One of the things I realized after becoming a VC five years ago is that the investor life, just like the entrepreneur life, is made of ups and downs. And some downs hit you hard but that is also where the Entrepreneur/Investor relationship is put to serious test. But the fact is, as former Entrepreneurs ourselves, we will try as hard as our Entrepreneurs until there’s just nothing more we can do and we have been there for them until the very last days.
Looking back, it is no coincidence if the first 360 video published by Giroptic was a rollercoaster ride.
I had met with Richard Ollier at Euratechnologies in Lille, France, in March 2014 and was very impressed by his drive and domain expertise, with the vision that rectangular pictures and framed videos would soon be replaced by a more immersive 360 experience, made possible by ubiquitous mobile devices and “soon-to-be-released” VR headsets.
I quickly found out he had assembled an incredible team of R&D, design and manufacturing engineers who had been working together for 6 years producing 360 surveillance videos for real estate and businesses. They were the only company capable of assembling multiple images from multiple sensors in near real time (a few milliseconds) on a chip, without distortion, discontinuity and perfect color balance, and to generate 360 videos out of the box without any required post-processing.
They soft-launched their first consumer product on Kickstarter in spring 2014 and collected $1.4M in pre-orders in just 45 days, crushing all previous French crowdfunding campaigns and a worldwide record for a consumer camera at the time.
During the same month, they turned many heads at the Google I/O conference in July 2014 when demonstrating the first 360 live streaming into a VR headset.
The high consumer demand for Action Cams (this was peak GoPro by then) and encouraging Kickstarter results, the defensiveness and the readiness of their 360 technology were the market-fit signals we were waiting for and decided us to lead their Seed round. But they ran into a first road bump some weeks later when a retailer submitted a cease and desist order forcing Giroptic to freeze any further development and sale of consumer products. They eventually settled 5 months later, a few days before CES 2015 (where Giroptic won an Innovation Award!). We then moved forward with our investment process by spring 2015, and closed the seed round during summer with our co-investors 360 Capital (no joke), C4 Ventures, historical investor Finorpa and awesome Angels like Oleg Tscheltzoff and Aloe Blacc.
The seed round helped them ship the 360Cam by early 2016 and also achieved compatibility with the all-new 360 Youtube format. They received promising initial feedback on the product, were the first 360 camera sent to the International Space Station and made it to 2nd place in Richard Branson’s Extreme Tech Challenge. Unfortunately the audience remained rather small for an over-engineered (fully autonomous with battery, wifi, GPS, waterproof, accessories, etc) and of course overpriced ($499) camera. They immediately realized that the market was shifting away from a GoPro form factor (rather limited to ski, bike or kitesurfing sessions but neither suited for mass market adoption nor everyday usage) and gearing towards sub-$200 products with more everyday appeal. That’s how the new Giroptic IO was born: a $199 two-eyed beauty (which won the IDEA Design Award for this product), a thumb-size connected accessory for iOS and Android phones, with the native ability to take 360 pictures, videos and more importantly live stream directly into most social networks. The camera was developed and shipped in a whooping 6 months, on time, on quality and on budget! We simultaneously helped Giroptic open an office in San Francisco and recruit, starting relationship with retailers like Amazon, B&H, Best Buy, etc.
They won another award at CES 2017 for this camera and got spotted by Facebook for a secret partnership. That was Series B time, with existing and new investors FFP and BNP Development as well as other Angels.
3 months later, Facebook was announcing the new 360 live-streaming format for the Facebook feed, while giving away 4,000 Giroptic IO cameras to developers at the 2017 F8 Conference to boost adoption of the new format and stimulate the creativity of the developer community. Some saw this is as a new 360 selfie format (360-fie) or as the ultimate VR-ready reality capture device. In all retrospect, Giroptic couldn’t have dreamed of a better launch event, with so much exposure and good press through an amazing partner.
Then we quickly realized the market for 360 live videos was just not there yet. The server stats quickly showed that users were using the Giroptic IO mostly for 360 pictures, rarely for 360 videos and almost never for live streaming (which was the key differentiator of Giroptic and the most defensible). It is just too early for that format and even Facebook has realized this now. As an immersive media, it will take immersive devices such as VR headsets to make a difference, but the market is just not there yet, as quickly confirmed by the low level of online sales.
Giroptic made an ultimate pivot with an even smaller, cheaper, sub-$100 camera in partnership with Orange and released the new Ping app for 2-way 360 video calls but even that didn’t really move the needle and that was unfortunately not enough to keep the company afloat.
The entire 360 camera market represented 200,000 cameras globally last year and Giroptic achieved a 10% market share, which is a very decent score against US and Asia giants, but let’s face it: such a low number globally is a slap in the face for the industry as a whole. And that also explains why after 6 months of hard negotiations, all potential acquirers from US, Europe and Asia eventually dropped the ball…
In this industry, every failure is an opportunity to learn and here are a few lessons I am getting away with:
– Kickstarter is not at all a proxy for mass-market adoption. Kickstarter backers are typically geeks (what can I say, I’m one of them) willing to pay right away to be the first to get a new product. In fact, there is no correlation between a successful Kickstarter campaign and a successful mass-market company. Crossing the chasm is hard for any innovative startup and even harder in the fast-changing consumer hardware world.
– Marketing hacking is everything in this business, in a world dominated by US and Asia brands so if you can’t outspend them, you need to outsmart them. Giroptic impressed me several times in that regard!
– The working capital issues for such businesses can be overwhelming and are not or partially addressed by banks, dramatically impacting the growth of such companies. It is a catch 22 for a young startup and raising more capital is sometimes the only option (when they can).
– Like 3D printing and VR, mass adoption in new consumer segments can take much more time than expected and that is totally outside of a manufacturer’s control. That is the price to pay for investors like us scouting all of the emerging sectors and innovative technologies… (Partech’s first investment in AR hardware was… in 2001!).
Although the death of Giroptic is a major disappointment for all of us, investors and partners alike, I feel privileged to have worked with such talented, hard-working and resilient leaders like Richard Ollier, Arnould de Rocquigny, Matthieu Grosselin and CFO Romain Seguy, who I would gladly back again in the future!
Their entire story is at www.giroptic.com as well as the LinkedIn profiles of every team member. We have no doubts that these talents will find a new home soon and we will actively advertise across our 140 portfolio companies worldwide, as well as on www.qapa.com, one of the largest European recruitment platforms (backed by Partech).
Please do reach out for introductions.
With much respect for the all the hard, resilient work and the great — although unrewarded — achievements of this awesome team.
That’s a good bye but not farewell!