Featured Startup Pitch: XYZ Interactive—a new twist on a proven technology that enables touchless and gesture interaction at a price that could have 3D sensors everywhere

Company: XYZ Interactive
Website: www.xyzinteractive.com
Founders:  Michael Kosic, CEO, and Andrew Lohbihler, CTO
Headquarters: Toronto, Canada. Silicon Valley office at Plug and Play Tech Center  
Year Founded: 2002
Employees: 3
Investors: Angel
Company Description (in 140 characters or less): “XYZ has a very low cost 3D positioning sensor technology enabling touchless and gesture control for all electronic displays and interfaces.”

By Michael Kosic, co-founder and CEO

Product Overview: XYZ is a software licensing company, the magic in what we do is not in the hardware sensors, but in the positioning method. Our method enables 3D positioning using common IR components like you would find in your TV remote control. Although our technology can be applied to many markets, (switches, appliances, industrial displays, toys, badge-tracking…) we expect it will find its way first to smartphones, e-readers, tablets, and associated peripherals.

Founders’ Story: The founders of XYZ Interactive are Michael Kosic and Andrew Lohbihler. We met in the 90s when Andrew was still working at Nortel and Andrew had come up with a method for accurately locating cell-phones for E-911 purposes using just base station software changes. We shared a passion and a core belief that as our systems around us inevitably became more complex, our precise location (down to the mm) would become more and more important and valuable. We believed that having a low-cost method of doing this would create huge opportunities and value and so founded XYZ Interactive.

Andrew, like many other Canadian engineers, parted with Nortel and set to the non-linear path of invention. He researched and evaluated several technologies and methods starting with a phase-based RF technology—things became really interesting when he started looking at a hybrid system combining RF and IR. Although our IP covers the whole spectrum, IR worked really well. IR was really low cost, so much so that it could get us into almost ALL consumer electronics. As a small company we decided to focus our immediate efforts there. In 2009 I raised some Angel money with the 3D positioning proof of concept Andrew had built. We added Karen Bozynski to the team, a fellow INSEAD alumni with a career in consumer electronics and so now have the core team and are ready for our next phase of growth.

Marketing/Promotion Strategy: There are some existing touchless and positioning technologies in the market ranging from simple distance based triggers on faucets, to advanced full-body immersive interaction systems. We are engaged with several key OEMs in the space (and looking for more through direct contact) to bring new interactions into their next wave of consumer electronics products and industrial applications. Like all markets there are companies more prone to seeking innovation and we are seeking those out first with direct contact—ones which see augmenting their interfaces with additional experiences for their customers as a key differentiator or part of their own strategic evolution. We also have a pull strategy that involves making demo kits available for companies and product engineers who are still in tinkering mode.

How We Differentiate From the Competition: There are now companies using optical, capacitive, and acoustic methods to achieve similar 3D positioning. We love that there now is competition, especially as it helps validate this somewhat nascent market to our potential investors. We also love that we deliver more for less. We deliver more performance: our technology works through glass, works outdoors, and without blind spots. We cost less: fewer components; less power required; and less supply and manufacturing risk—all for a lower licensing fee and total cost to the OEMs. The best known competitive technology is in the Microsoft Kinect and may be the right choice if the use-case you are looking to enable requires a very high amount of spatial information (say knowing the angle that a user’s elbow is bent at). If you believe, as we do, that the majority of the mass market use-cases will be driven from simple 3D positioning and gestures such as positioning your hand over and around a retail kiosk to navigate without touching, or “hushing” the GPS in your car by waving your hand at it, gaming on your smartphone, or adding precise temperature control by where you position your hand over a touchless faucet, then that system is over-engineered with unrecoverable cost.

Business Model: We have three revenue streams. The primary one comes from OEMs that pay a per-unit licensing fee for our enabling software. This software is optimized for their particular component and performance choices (accuracy, power usage, component choice). We have already cashed checks from some OEMs for exploratory project costs and prototypes, which are also great from a secondary revenue stream and validation perspective, but are negligible in the long run. In the next quarter we plan to launch some simple 1D (linear distance) and 2D (“AirSwipe” gesture) sensors through a major global electronics distributor—this is the third commodity component type of revenue we will get.

Current Needs: Funding: An immediate tranche of 750K—to accelerate the licensing discussions with the OEMs, as well as continue the evolution of our advanced prototypes and patenting, we may be looking for an additional round early next year depending on how the verticals develop. People: Industry and vertical specific experience—business development executives who are properly connected and can get us to deals faster; engineers both senior and junior that are passionate about this space and can help support internal evolution and next-gen projects as well as work with OEMs to optimize our solution. Partners: Organizations with wisdom to leverage—as a key enabling technology, our potential is huge—as a small company we should take help wherever we can get it.

XYZ Interactive – www.xyzinteractive.com