Bug Labs Seeking To Creep Out Of Shadows
Market Watch, October 18, 2007
By Ben Charny
When Peter Semmelhack was first raising money for Bug Labs, his new consumer-electronics company, he didn’t have a working sample of what the company made to show potential investors.
So he used a set of children’s wooden blocks instead.
Two years later, and as the company gets ready to release its first real products, the blocks Semmelhack toted while visiting angel investors now serve as a perfect metaphor for what his company is trying to do.
From a single set of blocks, a child can on their own create an infinite number of worlds to suit their tastes. Semmelhack said the same is true of the New York-based company’s collection of electronic parts, which anyone regardless of their level of technology expertise can assemble into their own personalized electronic device.
Put another way, Bug Labs is among the first to try a hardware-centric take on the “mash-up,” in which various different Internet-based services are pieced together to create a unique one.
“We’re kind of a Lego set for electronics,” said Semmelhack, Bug Labs’ founder and chief executive. “We won’t define the final products, you do.”
Giving consumers a freer hand in building and designing their own gadgets is not a new idea. It’s helped everyone from car makers to computer manufacturer Gateway Inc. become leading providers.
What makes Bug Labs different from the rest is how it’s providing the building blocks directly to consumers and how it leaves it up to them to assemble the parts in any number of ways.
They can also tear the thing apart and rebuild it another way, if they like.
By year’s end, the New York-based company will release its initial building block, called the Bug Base, which is a fully programmable computer based on Linux, an open source operating system.
Consumers can then literally snap on modules to come to add new features.
So far, Bug Labs plans on separate modules for adding a global positioning system, a digital camera, a touch sensitive screen and a motion sensor.
It plans to release up to four additional add-ons every three months thereafter, and Semmelhack said there are already 80 potential ones in the pipeline.
The sky’s the limit as to what enhancements the modules will bring, so much so Bug Labs playfully lists a “teleporter” to come on its Web site.
That’s obviously a joke, but within the realm of possibility now is a geiger counter and a carbon monoxide detector. “The vacuum clean module? Who knows,” Semmelhack said.
The company’s backed by investments from Union Square Ventures, the New York-based early stage investors whose portfolio includes del.icio.us., the Internet bookmark sharing company recently purchased by Yahoo Inc.
Additional investments are from Spark Capital of Boston and Robert Young, the founder of open source Linux software maker Red Hat Inc.
Semmelhack and others interviewed for this story would not reveal how much has been invested in the company.
“It’s certainly our most ‘out there’ investment,” said Fred Wilson of Union Square Ventures.
“Some of our investors have a hard time getting their head around it. It’s all about what people will make with a Bug, not what a Bug is when it comes out of the box. And I like that.”
Bijan Sabet of Spark Capital said to see the potential of Bug Labs, one can look no further than the reaction to Apple Inc.‘s iPhone, the combination phone, digital media player and Web surfing device.
Within hours of the iPhone’s first sales, developers had found a way to add their own features to it, and in spite of warnings from Apple.
“I think it’s quite amazing that thousands of iPhone users actually hacked their phone,” Sabet said. “I did, too. Consumers are demanding more control in their products, services, applications and data.”
To be sure, Bug Labs faces lots of challenges.
For instance, it’s relying on outside developers to come up with important breakthroughs, including the functions of new modules.
By basing their gear on Linux programming, Bug Labs is also hitching its star to programming that is far from mainstream, and often a difficult one to develop in.
But for now, the company’s drawing lots of interest - and buzz.
Dave Winer, the investor, technology creator and former research fellow at Harvard Law School, is among Bug Labs fans.
“It’s a powerful idea,” he said. “I’m really glad someone is doing this.”
http://www.buglabs.net
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