Occipital has come a long way in 2009.  In late December 2008, we were running on fumes.  Our TechStars funding was spent.  We had recently made the hard decision to postpone fundraising, while a number of our cohort were closing their seed stage or series A rounds.  We had ditched the concept we had spent all summer refining.  Not that it wasn’t a good idea, but it required significant funding to pull off, and factors outside of our control made fundraising a virtual non-starter.

We were down to that last month where we could pay the bills with our personal reserves.  I had come straight from earning a stipend in the Intelligent Systems CSE PhD program at Michigan, which means my personal reserves were more oil slick than Alaskan Oil Reserve.  Vikas probably had a little more, but cost of living in NYC where he had been working put us on pretty even ground.

So we did what we hadn’t needed to do up until that point: we asked for a little financial help from family, the only people who really know what you’re capable of, and those who are the most bullish on your odds of success.  We opened a bank account and deposited 20K, in on a convertible note from my mom.  For what it’s worth, almost everyone in my family was willing to help, but we didn’t want to put more at risk than we needed to.

We did another thing we hadn’t done yet: we decided to make Occipital cash flow positive.  Yep, we just decided we’d go ahead and do that.  We joked numerous times about registering and publicly displaying status on ‘isoccipitalcashflowpositive.com‘ as a sort of way to induce pressure on ourselves.

We also tried to make a “business plan” for the first time in company history.  Ok, in truth it wasn’t really a business plan.  Vikas got assigned that job and as much as I tried convincing him to include businessey stuff, there weren’t any fancy growth charts or 5-year projections.  But it was our biggest effort to date in terms of showing the business potential of Occipital.

We had decided to build next generation augmented reality technology, but we realized doing it like we wanted was still going to require some money.

So we did something that didn’t require a lot of money.  On February 3rd, we launched an iPhone application called ClearCam.  At its core, it’s actually the beginnings of our next-generation augmented reality engine.  But you’d never know that from using it:  To users, it magically doubles the resolution of their iPhone 2G/3G camera.  It also takes photos faster than any iPhone application to date, and can intelligently select sharp photos.  Since the camera was perhaps the most-criticized element of the first and second gen iPhones, ClearCam was a hit, and has been downloaded 780,000 times.

There’s a premium version of ClearCam which unlocks a couple of features, and costs $9.99.  We had bets on how long it would take for anyone to actually pay us.  For one thing, the free version gives you all the premium features for 15 days.  For another thing, due to the low-level way we interfaced with the camera, we weren’t able to use the App Store for distribution, and we had to roll our own payment system.  So we figured it’d be maybe 24-48 hours after launch that the first purchase would come in.  In reality, it was more like 10 minutes.

And with that, we were cash flow positive.  Near-death averted.  We upgraded to Ramen noodles after consulting OBE-1.

We really wanted to get back to augmented reality.  We started to spend every waking moment thinking about AR with Paul Berberian and his longtime business partners.  We were onto a mindblowing AR concept that everyone was excited about.  We knew we could build it.  But alas, this required money too.  An introductory meeting was held with prospective investors, and the result was only half positive.  The technology risk was too much.  We could’ve kept pushing, but the rejection took the wind out of everyone’s sails, and we eventually parted ways with Paul after discussing at least 12 less-risky alternatives.  Although we never became business partners, Paul is still in many ways the most significant mentor we’ve had.

Fundraising hopes nixed again.  Back to bootstrapping.

ClearCam was still selling and we decided we could afford an office.  Up until then, we were office nomads.  Our lowest office experience is shown in this recruiting video from our dingy NYC apartment/office.   We moved into a new office with Ben and Dan from Devver, another TechStars 2008 company that builds Ruby developer tools in the cloud.

March 1.  We realized not one of the 30,000 iPhone applications on the App Store was capable of reading product barcodes (Natively anyway.  There were a couple that worked with an add-on lens).  Everyone thought it wasn’t possible without autofocus.  The best open source barcode project out there couldn’t do it.  But we figured we could.  I often say that “If you can define a visual recognition task well enough, we can build a computer program that does it as well or better than humans.”  In this case, we had to beat humans, because not even people can read barcodes imaged without autofocus a couple of inches away from the iPhone.

On May 15, we launched RedLaser for $1.99 on the iPhone App Store.  An iPhone barcode scanner that worked with a carefully-taken photo.  By that time, there was actually another app, pic2shop, by a computer vision guy in Belgium which could read barcodes, so we couldn’t say we were first.  Damn.  But we were more accurate, and we had phase-shifting updates planned.

May 28.  We had a prototype that could scan barcodes without the still photo requirement.  On June 16, the application was approved by Apple for distribution on the App Store.  Aha!  This time we were first: First realtime mobile barcode scanner that doesn’t require autofocus.  We also learned a lesson: it’s way harder to get press when you update an application, even if the update is more significant than the first launch.  That’s a potential caveat with the release-early, release-often strategy that we generally believe in.  But we did get a great piece of coverage.

We’re getting closer to a scalable business.  RedLaser, in its paid App Store and free more advanced Beta forms, has been installed on 95,000 different iPhones and has generated about double ClearCam’s revenue.

Occipital is morphing from an application company to a technology platform company that happens to make a few applications on the platform, too.   As soon as Apple allows it, we’ll be powering barcode scanning in three already-popular iPhone applications.  A key turning point will be when we generate more revenue from technology licensing than from direct to consumer applications.  Both in our own applications and applications built via our network of partners, we intend to make Occipital synonymous with seamless computer vision.  Barcodes aren’t the only thing we’ll teach computers to see.

What are we launching next?  Will we end up raising money or bootstrap all the way?  Are we finally going to launch something viscerally recognizable as augmented reality?

We have more than one thing up our sleeve, and the future looks great for Occipital, but I think we’re still in the crawler on the way to the launch pad.