ThingMagic’s Rollercoaster Journey—From the Internet of Things to the Calculus of Reality

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a couple of times. It started as a consulting company, became focused on retail supply chains, and now has settled in to what seems like a good business delivering reader modules. The company currently has 32 employees, down from about 60 at its peak in 2006. Its venture investors have included Tudor Ventures, The Exxel Group, Cisco Systems, Morningside Technology Ventures, and In-Q-Tel.

A big reason why ThingMagic and other RFID companies are still around is that the hardware has finally become cheap enough (tags cost less than 5 cents each) to see widespread use—not to be put on everything, but on a lot of things. “They’re cheaper and also work better,” Pappu says. “At this point, you can read tags at 50 feet in free space, they come in a number of shapes and sizes, and can withstand any operating environment…The readers can be anywhere too now. They’re not tethered to a desk or portal, but in handhelds, in label printers. The third thing is, it’s not just about the RFID. It’s about reaching out to the tag, reading data, and connecting to other systems, like Bluetooth, GPS, Wi-Fi…By combining those, you now have the Internet of things.”

OK, with their business issues seemingly under control, I could ask these MIT Ph.D. guys a little more about their grand vision and thinking. For instance, are Google, Bing, and other Web search companies getting interested in building a “reality search engine” that incorporates RFID data?

“Google is really interested in mapping, but they haven’t crossed the boundary from the street to the building,” says Maguire. “We’re starting from inside. There should be overlap quite soon.”

Pappu took it a bit further. “Think about all the things you could look for. Think about the calculus of reality,” he says. “There’s a certain scale you can put Wi-Fi on—a laptop, phone. But the next level down does not admit batteries.” He’s talking about the idea that tiny sensors could be placed in all of the items you interact with every day, and information from those sensors could feed into a centralized database that keeps track of the physical state of everything in the world. “The interesting premise is, don’t make any changes to the interface, especially the interface to the human. Let them be how they are, and see how you can do this calculus without affecting them.”

It’s not really clear yet what the best applications of all this would be. But tying RFID into the exploding sector of location-based services and mobile applications certainly seems intriguing. You can see this technology as a form of artificial intelligence, Maguire says. “The computer is there observing the world in a very distributed way. Every object is like a little Twitter feed, and something has to make sense of it.” (Depending on whom you ask, that last bit is either the most useful, or most annoying concept ever.)

But back to the founders’ own calculus of reality—specifically, the future of ThingMagic. Pappu and Maguire are squarely focused on their next big deals. Pappu talks about the big opportunities for sensors in healthcare, and posits that within five years, there will be at least one hospital that is completely RFID-enabled. “Somebody has to place that bet and create that infrastructure, and prove to themselves it’s going to happen,” he says.

Maguire sees at least one short-term business trend that also bodes well. “Scale is one of the things we’re seeing,” he says. “The demand from customers is unprecedented this summer. For the first time, we couldn’t meet demand.”

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4 responses to “ThingMagic’s Rollercoaster Journey—From the Internet of Things to the Calculus of Reality”

  1. Another person who deserves a lot of credit is CEO Tom Grant, who helped guide the company as a consultant through bootstrapping mode, became CEO, and didn’t raise venture money until the company could scale. As Greg notes, one of the big mistakes too many technology companies make is getting ahead of the curve, and raising money too early is part of that. Tom waited until 2005 to raise the Series A and then a Series B in 2008. Looks like good moves in hindsight.

  2. Absolutely right—thanks for your comment, James. I had the pleasure of meeting Tom at the company’s ping-pong table. (Apparently Ravi is the champion there.)