to burst your bubble, and let you know that such lists are what are known as "clickbait" and are designed to be a quick and easy to write story, with zero controversy, and multiple page views with the associated ad revenue. Much more $/hr efficient than actual real investigative and careful journalism. Case in point, here's Influence Digest's "21 LA Based Entrepreneurs With Incredible Personal Brands" with, you guessed it, Meredith Perry, former CEO of uBeam, being an honored recipient.



"Meredith Perry is the inventor of Ubeam- a technology that uses ultrasound transmit power over the air to charge devices wirelessly. The tech influencer has been included in Fortunes “30 under 30”, Forbes, “40 under 40”, and has been recognized as one of Fast Company’s, “Most Creative People”. Meredith’s personal branding exploded after graduating from the University of Pennsylvania and serving as an ambassador for NASA.

Perry invests in technologies that drive the future. It is her tech-savvy skills that earned her the respect of many young millennials."

So at least 50% of the credentials for having such a hot brand include being on other similar lists. Famous for being famous, the Kim Kardashian of the LA Tech Startup Scene, but hey that's branding. This article was so well researched that they don't know that it's uBeam not Ubeam, that Perry didn't invest in anything, that "millenials" by definition restricts the age group to younger adults, but most importantly that a few months prior she'd "stepped down" from her role as CEO of the company she founded, which has produced no products or open demos despite near $40m in investment, and thought by some such as myself to have been "asked to leave" her role as CEO following poor performance. Well done Influence Digest, you've shown exactly how much value such an award has.

Now, if you've looked through some of the other awardees, you'll notice there is the likes of Mark Suster, a reasonable awardee given his prominence in the LA startup scene. As the article notes "The influencer manages an amazing Medium-hosted blog. His articles help founders and entrepreneurs understand venture capital and proper financial valuation." Indeed they do, but more than that, his Medium posts support founders of his investment portfolio companies when they come under fire in the press with promises to immediately fund their next company, which remarkably seem to just disappear at about the time the founder might cash in on such support. The one that caught my eye here, though, Brock Pierce:


Brock Pierce, cryptocurrency guru. Wow. Except that name rang a bell. It reminded me of John Oliver and his "Last Week Tonight" show. Take a peak at this segment:

As you can hear, Oliver says "Just Google 'Brock Pierce scandal'" and so I did, and a few hits came up, such as this one:

"Just prior to DEN’s IPO, a young man identified only as Jake W. filed a lawsuit accusing Collins-Rector of sexually molesting him for three years, beginning in 1993, when W. was only 13. The IPO was cancelled; Collins-Rector, Pierce and Collins-Rector’s partner Chad Shackley resigned; and the company filed for bankruptcy.

When the company collapsed, Collins-Rector, Pierce and Shackley fled the United States after the three men had been accused of sexually abusing, drugging and making violent threats against underage DEN employees. The three were extradited to the United States for charges of transporting a minor across state lines for the purpose of engaging in sexual acts, however only Collins-Rector was charged."

So as an Executive Vice President this guy co-leads a company into bankruptcy, flees the country when accused of sexually abusing underage employees, and is extradited back to the country on charges of transporting minors for sex (he was ultimately not charged). Putting aside the nonsense he spouts on that clip, that is some pretty major personal brand development right there. Perhaps that's what they meant by "endured many entrepreneurial adventures"?

So there you go, a glimpse into the quality of research and the people who receive these awards. And yet it works, it actually opens doors and gets access to people with money. The tech press, and media in general, actually do influence who and what gets funded just through nonsense like this. I could point you to a number of founders of companies who are so busy actually doing good work and technology that they don't pursue this kind of thing, and consequently have a harder time raising money. If we want better startups funded and more actual science and business, and less bullshit and exaggeration, these lists just need to die. Until then, even founders who know what they really are have to play along, it's just part of the game.

So, anyway. Congratulations to Meredith Perry for receiving this award, alongside a man previously extradited to the USA for charges of transporting a minor across state lines for the purposes of engaging in sexual acts.

Thanks to "StillTrying" on EEVBlog for spotting the original tweet.

Edit: Coincidentally, I just read an article on a "cryptocurrency cruise" that is entertaining in itself as a glimpse into the insanity that is that world, but also because there's a reasonable amount of the article covering Brock Pierce, and shows a different side to him. I'd encourage you to read "Four Days Trapped at Sea With Crypto’s Nouveau Riche", it's well written and interesting.

Wednesday, November 28, 2018

Energous at CES 2019

So it appears that it's not just uBeam that will be showing at CES 2019, but that Energous (the company that claims to do at-distance wireless charging via RF) will be there as well. While they are not in the official exhibitors list, one of the EEVBlog readers pointed out to me that they've applied for an experimental demo license from the FCC (Special Temporary Authority) to show equipment there that does not have FCC approval. They did this earlier this year for CES 2018, as well as back in June 2016 when trying to demonstrate their earlier system to the FCC.

The application for CES 2019 is very similar to the 2018 version, though only for 2 systems not 13, but a key difference in the amount of power transmitted - 10 Watts ERP (Peak) not 30 Watts ERP (Peak) from a year before. Whatever the system they are showing at the upcoming CES, its peak output is 1/3 of the system from last year. It would be interesting to know why they did this - but without further information it is hard to tell. (One other thing that is different is that they do not include the low power wifi/bluetooth communication component. Forgotten, or done via a separate commercially available part?)

Note this power is way down from what they tried to demonstrate to the FCC in June 2016 - not only was it at 5.8 GHz rather than the current 913 MHz, they were at 56 Watts (Mean), so what they finally got approved in December 2017 was significantly lower in power than what they showed the FCC only 6 months prior, and what they are showing now is lower than that. I go into a lot of detail about those 2016/17 changes here.

Looking forward to CES 2019 and the tech press completely failing to question Energous effectively, yet again...

Update Dec 7th: I clarified the wording that at this time it is an application for the license, not awarded. Also there is an informal objection filed against this.

Friday, November 23, 2018

The uBeam Handshake

It's Thanksgiving here in the US, and you'll see us Americans talking about what we are thankful for. For me I could say I'm thankful that things seem to be going well for my family and friends, that we've not all been incinerated in nuclear fire following a Twitter feud, and that I don't have to deal with the ridiculousness of working at uBeam any more.

Since I got such a good response to my earlier anecdote about working about uBeam, I thought I'd share my recollection of another that highlighted one of those ridiculous things - this time it's The uBeam Handshake:


Here's a picture of Meredith Perry in January 2018, founder and then CEO of uBeam, making a strange shape with her hand. At first you might think it's a Spock Hand (technically a Vulcan Salute), however you'd be very wrong. That, to the initiated and chosen few, is the beginning of The uBeam Handshake.

While I can't remember the exact date it started, it was sometime in the first few months following our Series A funding in October 2014, while we were in our office in Santa Monica. We were working hard to get the company going, equipment setup, and start the process of building devices, when during one impromptu group meeting Perry comes out and says how cool it would be to have our own secret company handshake. Trying to get the meeting back on track proved fruitless, Perry was on a roll and wasn't going to be dissuaded from this. Being a bit of a self described 'space nut', she starts making the Spock Hand and then has one of the other team members do the same, then reach out so they could touch fingertip to fingertip, at which point Perry said "Bzzzzt" - and lo the uBeam Handshake was born.

Perry was very pleased with it, and proceeded to educate the team about it for the rest of the afternoon, with mostly everyone there having to do it ('Bzzzt' included). Eventually the fun died down and we got back to work, and forgot about it all. Over the next few days and weeks, however, Perry started cajoling everyone to do the uBeam Handshake, and for me and others it quickly moved past being a slightly stupid and amusing distraction to being a really dumb and annoying distraction. From what I remember, many if not most were uncomfortable, Perry was the only one to ever initiate it, with most trying to get out of it but eventually being badgered into doing so - few wanted to tell the CEO "No".

I discussed with my team members how to find ways to get out of doing it, and spoke with Perry to let her know it was not popular and that for a CEO to press her employees to do something like that was inappropriate. Perry was clear that I took it too seriously, that everyone thought it was great as no-one else had complained, and she'd run her company as she pleased. A few days later at a company lunch in the office, Perry tried to get me to do the handshake with her, making a fuss about it to try to get the whole team to watch. I declined, making some joke about not shaking hands while eating, but Perry was having none of it and kept pressing. And I kept declining. After a few attempts, she gave up, and we went back to eating. That incident was never mentioned again, and it was the last time she ever tried The Handshake with me I can recall, but I felt she was annoyed that I had not done it, and I was annoyed she'd attempted to make me in front of the whole team - whether I had done it or not, the company lost with either choice.

The Handshake disappeared for a while, or so it seemed, and I wasn't really hearing about it from the staff. I remember Perry tried to create variations of it, such as The uBeam Wave, which she demonstrated to me in the hallway by standing straight upright with feet together, military style, with arm outstretched forward at an upward 45 degree tilt, very straight and hand in the 'V' shape. When I reacted with some alarm and said what it reminded me of, Perry stopped doing it (she hadn't realized the resemblance at first), and I think is one of the few times she listened to me tell her not to do something. Eventually the uBeam Wave seemed to morph into what you see in the picture above from Jan 18 - hand in the 'V' shape, elbow bent and close to the body hand about shoulder height, with a little side to side motion.

As 2015 rolled on, it started appearing again, especially around the convertible note round in early summer, sometimes with Perry telling guests, potential customers, or investors about it, then doing it with whichever staff member was nearby. Given the presence of a third party, it was a lot of pressure to not say 'no' to the CEO, and so people seemed to do it. Things at the company were very unpleasant at that time, and I was arguing with Perry about a lot more critical matters, throwing in stopping her doing it to the team just would have been an exercise in frustration - and one of the many, many, reasons I left later that year.

Pretty much every time I saw it done after the first handful, I had the feeling it was an odd power-play, a way to locate the few who would find it equally 'fun', or who were in a position where they wouldn't or couldn't decline. Or, perhaps, to identify the 'heretics'? It wasn't the only ritual that happened at uBeam that gave me that feeling, but I'll get to those others in future posts. In the meantime, if you see a former uBeam team member from that era, try to give them the uBeam Handshake, I promise you'll get a reaction...

Update 25th Nov 18: One of the former uBeam employees tells me that one of the handshake variations tried was that rather than touching fingertips, the hands were at 90 degrees to each other and interlocked at the 'V'. I also want to make it clear my opinion is these choices of variations were made without realizing possible alternative interpretations and not not done to be deliberately offensive to any group.

Thursday, November 22, 2018

uBeam at CES 2019

For those of you going to CES in Las Vegas this coming January, you might be interested to know that uBeam will be exhibiting at the Venetian. It looks like it may be one of those "invitation only" rooms, so you'd likely have to contact the company to see what they have to offer. From the CES notes:

uBeam is a technology leader in the wireless power industry by utilizing airborne ultrasound to transmit power to create a true contact free charging ecosystem. By using proprietary transmitters and receivers, uBeam is able to deliver the necessary power to charge a range of devices from portable electronics to IoT sensors at various distances. uBeam’s wireless power solution removes power constraints for system designers and decreases battery-related issues to enable performance enhancements and system robustness, thereby creating a new dimension in power delivery and design paradigm.

I'm not sure someone told the marketing team that they've pivoted away from consumer and portable electronics, to solely B2B and IoT (apparently only working with TLAs now). That they claim "proprietary transducers" is interesting because every demo I saw had them using Murata off-the-shelf car parking sensors, and any proprietary transducers highlighted were never shown working or in a device. It's a sleight of hand to show your own tech and claim it's brilliant, but the actual demo you don't admit there's something else in there.

I love the last sentence, it's "marketing buzzword bingo"-tastic. Seeing "new dimension" and "design paradigm" reminded me of the ridiculous terms that then CEO Perry and the PR team would add to documents, even technically oriented ones, over the objections of the engineering team. But, hey, if you can't dazzle them with brilliance, then baffle them with bullshit.

I don't think this shows that uBeam are still active as a company in producing a product, but rather that marketing booked this months ago and really want the free Vegas trip before the whole thing goes belly up.

Monday, November 5, 2018

uBeam Glassdoor Review: "Not sure if uBeam even qualifies as a company."

Some of you may not be familiar with Glassdoor - an online site where you can anonymously post a review of your job, your company, or your interview experience. The collated information is made available if you sign up with an email, and for sizable companies there can be a good amount of information as to company culture and even salaries. Somehow they must make money from all this, I guess at some point you hit a paywall or large companies pay for anonymized/collated data, because in June of this year they were purchased for $1.2 billion

I've checked in to the uBeam section of Glassdoor every few months over the last couple of years, and there's only been a couple of reviews posted. They were mildly positive with statements such as such as "5 star. It feels like working in a lab in grad school..." tempered with "Sometimes there is uncertainty with any project and there may be a sunk cost mentality." to the slightly more negative "3 star. No technical leadership at high level". For whatever reason I checked in today, and saw a review had been posted yesterday with the title:

 "Not sure if uBeam even qualifies as a company."

So this got my attention, enough that I finally signed up for a Glassdoor account so I could read it in its entirety, and oh boy, was someone unhappy with their time at uBeam. Before you read this, I'll be clear - this was not me, nor is it anyone I know (that I'm aware of).


Just to repeat:
"Not sure if uBeam even qualifies as a company."
Former Employee - Anonymous Employee
Doesn't Recommend
Negative Outlook
Disapproves of CEO
I worked at uBeam full-time

Pros

Dog friendly office
Benefits paid for 100%

Cons

Like being paid to sit and witness the ramblings of the mentally ill. The female head of the company was beyond delusional, and while I felt sorry for her at times, her delusions gave a complete false sense of reality. This company is more about a small group of engineers getting paid to run experiments than anything else. There is no chance this company will survive or succeed. Not a good career move in any way. I regret ever starting this job.

Advice to Management

She should have never been allowed to run this company - not even for one day.

So that would have been an interesting exit interview...

But, on a serious note, when someone asks me why I started my blog, what you read above is one of the many reasons. When people take jobs, they move their families, change their direction in life, and make choices that have huge impacts which ripple down for years or a lifetime. New entrants to the workforce have no experience of what is normal, good, or bad, and they don't have that metric to tell them "something is wrong". They can learn bad habits or miss out on opportunities for mentoring by talented seniors, or building a career in a worthwhile company. More senior staff can spot the warning signs, but they can be subtle until you're on the inside, by which point you've swapped your kids schools and put your old house on the market, and the practicalities of life force you to stick with a frustrating job for a couple of years. 

uBeam were getting so much glowing and uncritical press coverage (though, hats off to the few journalists who did a solid job) that the public perception was not what I saw as the reality, having experienced it from garage prototype through Series A and the next round. At the very least potential staff had to have some possibility of seeing an alternative view before making a major commitment. In some ways it was the excerpt from Adam Grant's "Originals" about Perry, which in no way resembled the reality I had lived, that was the straw that broke the camel's back and made me write the first blog post. So well done Adam Grant, I can now say your books are not completely pointless.

Update Nov 6th: I just realized that the two 'Pros' in this review were things I had a strong hand in setting up. For the year I worked in the Santa Monica office from its opening, I would bring in my dog Jackie on a regular basis, and so set the precedent. On the 100% benefit coverage, this is something Marc Berte and I had implemented, and fought for when incoming CFOs tried to kill it. We believed that happy, stress free, healthy employees were worth more to the company than ones worried to go to the doctor or stressing about paying bills. The automatic reaction of the MBA class to that setup was horror and an immediate "We have to end that" and "That's far too expensive" even though as a % of well qualified engineer salary it was pretty low and waaaaay down the list of company expenses. Feeling quite pleased with myself this morning. :)

Wednesday, October 31, 2018

Energous Earnings Call Q3 2018

Energous had their earnings call yesterday, and sadly it was a much calmer call than last time - no irate investor actually demanding real answers to pointed questions, demanding accountability for prior statements made. It was completely as expected, same old delays and obfuscation, you can read a transcript here for yourself. Last quarter's earnings call promised hearing aids on the market in the next 90 days, which was essentially today, so what do we get?

Indications are that the hearing aids from SK Telesys and Delight will be the first WattUp enabled products to hit the consumer market hopefully, before the end of this year.

"Indications" that "hopefully" in the next 90 days. Again. Will they just disappear and be forgotten, just like Myant? Why does anyone believe a single thing out of this CEO's mouth? Other 'highlights':

  • Key products such as the spine tracker and some location tags are listed, so essentially tiny markets from non-Tier 1 customers. Not enough to sustain a $200m+ market cap company.
  • Continuing with ~$12.5m per quarter expenses with ~$29m in the bank. Capital raise needed by the end of Q1 2019.
  • They claim progress on their GaAs and GaN chips for transmitter, receiver, and power amp chips, and that they can handle up to 15 Watts. This may actually be true, but the surrounding transmitters and receivers will still be in the <100 mW range. There is legitimate work that can be done in this area, if Energous ever have worthwhile IP, this is where IMO it will be.
  • They still mix consulting and licensing revenues so we can't split them, and they are still a paltry ~$200,000.

One of the more egregious statements came in the Q&A, regarding contact charging vs at-distance:

The strategy has always been that we go in first with near-field, engage the regulators and then migrate the discussions to distance.

The entire basis of the company for the first three years was at-distance, with FCC approval of at-distance always the 'Holy Grail' which finally came in Dec 2017 and then... nothing. They marketed themselves as charging multiple devices, at up to 15 feet, at up to 5 Watts. If they position themselves as a contact only Qi competitor, just without the existing infrastructure, support, standards, efficiency, or max power delivery, they'd never have the funding they have enjoyed. From the earnings call in Feb this year:

We expect the first contact-based transmitters will be in the hands of the consumers in early 2018, followed by the first at-distance transmitters coming in late 2018, culminating in far-field transmitters coming to the market in 2019.

We're heads down focused on commercialization, and we believe that the $40 million is sufficient capital to get us to that point (profitability).

So the first thing never happened, they've just admitted the second won't happen, the third really isn't a priority and never was, and that they will still be in the red by ~$12m/quarter by the time that $40m runs out so they miss the fourth by just a tiny amount.

Why does no-one call them on this? Well, in a way, the markets are doing that. Here's the stock price at around 8am Pacific this morning.


That's nearly a 9% drop first thing in the morning, hardly a ringing endorsement. We'll see if that continues. Unfortunately, you should remember that there are some large institutional investors still owning WATT, so that's part of someone's pension taking a hit there.

Now we wait another 90 days for the same again...

Sunday, October 28, 2018

Energous, Theranos, uBeam Updates

I've been at the International Ultrasound Symposium in Kobe this week, and have hardly had time to do any updates or summaries of what's been going on in Energous, Theranos, and uBeam lately. Having spent the weekend walking around Tokyo, my feet are now sore enough that I'm going to sit still for a couple of hours and write. Let's start with Energous:


We last left Energous after an earnings call where finally someone questioned their basis for optimism, and they were promptly cutoff. Emperors do not like their nakedness pointed out. The other key takeaways from that call were that the long range transmitter was pushed out to 18 months away (again), and that hearing aid products would be out within 90 days. Well here we are 88 days later (which means another earnings call is coming up, Tuesday Oct 30th at 1.30pm PT), and what's happened?

First thing is that the share price seems to be on a long, slow, almost constant trajectory down, losing about $1.50 to $2.00 per month since April, and right now the after hours trading has the share price under $8, putting the company market cap close to $200 million. Not good for shareholders and compensation of employees, nor for any future share offering. Worse, given their revenues, >95% of their valuation is based on the hope of massive future growth - there might be a stock price at which the big institutional investors need to exit, and at that point it's game over. So what are they doing about it? I've indicated in the past that I expected to see some goosing of the stock price with pointless or small-time product announcements and so on, and those products were indeed announced. (BTW Energous, you didn't bother to check your website after the redesign - your "In the News" page is a bad link). 

First of all we have some asset tracking tags by Qubercom, though it seems it's the contact based charging, which kinda defeats the "IoT charging" wireless benefit when you have to drop 20 of them at a time on a charging pad. Seriously if you want to charge IoT low power devices wirelessly, there's already solutions like PowerCast out there. Then we have some spinal position trackers, also with contact based charging from the Gokhale Method, which I did try to buy, but the nice lady there told me they wouldn't be available until next year and only available to practitioners, so it's not really a big market. Apparently Austar Hearing have an upcoming product, but I can't find anything there. Now Energous have also passed regulatory approval for their contact charging in 100 countries (oooooh...), so you can imagine my shock when none of these had any effect on the stock price.

Pretty much, it seems everyone is wise to their games now. No stock bump just before Apple WWDC events, no belief that charging hearing aids is going to make them a $1 billion company. Without a major product release (not announcement), real regulatory approval for something practical, or clear licensing deal with a real company like Apple, this thing is heading to $0. Remember they are out of cash in Q1 2019 so they've less than 6 months to raise more money, and with a declining stock price that's going to be hard to do. Have we reached the limit of this game? I would say so, but the chutzpah of this company, and the gullibility of the press and the public, might mean there's another round left in it.

Theranos

CEO Holmes and COO Balwani of Theranos are facing criminal charges for fraud at the blood testing company. Earlier this month they lost an appeal to try to keep documents out of the government's hands, and according to Bloomberg the judge in the case referred to undisclosed charges and activities, while the Assistant U.S. Attorney bluntly stated that the indictment did not cover all the criminal activity, implying there may be more to come for the pair. Not looking good for them.

Marketwatch had an interesting article on "The Last Days of Theranos" and is pretty blunt with the sub-title of "the financials were as overhyped as the bloodtests". It covers a lot of the mechanics of what happened but the really standout parts for me were the statements from Daniel Warmenhoven, a board member from December 2016. It starts with this quote from him about one of the huge deals that "made" the company:

“The Walgreens deal made no sense, ... It was doomed from Day 1 because it was based on using the minilabs, which weren’t completed when the deal was signed."

So he immediately admits the whole thing was a fraud, but later comes out with this gem:

Warmenhoven told MarketWatch he blames engineers for the final sinking of Theranos. “They lost the recipe. The tests were not coming out right. That 60 to 90 days extra to figure it out took away the runway we thought we had.”

Yes, that's right - after terrible business practices, fraud, intimidation of former staff, 15 years work and over $700 million of investment, it comes down to two months and dumb engineers losing the Post-It with the entire future of the company on it. Damn those pesky engineers!

This seems to be the norm for people like Warmenhoven - engineers as annoyances, replaceable cogs that better behave, not a vital part of the technology development or company, but rather the true irreplaceable geniuses are the CEOs who are the innovators and aren't held back by such things as fraud, physics, or Post-Its. 

This ties with statements I've heard C-level execs make with all sincerity "I told the engineering team what they needed to do, they just didn't understand/weren't good enough". There's some school of MBA that says engineers are fungible units, and are lazy and always say they can't do it, and so need pushed. To an extent there's usefulness in pushing a team to achieve more, and then as a C-level exec providing them the resources, cover, and time to execute, but those without the training and experience seem to regard measured statements that something can't be done as demanded as more of the frustrating whining of a developmentally challenged child than of an experienced employee trying to do the right thing. The idea that the C-level is wrong or mistaken is clearly an option never to be considered.

uBeam

And so that brings me to uBeam. Only a couple of things to say here, there's really precious little new information on this. Mark Suster, the lead investor in uBeam, seems to have deleted all his Tweets from prior to October 1st this year, which is shortly after Perry "moved on" as CEO. He's been a prolific poster on many topics over the years, so this was surprising to see. Further, his Medium post supporting uBeam from just after my blog gained publicity, seems to have been altered. The article "What is it Like to Wake Up and Have the Press Ready to Torpedo Your Business?" used to contain the line:

“If for any reason we fall short of expectations we have set in the market, I will be the first person in line to admit it and then to immediately fund Meredith’s next company.”

for which Mark drew high praise - you can see references to it in the original blog comments, as well as articles from other investors here, here, and here - but at some point between original publication and now, that line disappeared. I wonder why it's not there anymore? (Thanks to HowardLong of EEVBlog for spotting this).

Last thing - I've been asked "What would you do if you were made CEO of uBeam today?" Here's my simple answer, and bear in mind I have not seen the status of the company or the books, I'm just inferring from public information:

I'd give the staff 60 days notice that their jobs were ending, and an offer of a bonus should they stay and tidy up their work (document, and pack it up), along with services to help find another job. Then I'd close down the company, and return the remaining money to the investors. In my opinion, it's the most they'd ever get back.

I'll be surprised if that happens as usually the "sunk cost fallacy" along with legal hurdles prevents such an approach, but I just can't see how the company is viable at this point.

Thursday, September 20, 2018

End of an Era - Thoughts on uBeam Founder Stepping Down as CEO

Earlier today news was broken by Axios that uBeam founder Meredith Perry had "stepped down" as CEO to spend more time with her family... I mean make way for a more seasoned CEO. As always seems to happen with big uBeam stories, I had work commitments that meant I had barely a few minutes to type up a post as it happened, so I'm only just getting to my thoughts on this late at night. Now bear in mind I have access to no more information than any of you on this event, so this article is simply my best guess based on knowing much of the history and the personality of the people involved.

There's a small number of articles that have any hint of original information - there's the original story from Dan Primak at Axios, a series of tweets from lead investor and board member Mark Suster, (Suster deleted all his Tweets Pre Oct 18, here's the waybacked record of that) and the statement from uBeam on the company blog. There's also an article on Techcrunch by Josh Constine that recaps some of the history of the company. From the company blog:

Meredith Perry has decided to step down as the day-to-day CEO of uBeam and will assume a role as a senior advisor and an active board member at the company.  Having overseen uBeam from its inception through its development of a functional working product, Meredith felt it was time to bring on a seasoned executive in the electronics field to lead the company through its commercialization phase. The company has begun a search for this new CEO.

The official accounts are very professional, making it clear that it was absolutely the decision of Perry herself to step down, praise for her great ability, and positioning that her stepping aside is actually a new era in the company. A bold step that bodes well for the future! Yeah, right, that'll be why Suster's tweets seem to quietly admit they've abandoned the phone charging thing, which is pretty sad considering they raised $10 to $14 million dollars on that promise less than a year ago, and (by my guess) around $37 million promising over the lifetime of the company.

So let's take much of this in turn - first of all the Perry I thought I knew would never, ever, in my opinion, voluntarily step down from her position in the company. If an interviewee for a senior role ever asked if she might consider stepping into another role in the future as the company grew into a new phase, it appeared to me as if that ended any chance of a job offer, no matter how talented or capable they otherwise were. In describing her role I would hear her talk about "the mission" and her "destiny" to bring wireless power to the world. I always felt that in Perry's mind, she was uBeam, and uBeam was her, and given how much stock I believe she held in the company at least when I was there, legally that was pretty much true.

A "functional working product" made me raise an eyebrow. If they had that, I'm pretty sure an Apple or Google would have taken them off the field by now, and neither would they be moving from "consumer-facing mobile charging to b2b licensing for IoT". A functional working product that could charge a phone at 15 feet and faster than a wire would not be pushed to IoT (Internet of Things), in my opinion. As I've commented in the past, pointing at Energous and Ossia, there's a pattern to the at-a-distance wireless power companies of initial bold claims of producing devices working at multi-meter distances and multi-Watt charging, then to 'trickle charge', then to a licensing model, then to IoT. I would expect at some point investors just don't buy that the 10 to 100mW charging levels under good conditions will work for phones, so the business model shifts to saying IoT because you can make some half-baked argument it'll work, right up until it doesn't. In my opinion, if you want an IoT charging option for distance, that's low cost and been on the market for years, and you only need micro- to low milli-Watt charging, look at Powercast. Basically, what they have works and none of the other options, to me, offer anything better (but some possible big downsides).


Taking a look at uBeam's product roadmap from the last fundraising round, you can see that by now they should have completed multiple new transmitter and receiver designs, licensing deals, and about to start a private beta test, with a product launch starting early next year. I'll just quote Techcrunch here saying "repeatedly missing self-imposed deadlines" and leave it there.

The "begun a search for a new CEO" line is interesting, as normally that line is "and introducing our new CEO" or "long serving COO steps into this role" or similar. Problem is that uBeam has bled senior executives - by my count it's 1 CEO, 1 CFO, 2 CTOs, 2 COOs, and 3 VP Engineering that have departed, and that doesn't include the other staff. The COO who left most recently (according to LinkedIn), around May 2018 after barely 9 months on the job, had an extensive background in IP licensing and would have been perfect for a role to transition to "b2b licensing for IoT". To me, there's a red flag here, if this were well planned out and in a well running company, I'd expect to see a smooth handover to an experienced executive happy to take on the role, and you don't hand it over to the head of HR, no matter how talented they are, they're not the right choice for a tech company looking to do licensing deals.

Next thing that I notice is not what is said, but what is not said. Where's the quote from Perry herself? These releases usually have something from the founder/CEO saying "It's been the honour of my life to grow this company and build this team, but I feel my talents best serve the investors on the board and evangelizing for the company, and I leave it in the capable hands of my successor." but this time - nothing. From Constine's article "TechCrunch spoke to Perry but she declined to comment on the record." is interesting, there wasn't even the prepared one liner to hand out. Nada. Zilch. Nothing... Hmmm.

Update 9/21/18: Perry tweeted a short statement after close of business yesterday, which managed to say very little but was at least professionally written. Still strange this wasn't prepared ahead of time, it's the sort of thing that takes a few minutes to prepare and is standard in this type of situation.
End of update, back to the original post.

So jumped or pushed? I don't know, but this doesn't smell to me like a regular founder transition.

I'll leave this post with a story about my time at uBeam, and specifically my last day at the company, in October 2015. Things had been untenable for some time prior, and I had exhausted every route available in trying to correct what I saw as a terrible situation for myself and the company, all the way to the board. I had been interviewing and things were clearly going well enough that I was prepared to go, and had some upcoming personal events I wanted to attend to.

One meeting in particular pushed me over the edge, and I told the CEO that I was extremely unhappy, and we should discuss a way to amicably separate. I knew the transducer and acoustics side better than anyone, and would give the company as much time as needed to transition and pass over my knowledge. It was a tense meeting, and I went home after, and there were then a series of ... interesting ... emails and phone calls with Perry, that ended with no conclusion. Ironically, among the demands from the company was a statement for the press about how I still believed in uBeam's goals and the technology, but I declined. I got a text the next morning to come to the downstairs company conference room, and to bring my laptop, lab-book, and any company property - it was clear what was about to happen.

I arrived and the room had CFO Hushen and CEO Perry. It was tense, and Perry sat at the head of the table in her position that she used when about to be CEO-like and give a prepared speech - straight back, leaning slighty forward, hands together. She looked at me and said:

"Today will be your last day with the company. But before we go on to that, it is important that you understand that you are a quitter. You have quit on me, you have quit on yourself, you have quit on the company, you have quit on your team, you have quit on.... wait what are you doing?"

At this point the speech was so ridiculous I had picked up my phone to start taking notes because this was too good not to write down. I looked up and she seemed shocked and demanded "Are you texting someone? I'm talking." and I looked at her and said "Just taking some notes." Sadly, this seemed to throw her off, and I never did hear the rest of that prepared speech. She simply mumbled then moved to telling me that I would now give an exit interview, and was again perturbed when I declined. She insisted and the CFO, acting as HR, had to step in and say that wasn't necessary. I handed over my laptop and the few items I had, and made a clear instruction that the company was not to make any statements or quotes that were to be attributed to me - I heard from the team that about ten minutes later they were all told in a company meeting by the CEO that "I wanted them to know that I wished them all the best and success for the company, and still believed in the company mission" or something similar.

The next few weeks were also interesting when it came to the mechanism of departure, but that's another story. So to end this post I'll address Perry herself and say that if you stepped down from your role:

"Today is your last day as CEO of this company. But it is important that you understand that you are a quitter. You have quit on yourself, you have quit on the company, you have quit on your team, you have quit on.... well, you'll have to look at your own notes for who else you quit on.

Oh, and the exit interview is optional."

Meredith Perry No Longer uBeam CEO


Meredith Perry has stepped down as CEO of uBeam, the controversial wireless charging startup she founded in 2011.

uBeam wants to commercialize its technology via licenses to embed it in third-party products, and Perry was not viewed as the right person for that task.

If only someone senior in the company could have told the board and investors that back in 2015...

Perry will remain a "senior advisor" to the company and on its board of directors.

I didn't think that Perry would ever willingly step down, so if I am correct there, this was forced by investors after failing to meet milestones. I'm certainly surprised it happened this early after the last round. More comment as I learn more.

You can find my uBeam posts here and more detailed thoughts on this event in a much longer post.

Update 25th Nov 18: The interim CEO and VP of Finance and HR lists herself on LinkedIn as being in the Interim CEO role since July of this year, whereas this announcement came in September. Mistake, or was Perry on 'gardening leave' since July and it was only made public in September? (Thanks to sdpkom on EEVBlog for spotting this). She's also, apparently, still CEO of Cubed Communications, so that's 2 CEO and 2 VP roles simultaneously!



Wednesday, September 5, 2018

It's Dead, Jim - Theranos Edition

Yesterday I posted pointing out the Theranos website was down, and wondered if that meant the company was defunct. Today, the Wall Street Journal confirms - Theranos to dissolve. From the article:

In the wake of a high-profile scandal, the company will formally dissolve, according to an email to shareholders. Theranos will seek to pay unsecured creditors its remaining cash in coming months, the email said. 

Most of Theranos’s two-dozen remaining employees worked their last day on Friday, Aug. 31.

All told, investors in Theranos have lost nearly $1 billion.

I think it's all been said in previous Theranos posts. Nothing more to add really. Now to see what happens in the court cases.

Monday, September 3, 2018

Magic Leap - Product Delivered and Oculus Founder Reaction


In late 2016 I wrote a post on Magic Leap, the company that had raised billions of dollars for its Augmented Reality (AR) product, which they promised would be so far beyond anything else it would be like magic. Journalists fawned over them, willingly signing NDAs just to get a peak and then allow the company to decide what they can say (hint: if a journalist admits they signed an NDA with the company they are covering, they are simply, IMO, a stenographer and mouthpiece for PR whitewashing). It was amazing, and we had wonderful insights into the amazing character of the founder Rony Abovitz, and learned that he met Beaker from the Muppets, a factoid so compelling it could be used 18 months later to fill column inches and avoid talking about the technology and failure to deliver.

By the end of 2016 a lot of questions were starting to be raised about the extent of their promises, and that videos they had claimed were actual AR turned out to be more a rendered version and not truly representative of what would be seen by a user. The company got very defensive, understandably, and the CEO put out a statement that users would get an experience "powered by unicorns and rainbows" (It looks like that blog post has been taken down, but excerpts are here).

The usual cohort of big-company defenders sprang into life, proclaiming that hardware is hard (Is it? Really? Thanks for that, never would have guessed), those criticizing don't understand, to have faith (Faith? This isn't a sports team or deity, it's a technical product and business) etc. I'm sure the oft-quoted "Man in the Arena" speech was used to silence those who dared question. I've never quite understood why individuals leap to the defense of multi-billion dollar companies (yes, I did it here with Verily, my point being not to defend the company but to try and point out the difference between doomed "Mars Shots" held up as fait-accompli and difficult but achievable "Moon Shots" that are honestly explained) As usual, they focused on the "they are trying, you shouldn't be mean, what are you doing?" As an example:

"I don't get why we live to shoot down people who try something new and ambitious. Why we get this urge to say 'No.  Stop. You can't be good.' Why we jump on them as soon as we see a chink in their armour and are proud of ourselves for it...

We should be praising companies and people that try. Especially new companies that want to break the Google/Apple/Microsoft mold we are currently trapped in. We should celebrate their success and encourage them when they struggle. We should acknowledge that ambitious things are hard and not expect too much of them (something I am certainly guilty of)."

Yeah - it would be nice if they acknowledged these things are hard to the point of being decades away upfront and not lie about what they have already achieved. That's the thing about lying to people, they tend not to like or trust you when they find out. It's a natural reaction...

Anyway - it's nearly two years later and Magic Leap are finally releasing a product, their Magic Leap Creator One, and for $2300 you can get the package with the eyewear (Lightwear), the portable/wearable computer/GPU that drives it (Lightpack), and the handheld controller. Along with the $500 "professional development package" this is broadly the same price range as the Microsoft Hololens, their AR offering, which came out 2 years ago. Various tech media have reviewed it and given it a resounding shoulder-shrug, and mostly "Meh, nice start, might be awesome in the next version though". I'd love to review it myself, with a more technical eye, but quite frankly I'm not going to pony up $3k for the privilege. Fortunately, someone with a lot more understanding of the in-and-outs of VR and AR has already done this.

Palmer Luckey, the founder of Oculus VR (now Facebook's VR company), has weighed in with his review, and it's hardly full of praise. Now as the founder of a rival company, there is room for skepticism, but read the review for yourself, it's pretty clear about the concerns, where it succeeds, and where it doesn't. To briefly summarize his views:

  • Motion tracking method is a poor technical choice that causes issues, worse than competition
  • Controllers are hefty and not ergonomic, depart from industry norms
  • Lightpack is well designed and built
  • Lightwear visual quality does not live up to the PR expectations
  • OS is on a par with an Android watch, no more
  • The only rainbows are artifacts in the visual field

There's an explanation for each of his points, it's well reasoned. He praises them where they deserve, and it seems at the end had it not been for the ridiculous PR and billion dollar funding the response might have been "Nice first shot, a little better than the Hololens, great to see some competition".

Luckey makes points beyond the technical though, and that's really the bit I want to concentrate on as it's part of the larger picture of tech funding and tech media coverage. He shows this image that was used by Magic Leap in promotion of their tech, and comments on it.


"Above is a telling picture from a piece Magic Leap did with Wired magazine a couple years ago, back when they were still hyping up scanning fiber displays.  See the fancy-looking, high-tech light up  strands?  They don’t do anything.  It is just electro-luminescent wire.  It looks great to casual observers, but does not hold up to any kind of scrutiny from people who are in the know."

Basically, you're being lied to. Shiny things and glitter are supposed to make you say "ooh" and "aah" and think it looks cool. But there is a more insidious side to this, as once you are invested in liking it, thinking it's awesome, when an expert comes along and rubbishes it, you take it personally. Like the victim of a con, rather than admitting you were duped, you double down and take the side of the conman. From then on, you are a member of a "tribe" and it becomes "us against them", the "believers vs the heretics" and it's no longer about the tech or the business, but about belief. You're far enough in the hole you're just going to keep digging. Once you're there, there is no amount of data or evidence that will budge some of these people. Look at Tim Draper even after Theranos has been proved to be a fraud, he's still claiming it was just because a journalist and the government were out to get the CEO.

There are other, invisible, costs to this type of hyped startup. To quote from Luckey's post:

"Their current offering is a tragedy in the classical sense, even more so when you consider how their massive funding and carefully crafted hype sucked all the air out of the room in the AR space... It does not deliver on almost any of the promises that allowed them to monopolize funding in the AR investment community."

This echoes a point I have been making in this blog over the last couple of years - certain companies like Theranos or Magic Leap come to the table with bold claims of advancements vastly beyond what anyone else offers, with "Star Trek" levels of capability. Their charismatic founder gets puff-pieces in the tech press, with little scrutiny of the actual technology - which, of course, is a closely guarded secret you can't be allowed to see. They get huge amounts of funding, and the common wisdom quickly becomes "They've already won, how could you compete with them?" Theranos are clearly in the realm of fraud, Magic Leap perhaps is more "extreme exaggeration", but the chilling effect on entrepreneur funding is the same at the outset.

To quote from my last Magic Leap post:

"It creates the standard by which all other companies now must be compared. Imagine you've a small company with solid VR technology that actually works and can be delivered as a product, but when you present it to a VC you're told "Magic Leap already beats that - I won't invest, there's no market". Because you are honest, you don't get funding and your company never takes off, we as the public don't get the benefit of that technology, and the VC's investors (like pension funds) don't get the benefit of the profits. Worse, it encourages the less-than-honest founder to "exaggerate" capabilities and exacerbates the problem. As a society we all lose from this."

And this is the key for me - on the one hand you can't blame a company for putting the best spin they can on what they have, it helps with fundraising and recruitment, and harms potential competition - however there is no excuse for the tech media (at least the ones who claim to be reporters and not in it for page clicks alone) to enable this, nor for institutional investors to fund in a way that encourages the less-than-honest (or above-average delusional).

Perhaps a worse outcome is that when the over-promised thing under-delivers (or delivers fraud), it taints the entire sector for investors and potential employees alike Sure, Magic Leap finally got a product out, but it's was a resounding "meh" and with $2 billion in funding, you really have to work to screw up one delivering something. But what if that something is a negative for the industry overall? As Luckey says "That is not good for the XR industry."

How many advances have we lost because media and investors allowed the PR departments of companies to bamboozle both us and them into ignoring a small but capable and honest company? If you're in engineering, you know of many people working on great technologies that struggle to raise because they just don't lie, or are better at the tech than the pitching. It still confuses me that professional investors heavily bias their selection towards the well-connected, gifted presenters and fundraisers, rather than those with the actual capability to deliver a realistic if bold vision.

Is It Dead Yet? - Theranos Edition

A reader points out that the Theranos website can no longer be reached, it looks like it has been taken down. They had indicated they may be out of money (at least the minimum to meet contractual requirements) by the end of July. 

So is it finally an ex-Theranos? Most likely, yes it is.

Saturday, August 25, 2018

Startup PR 101: Planting Stories and Gaming Data

Given the name of this blog, it's hardly surprising that I spend time talking about how misleading PR from any company can be. Most of the time I don't blame marketing for pushing the best possible narrative they can get, if the product is pretty meaningless and it's really on the press, investors, and public to look at it with a skeptical eye - which sadly is a pretty rare event. Where it gets shady is when the marketing "white-washes" their desired story through a third party, often media looking for the next scoop, to be able to pretend it isn't them making these bold claims, but rather a neutral bystander. Where it gets illegal and immoral is when "facts" are simply fabricated and planted in the media, especially if it's during fundraising or for the purpose of manipulating company share price or valuation. Most of it is pretty blatant, and when you see it up close and personal, it's amazing how easily people fall for it, or even how company "fanboys" evangelize based on this and will not hear otherwise from "heretics". 

While there is a pretty high profile case of this out there right now, since so many column inches are already spent on it, I thought I'd highlight this technique using a recent tweet from VC Josh Wolfe of Lux Capital. For those of you who don't already, I'd recommend following him, he has a lot of very interesting posts and insights that are worth reading. Here's the start of it, the fully unrolled version is at the base of this post

The basic premise is this - the founder of Red Hat (now a ~$25 billion company) needed to gain credibility for his product, so he essentially gamed a 'study' of high Linux user growth, and got a small Linux journal to quote him. Then he managed to get BusinessWeek to quote the Linux journal, and suddenly this made-up statistic had all the authority of being stated in a prestigious national publication. He abused the lack of fact checking and diligence to plant an idea in the media as if it had substance, and used that to help promote his own company.

Is this OK? He didn't really lie, no-one asked him for corroborating evidence, so it mostly falls into the realm of "amusing anecdote".  As the author say "This kind of stuff happens ALL THE TIME" and it's pointless to try to stop it in most cases - press just need to be more careful and the public need to be more skeptical. When the stakes get higher such as with safety, or actual investment, then it's much harder to turn a blind eye to this - if investment was raised based heavily on this, and while specifically quoting that statistic, that is moving towards the illegal.

When it starts to matter is something of a grey area, but sometimes it's just pretty damn clear. Let's take WorldCom, a telecommunications and internet backbone company from the original dot-com era around 20 years ago. By the late 1990's they were claiming that internet usage was growing at 1000% per year, and this widely quoted (though rarely challenged) statistic drove (mal)investment in many other companies. A readable story on this can be found in an industry publication, but to quote from a 2003 Yale Journal on Regulation article:

WorldCom’s false Internet traffic reports and accounting fraud encouraged overinvestment in long-distance capacity and Internet backbone capacity. Because Internet traffic data are proprietary and WorldCom dominated Internet backbone services, and because WorldCom was subject to regulatory oversight, it was reasonable for rival carriers to believe WorldCom’s misrepresentation of Internet traffic growth. WorldCom’s accounting fraud may have destroyed billions of dollars of shareholder value in other telecommunications firms. 

How did this statistic get justified? From the industry publication, Light Reading:

Here's how it worked, according to the former WorldCom employee: WorldCom would hook up new customers with connections capable of handling, say, up to 1.5 Mbit/s of data, knowing that for most of the time the lines would only carry a fraction of this amount. WorldCom would then use the 1.5 Mbit/s figures, not the actual traffic figures, when citing Internet traffic growth statistics...

"The myth of Internet traffic doubling every 100 days seemed to be based on (i) the fact that such growth rates really did hold during the two-year period 1995-1996, and (ii) WorldCom making misleading claims in subsequent years,” 

So like the Red Hat founder, the numbers were essentially made up, and the laziness of readers and media taken advantage of. In this case, that the company was FCC regulated gave the misleading data a stamp of approval it otherwise would not have had - something that 20 years later other technology companies like Energous remember. Now some did call this out, for example here in this 1999 report from AT&T Labs:

"The growth rate of traffic on the public Internet, while lower than is often cited, is still about 100% per year... these claims can be correct only if something unusual is happening to the WorldCom network... Reports, which claim 1,000% growth rates for the Internet, appear to be inaccurate today..."

but no-one listened to the sensible data and fact driven analysis because it wasn't so exciting (I feel their pain). In the end the con at WorldCom, which extended into accounting and beyond just exaggerated PR, resulted in bankruptcy and eventual purchase at a fire-sale price by Verizon. The CEO, Bernie Ebbers, was found guilty of fraud and conspiracy and was sentenced to 25 years in jail (if you're wondering why a white collar crime got punished, see the "may have destroyed billions of dollars of shareholder value" quote above). I do wonder if the willingness of a company to be lax with the truth on smaller details like PR is a more public sign of a willingness to push the limits in accounting and other areas.

Why does this matter? In this case, WorldCom data pushed investment by the public in an area that ended up oversupplied, and when the crash came (it was a dot-com and telecommunications crash back in 2001, not just dot-com) it caused great pain for companies and employees that had to find new businesses and jobs - and to re-re-quote "may have destroyed billions of dollars of shareholder value". Companies in other areas that may have been more viable in the long term didn't get funded, and what they could have done either lost or delayed. Mal-investment has an invisible cost in what doesn't happen, and in the loss of trust in the system. In the end, the system (kinda) worked, but if this had been caught earlier then that pain for others could have been avoided.

What's even more hilarious is when you get two companies in the same industry trying to out-compete each other this way on stats, covering performance that neither can actually achieve. It's like setting two mirrors facing one another, it just reflects off each other into infinity, and ridiculousness. From another post on companies playing the media:

In the past, I've sat inside a company watching the CEO engage in a war of fantasy performance stats and delivery dates with a competing vaporware company, using the tech press to launch salvos of ever increasing capabilities. When the enemy returned fire with a further 'improved' product, there was panic at the top and demands made to engineering that our product get better or timelines be shortened - statements from those trying to be rational, such as "No. Their numbers are just as made up as ours.", garnered a mix of confused and annoyed looks.

Neither company has, to my knowledge, released a product since then and in part this is connected to these inflated performance promises. (And two years later, as of August 2018, still hasn't happened)

So when you read something in the media that seems to be too good to be true, remember that it might be that "truth isn't truth".


Sunday, August 19, 2018

Mailbag: Questions on Energous

I've been asked some questions on Energous and my recent posts, and rather than answer in the slightly-annoying-to-reply-in comments section here, or in private email, I thought I'd just answer them as a post in themselves. Nothing startlingly new here, for those who have read my prior posts, except for one thing. In the earnings call, CEO Rizzone talked about devices at the 5 to 15 Watts level, previously they'd claimed up to 5 Watts and 15 feet, so if he truly meant Watts, that's quite a bold new claim.

1) Has Energous implicitly conceded it cannot generate significant charging power in the near field, ergo its new focus on tertiary products?

I'll start with the most important point - this company has no products, and in my opinion, never will. To say otherwise is to play their game. Everything is turned on its head compared to other companies, all IMO of course. If the thinking of most of Energous' detractors is correct, the goal is not to release a product but to maintain interest in share purchase by large institutions, not to develop technology but to offer the fantasy of safe at-distance wireless charging, that marketing is the true innovation and money earner in the company, and engineering R&D is simply the necessary expense to maintain the illusion it's about products and technology. In summary, it's a very well run marketing company with large R&D expenses that is successfully extracting millions of dollars a year for the insiders.

Now to the 'technology'. I'm going to start covering the 'at a distance' application - basically the non-contact version, since I'm not sure you meant "near field" when you said "near field", and there are multiple definitions of that term being used. In physics terms, near-field and far-field refer to the regions of interference from radiation emitters. In simple terms near-field is close to the emitters where the field varies extensively (it's bumpy) while further out in the far-field it varies inversely with distance (it's smooth) - the image below from Wikipedia shows this. Where this transition happens is relative to the size of the transmitter and the wavelength of the radiation.


So for Energous there is the "contact" version of their charger, the "miniWattUp", which they position as a competitor to Qi, except it's less efficient, slower at charging, has no existing infrastructure, and isn't available (there are multiple product announcements that never make it to market, such as with Myant). Then they have the claim of "at-distance" charging, such as the "long range" device they've been promising for years at 15 feet and up to 5 Watts (now 15 Watts apparently), and the FCC Part 18 approved "mid range" device that will send at best 30 mW at 0.9 meters to a single device, requires a safety cutoff, and also isn't available.

I'm also careless with the use of the terms here, so in part I'm writing this to force myself to be more consistent - the confusion from Energous I think is deliberate, as it helps them with allowing the public to think whatever they want of the technology, rather than making them see it as it is.

Now to actually answering the question:

Energous seem to be careful not to bluntly lie, but let ignorance and laziness of press and investors do the work for them in drawing incorrect conclusions they want from what is said. For years they hinted about a "Tier One" they had a deal with, that they did everything bar say was Apple, until they finally had to give up on that one following AirPower last year - there's a post on some of that here. They deliberately confuse everyone by talking about "WattUp" which is a branding term for all their "products" such as the contact, mid, and far range devices. They also give demonstrations of products that are not FCC approved and exceed the SAR limits to get higher power levels and have people associate with the approved products. I cover some of that here.

In summer 2017 the CEO was already dialing back expectations in specific statements:

“As long as you’re in that 15-foot range, you’ll be charging. Small, small amount of energy. It’s not charging super fast, like you would be plugged in the wall, but a small amount of energy, trickle charging it. And as you put it down closer or farther away, the amount of power changes.”

I cover my opinion of the journalism that let him get away with that statement and no follow up here.

Rizzone says this again in January this year, in a Barron's article

As for five watts, “I don’t see it happening at 15 or 18 feet,” concedes Rizzone. More likely, he thinks Energous will be shipping at the end of 2019 systems that can charge devices such as wearables and smartphones at that distance, but perhaps only with a watt or two, perhaps only hundreds of milliwatts. 

Despite these statements, Rizzone makes claims in the earnings call this month that would lead people to believe 5 to 15 Watts charging is coming. It's no wonder people are still thinking that somehow you'll be charging at the same rate as a wire from the wall. If Energous ever end up in court on fraud claims, they can point to this and say "See, in major interviews we said it was a trickle charge, we never lied, they just interpreted it another way"

Regarding the contact version - The FCC reports for the latest contact device, the 2ADNG-NF130, shows two antenna each able to transmit just shy of 1 Watt. I assume they are at 90 degrees to one another to try to improve performance with receiver position. Given Qi charges at 5 to 7.5W there is literally no way, even at 100% efficiency, for this method to challenge the established market leader. FCC documents show this system charges at a maximum of 300 mW, so a tiny fraction of what is needed, and at no more than about 15% efficiency (Qi is usually 70%ish).

Now does anyone think that the far range transmitter is going to be better than one that's in contact?

So to answer the first question - they seem to almost deliberately confuse terms like feet and Watts, and give differing statements at different times. When Energous have no choice, or are on the record, they downplay performance and obfuscate. They have to know it won't work at the multi-watt level, there is no question there, but what can they badger the FCC into allowing, especially as it seems they have contacts at the top like Chairman Ajit Pai willing to break the normal rules for them. They have to keep this gravy train going for as long as they can, so let the rubes think the next great release is 18 months out perpetually. One thing I'll give to Energous, they are geniuses at how to milk this market.

Next question:

2) Given your assessment of its RF based technology and its limitations re SAR compliance, what could the basis be for Rizzone's claim on the call of achieving 5 to 15 watts for midfield?

Now let's get the first thing out the way - as with all at-a-distance wireless power transfer - is sending 5 to 15 Watts possible? Yes, of course it is. But you do not want to be anywhere near that thing, as it will be hideously dangerous to anyone around, and highly inefficient. So it is possible, just not in any vague sense practical or within SAR limits.

So in the real world, the basis is 'None'. It was always fantasy. This is like me claiming I can run a 3 minute mile, but I just need to train harder and I'll soon get there, maybe another 18 months... Now Energous claimed the 15 feet for the "far range" device in Jan 2015, to my knowledge this is the first time anyone has ever claimed 15 Watts for Energous. Either a slipup by the CEO, or a sudden increase in performance for this so-far nonexistent technology.

The "mid range" device was the one that got Part 18 approval last December, and only goes to ~100mW max, 0.9 meters max, at safety limits, so why would they be able to charge >50x faster at longer ranges? See the quote above where they admit it's less than a wall charger, so not even 5 Watts. Yes, Energous are inconsistent, but that helps them, confusion benefits their message as most people give up.

Looking at the physics, I don't think there's a practical combination of size and safety that results in an even vaguely useful amount of power received (impractical, maybe). That doesn't mean that they won't keep this deception going IMO, and pretend something ridiculous that games the system is coming and will have the fanboys salivating - but in any practical sense it will be pointless. Now, here's what he said in the call:

We expect to see the full impact of this next generation of chips towards the middle of next year, when we anticipate the first product releases to the consumer using our high power WattUp technology for quick charging and applications requiring 5 to 15 watts of charging power.

So that's just not going to happen. It's a year out, minimum, same as all their claims, then it's for applications that require 5 to 15 Watts, he doesn't say they'll actually provide it. Maybe the chips will do 5 to 15 Watts, but the antenna and rest of the system won't. This is definitely a "hopeful" statement and probably can be justified because they keep asking the FCC to approve their 5 to 15 Watt (feet?) device and keep getting told 'No, not safe'. I expect as the end gets closer, the statements will get a little riskier and them less careful about blatantly lying (see recent statements by CEOs of well known tech companies for examples...)

Next question:

3) It seems odd that Dialog would highlight its relationship among others with Energous in its latest press release. Merely justifying its investment and partnership seems unlikely to be the only reason; isn't there something material the partnership could realistically produce?

Yeah. Dialog. No one gets why they did this. I liken them to Safeway and Walgreens with Theranos, where stupidity at the CEO level over-rode all internal advice. They had warned it was possible they were going to lose some of Apple's business, and perhaps were desperate for a 'must have' technology to replace and got suckered, or maybe they knew it was a scam and after the share price hike got their money back out at a profit (looking at their quarterly reports, I don't think they did). I have no idea, it might be a great business school case study when this is all over. As for their statements, note that they make no press releases on Energous since January, and in quarterly reports they say the minimum they can and still be compliant with disclosure rules. This is not a relationship they want to promote right now.

Overall with Dialog I'd say "Stop trying to apply logic and sense to this decision, it's not there". Anyone who has worked in large businesses knows that even when there is a ton of money on the line, what the coal-face workers know are dumb-assed decisions still get made.

4) What do you see Energous doing next?

I see them continuing what they've been doing for the last few years, until the market or the SEC says they can't. What does this mean? Basically, gaming the system and abusing the poor diligence of both investors and press, to raise money from a hopeful public. If I had no scruples, what I'd do is try to find a way to weasel around the FCC rules on Part 18 on my long distance charging to get something that sends 10's of mW over 2 to 3 meters. Perhaps something impossibly large, say a 1 to 2m square array, to keep the W/kg down for SAR, and pushing the far-field boundary out for 'contained' energy. Maybe a safety cutoff variable with charge rate so at any useful rates no-one can be in the room, and if they can it charges at the sub-mW level, but the press and public will not understand that. It would be utterly useless and impractical, something that would never be viable as a product, but the press and investors will believe, because they have no idea what's actually just happened. (Alternatively, I'd get it approved under Part 15 at the sub mW level and then claim Part 18 is coming). Products will be announced for 18 months out, and that they've decided to cancel the contact and mid-range products to concentrate on the long range one, hence managing to excuse how they failed to deliver upon promised products.

At that point, stock price will spike, and they'll a) have the insiders sell their current holdings, b) raise more capital via stock, up to $75 million at the boosted price, to keep this thing going another couple of years, and c) reward themselves with more stock and bonuses. IIRC the CEO gets large bonuses if the market cap spikes beyond $1 billion (a $38.70 stock price assuming no more dilution). We may then see a company with a market cap of >$1 billion, with no products, and revenues in the high 5, low 6 figure range.

Basically, expect something to happen to goose the stock price. This trick worked last year, why not do it again? When someone is rewarded for a set of actions, they are incentivized to repeat. In the end, this stock is going to zero, IMO, but that doesn't mean it's not going to be a rollercoaster until then.

(Repeating the seemingly obligatory statement - I have no financial position, short or long, in Energous or any related company)