Mister Beacon Episode #18
Bluetooth Mesh Beacons - BeaconixOctober 16, 2016
Bluetooth mesh offers advantages for management of beacon deployments, enabling new use cases and support for the Physical Web. We talk to the CEO of Beaconix whose early work enabling large scale location based campaigns convinced him to commercialize a mesh solution.
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Daniel Dreymann 00:04
In order for beacons to be a scalable solution, you have to manage them from the cloud. So the idea is to use Bluetooth not just in order to broadcast the payload of the iBeacon, or the Eddystone format, but also to connect to neighbors, and to relay information that's being sent from the cloud to those individual beacons. In fact, your beacons are connected to the cloud allow us to do things that are previously impossible with standalone beacons such as two way communication with the handset, which is very useful in a situation in which the handset is not connected to the internet.
Steve Statler 00:48
You're listening to The Hitchhiker's Guide to the Beacosystem with Steve Statler. Welcome to Episode 16 of The Hitchhiker's Guide to the Beacosystem. My name Steve Statler of Statler Consulting, we're doing this in partnership with Proxbook. In fact, next week, we have the CEO of the company that funds Proxbook is going to be on but this week, we've got Daniel Dreymann, who is the CEO of Beaconix. That's one of the companies that he's received on and the topic that we're going to be discussing is Bluetooth beacons and mesh networks. So in my humble view, Bluetooth beacons are very cool. I think mesh makes them even cooler, even more internet of things. And so we'll be learning a bit about that. So Daniel, welcome to the show.
Daniel Dreymann 01:45
Thank you for having me.
Steve Statler 01:46
I'm excited about what you're doing. And I think we should probably start off with a brief explanation of what Beaconix does. And then I'd like to get a bit of a bit more background on the other company that you're CEO. But first of all, what does Beaconix do?
Daniel Dreymann 02:03
So Beaconix offers tools to manage, because remotely, you know that there are multiple ways to look at the company as a technology company and the Bluetooth mesh implementation that we developed, but at the core of it. The idea here is that in order for beacons to be a scalable solution, you have to manage them from the cloud. And in an effective way, reduce the total cost of ownership for a practical, large scale implementation. And that's what Beaconix does.
Steve Statler 02:40
So the core of it is management of beacons using mesh technology. And do you make beacons?
Daniel Dreymann 02:47
Yeah, so as of today, we sell a complete solution, where we offer both the hardware and the software and the services that goes along with such a solution. But we're also working with OEMs. And you will find our software embedded into beacons manufactured and sold by others. So there are two ways to work with us. You can get from us a complete solution, how to include it. And you can work with another beacon manufacturer and just find our technology embedded into it and then use our cloud based systems with somebody else's beacon. When we sell our beacons, there's no special sauce on the hardware side. So the hardware is the same commodity beacon that everybody else is using. And all the intellectual property is really in the software that makes those beacons instead of being standalone devices, cloud connected beacons that can be controlled and interact with the cloud on a constant basis.
Steve Statler 03:52
And just peel open this this mesh concept, what does a mesh of beacons look like?
Daniel Dreymann 03:58
So it would be impractical to have every beacon connected to the internet with its own Wi Fi or power or Ethernet connection. So our approach to managing beacons remotely is to have a single element in every venue, which is connected using power or Ethernet physically to a router or to a switch. So to the back end of that particular venue. And these elements that we call the controller connects over Bluetooth to beacons that are in relatively close proximity. So let's say up to 20 meters from the controller. But then those beacons in turn, can relay information that they receive from the controller to beacons that are further away from the controller and so on with multiple hops, you can cover a very large venue such as airport stadium, a big box, retail mall, and so forth. So the idea is to use Bluetooth not just in order to broadcast the payload of the iBeacon or the Eddystone format, but also to connect to have neighbors and to relay information that's being sent from the cloud to those individual beacons.
Steve Statler 05:07
So we have beacons that are talking to each other as well as talking to the phones. And over that connection, they can do a number of things, they can presumably propagate updates to their configuration to the firmware. Anything else?
Daniel Dreymann 05:23
Yes. So, first and foremost, you can do firmware updates. with the press of a button, you can update your entire fleet of beacons with the latest firmware, extremely important for security reasons. And for advances not to match whatever Google and Apple you know, are going to keep innovating in that field, then you can individually control every deacon in terms of the content, which is broadcast by the beacon, whether it's an ID or URL, if we're talking about Eddystone URL beacons, the power level, so oftentimes in detail, merchandising, you know, we change and suddenly a beacon that was transmitting at a certain power level needs to be configured to transmit at a higher level or at a lower level. And typically, a retailer would send a technician to the store to go and update the configuration for the beacon, we can do it remotely. Now, the fact that beacons are connected to the cloud allows us to do things that are previously impossible with standalone beacons, such as two way communication with the handsets, which is very useful in a situation in which the handset is not connected to the internet, either because you're the basement of a department store, and you're not going to good signal, or you're a roaming tourist, you know, they just landed in an inner country in which you don't have a data plan. So we can use beacons for that as well. And that is an entire concept of real time location services, in which the beacons are not just being picked up by smartphones, but can actually listen to beacons in their vicinity, and report back to the cloud, what they're seeing. So an example for that would be location of patients and off capital equipment in the hospital, where every patient has a small dkn commodity beacon standard, let's say I became attached to the wrist and every capital, every piece of capital equipment will also have a beacon attached to it. And stationary Beaconix beacons, as on the walls will simply locate the movement of those beacons and report it back so that every moment in time, you'll be able to know where people and equipment is located, which is again, a new approach to using beacons for remote, fully fabrication services.
Steve Statler 07:51
Yeah, I think this is a fascinating application asset tracking, whether it's a secret or not, but this is really what's been driving the bulk of the sale of beacons. I mean, you only need so many beacons to cover a store, but you start attaching beacons to assets and you can get into the 1000s very quickly. So for companies that are in the business of selling a lot of beacons, the companies that have sold a million beacons, and there are companies out there, they've they've done that through tracking assets. And so this is interesting. From that perspective. I think it's also fascinating in terms of showing ROI and some real business benefits. And sure there's real benefits from a marketing perspective in the in the retail applications, and we'll, we'll talk about that. But from a consulting perspective, actually, one of my clients is focused on this area. And if you think about what you can achieve in terms of finding things faster, if they're valuable things, you can speed up workflows, there's a lot of business efficiency, so rather than kind of speculating on product left, which is is challenging, if you can look at efficiencies and see how we can do things faster, lose them less often, then there's a clear ROI there. So I think it's great that you are focusing on that as a use case, very interesting. Let's, let's just take a step back and tell us how you ended up founding Beaconix and what was the genesis of this idea?
Daniel Dreymann 09:23
So that's a good question. And you know, sometimes serendipity plays a big role in life. I've been involved in marketing and retail for for my entire career. But for the last six years, I've been running a company which I also co founded called mu Wingo, which provides platforms that enable retailers to engage their customers. One of our largest customers is a leading quick service restaurant that uses our platform to engage their customers over a mobile app. And when we started using mobile to engage customers, we did a bunch of geofencing. You know, simply using GPS. And that proved very effective, but it had its limitations. For example, in the fast food scenario, you cannot know whether the customer is in the drive thru, or insights into the restaurant or the counter. If the restaurant is not, you know, in its own building, but it's in a food court in a mall, you actually cannot know whether the customer is at the restaurant or shopping at the gap. And then beacons came. And we saw an opportunity to have much more accuracy and to to come with use cases that are even more powerful with, you know, indoor accuracy of location. But we immediately found that those customers of ours that piloted the beacons didn't see the technology is something viable for large scale deployments, because of two issues. One is reach. There's only so many people that have downloaded the retailer's application. And the other one is the cost of management. So the reach is being resolved by the industry. So if you think about products, that enables you to reach customers, not on your own app, but by I think a proximity advertising network in which you can leverage, you know, popular media apps, and so forth. And if you think about what Google is doing in terms of nearby and the Physical Web, where you can use beacons, for people that did not previously downloaded your application, I think that this this early problem that beacons found, which is a problem, which is being solved by the industry, big time by an order of magnitude. The other problem is the problem of the total cost of ownership. So if you have 500 stores, and you install 20, Deacons in every store, and now you need to do a filmer updates and sustains the technicians to you those 500 locations and spend a few hours in each one of them to update the beacons or you just sporadically need to grow or to update a set of beacons, this becomes unmanageable. So you know, I will kind of spreadsheets that show that the initial cost of installing the purchasing the beacons and installing them pales in comparison to the cost to the annual cost of managing them. So I didn't really see a solution for that, until against serendipity. My next door neighbor, who is a good friend of mine, and a wonderful engineer, very smart, developed a Bluetooth mesh solution for non beacon application for some industrial applications. And well, while riding our bikes together, and comparing notes about you know, how was unique, I was very weak, we came to the conclusion that the technology that he had, and the problems I was facing, are really a match in heaven. And that's how we decided to create a new company to focus just on that solution, which is remote management of beacons. Obviously, once we can remotely manage those beacons remotely, other opportunities arise from the fact that those beacons are cloud connected. So beyond just reducing the total cost of ownership, we can do other applications. But at the core of it, the genesis of the company was a match between the technology and the problem. That seems to be predestined.
Steve Statler 13:40
I think this is fascinating. I think it's a great sign that our industry is starting to mature that we're going beyond just the very basic essence of proof of concept use cases. And you've, you've done it, you've worked with some really large companies that deploying beacons, and you've seen the problems and this new company is looking at solving them. Mesh totally makes sense. And actually, you know, I was referencing my clients looking at asset management, and they, you know, one of their issues is it's a warehouse, they don't have Wi Fi, they're the connectivity is, is poor. It's a Faraday cage. And so this is, this is a really interesting application for that. What are the challenges that you have to overcome when you're building a product that implements mesh? It sounds like the perfect solution. I'm sure that there's some problems.
Daniel Dreymann 14:30
There are a lot of problems and but you know, as an entrepreneur, those problems are opportunities. And so what we have is we filed a large number of patent applications on the way to resolve those problems. So some of the problems are resilience so that our mesh is self configuring and self healing. So when an element of the Mesh node goes out of order, it doesn't bring the entire mesh down. With it, we can route At around it. You need resilience for noisy environments. So you know, in your lab when the only Bluetooth elements are your own, it's one thing when you go to real implementations and there are lots of other devices that you have no control over yearns to have protocols that will allow you to basically survive in a hostile environment. And then one of the biggest hurdles to, to implementing a mesh of beacons is battery life. So, when you use beacons that are power, AC or USB, that's not an issue, you have as much juice as you want. But in real life scenarios, you don't have this luxury, you bound to have a large number, a large percentage of your details to be confined to, you know, a battery powered solution. And a naive implementation of the mesh would maybe make it impossible. So because the mesh is much more demanding than simple beacons, that are just broadcasting the payload, the battery life would be puny. So some of the innovations that we have a ways to utilize beacons that are powered by batteries in a mesh environment, in a way, which is efficient and prolongs the battery life, the autonomy of the speakers.
Steve Statler 16:40
What sort of battery life are you seeing at the moment from beacons that are participating in a mesh.
Daniel Dreymann 16:45
So our goal is to have before the end of the year, a solution for beacons that will survive on two double A batteries for over two years, while participating in a mesh. And one of the realizations that we had is that, you know, some people are competing on battery life. But unlike fumer, updates and other things, where it really wants a technician, just replacing the batteries in the beacon is something that can be delegated to a shop manager, you know, somebody who's not very technical, this is no different than replacing the batteries into a fire detector that you have at home. And therefore, we think that providing beacons that have a two year autonomy is something that's commercially viable.
Steve Statler 17:35
That makes sense. And what stage are you at in the in the development process, where's the product?
Daniel Dreymann 17:42
We are now in trials with, you know, select customers. We are doing trials with some very large retailers with OEMs that are testing our software to embed into their own hardware. And with application vendors, which are faster channel because because Onyx is really not providing, you know, full blown solution, we are an infrastructure layer. If you want to do indoor navigation, you're going to buy it from an indoor navigation vendor, if you want to do payment. With beacons, you're going to do to payment vendor, if you're going to do mobile engagement, you choose a company such as Boingo, or one of myriad companies in the field. So they can see all those companies as channels for the Beaconix. And we're in trial with those three buckets, you know, so retailers, OEMs solution providers, we are not yet shipping product at scale. This is something which we will start doing in the beginning of 2017.
Steve Statler 18:47
All right, and where's the company in stage in terms of people, fundraising, that sort of thing.
Daniel Dreymann 18:54
So we're based in Silicon Valley, and the core team is a team of five. Mostly engineers, I'm the only guy who doesn't call the lid on. Do I'm an engineer by background. But it's been a while since I've written a piece of code. So we're five engineers here. And then we have a team in Ukraine, which supports us with a lot of development people that we we've been working with for a long, long time. So far, we've been self funded. We are now in the process of raising the major round to remove from trial to production. But you know that that's where the company.
Steve Statler 19:42
Very good and exciting time and where do you see this going? What are the some of the things that you you want to do in terms of developing the product? I guess you got to launch it and anything else you want to talk about?
Daniel Dreymann 19:54
So you know, I think one of the The hurdles that the industry is facing is around standardization. And I think that even the management of the beacons is something that's going to be standardized. So obviously want to put forward our technology as the basis for a forthcoming standard of how you manage beacons from the cloud. Exactly how we do that, whether it's under the tutelage of some type of, you know, seeing, or we open source some of the elements, this is still to be determined. But I think it's very important for any company that field to play nice with the other ecosystem. Vendors, this is something big. You know, I think we keep talking about retail, because it's one of the obvious applications for beacons. And because I'm by no means limited to retail. But if you think about it, no Software is eating the retail world. You see, Walmart, closing stores, and Macy's closing stores, and virtually all the department stores announcing that they have losses, and they don't have a level playing field, right. So if you're an E commerce player, you know everything about the customers, and you're able to tarot offers for those customers. While if you're a brick and mortar retailer, you know, nothing you don't you don't know who the people that go to your door. And you need tools, both in terms of analytics, and in terms of improving the shopping experience, which is another thing that retailers need to do in order to win or to lose less against the E commerce players. So it's a huge multi trillion dollar market that is craving such solutions. I think the beacons are a critical tool for great brick and mortar retailers. You know, when they try to stem those losses, and no single company is going to provide all the solutions. It's an ecosystem play. We believe we're going to be an important player in that ecosystem, but we have no illusions that we buy ourselves can provide all the answers to the questions.
Steve Statler 22:09
Last question you you touched on the standards for management, and obviously, Google started doing some work in there filling in the gaps that were left by Apple. So that's kind of interesting. And you've also talked about, you made a reference to Eddystone URL, what, you know, how does what you're doing fit in with Eddystone URL and any particular implications of using mesh and, and URL beacons?
Daniel Dreymann 22:38
Well, I'm glad you brought it up. Because there's a spec assert a certain value in being cloud connected in a world in which you don't have an application to translate with the beacon is sending. So if you think about Eddystone URL, one of the issues with it is that if the URL is fixed, you provide business intelligence to your competitors, right, because they can sniff those URLs and know exactly where your customers are located. And also, because you rely on the redirections on the back end. And because Google is caching this information, it's difficult for you to change the information on a dime. So one of the demos that we did is a beacon on a platform, that analysis directly in your notification area in on your Android that you train is arriving in five minutes, your train is arriving in three minutes and trains arriving in one minute. There's something you cannot do when you don't control what the beacon is actually sending. And you rely on some cached information delivered by proxies. So our ability to drive the content, which the beacon is transmitting in real time, opens the door to applications centered around Eddystone URL, which is simply not possible when you have a dumb beacon or a standalone commodity beacon. Another thing where we're taking the product is Bluetooth, web, or web Bluetooth. I'm not sure exactly how they're going to call it. So today, the beacon just transmits a URL, and you rely on the handset to go and fetch information from the internet. But what if there was a dialogue between the handset and the beacon, Google calls that effective beacon, but in their mind, it's a beacon that's been pre programmed with scripts, you know, in order to have this interaction with the smartphone, because in our case, the beacon is connected to the internet, those scripts don't need to be fixed. It's not that you need to program the beacon, ship them and forever be confined to whatever you scripted them to do, but basically can teach those beacons periodically new scripts and allow them to engage with customers on a local basis using this Bluetooth web in A more intelligent way. So I think it's very, very exciting to move towards those standards, those implementations of interactions between basic browsers and beacons, and 2017 is simply going to be fascinating here.
Steve Statler 25:15
Yeah, I think 16 is pretty fascinating and 17 is going to be even better. Daniel Draymond Beaconix, really interesting company, love what you're doing, I think mesh is going to be a key part of the landscape going forward. And congratulations on being one of the first to bring this to market.
Daniel Dreymann 25:35
Thank you so much. Thank you again, for having me.
Steve Statler 25:55
So are you a very musical person?
Daniel Dreymann 25:57
I'm not a very musical person. I like music. But it's very diverse. So I'm listening to the same rap songs that my daughter is listening to, and to classical music as well. So it's a little bit of everything.
Steve Statler 26:14
Fantastic. So if you had to choose three songs, which would be the three that you took to Mars, and why?
Daniel Dreymann 26:24
It's difficult. Question three is very limiting. So but if I have to go with three so one would be definitely a song from one of my favorites troubadours and I have to select between, you know, Jack Welch, or Leonard Cohen. And I don't know exactly which song you know, from either we stake then the second one would probably be the Adagio, which is attributed to the nominee but was actually composed by somebody else. Because I think it's a very suiting thing. And if you're, you're going on a very long voyage to Mars, you're on something you know, you can come to and the third one would probably be Sultan of swings by Dire Straits because this is the most humbling song I believe, when you hear Mark Knopfler you know, playing the guitar, I want to realize that no matter what are we undertake, is no field in which a will be as good as ease with the guitar. So that's, that's when you know, I kind of got humbled by that. But that's a song that's following following me.
Steve Statler 27:32
Well, I think you're the first of our guests to choose classical and it's very eclectic mix. I like it.