Israeli company OrCam is the second company founded by Mobileye (NYSE: MBLY) entrepreneurs Prof. Amnon Shashua and Ziv Aviram. OrCam and its solutions are being marketed directly to the end consumer, while Mobileye mainly sells its solutions to auto manufacturers and electronics players in the auto industry. The name OrCam, incidentally, is a combination of the Hebrew words "or" (meaning "light") and "cam" (meaning "rise"). The name selected by the company founders expresses their wish to enable people with vision disabilities to do more and succeed.
Mobileye has already held its IPO, and has a $9 billion market cap, while OrCam is still a private company, but it will probably not be one for much longer.
OrCam has developed a computer vision device that includes a miniature video camera and processing unit that can be attached to eyeglasses. Through a computer vision algorithm, the device is able to vocalize texts it encounters, such as street signs, a restaurant menu, a newspaper, or a book, to those with vision problems. It can identify supermarket products and distinguish different denominations of bills. The identification is communicated to the user verbally with almost no delay from the moment the information is requested by pointing. The device weighs a very light 14 grams. Like every electronic device, it must be kept charged.
The company has two products. The first, OrCam MyEye, is designed for reading texts in newspapers, books, documents, and signs; identifying products at home or in a store (such as distinguishing between a can of corn and a can of beans); and identifying people's faces (mainly for people with face blindness syndrome – an inability to distinguish between people). The second, OrCam MyReader, is designed for reading texts on smartphone screens. A third product still in development, OrCam MyMe, which can be worn on a shirt, provides the user with information about almost anything, from the food he is eating, the person sitting in front of him, the time he spent in his recent sports activity, etc. OrCam's solution still cannot be used to watch television, because you have to point to the screen from close up.
OrCam unveiled the next generation of the device, which includes a camera and loudspeaker attached to the user's eyeglasses without being intrusively visible, at the recent CES exhibition. This version includes a touch sensor that makes it easy to operate the device. With less than half the weight of the current OrCamMyEye model, the device is attached to and detached from the frame of any eyeglasses using a magnet.
In effect, Shashua and Aviram have translated the computerized vision of Mobileye for those with impaired vision (including the blind). There are 285 million such people worldwide, 39 million of them completely blind, while the other 246 million have various vision disabilities, according to the World Health Organization (WHO).
This market is big enough for the company, even if its market share is only a few percent. At the same time, the burden of commercial proof is still on OrCam.
What Mobileye and OrCam share, and the reason why we chose to tell OrCam's story now, is that 2017 will be a very important year for both of them. Mobileye will test the autonomous vehicle it developed in cooperation with BMW and Intel on the road for the first time this year, while OrCam will make its first massive penetration of its target market, break even or make a profit, and prepare an IPO - yes, an IPO.
"OrCam has very large potential," says Shashua, who is the company chairman and CTO. "Our plans for 2016 were fully achieved the way we wanted. If the plans for this year are also fulfilled, OrCam will hold its IPO in 2018. I believe that it will achieve as much as Mobileye."
We have no crystal ball, but if the company submits a prospectus for an IPO in the US capital market, it will come as no surprise if the sterling reputation of its two founders makes the task easier.
"Mobileye and OrCam are very similar," Shashua says. "They're both doing something that goes beyond economic success. Mobileye is creating technology that saves lives, and OrCam is creating technology to makes the lives of the visually impaired easier. The employees of both companies like being part of something that helps others, and even saves lives. For example, OrCam is currently working on a line of products that is more like a gadget, not something really essential, and they don't like it. They want to go back to working on the line of essential products. That's what they tell me."
"Globes": That is surprising and encouraging.
Shashua: "It doesn't surprise me, but it does encourage me. People aren't motivated just by a salary; they also want to save lives. It gives them much more meaning. They develop technology in order to feel that they're doing something meaningful, not just making a living or raising the value of the share, and that's true at any age."
"The main sense for experiencing the world"
"Vision is the main sense through which we can experience the world, so there are many things that someone who loses his or her sight or has impaired vision is unable to experience. It's very hard to live like that. This is a group of people that can be helped," says OrCam executive VP R&D Dr. Yonatan Wexler. Wexler joined the company shortly after it was founded, and took part in developing the algorithm on which the company's developments are based. Shashua was one of his two advisors for the doctoral these he wrote about computer vision at the University of Maryland in the US, which paved the way for Wexler to join Shashua's company.
"Before we began, there was no company investing many resources in finding a technological solution for the visually impaired market. At present, a blind or visually impaired person gets a cane or a dog, and that's all. It can't be that there is no technological solution in the 21st century. No company is focusing on this market, and we're developing a cutting-edge technological solution for a group of people that no one has bothered to help - technologically, I mean.
"It's hard for the visually impaired to get information, so OrCam's solution brings them the information. OrCam's camera is able to read the text before it aloud; in other words, it's a camera that looks and talks. A visually impaired person, and certainly a blind one, is a person who knows how to listen, because when their vision became impaired, the other senses, such as the sense of hearing, become more acute," Wexler explains. He emphasizes that OrCam's solutions are currently designed for reading texts, not visual identification. The company began by working on visual identification, but abandoned it because there was not much need for it, but is likely to return to it later in a slightly different way.
How does the camera know what the user wants to read?
"This is the main question we came up against after the camera was able to identify what was in front of it. We realized that the device won't keep quiet, so you have to point to what you want to read. Think about it: pointing is a very natural act. When you were a child, your mother undoubtedly always told you, 'Don't point'.
"Sight begins to decline after age 50, and after age 60, one out of every three persons suffers significant vision impairment. These people are still working; they haven't retired yet. They start out by enlarging the font on the computer screen, but after a while, they start getting headaches, so they stop working and sit at home, because it's hard for them to do outside activities. They're even embarrassed, because their impaired vision causes them to make mistakes.
"People are living longer now, so it's more likely that something will go wrong with their sight. Vision is a very complex sense. There is the optic aspect - the lenses - and the photometric aspect - the retina. There are 600 million nerves transmitting information from the eye to the brain. There is the brain itself, which has its own complexity. Impaired vision isn't just needing stronger eyeglass lenses, in other words, an optical problem. If even one of the links in this chain doesn't work right, vision is impaired."
Does the device heat the eyeglasses? Does it give you a headache?
"No, you barely feel it. It weighs only 14 grams, and we'll launch an even lighter version soon. You can take it off and put it back on at any moment, and it's barely visible. You don't really notice it's on the eyeglasses. When we began designing the product, customers told us that they weren't willing to wear something that looks embarrassing, so we made sure that the device would be as small as possible."
At this point, OrCam marketing director Eliav Rodman chimes in. "Our target market doesn't have an easy time with technology. These are older people; you have to explain to them how to use an electronic product, and how to fit the benefit they get from it into their way of life. A way of life consists of habits, and habits are hard to change, so we give training to all users. We have a very low return rate. Sometimes we get people calling and saying, 'The device fell, it doesn't work… I need you to fix it for me, because I use it every day'."
Is the device adapted personally to the user?
Wexler: "No, in contrast to the existing vision solutions, such as eyeglasses with lenses that change their strength. For example, some people suffer from retinal changes that make their vision deteriorate constantly, but slowly. Their vision changes every few months, and they have to replace their eyeglasses. Eyeglasses cost a lot of money - several thousand shekels. Our solution actually sidesteps this entire process, because the device fits everyone."
OrCam has sold 2,000 devices to date, meaning that commercially, it is just beginning. The company is marketing the devices in the US (the official launch was 18 months ago), Canada, the UK, and Australia (English-speaking countries); France, Germany, Austria, and Switzerland (French and German-speaking countries); and Israel. There will soon be a device in Russian, too.
When a person with impaired vision wants to buy such a device, where do they go? Whom does he contact? It's a consumer electronics product that helps cope with a difficult medical problem, but it is not being marketed as a medical treatment.
"When someone loses some of their sight, they are referred to all sorts of organizations that help them. and those organizations are aware of our solution. It doesn't need US Food and Drug Administration approval. It's regarded as a gadget, but it's a gadget that is making a revolution like insulin. That's the level of its added value. It's obviously needed, but the system, meaning the regulator, health funds, insurance companies, and so forth, still doesn't know what to do with it. For example, the Israel Ministry of Health is glad to buy the devices, but they want them left in the schools, instead of the students taking them home, because that would require coverage from the National Insurance Institute. We're working hard to create the social infrastructure to change this situation."
Wexler looks at the bigger picture when he talks about the company's vision. "A blind child's chance of finding a job is very poor. The National Insurance Institute sends the blind welfare checks from the time they are born to the time they die. When you take a child like this and give him a solution like OrCam's, you are enabling him to study and succeed - to do everything that a similar non-disabled person does."
Wexler has many examples of the device's success, especially among children. "There's a three year-old girl who can already read thanks to us. When she gets to first grade, she'll be ahead of her class. There's a seven year-old boy in the US who got our first device, and discovered that he could use it to read the Harry Potter book by himself, without his father reading to him. That made him so happy. There are a lot of smart kids like that, whose impaired vision is liable to stop their progress. A solution like OrCam's liberates them."
OrCam claims that its solution makes Braille superfluous. It is difficult to learn to read Braille; only a small proportion of the visually impaired use this skill.
"In Israel, posting every office sign in Braille was proposed in the framework of the accessibility laws for the handicapped. That's a nice idea, but it's ineffective. Blind people can't start feeling walls, not to mention the large amount of money it would cost. In other words, the added value is negligible, while our device makes everything accessible in a smarter way," Wexler argues.
Let's talk a little about numbers. How much does the device cost?
"It costs NIS 15,000 in Israel and $3,500 in the US. We didn't set those prices arbitrarily. We needed some kind of comparison, but there was none, because there's no such product in the market. The closest comparable product we found was a hearing aid. Hearing devices revolutionized the world of those with hearing disabilities, just as we are doing in the world of the visually impaired. The average price of a hearing device is NIS 15,000. I have a customer who said it was too cheap."
Really? How does he explain that?
"This is a guy in Tel Aviv who said that he will cover this investment within two years, because he doesn't have to pay someone to come twice a month to read his mail. NIS 15,000 is more or less one month's salary, but the device enables users to work more years before they retire. That's priceless."
But there is usually reimbursement for a hearing aid. Here, there isn't.
"Right, so we're working a lot with the National Insurance Institute, the Ministry of Health, the Ministry of Defense (for disabled IDF veterans), even the Ministry of Education, with which we already have a second pilot, the municipal welfare authorities, etc. In any case, the proportion of subsidy is different."
Is the company making a profit?
"If we sell enough, we'll make our first profit this year. If not, we'll break even."
Why is the Israeli market important to you?
Rodman: "Because we give training - we have a strong connection with our customers. It's very easy for us to work in Israel, because the feedback from the Israeli customers is the most useful. Israelis don't hesitate to criticize. They're the most uninhibited; they tell you the truth to your face, and that really helps us improve the device. Up until now, we've managed to talk with each and every one of our customers. That might change when we get bigger, but right now, it's simply amazing. We owe a lot of the way our device works to feedback from our customers."
Wexler adds a parting word: "It's both economically and socially worthwhile, so I have no doubt we're in the right direction."
Published by Globes [online], Israel Business News - www.globes-online.com - on January 15, 2017
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