Orbotix Rolls Out Next-Gen Sphero, Considers Possible New Directions

8/14/13Follow @MichaelXBD

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the device more engaging.

“The user interface is changing pretty dramatically to create more of a personality for Sphero,” Wilson said. “There’s going to be a huge change in the way you interact with Sphero.”

The hope is that the new interface will make it appealing for a younger market segment. The ball has received very good reviews in the tech press, but Orbotix would like to broaden its appeal beyond tech-savvy adults, Wilson said.

Sphero 2.0 will cost $129.99, the same as the original version. The original Sphero will be available for a reduced price of $109.99, Wilson said.

Orbotix is taking pre-orders now on the Sphero website, and retail partners like Brookstone will start selling it Aug. 31. The Apple Store will sell a special edition with clear plastic that allows users to see into Sphero’s gears, motor, and other components. That will be available in September.

Building a Ball and Building a Company

More than 100,000 Spheros have been sold, Wilson said, and that’s come despite production problems in the past.

Sphero’s white plastic shell and cute logo hide the fact it’s a very sophisticated robot that’s about the size of a baseball. It is packed with an accelerometer, antenna, battery, circuit board, gyroscope, LED light, motor, and more inside a durable plastic shell that can survive being hurled against a wall or immersed in water.

That presented engineering, manufacturing, and distribution challenges. Finding the right manufacturers in China was a problem early on, and Orbotix had trouble keeping up with demand.

“Last year, the good news was we sold everything we made. The bad news was we sold everything we made as fast as we could make it,” Orbotix CEO Paul Berberian said. That meant expediting delivery by air, which cut into Orbotix’ bottom line.

Sharky

Now, Orbotix won’t be playing catch up, Berberian said when I visited the company’s headquarters in May. At the time, Orbotix was putting the finishing touches on The Rolling Dead, and early versions of Sphero 2.0 were being tested around the office and in the building’s underground parking lot.

The company also had just closed a $4 million Series D equity round (Orbotix has raised a total of $15 million) that allowed it to stock up on inventory over the summer. So it should be able to keep up with holiday orders, Berberian said.

The big push toward the all-important holiday season was on, and that meant expanding Sphero’s market beyond early adopters.

“Those who are looking for cool stuff like this have already seen it, or may have seen it and not purchased it yet. Now we have to deliver on the bigger picture,” Berberian said.

Enthusiastic reviews in the tech press, a savvy social media campaign, and an amazing bit of guerrilla marketing that got President Barack Obama to test drive Sphero during a 2012 campaign stop helped build the company’s momentum. It all culminated in Wilson and Bernstein landing a spot on Inc. Magazine’s 30 under 30 list earlier this year.

But now Orbotix knows it needs to get the attention of average consumers and the wider media.

“You have to start going out and telling the story to the average Joe about why they want a Sphero. That early hype and momentum will take you so far, and then you have to make the transition and start building a real business around it,” Berberian said.

Internally, Orbotix has had to grow up a bit. In 2010, when it emerged from Techstars, it was a small startup. Wilson and Ian Bernstein, who is the chief technology officer, had founded the company (then known as GearBox) just before being admitted to the startup accelerator.

That’s where they connected with Berberian, the Techstars entrepreneur in residence that year. Prior to Techstars, Berberian had founded Raindance Communications, a Colorado-based web and voice conferencing company. As CEO, Berberian took Raindance public. It was acquired by the West Corp. for a price reported to be between $110 million and $160 million.

Since Techstars, Orbotix has added a marketing director who worked for Parrot AR, which makes a quadricopter, and a sales consultant who has worked with Apple, Slingbox, and other consumer electronics companies. Berberian said working with experienced staffers and consultants has put the company “through charm school” and taught it how to work with retailers.

Everything looks to be coming together, Wilson said in an interview yesterday.

“We’re cranking along, unless we totally flop for Christmas, which I can’t see happening,” Wilson said.

Beyond the Ball

With the launch of Sphero 2.0, Wilson said there’s a bit of a feeling within Orbotix that it has pushed its product and the concept to their limits, at least in terms of the hardware. The next step for the company might be to develop something new.

“We love Sphero and the robotic ball, but there are other things to do with the technology,” Wilson said.

Wilson didn’t go into much detail, but said the robotics inside the ball, the software that controls it, and its ability to do advanced augmented reality could make the leap to additional consumer electronics or beyond.

The software developer kit for Sphero will let third-party developers continue to develop games around Sphero and expand on its capability for augmented reality, and apps and games for Sphero should keep improving.

“When we started we wanted to create this really cool experience around a physical device. When we built Sphero, and we didn’t initially plan for it, it turned out Sphero was a device where we really bridged the gap between the physical world and the digital world for gaming,” Bernstein said in May.

“I look at Sphero sort of like this Atari for the new generation of gaming,” Bernstein said then. “We’re at the beginning stages of something really cool in the world of gaming.”

But with the work that’s gone into the hardware for Sphero 2.0, the vision is expanding, Wilson said yesterday.

“Our technology is extremely deep. That could be missed by people who only see us as a gadget-maker,” Wilson said. “Putting (parts of) our system in any robot will make it better.”

To a degree, Bernstein and Wilson have been here before. When they got into Techstars in 2010, they didn’t really have … Next Page »

Michael Davidson is the editor of Xconomy Boulder/Denver. He covers startups, venture capital, clean tech, energy, aerospace, telecoms, and whatever else happens above 5,280 feet. Contact him at mdavidson@xconomy.com. Follow @MichaelXBD

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