Ben Fahy: You’re vision is to connect the world. You don’t think small do you? It’s a confusing realm in some cases, to explain, so without using too many buzzwords, can you explain it?
Perry Lobb: There's lots and lots of investment and companies at the moment building solutions, and a couple of years ago we identified that there was a need for tools that allowed people to build these solutions faster. The genesis of our idea is providing infrastructure as a service that can allow you to basically scale and build devices, connect them together quite easily.
That’s the general trend, that globally, devices are being connected to the internet. It could headphones, it could be coffee machines, it could be motorbikes. A recent report that I saw was that by 2020 there could be 30 billion connected things. That obviously means there's a lot of competition, it's supposed to be a $3 trillion global market. What makes you think you can succeed in that realm?
It's a huge market worldwide, $3 trillion dollars potentially and 20 billion devices or 15 billion devices, depending on who you believe. There's a lot of scope in that for finding niches. There's also a lot of scope for different use cases and specialisation in different verticals and things like that. We think that it's a huge market and we can certainly - especially with regards to New Zealand - find opportunities in agtech for instance, which are quite big here. There's lots of different areas that we can target that are not going to be necessarily targeted by the bigger players in the market. Of course, our longer-term goals are to expand into other markets, into Australia, into the UK, into Europe, potentially into the US eventually.
So the budgets are increasing pretty rapidly. And according to that same report, IoT development now accounts for around 24 percent of the average IT budget. That’s pretty massive. So you’re rich, aren’t you?
No, not quite yet. The plan eventually of course is to make some money out of it. At the moment we’re just about building cool gadgets and technology and infrastructure and that’s pretty much where were coming from. If it makes us rich in the longterm, that’s a pretty good outcome, but at the moment we’re just going to focus on delivering good products and services in the IT space.
What have you done to try and get a piece of that action? What has and maybe what hasn't worked?
We found working with mobile networks, with ... We're working with Vodafone as part of the Xone program, and that's been a very big help to us, because it opens up certain opportunities in terms of engaging with bigger enterprise customers. The reality is that a lot of companies don't want to deal with startups because they think they're a quite high risk and they think they're not going to be here tomorrow or in six months' time. Working with Vodafone gives them some reassurance that the base of the company has got a bit of backing and that we'll be able to work together to build solutions, and that we will be there in six months or a year's time.
It's a symbiotic relationship obviously. Vodafone presumably gets some of the energy and enthusiasm and creativity of the startups that they're supporting.
It's a story that's been going on for a long time actually, that they're constantly trying to add value to their network. They want to almost provide services over-the-top that generate additional revenue streams and make their connectivity revenue a lot stickier. One of the ways of doing that, actually, is if a customer consumes some connectivity and they also consume an over-the-top service like ours, then it makes much stickier and it means that it's of much more value to Vodafone as an over-the-top service in terms of retaining and keeping customers on their network.
How did you get into this line of work? Did you choose it or did it choose you?
I definitely chose it. I got to the point on my life ... Middle management, I was relatively successful building products as services, and my business partner Danny [Tan - founder] suggested that we leave to form a startup based on some ideas that we'd been playing with, with some hardware and stuff in the office and things like that. It took a bit of persuading, but eventually he persuaded me and we decided to pull our resources and our life savings and make the leap and try to build a technology company, and so far I think we've done really well. We've been really successful and I'm pretty pleased with the progress.
Is that scary, or scarier than maybe the mythology suggests?
It's not as scary as you think. The scariest part actually is making the initial leap, jumping into the void and actually deciding, okay, we're going to take some risks with our funds and our futures and see where it leads us. Actually, if you look at all the other companies that are out there, if you have the sort of technical skills that we do and you have the know-how and you actually know how to build products and services in this space, it's actually not as difficult as you think. It's worth taking the risk if you've got a good idea, and I think we do.
The cloud is often thrown around as the future of business. And it has democratised business in many ways. I can set up my online shop in a day, and find my market for it if I want to. There are many examples of that. So what opportunities does the cloud offer New Zealand businesses and are they harnessing it effectively at the moment?
I think it’s a steady progress because the key thing about cloud is what it comes down to is lower cost to serve for businesses. They can consume services that are provided in bulk by somebody else that means it lowers their cost to do business. The commercial pressure is definitely there to move to the cloud. Provided you can meet certain requirements around security, and access to data, and reliability and things like georedundancy. There’s no reason why businesses shouldn’t move to the cloud because their competitors are. Nobody hosts their own email. Everybody uses Microsoft or Google to host their email so increasingly a lot more of those services will be provided by the cloud. And the business case just makes sense. It’s just a matter of time before it dominates that space. There will always be use-cases where companies want to keep data on site or it’s too commercially sensitive, but for most everyday functions it’s going to move to the cloud.
Why did you want to get involved in the Vodafone Xone programme? What have you done differently from being involved? Has it given you expertise in different areas?
In terms of technical expertise, probably not that much. Myself and Danny we’re relatively skilled and we know our field. But in terms of opening up business opportunities, making introductions to the right people and generally being helpful to us in terms of being a way of opening doors into customer conversations it’s been really really useful in that respect.
What’s one thing you know now that you wish you knew earlier?
In terms of financing and managing your expenditure as a startup, don’t rush ahead and spend money on lawyers and things like that …
No long lunches?
Just get down to work, just manage your cash well It’s not that we haven’t managed it well, but certainly as a startup you need to be very conscious that the difference between success and failure is just a few months of expenditure away so you need to manage that very closely.
What’s that phrase? You’re just one phonecall from disaster. What advice do you have for other people who want to turn an idea into a business?
I would say just go for it. I was relatively conservative in my outlook and didn’t particularly like taking risks with new business ventures and stuff like that, but once you make the decision to make that leap, I’m so glad I did it and I’ve got no regrets whatsoever, it’s been really enjoyable and it continues to be enjoyable. So no matter what happens in the future it’s going to be something I’m going to build on and really enjoy. So I would say just go for it. Don’t spend too much time worrying about the implications of your actions, just go for it and see where you end up.
We’ve mentioned some of the applications [of IoT]. Coffee machines, your fridge talking to the supermarket. And there are other things: driverless cars, smart metering for power and gas, remote monitoring for homes and industry. But what sticks out as your favourite application?
Pokemon Go is a very big thing at the moment and that’s augmented reality where you superimpose monsters onto your mobile phone screen. But it’s not necessarily missing, it’s not part of the product, but you could definitely see it added in the future, and that’s the integration of real world IoT elements into your Pokemon Go. So rather than just having an imaginary monster in your screen you’d also have digital beacons, if you like, that would be superimposed on the environment that would trigger certain event on your phone so you could walk round with a beacon, you could drop it in the park and it would emit some sort of signal that could get picked up by your phone. It could be a spawning point for monsters. So you can imagine that rather than just having a synthetic world imposed over AR, you could have a real world, as well as maps, and interact with the environment in a digital sense, so all the beacons are giving off information. You could play games that are linked to real world locations, or real-world moveable base stations that would create environments for people to play with. I think a combination of AR and IoT would be an interesting application for the future.
Excellent. I love that when there are things like driverless cars or remote monitoring of motorbikes and you pull out Pokemon Go.
That’s what everyone likes.
Indeed they do. It’s a great access point.
Thanks for your time Perry.