From Croatia to CES: The story of Teddy the Guardian's unlikely Las Vegas debut

Central Hall at the International CES in Las Vegas can be a little overwhelming. Wall-sized panels looping short clips of impossibly clear footage will dazzle you into thinking that $10,000 for a new television is perhaps not such a bad investment. Up to North Hall, concept cars from all the major manufacturers will make your own wheels seem impossibly remedial, and it's impossible to get through South Hall without asking yourself why there isn't a robot cleaning your carpet and a fitness tracker charting your activity.

Meanwhile, the rest of CES, scattered across hotels and casinos all along The Strip, has traditionally been a collection of also-rans. These were places that you visited if you had time or if you were called in for a keynote presentation, because otherwise it wasn't worth wrestling with the traffic or waiting for the shuttles.

That's changing. In 2012, the Consumer Electronics Association gathered together some of the smaller companies, usually tucked away in the basement of the Sands Expo or hiding off in a nearby hotel, and created Eureka Park. Here would live the Kickstarter successes, the Indiegogo darlings, and the independent entrepreneurs with small products and big dreams. At the time, it seemed like a rebranding gimmick. Since then it has evolved into my favorite destination of the show.

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Here, you not only get more interesting products, like a spherical camera you can throw in the air or a military-grade flashlight that doubles as a phone charger, you get great stories. You don't sit through a pitch about how the additional half-inch of display size on the 2014 rendition of a tablet is going to revolutionize your world. Instead, you hear the story of how the founder came up with the idea for a given product, typically told by the founder him or herself.

It's like being on Shark Tank or Dragon's Den, but nobody wants your money. They just want your attention and, sometimes, your feedback.

No single product nor entrepreneur at CES got more of my attention than Teddy the Guardian, and its creators, Josipa Majic and Ana Burica. As I was walking around the Eureka Park area looking for companies and products of interest, I'd seen the pair clutching stuffed bears. The bears were plain looking, the sort you'd expect would still be scattered across toy store shelves on December 24th. I took one look and kept walking, thinking it was nothing special. I spoke with a number of other overworked CES attendees who did exactly the same.

That was a mistake. Majic, thankfully, tracked me down and gave me the pitch. I went back to learn more.

Origins

Teddy the Guardian may be soft, but he is inarguably a piece of hardware, a toy that can read your vital signs through a smart paw. In a hospital where Teddy's around, kids would never need to see a thermometer or blood pulse oximiter. They'd just need to hold hands with Teddy. Still, the concept of Teddy, his origin story, has its roots in software.

Majic and Burica, both 24 years old, met in Zagreb, Croatia, college classmates assigned to work together in a small group. Majic is founder and CEO, tall with unruly brunette hair and piercing eyes. Her last name is pronounced like "maiej." ("But you probably think it's pronounced 'magic.'" Does she mind Americans garbling her family name? "Nnnope, I love that.") Burica is co-founder and product manager, equally striking with long blonde hair and glasses. Both were passionate about the medical industry and, specifically, the impact that technology was having upon it. They quickly joined forces. Says Burica: "We thought 'Okay, where do we want to go?' We started with dermatology as an industry that satisfies our needs. Then we switched to parentology, to kids, to let's do something that is hardware for a change, because we felt that this is the time where hardware can definitely develop in the best way possible."

Through 2012 and 2013, the pair would deploy medical apps through Europe, India, Jordan, and elsewhere in the world. They learned about the unique demands of doctors and clinicians when it comes to app design and development. ("The more simple and uglier it looks like, the better it looks for them," says Majic.) They gained experience in the increasingly complex rules and regulations governing the medtech arena. They established relationships with clinics and hospitals around the world. But, Majic is candid about the most important thing they gained during this period: "cash flow."

The two had their eyes on solving another problem uncovered while spending time at hospitals and clinics. Majic explains: "We encountered a very specific problem at the pediatric office, which is that nurses usually take plush teddy bears to simply calm the children down, and then they trick them into giving them, for example, a thermometer." The switcheroo is not always effective, as many kids are scared and uncomfortable to begin with. And who would blame them? Hospitals are scary places at any age. The sudden presence of a cold, hard medical device can be a problem.

"The effect is not really satisfactory because the kid again gets really stressed out when he sees the medical device," said Burica. "So we thought, 'Okay, why don't we just put it all together and see how the concept works?'"

How it works

Burica demonstrated a prototype Teddy for me, connected over Bluetooth to a Samsung Galaxy Note 3. After grabbing Teddy's paw, a simple (and, yes, ugly) UI displayed her current heart rate and oxygen saturation. All readings are associated with user profiles, making it easy to track historical data for a given patient.

The challenge of calming a child down with a stuffed toy before presenting them with a medical sensor is no longer needed. Instead of clamping a cold, plastic pulse oximeter onto the patient's finger, they just need to hold Teddy's hand for a few seconds while their info is beamed back wirelessly. (And, fear not, Teddy is easily washable to keep sanitary. Says Majic: "Teddy The Guardian's electronic parts are protected within the toy using special silicon skeleton that prevents kids from getting their hands around electronics and with one other, even more important reason: for the toy to be easily washable. Being aware of the fact that toys need washing every once in a while especially in hospitals where it will occur every time Teddy switches from child to child we created completely washable plush toy. The skeleton is easily pulled out, Teddy gets washed in the washing machine under 90 degrees Celsius and he is ready for usage again.")

This is just the beginning for Teddy, base-level functionality, but he can do more. Hospitals and clinics can request a Teddy that connects over Wi-Fi instead of Bluetooth, or one that can also read blood pressure. ("Here the teddy bear just hugs you," explains Majic.) Teddy can also be configured to monitor the environment around the patient, cataloging things like air temperature and humidity.

It's all basic stuff, based on standard sensors already in use in many hospitals. That's not because of laziness, that's because medical regulations make it near-impossible to introduce any truly novel sensors into hospitals. "For the hospital version, it can only be the one with basically repackaged technology. ... Everything that has to go into a hospital or any kind of institution really needs regulatory approval, and that is the barrier. An option for that is to partner with manufacturers and speed it up a little bit, but it is a fact that a lot of the regulation is stopping a lot of med tech innovation."

Despite these challenges, Majic and Burica have managed to make Teddy a compelling option for the sorts of institutions where he could be useful. I ask Majic the cost of a typical sensor capable of reading pulse and blood oxygenation. "Approximately $230." And the cost of a Teddy that reads the same data? "Approximately $230," she says, with a mischievous smile before explaining further: "Medical market pricing strategies are very complex. In the US, the requirement is usually to partner with a leading medical part producer. They want to have all medical technology produced and approved in the States. In order to fulfill these needs, the price needs to be high. There was a time when Teddy was only $69 and we were asked 'Why is Teddy so cheap?' The medical market is a special one."

Thanks to the lack of additional cost, and the potential to make hospital stays for young patients a little less stressful, Teddy has already garnered 2,800 sales. For Majic and Burica, that's just the beginning.

Going commercial in the US of A

FDA-approved Teddy, with his overpriced but officially certified bionic right paw, is an important part of the equation. But there's another Teddy, a smarter one with more tricks and more abilities. If all goes well, you'll be able to buy him (and his less-ugly app) before the year is through.

"For the hospital version," says Majic, "it can only be the one with basically repackaged technology. But, for the consumer version, and for the version that has a lot of interactivity options, we have our own engineers, our own designers. ... In that version of the product we like to make everything from scratch, and we use a lot of open source."

When she says interactivity, she imagines a version of Teddy that will combine the best the hospital version has to offer, but add some games and rewards to the equation. This Teddy will make kids want to stay healthy and track their own stats. While this is all rather conceptual right now, Majic and Burica envision parents buying their kids a Teddy and then configuring goals for their children.

If little Billy lets Teddy check his blood glucose levels after every meal, then maybe Teddy will read him a story at the end of the day. If Billy forgets, the parent might get a notification on their phone. "It becomes more of a communication platform than simply using medical data," Majic tells me.

This teddy also has a plastic heart on his chest with a red LED behind it. When Teddy's owner checks their pulse, the bear's heart beats at the same rate, an effect meant to create a bond between kid and bear.

The expected cost for this smarter, more advanced Teddy? $69 here in the US, which will be his target market. That's about what a Teddy Ruxpin cost in 1985, and all he did was play cassettes.

To the show floor

Though 3,800 sales is a good start, Teddy the Guardian is hardly an operation flush with cash. This begs the question: How did they get from Zagreb to Las Vegas and onto the CES show floor? It's thanks to the 2013 Venture Out Challenge, organized by the World Bank and CRDF Global. Hundreds applied and ten were selected to pitch at the final competition in Moldova, just two months ago.

Burica says the "very extensive" application process lasted for more than a month, and that they learned a lot from a series of mentors who were part of the competition. "They made us work on our presentation, pitch, on how we present the product to different kind of product. We made the best we could, we won. As we were the only hardware startup there, we got a very satisfying award, and the CRDF Global took us to CES, which is an opportunity that we probably wouldn't have been able to take advantage of otherwise."

Global awareness is the biggest opportunity. In their home of Croatia, the pair have faced a number of problems both economic and social. Majic gives me an abbreviated run-down: "Poor economic situation, very high youth unemployment, very poor political situation, and it's still considered socially unacceptable for younger women like ourselves to be entrepreneurs in the industry that is predominantly male."

As Majic struggles to make lives easier for parents in the US, her own parents in Croatia have not always been particularly supportive. "My parents are really heartbroken that I never accepted any bigger financial/IP/healthcare job. We had a lot of offers when I first started. Ana's parents are engineers and are really supportive. Mine aren't...they do not get the whole startup thing. They think we are just wasting our time and money and precious youth."

Likewise, there's still a misconception among many that time spent at Eureka Park is time wasted. This year proved that to not be the case. I spoke with many entrepreneurs, some who were at Eureka Park for the first time and some who have been there in the past, and all were quite flattering. Ben Forman, who spent much of CES 2013 riding around Eureka Park on his electric ZBoard, was very encouraged by his time there: "I think Eureka Park is great. First of all you don't have to pay the high prices involved with getting space at the main show, and secondly you don't have the follow-on costs of building and staffing a booth that has to try to steal attention away from the big boys like Samsung and Panasonic. Also in the main halls I find that people are often on a beeline to a destination, and they simply blow by the smaller booths. From what I see the attendees -- and journalists -- at Eureka Park are strolling through, taking at least a few seconds to check out every single booth on a row. As a startup thats all the opportunity you can ask for."

And for Burica and Majic, it was well worth the trip. Says Majic "I think Eureka Park is quite a hot topic here. We didn't expect that amount of interest. That is why we haven't really arranged any fancy booth or anything. It's very modest looking. If we come next year, it will be a different story." Coming back next year? "We are almost sure."

Majic does the math for me, adding up travel costs for the two of them, including a long flight from Eastern Europe and a week in an expensive hotel in an over-sold town during peak season, plus the materials costs for the booth itself. She estimates roughly $15,000 for she and Burica just to show up and have something to show up to. That's not counting what the CEA normally charges for the floor space.

Can they really afford to do this on their own dime? "At this point it would be completely unacceptable, but since we're extremely ambitious, a year from now it will be extremely affordable," Majic says, laughing. "This is the optimistic answer. Really, being as ambitious as we are, we think it will be realistic and attainable."

Burica agrees, and she thinks Teddy does, too. "This is the opportunity that we are really, really grateful because we got the chance to present Teddy in front of 2,500 other companies and potentially investors. We learned a lot, we got a lot of feedback, which is good. This is Teddy's premiere on the American market. This is the first time we brought him to the States and he definitely plans to stay here. He said he likes it."