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.

We are just starting the search to find an extremely talented full-time engineer to join our team in Boulder.

The spot will be an extremely crucial one – we need someone that’s both incredibly talented in our areas of focus, but also able to work alongside the founders at breakneck pace and long hours. You’ll need academic prowess and startup mentality. We’re looking for the best of the best.

We have mind-bendingly exciting products already in the works, but if we’re successful in finding the right person, we expect this person will be instrumental in helping us craft our future products, as well as the future of mobile visual search.

See the Founder-level Computer Vision Engineer posting for more information. And if you think you’ve got what it takes, apply online.

We had a great time this summer as one of the 10 companies that participated in TechStars. I took a lot of photos, and I finally got around to uploading them to the internets. However, these photos are a skewed view of TechStars because I mostly took photos when we weren’t working. So consider the following photos mostly a story of the 5 to 10% of the time we were goofing off.

Our team from the summer. Left to right: Gandhi, Jeff, Vikas, and Shun. This is actually one of Andrew Hyde‘s photos.

Soul Patch Concert

Unwinding at the St. Julien after the first demo day:

TravelFli showing off their EntrepreneurWear t-shirts, a counterpoint to VCWear.

Foodzie with Howard Diamond, one of the TechStars mentors.

Rock Band! Andrew Hyde is rocking out on the drums as usual.

Our official company book, it goes everywhere with us.

Andrew Hyde and Jeremy Tanner hanging out at the Bunker.

Jeff and I on stage at Boulder New Tech Meetup.

Hungry entrepreneurs feasting on Foodzie food ferociously. Alliteration anyone?

Tailgating in the parking lot before a Live/ Blues Traveller concert at Red Rocks with Ignighter.

Team Ignighter vs a hybrid Occipital / TravelFli team in a beer pong tournament at our house on the Hill in Boulder. This tournament was where BHARD was born.

Samantha Murphy, the Highway Girl, being amazing on stage at the Laughing Goat.

Our sublet for the house on the Hill ended 2 weeks before the final demo day, and luckily Foodzie let us crash at their place. Gandhi and I slept on the living room floor. Here is Gandhi curled up on the living room floor.

Shun and Jeff slept in the extra bedroom.

Practicing for demo day:

Foodzie’s awesome and adorable dog, Bently, who woke us up every morning in the living room.

The team practicing for demo day:

TravelFli prepping for demo day:

Foodzie with Brett Jackson.

A pizza box with a phrase very similar to “BuyPlayWin“.

Finally it’s Demo Day! Here’s Jeff on the way to the theater.

Team Ignighter looking sharp. Adam, the one in the futuristic coat, is saying “this guy knows what I’m talking about!”

TravelFli dressed appropriately.

Jeff presenting.

And then to unwind! Here we are at the Kitchen Upstairs.

Molly eating an entire ramakin of ketchup (thanks for teaching us that word Austin!).

Austin asking “who wants to go to Houston?”

Nerding it up at the Bunker by playing StarCraft with Devver and BuyPlayWin.

Occipital Founders vs Interns ping pong battle.

David and Jill Cohen invited us all to their beautiful house for an end of TechStars party.

David Cohen, executive director of TechStars, manning the grill. He’s saying “eat more, faster!”

T-Shirts from some of the companies.

Joe “two beer” McVicker from App-X talking to Tom Keller of IntenseDebate.

Ben from Devver saying to his girlfriend, “I’ve got something really important to tell you, my real job is as a backup Britney Spears dancer.”

And here is Ben showing off those dancing skills in the Cohens’ backyard.

And finally, the team at the end of TechStars having a well earned drink. It took me the entire summer to get Shun and Gandhi to drink with us. We miss you guys!

We decided to get an Android G1 phone for work, and it arrived today. I was excited that we had already received two text messages!

But not so happy when we looked closer. One was a message from T-mobile, sent yesterday, telling us what the phone’s number was. Useful — timely. The other message was from “FStick13″, also sent yesterday. Not so useful — but timely. Nice work, spammers, you beat the delivery guy. If only your talents were used for something a little more positive.

We moved to Boulder about 4 months ago to participate in TechStars. Before getting here, I didn’t know much about Boulder except that it was a liberal city near the mountains and it was home to the University of Colorado, the team that beat my beloved Wolverines in 1994.

What we found was a thriving tech startup community nestled up against the beautiful foothills of the Rockies. The tech community here is incredibly supportive and filled with smart, interesting, and fun people. The mountains are beautiful, the air is clean, people are healthy, and the local beers are awesome.

If you want to experience Boulder for yourself, 20 boulder tech startups are hosting an all expenses paid job fair for 100 kickass developers. Here’s what TechCrunch had to say.

One of the things I’ve often read about doing a startup is that there are amazing highs and disappointing lows. We’ve definitely had our share of both, and when things get tough I think about why I’m doing this.

What gets me out of bed in the morning (or afternoon if we’ve been up late working) is that we’re working on hard, interesting problems that have the potential to change the world in some way and that I get to work with one of the smartest people I know. It also helps that I have the support of my amazing family, awesome friends, and how we’ve become part of the great tech community here in Boulder (which means more friends and smart people!).

We’ve got some exciting things on the way here at Occipital, so bring on the lows – they’ll make the highs we reach even sweeter.