Peter Semmelhack founded Bug Labs in April 2006 with the intention of making it easier for people to create innovative electronic devices. The company makes a product called a Bug, which is a series of modules — GPS systems, cameras, motion sensors — that can be snapped onto a small computer and programmed to create products that would otherwise take years of development and millions of dollars to build. The following is an edited transcript of an interview with Mr. Semmelhack.
Joshua Brustein: What have you built with a Bug?
Peter Semmelhack: My sister is a Type 1 diabetic, and she started to have low blood-sugar levels when she was sleeping. I wanted to buy something to monitor her sugar while she was sleeping, and set off an alarm if it got low. I was frustrated because I couldn’t find anything.
I knew that for a Type 1 diabetic a low sugar is accompanied by a spike in heart rate. So we had a heart strap that was a transmitter, a receiver device. If it came to a point where if the heart rate fell off a cliff or went up, it would turn on the radio, turn on the lights and send me an SMS message.
I literally built it over the weekend with the Bug.
Does doing that take a lot of technical expertise?
It’s like programming a computer. To the extent that you’re comfortable programming a computer, this should not be that complicated.
This seems like it could be a hard concept to explain to people.
That is a big challenge for us. We announced our device at the Consumer Electronics Show in 2008, and won best of show. We gathered a lot of attention because this idea was so novel.
People were used to thinking that new cool electronics came from companies like Samsung and Apple. What we were saying is, “Here’s a new way of conceptualizing how to use electronics.” When we put the concept out there, we got an avalanche of press, and everyone said, “Oh, this is great.” On the flip side of that was, “What is it?”
But now you’ve been working on this for five years. Who’s buying into this idea now?
Largely it’s wireless carriers. Last year we announced strategic partnerships with Verizon, Sprint and AT&T. We’re about to announce four other relationships with carriers in Europe, Latin America and Asia.
They want more devices on the networks. If you’re a network provider, and your business is selling data, do you really care if the data is being consumed by a fancy iPhone, or a device that is tracking air quality in a basement? It’s the same money, so why not let a thousand flowers bloom?
Why do you think that most of the start-ups in the tech world focus on software rather than hardware?
Think about software 20 or 30 years ago. All of our software came from 10 or 20 big companies. There were some big software companies out there. Now we get our software from two guys in Helsinki. The cost of innovation has gone to almost zero.
The reason that was able to occur with software is that platforms existed that people could leverage. The vision of Bug Labs is to have that happen with hardware.
So how do you do that?
We’re working on building this platform.
Let’s take a real example and say we wanted to build a device that would keep track of hazardous materials for a trucking company. If we hire an engineering firm to build it, the standard metric is $1 million and a year to come up with one working hardware prototype.
But you could also take our Bug base, which has a little Linux or Android computer in it. You take a GPS and snap it onto the base. Then you connect it to another module that monitors air quality. Now a driver can wave the device in front of a container that may have hazardous materials in it, the air quality monitor will be able to tell whether it does, the GPS can determine the location of the container, and the device can send that information back to the company.
The company in this particular case could choose between having nothing and spending $1 million to develop a custom device. Instead, they can use something I made over the weekend.
What kinds of devices are people building?
We’ve done deals with Darpa [the Defense Advanced Research Projects Agency] on a 360-degree camera. We’ve done work with medical institutions on medical devices and with universities to build educational devices.
But there are three main areas that are the most popular. The first is health and wellness devices. The second is telematics, which is loosely defined as keeping track of anything that moves. That could be trucking companies who want devices to help with fleet management. But it could also be things like keeping track of your dog.
The third is what we call financial point-of-sale, or digital payment systems.
Most of the examples you’ve given are not consumer devices. Does this model not work for that market?
Well, the word, “consumer” implies mass-market pricing. The problem is that getting the price down to the mass-market level, especially with sophisticated things, you have to make a ton of them. You need a company like Amazon or Sony or Samsung to make that kind of backing, so when we’re talking about consumer devices you still see a couple of large companies making your smartphones for the foreseeable future.
But is that a bad thing?
I’m not saying that’s a bad thing. It exists for a reason, which is to keep costs down. But there are costs that have to do with the amount of choice. What I’m suggesting is that consumers now are less happy with one-size-fits-all, and the current industrial process by itself will not drive these interesting changes.
But there’s this huge segment of markets that are never going to be mass market, but that have to be served somehow. And if you can build a system where you can build 10,000 or 20,000 devices you can serve these markets. Our approach allows you to start thinking about that.
You have said you think there’s a shift coming in terms of how personalized people expect their products to be.
I think that, in general, people are becoming a lot more interested in modding – tinkering with the things they own. Now, modding is not new. Think about cars. But now, if you go into the Converse store, you can mod your sneakers. You sit there, you talk to them, and they’ll do whatever you want.
This tendency towards personalization is not about electronics per se, but I think that’s coming. I think the idea of me carrying the exact same devices as you may seem archaic over time, just like how if you and I showed up wearing exactly the same clothing it would be weird.