Generally speaking, the tales of how hit products and services make it big are usually retold through reenacted scenes on television programs, with dramatization being the primary style.
However, as more and more startups come into the world and prepare to bring us the next generation of hit products, what they could really use as a model is not reenactments, but real information from their peers — what issues those that came before them faced, how they overcame them, et cetera. What is needed are realistic backstories.
Amidst this, the generous folks at Atmoph Inc. , a leading startup in 2016 that was selected by the Nikkei Trendy as one of the “100 hit-makers to watch in 2016,” took time to sit down with the editors at BRAIN PORTAL and discuss a range of interesting episodes in detail.
Kyohi Kan, CEO of Atmoph, told us about the idea behind the Atmoph Window and the numerous hurdles that awaited the company in its joint pursuit of hardware and software. We hope these words of advice from Atmoph will serve as a source of inspiration for those to come.
Making interiors open and airy
——How did you arrive at the idea of incorporating a ‘digital window’ using 4K footage in an interior space?
Kan: Ten years ago, I was studying abroad in Los Angeles and found myself getting down in the dumps as I studied. One day, feeling stressed out, I looked out the window and realized that all I could see before me was the adjacent building. I realized this was a major factor in my stress, so I began wondering if there was something I could do to improve windows and create better vistas. That’s when I started thinking about a digital window.
At the time, of course, it did not occur to me to take an IoT approach to make this happen. I attacked the idea from a range of angles – should it be a virtual reality approach, or more like a television, or like projecting a beach onto a computer screen – what was the answer? I tried several things, and in that time, ten years came and went. In the intervening time, digital panels became thinner and more inexpensive to produce, and we saw technical advances like the appearance of 4K. That brings us to the present.
—— The idea of resolving interior stress from the interior itself is fantastic. Besides stress relief, are there any other ways in which you want to use the Atmoph Window to change user’s feelings or mood?
Kan: Another major goal is encouraging people to dream big and think about places they want to visit one day. While our product is designed to use digital information to clear up the feelings associated with oppressive indoor spaces, we also want to invite people to visit the places they see through the window and experience their unique culture and flavor. Next time they look out their digital window, those experiences will inform what they see. In this way, the Atmoph Window continues to serve as an interior item and can provide value-added information to the user, such as details on the place they are viewing.
—— The product would become a veritable ‘window’ onto potential travel destinations.
Kan: I’m pleased to hear that. That’s exactly right. Photo frames and televisions are usually freestanding, so users wind up looking at them as standalone objects. By causing the user to unconsciously think of this as an actual window onto the outside and having it flush against the wall, it creates feelings of spacious openness.
An initial pitch is rebuffed, partnerships with China, and manufacturing hurdles
—— I understand that in a prior role, you were engaged in developing enhancements for Nintendo hardware and its web UI. What new challenges do you see yourself facing as the head of a hardware startup?
Kan: I myself have never been specifically involved in the production of hardware from scratch, so that, in and of itself, is a big challenge. Nakano, another founding member, had only had experience as a software and server engineer. Even so, I did study robotics in school, and I had some basic knowledge of electronics and circuitry, so I cobbled that knowledge together when making our first prototype.
About six months after founding the company in 2010, we took a prototype to a range of manufacturers and tried to get feedback on how to improve it. However, we were proposing building something unprecedented, so most of the plants turned us away at the door. Amidst these hurdles, we kept searching for a producer in the Kansai region.
—— What prerequisites did you look for in a factory?
Kan: We started by researching online and looked for manufacturers that would be onboard for the whole product from the get-go. Unfortunately, we struggled to find such a place, so we pivoted to searching for designers and plants for each of the dedicated components.
—— Did you use your prototype as a sample when seeking out specific components?
Kan: The original design was fairly simple, so it wasn’t so much about procuring specific components as it was about finding the right people to design and build the LCD panel and plastic housing. In addition, we needed someone to develop the circuit boards to go inside all of this.
—— Were you turned down so many times because of a technical issue?
Kan: One problem was the cost. The ideal way of building a 64’’ tall product like this would be to have a dedicated mold built for it. We were told that the mold alone would be 10M JPY, and we certainly didn’t have those kinds of funds lying around when we started.
We finally found a design firm in Nara Prefecture that was able to break down the parts and build them individually, so we felt this would allow us to keep costs down and avoid the expensive mold-casting process.
—— Did you find that keeping costs down and learning as you went enabled you to find the optimal way of solving the mold problem and achieving a solution to mass-production?
Kan: That’s exactly right – we are right now in the stages of reaching mass production, so everything has been a learning lesson. At first, we had no idea which of the estimates we received was believable and which manufacturer would do the best job, so it was partly a stab in the dark.
For example, in order to keep the mold costs down for the plastic housing, we had it made in China. There may have been some conceptual differences in what we were looking for versus what Chinese manufacturers had to offer, as many of the molds that came back did not meet our standards. We resolved to go to China in person or, where needed, have samples sent directly. This is letting us narrow down the best housing.
—— Traveling to China and visiting candidate plants is probably taxing in a number of ways, not to mention in terms of timing. What was the hardest part?
Kan: The company designing the circuit boards and the company designing the frame are different, so tying the two together was extremely challenging. For example, we would receive a circuit board sample, but it wouldn’t fit the housing we had. Even wanting to fix that, I didn’t have the knowledge to do so, so this ate up time.
However, we learned just what it means to have a mold built and how that all works, so it was a valuable experience. I think this will make the next go-round even easier. In addition, we launched the company as three people, so I acted as project manager. I realize now that if we had had an external advisor to consult with about things like QCD (quality, cost, and delivery), it would have been smoother.
Therefore, looking back, I think that having an advisor to work with both of those companies and having a dedicated product manager would have let us forecast problems before they occurred and let us develop cost-saving strategies.
The response to crowd-funding and a view onto global needs
—— In addition to the manufacturing challenges, was there something else that posed difficulty?
Kan: One real challenge was creating the promotional video and page content to be used on Kickstarter for pre-orders. It has to be something that intrigues first-time viewers. While the product was up and running, we really didn’t know the best way to pitch it. Plus, Kickstarter is an overseas site, so everything had to be done in English, which took 2-3 months to prepare.
—— The product launched on Kickstarter in May of 2015. In December of the same year, Atmoph ranked in 15th in the “100 hit-makers to watch in 2016” by the Nikkei Trendy, which is quite a response. What did it take to get there? Do you feel that the time you spent developing content paid off in terms of a big response?
Kan: Thankfully, after we started the Kickstarter campaign and were close to reaching our goal of 100K USD, TechCrunch featured us in an article that had a tremendous impact. We then started a crowd-funding campaign on Makuake in September, and we brought in 6.8M JPY. On Kickstarter, we raised 20M JPY, so this brought the total to 2.64M JPY.
Since Makuake is a homegrown Japanese crowd-funding platform, we were approached by a range of domestic media outlets, which acted as great PR for the brand. Amidst this momentum, we were featured by the Nihon Keizai Shimbun and appeared on the Nikkei Trendy.
—— When using Kickstarter as the first point of contact with potential consumers, creating content that conveys the product as appealing and cool is key, wouldn’t you say? We understand that half of your funding came from overseas. How would you look back on this?
Kan: As you mention, demand overseas played a major role in the success of our Kickstarter campaign. We learned that people living in cities in developed countries face a universal problem of poor vistas, overplayed scenery, and environmental stress, so the concept of a digital window was in fact a concept with global resonance.
While our product is an IoT innovation, it is also an item of interior décor, so that “cool” aspect seems to have played well to city-dwellers in the US and Europe.
—— That’s a good point. For people who are deeply interested in interior decor and technology, the product has a borderless appeal. Did you find there was a difference between what Japanese consumers and those overseas wanted from a digital window?
Kan: Definitely. 90% of our backers are individuals. The fact that Japanese living environments differ from those overseas is a major force behind the differences we saw. For example, in New York, apartments have tall ceilings and large walls, so the digital window appears comparatively smaller, so many backers wanted a bigger product. In Europe, homes are daintier, so people liked the size as it was, but they in turn said they wanted to have multiple windows.
—— What about content-wise? We understand that the window can display not only natural scenery, but things like night and city views.
Kan: At first, my own experience of wanting to get a bit of nature in the midst of the thronged city is what spurred the idea for the product. However, people already living in nature told us they were used to it, so they actually wanted to see city views.
—— Since you got orders from so many places, you will have to create content to cater to all of these needs. Are you prepping a lot of content?
Kan: We have about 300 raw video clips. We have about five videographers around the globe, and Atmoph purchases content from them and maintains it as part of our stock.
Covering the entire world with five people is not easy. The other day, our Japanese videographer went to Patagonia. We fundamentally have videographers who reside closest to where we need footage go to get it. However, we have yet to answer the full demand for video content, so we plan to keep expanding our lineup.
Trends at hardware manufacturers
—— You went on-site to plants, used crowd-funding to gauge global demand, and proactively sought out the information you lacked. Did you also take part in, for example, events with other hardware startups to exchange information, or track the media for coverage?
Kan: Hardware and IoT firms are on the rise globally, so we follow a range of channels. For example, there is the Kyoto Makers Boot Camp, a program designed to accelerate hardware startups. We took part in that for six months, and we were able to share ideas with another 6-8 firms facing the same issues.
—— Would you like to see the more active exchange of information in the hardware startup domain?
Kan: Definitely. We would be able to seek each other out for advice on problems we share. Even if we are making different products, we can share and learn about production techniques and other ideas. I think it’s essential that more hardware ventures build stronger ties.
—— Lastly, with more and more startups appearing on the horizon, what practical advice would you give to up-and-coming companies?
Kan: This is not a dramatic piece of advice, but creating products takes much more money than you might initially imagine, so let me emphasize here that problems will absolutely occur when manufacturing a product, so secure ample funds upfront. Even if you manage to secure some seed money with crowd-funding, you will absolutely find yourself lacking funds when you go to take the next step from there. Whether the product is big or small, you will want to have about 100M JPY.
—— This is the kind of advice that should be found in textbooks for future hardware startups. Thank you for your time today!
The success of a startup requires creating a concept to be pitched to the market. Like a game of chess, that pitch may be nothing more than the opening move in a complex strategy, the very tip of the iceberg. This interview made us realize that anew.
In the unfolding drama that leads to a startup’s success, we might say that slowly but surely clearing the oncoming hurdles that appear after hitting the ground running is the key to victory. Atmoph is in every way a litmus test for that in 2016.
We feel that the creation of vital communities and ecosystems around hardware ventures, the better to incubate future talent, requires the sharing of real-world experiences like those above.
It is our hope as the editors at BRAIN PORTAL that information like this will continue to be shared in an open fashion and promote the growth of Japanese craftsmanship, a prideworthy homegrown asset.