The Internet of Things (IoT) is a growing network of interconnected smart devices. The transfer of data between devices is a crucial process for IoT systems — and the amount of transferred data is expected to grow as more and more devices become interconnected. Poor connections or large data packets can result in slow or delayed processes and expensive costs for end-users.
AtomBeam has developed data compaction software to address the need for fast and secure IoT data transmission. We sat down with co-founder and CEO Charles Yeoman to learn more about this cutting edge technology.
Note: This interview was conducted over phone and email. It has been lightly edited for clarity and length.
Can you give us a brief elevator pitch for your company?
We are a team of highly experienced senior managers, software engineers, mathematicians and sales professionals who have a truly new and radically efficient software that addresses key business process issues around machine data. We have seven issued patents that protect a cutting edge, machine learning enabled technology that reduces machine/IoT data by 75% while adding ultralight security. No other technology — including compression — can compare to AtomBeam’s ability to reduce transmission costs dramatically and expand bandwidth and/or data speed by a factor of 4x while driving massive efficiencies in networks. Our technology is currently being tested in proof of concept studies by several major electronics companies, and with early adoption by important manufacturers, AtomBeam hopes to expand its market presence rapidly. AtomBeam has the long term potential to be in a very wide variety of machines, including cars, phones, robots, UAVs, smart cities and much else.
What inspired you to take the leap and build this company?
I have much experience in management and finance with several companies, both large and small. I had been CEO of a prior company but stepped away to become chairman and look at other opportunities that had become available. I knew my cofounder, Asghar Riahi, from our kids being in the same Boy Scout troop (we live in the same town east of San Francisco). My wife suggested I have lunch with him to help him out with a business idea — Asghar has a ton of experience in Silicon Valley but not a lot on the business side and knew he needed help. When he pitched me on the idea (after I swore there was NO WAY I would do a startup), I was knocked back — this was too good to be true. So I talked to patent attorneys, technology guys I know and some computer science professors to find out what they thought. And they all agreed it was an original idea. I pitched an investor who had backed me before, and he got it right away and wanted to back us. So I took a deep breath and dived in.
What past experiences prepared you to start, build, and lead your company?
I have been COO and CEO of three successful prior companies, after working on Wall Street as an investment banker. I also have an MBA from Stanford and many classmates and other friends from past experiences who are leaders in business and technology. I do not want to be immodest, but I think I am qualified to lead this company.
What is your vision for the future of the industry you are operating in?
We are a truly unique animal, and our extensive patent portfolio we think will help keep us that way. Our future is, however, tightly bound with IoT, the internet of things. IoT data is machine generated and is by far the fastest growing data category, estimated to reach 90 zettabytes of generated data by 2025. To give a sense of how much that is, the storage capacity of every data center in the world is less than two zettabytes at present. Moving all of that IoT data around and storing it efficiently is a major issue that AtomBeam can dramatically impact. Our technology has the potential to be in many, many categories of these things: cars, phones, robots, smart cities and factories, satellites and much else. AtomBeam’s code is small, operates autonomously behind the scenes and with very light computing and memory requirements, giving it the potential to be virtually universally applied.
Who is on your team and how did you come together?
We have 10 full time people and about 12 part timers. Of the full time people, I am the only full time administrative person. We have one full time and a few part time sales and business development people. The rest are in architecting and writing software, including several part time, very high end mathematicians. We also have a number of terrific interns who have been a godsend. We have a part time person who keeps our books and who handles our taxes. We have a very distinguished group of advisors, including people who advise us on various specialities that they have: software development, IoT, and general business and financial skills. It is a very strong group, assembled by a combination of contacts that I have, Asghar has on the technical side, and a kind of evangelistic “this is cool – come join us” attitude that we share. While I might recruit someone into the group who is excited about what we are doing, they then often bring a friend who has high level expertise as well who becomes a formal or informal contributor. It is exciting and fun to be part of something that we think will change the world.
Do you have any competition, if so, how do you differentiate?
That is always a tough question for us, because there is no way to significantly and consistently reduce the size of machine data other than our method, and our method is protected by seven issued and more pending patents. Consequently, we like to point to building more bandwidth, like an AT&T or a satellite company would do, as the main alternative. We, however, are just software, and consequently our cost of goods is a bit lower than building a 5G network or launching another geosynchronous satellite to achieve similar end results. To a lesser extent, we can be compared to IoT encryption solutions. While we would not claim to be nearly as secure as a sophisticated post-quantum encryption, for keeping data secure that comes from your cornfield informing you of the moisture level we are “good enough security” — to use the technical phrase — and security for us is a side benefit. Overall, though, we are pretty much complementary to virtually every alternative. If a customer needs a fast network, we are a pretty cheap, fast fix that they can continue to use even as they move to faster hardware, with the added benefit of added security.
What does your business model look like?
We invite prospects to test their data samples on our web based interface, discovering the degree of compaction they could expect to achieve and watching data transfer in a simulation. Once they are hooked, they can obtain a “software development kit” (SDK) normally for a modest charge, along with help from our engineers to help them test our software in their own lab. Once this phase is complete, they are ready for the final, most realistic proof of concept — provisioning of our software in their “stack.” In this phase, they add our software to the firmware on their device and then test it in a field environment, for which there is a larger fee for us. If the decision is made to go forward with AtomBeam, the customer will pay an annual fee for each server provisioned with AtomBeam software and also pay a per connected device, or “volume” fee, that varies significantly based on the kind of device that is used.
What brought you to equity crowdfunding and how do you intend to use the money you raise this round to scale the business?
AtomBeam has a revolutionary technology that has unquestionable value to users, but it is truly unique. We have not built a better mousetrap. We invented the mousetrap, and venture capitalists want to know if anyone will pay us for it, regardless of the world being overrun by mice. So to attract venture money, we must first sell our product to large, reputable customers, and to do that, we need a modest amount of capital. Crowdfunding seemed like a good choice, and the response has been gratifying. We have also taken in significant money ($1.6 million) from angel investors and management, including my co-founder and from me. The money raised in this crowdfunding effort, therefore, will be applied to key engineering, sales engineering and marketing initiatives to make sales happen as soon as possible.
What do you want potential investors to know about you and/or your company?
First, I would like to point out that our vertical focus at present is on telematics, which is the technology of sending, receiving and storing information using telecommunication devices. We have a major Korean company that is deep in testing right now for this application, and we also have a Fortune 50 heavy equipment maker, an electric bus company and others testing our software for potential inclusion in their products. Our marketing is focused on telematics, but the software, without modification, can be used for any machine data that has patterns. So, we have a major Japanese electronics maker testing it for smart manufacturing and a major French company planning to include it in their smart building products. Our technology operates at the bit level, making it extremely versatile and of potential use for a huge variety of applications.
One more point to mention. AtomBeam was recently selected to join Stanford’s accelerator, StartX. StartX is one of the most selective accelerators (8% of applicants, which are generally required to be Stanford alumns or otherwise affiliated) and consequently are high profile with respect to venture firms and big companies. Their track record is extremely good — 92% of their companies have either been acquired or are still growing since their founding in 2011, and the average StartX company has raised $11 million. We are already receiving many benefits from our affiliation, including help from dedicated Amazon Web Services employees, $50K in AWS credits, referrals to prospective customers, help in pitches and much else.
As you think about the business 5-10 years down the road, what do you see exit opportunities looking like? have you set any future goals for the company?
We have already had hints from the big companies testing our product of their potential interest in acquiring the company. We think it is too early for that, but it gives an indication of the prospective interest we could garner when we get there. My guess is that we will be taken out in three years or so. It could easily be more, and possibly less, but some of our most sophisticated advisors agree that is a reasonable assumption. That being said, once we start moving forward with sales to marquee companies, we would expect that our value will increase, capital will be easier to find (we have a number of venture firms that check in with us at regular intervals for when we get a bit further down the road), and we think we will be a desirable candidate for a big company wishing to build a sustainable competitive advantage. It is our hope and belief that we will have plenty of options.
We at KingsCrowd are excited to see where Charles and his team take the company. AtomBeam is currently raising on StartEngine.
About: Olivia Strobl
Olivia comes to KingsCrowd with a background in venture capital and technology. She spent time at Glasswing Ventures, an AI-focused venture fund in Boston, before joining the KingsCrowd team. There she helped develop machine learning algorithms for the opportunity qualification of preseed and seed-stage startup companies. Prior to her time at Glasswing, Olivia worked in a lab studying the neural correlates of attention. She holds a degree in Neuroscience from Wellesley College.