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Ep. 105: CES, where new technology fights for deals.There's more happening at CES than just big companies launching giant new product lines. Each year, startups vie for attention from consumer electronics partners and from investors who attend the show. Discussing this topic with Rafe Needleman: CNET's...
Hey everyone welcome to reporters' roundtable -- -- work around it -- 2012 and we're doing that lives. From CES. Here on the convention for the giants CNET make -- boot. -- -- This is a show about gadgets that big companies Sony Samsung LG Toshiba. Showing off all -- -- get -- refrigerators their rumba competitors all that stuff but there's a whole other side. The technology economy which is what we normally when I normally cover back it -- CNET which is. On Norton's part in the little companies that are emerging that want to -- be the big companies in the central hall here. So we're talking about this edition of reporters' roundtable two great guests. -- how this small fry the smaller up and comers. Companies. That are actually big guy have a small guys get here. Get in with the big guys to do it and -- to get to discuss -- really interesting topic of the technology with that the house small becomes big efforts like -- left. Policy on an executive at CNET poll worker Paul thanks to -- in of course like. Yes and jobs time managing partner at -- -- -- -- -- one of the coolest BC's. On sand hill road just think your comment thank you for -- -- that started here. What if you personally. Is there. Where are the start -- here I mean are -- the big hall or the elsewhere mean where do you see the cool new technology. So this year's CES. For the first time they've sort of created this startup Alley that vehicle you -- of -- over at the Venetian. And there are some cool stuff there thumb it's a little weird to have a separate from the hold. The whole Paul and I met a lot of great startups that are not there and -- that they didn't wanna be there. On the other there again and arts there's some great and devoted to net a lot of startup. Company to come here for the events that are not CES that the nighttime events parties and so clearly there's a big presence for here we kinda neat. Folks think yourself and -- you know Chinese retailers and distributors it's just they're little that they're they're actually little program. This would definitely BC comes to us the authority hang up. Well you know I I think we obviously come to the floor and -- with big companies around you know. I I always tell people we we backed startups but the big companies -- ecosystem with -- -- operating if you want on the -- it. You know each year Microsoft -- -- don't agree Palestinians are all yours gets -- products. -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- So. Are there are lots of small emerging companies here. Yeah you know what I think less in the -- and certainly not central -- -- -- you'll see the occasional one typically the ones that are selling through retail channel let -- -- -- attached to go pro attached camera things like that. Smaller companies are trying to accurately big impression on the retail channel. You know more traditional Silicon Valley startups I I don't think and -- they -- the big that you can be here while filter here and you're here we would get if indicates that your and I figured out the only venture capitalists and their. Who's who's here and and what. What's kind of your your mode of operation are you are you going from Booth to Booth looking for things in movies scene are you taking meetings. Are you. Looking at in the Panasonic Booth to look for opportunities where portfolio companies -- to work. Yeah a little all that I mean it's it's a really efficient places that it needs of people -- people here you block it out and then with the bigger companies. I'm what I like to use usually will happen gives -- that is so old they'll walk around -- all the new products are coming that it did again and when you go to a sharp Booth there's something. And that they're they're doing deals with. Best buy and target and Costco and you come along if they mammoth sandhill. -- -- areas entrepreneur or representative. Do they know what to do with you. You know it it varies yet very Sony you know we're we're gonna hurt Microsoft later today notebooks are there really well and Dyer Matthew you can do that by the way. -- exactly it is the we're we're no longer and have. Apple of course you know -- big story -- not here and and a -- Microsoft's last year novel idea of the interest in but. Yet at the you know they they think it shows around its its its thing it's a useful thing I mean I think you know a lot of our companies want to partnerships -- company so having those actions. -- -- -- -- -- seen from from the big companies will company emerged that if -- -- You know. You mentioned the camera I've seen a lot of companies making gadgets for the iPhone making cameras. One of them -- Companies on a remote is and they just as we close it finance. Program to change. That -- -- Stanford University -- it -- money did make there's a lot of people making these things. Gadgets that the yet. Find ways to work with you're Smartphones. And over -- -- them all at the Venetian. They -- -- guys from that Apple retail stores there looking to check if it checked in yet trying to get -- stores that involves getting Apple's making things stop stop what you're doing easier encouraging even more. Apple mark iPhone case manufacturers know -- Cases and I told the likely to the other day -- an iPhone case bubble. There's just too many cases it's create jobs a little word of warning people have eleven -- of Virginia's case please don't don't think you. Content but if I get it alleviates some related charge iPhone without cord and write a book you a drop of equipment -- a phone in and it discharges. I want to know if you've actually made any deals here or if -- never made you use them. Mean yet you know we've done a lot partnerships here in terms of actually making investment yes. I know I have little look at it and you're missing the company that's now fairly well known it company that makes the Jawbone headsets can -- -- mile. -- -- -- 56 years ago and -- the company. You know products -- anywhere to coordinate product that publicity thing and still haunts me. If we didn't manage to find -- way to making that investment if you know obviously the company now. That so that alone keeps you coming back and again in its you know -- -- it won the title and -- -- got -- and the the FAO heavily artist right now and askew on what particular what specifically you're looking for before we do that would come back and talk about what a BC looks for. At the yes we're gonna take a quick break right now and get into that and -- Sony comeback think that. Price we are back -- record -- Paul Sloan from CNET have you seen any deals get done here. I haven't seen any deals get done though I've seen some of approaches -- offers. I just have one company I saw that makes that the vehicle mode modular robotics and they make these cute things called -- -- to grew out of beta project out of them a nice Ph.D. thesis actually at Carnegie Mellon. And of these toys. These -- sensors that have sensors and they may actually thinking of building blocks include -- And honestly I felt bad for all the -- within you know a hundred yards of non obvious to look at that all the -- around -- people who -- Rallying around this one -- plainly these things. And those guys -- sort of been in stealth mode and have them and gets press they get all -- traffic and people -- -- and -- the manufacturing it in from boulder and I was here the other day talking to them. And came back to -- and -- system Nike -- -- Nintendo and our investments on which they turned down there needed night. There's more money there's definitely going after felt when you can -- -- Booth jobs done. That is -- Like that does what does that mean you does that mean that it makes the TV or it might -- that investment and it does it indicate anything you. Yes yes and that's just mean -- -- Booth -- there but -- -- you know I yet not in this case. You -- have been over the -- felt that the difference and a good evening you look for the bullets you literally eat you know when things we always have four dollars -- -- in its popular separately are also got to be very business one of the challenges for us yes -- there lot of hardware businesses generally -- businesses haven't been naturally Apple takes too much money scale not mark what is -- hang up yet. It takes too much money you -- sitting on piles of cash. I mean here's the problem as as I -- the and in order for venture and -- certainly doesn't -- today. You can start an Internet company to guys in the garage with no hardware. Practically nothing in different services and it's hard to figure how to use when he million dollars in some cases. -- agree I think -- -- and eat it it's you know what's changed with you know things like Amazon web services -- -- hardware. Things like that -- you can get product market yet very early to you can know if you have something where the the directory in the -- skinny -- company really building a company that's built on -- mean you know FaceBook would be great example look at the amount of money they but it. Raised -- and on on its path to greatness. It's the life -- still higher a lot of people the infrastructure cost. You know scale pretty significantly you know there and not mean to Russian mod nation is important. You know if you -- -- figure out what is the application. What is the product really do on the forger forced into doing things. You know when -- much -- and -- he also got cheap -- companies and in congress that our components but are -- -- any cheaper option isn't that much in the night. The company -- called drop can hear it means. Six million dollars recently in his home surveillance camera. Shipments coming down them. -- that -- that's definitely true I mean media you know you really like it just as you can rent servers ran on now you know typically manufacturing contract partner. -- still a lot of money if I had an inventory. And ironically the faster the company grows the worst problem yet. Writes if you were really popular product in an -- -- You that you might have to spend under two million dollars just on -- to get product built out there nuclear missile through but you know that's. The -- -- you don't have time to. Built the prophecy. Forecast budget it deals sperm quantity yet you know the one -- -- -- about software and you know particularly now let's offer it becomes passes if you make a mistake if there's a -- you can fix it right then -- -- -- -- back in the old days when I was. Aetna objects offer companies we ship the code into the retail channel -- and Expedia we -- a mistake it was really expensive to put out there wasn't. You know -- your sales force you just hit a button in the and you can't record but you'll have to tell her talk let's talk about though as a reporter what are you looking for you come here with representing. Silicon Valley and your own -- reports -- what do you look workers of opportunities. For aunt from entrepreneur or -- -- big show like this. You know I think. One of the things that we play with looking at the big companies it's just an instance of what's coming on the plate what's possible and also we're the big guys focusing though because you you can make money by supporting them also you know -- areas that they're not focusing on -- -- I'm you know I think this year for -- mobile is the really big story I think I you know I'm -- -- and it -- those -- I think you know. Seem -- it's becoming redundant everything is mobile. I'm -- looking at the hardware I don't think we would ever best any -- that manufacture port companies actually need the artwork from mobile. But understanding the physical capabilities of licenses crippled Wi -- entrepreneurs and then. You know picking up on the news services because every platform shift creates opportunities and if you talk like that that's really think that's one thing that we keep the all the TVs and it definitely Smart TVs obviously there's an opportunity. In apps for Smart companies. Or. But what the white space that you see maybe the big guys are leaving out -- there's -- where there have been put away. What a -- classic -- to a company I work with that is -- -- -- is fast company. I've been very powerful solution for collaboration around content and particularly in you know rise of their filling in really interest you -- days. In what I would stated that Microsoft -- her left the gap in between SharePoint which is an established product which they've largely -- through their channel. Which they had me like most big companies it hurt for them to radically reinvented without a lot disruptions and and one of things there was interest -- today was talking to their Skype right which is there new. -- box Dropbox like product that we're gonna for -- -- working for years cannot actually looks okay but it's you know it's there really needed consumer so I tightly sat down the product manager walked through things like okay. Out of the -- the access permissions work well all it's all individually files -- a -- work forever but you gotta feel that you kind of large scale -- -- -- -- level where the group level if you have a thousand employees and buyers and but he and treaty provisions accessible content. -- -- of the view that god. You know that's useful you know they are leading this open space and boxes right and so while you were looking at all companies over -- market elsewhere on the edge of the took the edge of the show by the way -- become -- -- 100 exhibitors here. If the perimeter the key Booth. That's no accident that huge -- to -- -- Only you see here that you think it is likely for an opportunity for which there. You know that's a good question most of it is around mobile and there are some people here who -- you know making apps. Which doesn't seem quite -- ultimately function but it is -- serving the gadget. So to speak -- as those that sort of a company that some interesting plays and attempts -- new things involvement in reality. That seems to be a big one -- a few augmented reality company news and really it's myself a liver that it seems to be. This in the UK China presence in the US I don't know whether this couple get beyond just marketing collateral -- in the book there. Nonetheless the company just -- -- -- -- ID -- -- augmented -- -- interesting and I -- -- a demo from one of those events of this giant helmet if you financially it's an entry computer. In a helmet with that blocks your vision with Lindsay is looking at -- can overlay. The real world on though they are or my first anyway if you were not -- investment but expect it. Your lives but there's another company here can't remember -- -- something that they have -- wanna a monocle on -- glasses frame that projects an image so you can get the heads up display -- isn't necessarily augmented reality that is not of interest you just a curiosity you know it. Would demonstrate that it absolutely I don't think lots of inventory on -- anytime soon but I think -- what we often -- -- they could come back yes I was -- I think you know I'm I'm gonna -- -- limited to -- -- enterprise models are not getting -- next year. But you know what we often see is not the first person who has an idea doesn't get it quite right but it's it's still the -- right right and so what's gonna happen is in the year two people in the -- on somebody's gonna find -- way. To make it work -- -- -- really works for people. -- you'll find met back in 1999 I was building mobile shopping apps right back on lap and you work that you were dead on right out the latest -- I thought he would look like a bargain price that hey we were -- -- we were utterly wrong as opposed to just wrong wrong before the -- elvis' song compilation but that you see a lot -- you know the -- yet has. Has merit and just you who filed a back page because this talk about one of the alternate way -- -- -- you know. In this bubble of entrepreneurship in the early bubble the first bubble -- -- covered in 1999 it was. Venture capitalists which is a fair amount of money now on this level -- -- Angel -- there Angel investors of the smaller amounts of money. On and then there's this new model which is emerging now and it's really interesting products -- -- -- which you covered. Which is kick start which is the crowd funded start crisper with a kick starter indigo go and other models like that what you think of those Paul and -- I find it interesting that you just using -- answer accepted. -- state -- -- area and it isn't it way the world works with whom Democrats remove the Democrats wait I don't understand that that's a whole other challenge -- as it is in bubble bubble lets yet. And of that -- Look at you know all these gadgets I've seen it mentioned coming from the phones these. One company that made a Lindsey put on for me to you for your phone -- and -- wide angle and humans all the things -- aren't there and they can't get money from you -- you look and -- we don't want to invest in hardware -- generally can't -- many -- they say you don't want to invest -- hardware. -- -- -- -- -- -- -- -- -- -- Just like -- -- modular robots -- confident they did it dummies lot of money this week. You know they -- It was a hundred and it when he thousand dollars -- -- daughter those people paid essentially for their prototype this development in the viable product. -- -- that and you know six months later raised. Time and money yet so you know I think it's really really amazing things -- just had it has -- in theory the system. I think it's great -- -- you know again I think the most important thing is knowing you have something that people walk by me and the sooner you can get an error. On the better I think you know we're seeing more and more companies. Either coming in and they already have customers area users and they have -- and even Apple you know ten years ago. Decreased by ten million dollars for a software company make sure you guys you have private market that night you that over fiber and I mean one of the problems in the first bubble was. If you do is that people people love invested -- things before they knew if there's any traction. Yes absolutely and and -- -- money it -- -- hope. And now it's like that's -- -- you wanna see you wanna see traction he -- to customers and paying customers and what you know and you can prove that pretty quick. You know when you -- -- you're so nimble and your three you know I I I -- -- -- don't -- in the -- rushed it did you know expanding get -- it's like yours so you really can't simply -- three for people to that strategy -- Once the -- rates are thinking up your burning you know half a million dollars a month you -- -- it to actually read the hard. To turn the ship at that point if you if you really you're -- the wrong directions that you can get it working eighty can get things were when -- -- there before you hit the gas. The that are. So. What other opportunities we talk about mobile obviously is the app economy there -- others accessory economy. What other opportunities you fear of it that -- obviously I mean I I think the you know that that the twin sister of mobile clout. Right -- services that go with the -- I think that you don't want is enabling the other. -- I I think you going to speaking about her where I am thinking we never say never terms of the category. But hurt -- attached to a service is very interesting right because I just look at the hardware guys. Media -- cost of acquisition or just the one time thing but that would occur in nature you're attached to high margin offering service -- I'm very interest and you're ready to mobile the mobile industry. Yet the deputy that's exactly right and and all the subscription -- -- doesn't have the problem described before it can get the hardware pretty much right you know you can keep updating it from there. Yet been totally exactly but I -- and I just think that you know that recurring connection I have had a great talk with them. You don't want it to the folks over Samsung -- this is a real shift for those guys this idea that the relationship with the customer -- -- on the sale and make. I'm you know I I was sort of I tearing them a new one for. On how they handle Android on their tablets you know you get it it's it's they've gotten better at it. But you know the new version of Android come out and it wasn't -- it wasn't always the case that you could upgrade your device I mean that's just always got me I had a sitting right where you are -- people from Samsung yeah we were looking at the the galaxy nexus and I have the -- is the next -- up in the one after -- five point pirated item whenever. And they were all running different versions for expressive side note here but whenever I think they -- -- on that now I don't think they they -- the big guys have really didn't happen Tuesday but -- -- total cloud. Fusion killer idea I mean. Everyone is offering their own cloud services sort of has this app. Apple might end up wanting to own the whole chain you know and it's just like -- I think that consumers -- totally confused at which service to -- -- why you don't bring the -- instinct -- what is the for the option for somebody trying to break into the CE economy what is the impact of Apple at a place like this that is important and true to. Be aware. -- I mean I think you know Apple really is driving mobile environment many Android obviously is driving a lot of via Nat penetration -- government in innovation sampling and Apple's front and I don't know I think you've got to be -- what Apple's doing. On the controller ecosystem very tightly which is why it works so well the end users but I'm. You know we've seen them today and you know it can it can change models pretty quickly you know. I think you have to try and maneuver around those guys but if you can work within Apple and nothing of mobile gaming for example we available in company that is -- Faster than almost any other opinions is the company generated. Millions and millions of dollars in net income in its first year out which is not typical in in in this -- service -- you know you can the mobile games you can build them quickly. Apple's -- all the monetization built in there. And it's just amazing companies they'll. -- -- imagine what this whole show would look like if Apple had -- when it's done last few years now. Mean all -- -- will be classical look like crap right all the MacBook. And a rip offs. -- look -- this -- you on behalf of those who have keyboards on all those cases wouldn't be here right because there wouldn't be it would be dominant happy being. Yeah and -- I mean Taiwanese companies just wouldn't exist yet. So listen finally recommendation if you're gonna come to the show if you're not from an area for -- for -- -- company got a product. Trying to get traction how do you best use the yes. All of you wanna go -- from it from our perspective the journalism respect -- from the the funding the venture perspective look most a lot of it. Companies to come here. Weak right they don't even have much music -- -- but to bring but -- didn't bring a little thing new casino -- an army must have here is ready to coverage coverage so to total. Marketing -- for them. That you just happened messaging leader in street try to make it exciting -- -- -- -- -- it in an unlocked -- happy hoots and look at and I know what they do. And penises like basic outlines you know but you know the good ones did that -- get attention -- -- -- make good -- Him. Document it to take advantage of the fact that you -- your compatriots are here. I think the big thing it's planet that you know the biggest mistake I think you make it's just kind of coming to the show and clean it up I you know plan Michael schedule at a time a lot of also a lot of -- -- people would email me and maybe we get togethers I would say you know figure -- -- you want me. Plan ahead so that genes and you think is you can you know -- host events I think one of the best ways if you wanna get a bunch of easy to her partner's eyes set up the dinner you know and invite people. The parties where happen. Through that's where the call -- that is definitely human that you agree the -- -- later Wednesday. The medium of greatest band with his dinner -- the end and -- and afterwards and attacked him in the matrix and we're really what that Paul Sloan is -- -- at CNET. -- -- is a partner over -- Dirksen. That is it for portrait of him for this show will be back next week it back in San Francisco. Stay tuned for buzz out loud at 11 o'clock Pacific if you're watching this live -- and we've got -- show every hour on the hour here from CES live until they kick us out. -- come back we'll be back and just go thank everyone.