A Q&A with ByteLight co-founder and CEO Dan Ryan. The Boston-based startup, which has developed an indoor location-based services platform for retailers by utilizing LED lights, closed a $3 million Series A funding round in late October. Investors include Flywheel Ventures, Motorola Solutions Venture Capital, eCoast Angel Network and Sand Hill Angels. It was founded in 2011 by Ryan and Aaron Ganick, and previously raised $1.25 million in Seed funding in 2012.
SUB: Please describe ByteLight and your primary innovation.
Ryan: ByteLight is a retail indoor location provider. ByteLight’s innovation is software that modulates LED lights within retail outlets and large venues so that they can be picked by the camera on customers’ smartphones to determine each customer’s location. The result is sub-meter indoor location accuracy and sub-second responsiveness for retailers. This enables each retailer to send information, redemptions, maps and services to customers via their mobile device at precise locations within the store.
SUB: Who are your target markets and users?
Ryan: As a B2B solution, ByteLight’s target market is retailers that are looking for new ways to engage with customers in-store. However, potential customers could be any large venue owner that is interested in location-based information and data, as well as visitor engagement.
SUB: Who do you consider to be your competition, and what differentiates ByteLight from the competition?
Ryan: There aren’t any other competitors using light field communication as an indoor location or positioning solution. However, there are nearly 40 different players in the space using Wi-Fi, Bluetooth, and other technologies in an attempt to address indoor location. ByteLight’s differentiation is its sub-meter accuracy and sub-second latency. Prior to ByteLight, no indoor location provider had been able to get to sub-meter accuracy.
SUB: You just announced that you’ve raised $3 million in Series A funding. Why was this a particularly good time to raise funding?
Ryan: For us it was a good time because we’re reaching a tipping point with the indoor location space and we need to accelerate our growth to keep up with growing demand. Analysts are now predicting that indoor location will grow into a $4 billion market by 2018.
SUB: What were the first steps you took in establishing the company?
Ryan: After establishing our conceptual idea, we were fortunate enough to be accepted into the Highland Capital Summer Program. The program for student or recently-graduated entrepreneurs gives a stipend of $18,000, free working space and access to seasoned mentors and speakers. It really enabled us to get our feet under ourselves and eventually led to us joining the Dogpatch Labs community to further our business.
SUB: What was the inspiration behind the idea for ByteLight? Was there an ‘aha’ moment, or was the idea more gradual in developing?
Ryan: My co-founder and myself were both at Boston University’s NSF Smart Lighting Engineering Research Center. We were actually experimenting with sending data through LED lighting when we stumbled across the possibility of using each LED light’s modulation as a location point.
SUB: How did you come up with the name? What is the story or meaning behind it?
Ryan: Our start with sending data through LED lights really led to our name—essentially sending bytes through lights.
SUB: Do you have plans to seek additional outside funding in the near future?
Ryan: Our current focus is really only on accelerating growth in the retail sector and expanding our platform.
SUB: What have the most significant challenges been so far to building the company?
Ryan: One challenge has been that we’re innovating with a solution that is completely new in a market that is also completely new. Yes, there is now a ton of momentum in the space, but in the beginning we really needed to do a lot of education on exactly what we offered and what the indoor location market was.
SUB: How do you generate revenue or plan to generate revenue?
Ryan: It’s a SaaS [Software-as-a-Service] model where we won’t be making money off of the ByteLight chips within the LED lights, but rather the use of ByteLight’s indoor location platform by the retailer or additional third-party users of the platform—Consumer Packaged Goods providers, etc.
SUB: What are your goals for ByteLight over the next year or so?
Ryan: It’s really about accelerating adoption in the retail space this holiday season and expanding our platform. We hope to have a public retail implementation that you can check out soon.
ByteLight – www.bytelight.com