Wednesday, January 5, 2011
Interview with Derrick Oien, Chumby
Story by Benjamin F. Kuo
In the world of Internet devices, there are PCs, mobile phones, iPhone and Android smart phones, tablets like the Apple iPadů and then, there is the Chumby. The device is an alarm-clock like, Internet connected electronic product developed by the firm of the same name, San Diego-based Chumby (www.chumby.com). The firm is now run by Derrick Oien, who an experience entrepreneur, who was the founder of Intercasting Corporation, and a member of the management team which sold MP3.com to Vivendi Universal. To better understand what the Chumby is, and what the company is up to, we sat down with Derrick to talk about the company.
First, for those who haven't seen the Chumby, describe what it is and the software behind it all?
Derrick Oien: The original concept of the Chumby was an Internet clock radio, bringing the clock radio into the Internet age. It does that by bringing information, such as news, weather, sports, as well as Internet radio, to the clock radio. The classic Chumby was a beanbag, which was superseded this year by the Chumby 1, which is a hard shell, combination computer, speaker, and clock radio. Over this last year, we also partnered with several companies, including Sony, which released the Dash, and Best Buy, which has two version of the Infocast which we power. The Infocast and the Sony Dash are more like a digital photo frame in terms of look and industrial design.
We always struggle with what to call the category of the Chumby. What do you guys call it?
Derrick Oien: That remains to be seen. Obviously, we call it internally as the Chumby. But, we think there are a variety of devices you could ultimately describe as Chumby-like. For example, there is the Chrome OS which was recently launched, which is Chumby-like. If you think about it, it's really a streaming Internet playlist. Some people position us as an Internet viewer, but the challenge with that is people expect it to be a tablet. Unlike a tablet, it is a background device. It is interactive, but it's really giving you a slice of the internet in the background. It's much like a music playlist playing in the background, updating you on Twitter, updates from ESPN, things of that nature.
You've been expanding the platform -- to the digital photo frames, autos, Android -- what's the strategy happening there?
Derrick Oien: Originally, people thought of the Chumby as just a hardware device. Steve Tomlin, the founder, envisioned the company as instead a network of content, and potentially a media network. The idea was to spread the Chumby's content in a number of places, free to the consumer, and monetize through advertising. With me coming on board, I'm taking what we've built so far and scaling it. I'm looking to drive the scale pretty substantially, using the experience I had at some pretty large companies like Vivendi, and take the core software and put it on a variety of devices.
How did you decide to join the firm and get involved?
Derrick Oien: Chumby invented a category. But, the challenge of the Chumby device is the question of where does it go. It seems like a simple problem, but if you're inventing a new category, how do you describe your device is a bit of a challenge. That was exciting to me. When you're in a startup, you first ask--will people buy the product? I've faced that with other startups. Clearly, Steve and his team were able to answer that with a big yes. The company has been able to hit some big milestones, such as partnering with Sony and Best Buy. Coming into the company, we have over 100,000 units in the field, and that's accelerating. The second question for a startup, is if a customer is willing to buy the product--can you scale it to millions of users? For me, looking to answer that question, the obvious and strong answer is yes. To do that, you have to find partners on the distribution and scaling side of the business. So, it was two pieces for me, the attractiveness of the startup opportunity, and the work the team had done. From the investor perspective, I knew Steve, because he had been on my board at Intercasting. Rich Levandov, who was on my board, was also at Chumby. I knew both of them, and I had great experience with them and their faith in me to take the company over at this point, and I was extremely comfortable they were very supportive of the company and its goals.
So, what's next for Chumby?
Derrick Oien: There's a couple of things. Obviously, we have a great opportunity to scale. We've also been looking at tablets--we've been really impressed with the attraction of the tablet, certainly with the Apple iPad, and the Samsung Galaxy, which has sold over a million units already. So we have interest in that category, as it gives us an opportunity to play where other people aren't playing. The second piece, are platforms like Android and Google TV. While you can't currently deploy Android application on Google TV, it's set up for that, and after the first of the year we'll start looking to help deploy Chumby partners on television. We're also working with other television OEMs, and looking to scale across other devices. In addition, we've got a new product we will release after the first of the year which we're pumped about. In a lot of ways, even though we now have a strong focus on software, we're not getting away from our roots and are doing interesting things on the hardware side. We think there are some pretty cool opportunities in the space.