July 5, 2022 BACK
Presenting This Month:
CamDo Solutions Inc.
Condition One Nutrition
Featured in this issue:
Open Sesame (Julian McCrea)
Jim Schaefer, Pasadena Angels Treasurer
This month we have three presenters. Below is a brief summary of the companies presenting on Wednesday. Then you'll find a profile of Open Sesame and a profile of a longtime member of the Pasadena Angels and the current Treasurer, Jim Schaefer.
Startups Presenting Wednesday, July 6th
COMPANY: Celitech Inc.
Presenter: Al Fares, Founder & CEO
Celitech helps travel-related companies offer co-branded international cellular data plans using one-click eSIM technology. We offer a programmable eSIM API + dashboard to leading customers like Expedia, JTB, Kayak, FlightHub, and Fareportal. Customers subscribe to our API (Basic/Pro/Pro+ tiers) and pay monthly subscription on top of the eSIMs ordered via the API.
COMPANY: CamDo Solutions Inc.
Presenter: Todd McCann, CEO
CamDo Solutions Inc. has developed a Computer Vision system to allow General Contractors to reduce workplace accidents & deaths by more than 50%. We save lives in construction, which accounts for 20% of all workplace deaths.
Vancouver, BC, Canada
COMPANY: Condition One Nutrition
Presenter: Matthew DeMaio, CEO and Founder
Condition One Nutrition ("C1") created, manufactures, and distributes C1 protein bars. C1's large 100-gram bars are a ready-to-eat (RTE) nutritionally complete meal to keep the brain and body functioning at peak performance.
Open Sesame and Zero Latency
Revolutionizing Music, Gaming and VR
Started right before the pandemic in 2019 by Steve Lyons and Julian McCrea, Open Sesame reflected their interest in voice recognition technology. Alexa was growing, and “social audio” was emerging. What they developed was a way to connect people with spectacularly low latency. Then, they created World Karaoke as a proof of concept: sing along with anyone in the world, which is only possible if there is almost zero lag.
As with Amazon, where the bookstore was the hook, but the underlying technology of AWS has proven to be the engine, with Open Sesame, the karaoke attracted attention, but the underlying technology called SyncStage is generating the excitement.
Quake Capital was impressed. So too was AWS, who offered to provide the infrastructure. Deutsche Telekom, Verizon, SK Telecom, Singtel, Orange, Telefonica, KDDI and Softbank became partners, seeing Open Sesame as an enabling technology that will make 5G indispensable. Open Sesame’s initial fundraise was at a $3M valuation in 2020, and the next was at a $5M valuation, and the last was at a $8.5M valuation. Besides Pasadena Angels, the Chicago ArchAngels, Band of Angels and USC Venture Fund have invested. Even the German government provided some non-dilutive funding.
“Consistent low latency” is the value proposition at Open Sesame, and the applications are numerous. After singing and playing music, gaming represents a huge opportunity. Gamers hate lag more than anyone. But maybe the biggest application on the horizon is the metaverse. When users interact in a virtual space with other avatars, consistent low latency becomes as critical as air.
Thanks to AWS, Julian is meeting with Guitar Center representatives to explore opportunities related to music lessons. And he recently met with T1, the most prestigious professional esports team as part of a test with SK Telecom. Last week, they were selected as one of 60 companies (out of 2,653 applications) to join the K-Startup Challenge, supporting their expansion into Korea. And, he also got together with Meta to explore possibilities in the metaverse. But those aren’t the only relevant applications. Faith and worship, learning and tutoring, meditating and the military are other prime applications.
Open Sesame’s challenge was how to reduce lag from 150ms to 66ms to allow for synchronized experiences between different devices. The solution leverages 5G for the last mile of the connection, which is why it’s so compelling to telecom providers. Open Sesame is consistently 8x faster than Google Meets and 5x faster than Discord, which dominates gaming communication today. After a couple years of development, proofs of concept and business development, the demand for development tools started growing rapidly in 2022.
The company has started selling software development kits to developers that enable syncing of up to 8 devices. Developers can build Sync Stage into their applications, and when users want to sync devices, Open Sesame charges 1.5 cents per stream per minute. At that rate, gaming, live performance and metaverse - all of which amount to 670 million minutes just in the U.S. - equate to a $19B opportunity.
Which leads to one of the great dilemmas of successful startups. How to pursue growth? One strategy is to find a friendly acquisition leading to a profitable exit. Certain customers, e.g., someone like Facebook, have dozens (or hundreds?) of employees already working on audio for the metaverse. An acquisition by a large company like that effectively eliminates risk.
Another strategy might have much larger upside, namely, maximizing growth while you have the competitive advantage. Technological advantages can sometimes be fleeting, and maximizing growth in every sector in every nation might cement your position as the default technology. This approach would require raising lots of money, hiring rapidly, and managing the chaos of uber-growth.
The third approach is what Open Sesame has chosen: prudent growth. It involves leveraging partners to develop new implementations rather than hiring large sales teams. Open Sesame has only recently hired a Chief Revenue Officer and created revenue goals for 2022. The objective is to create 16 POCs between June first and year-end. Already they have eight. The team is still only 10 employees as Steve and Julian try to stay lean and keep a long runway.
Right now, competitors fall into three camps. Some are pursuing “edge deployments,” effectively attempting to locate servers at the edges of the networks and bring computers “closer” to one another. Others are doing something called “wayfinding” to find shorter routes between computers that are talking to one-another. Both methods struggle to deliver consistent low latency. The third method is to employ custom audio hardware, which offers exceptionally low latency but can’t scale without a hardware investment (e.g. Elk Audio). Open Sesame is unique in terms of its ability to offer consistent low latency.
Open Sesame is looking to another fundraise at the end of 2022, potentially with a $20 million valuation. And right now, the world is starting to beat a path to their door.
Jim Schaefer is Flying By the Seat of His Pants
Lots of people know Jim Schaefer as the Treasurer and a founding member of the Pasadena Angels. Many know that Jim’s brother Howard was a founder of the Pasadena Angels. But very few people know of Jim’s travel exploits - how he has traveled all around the country and much of the world without any reservations.
Jim Schaefer in Greece, moments before he leaned back and fell into the Mediterranean
There should be a term for flying without a reservation - neither for your flight nor for a place to stay at your destination. It requires a Zen-like acceptance that things are out of your control. It requires carry-on luggage, because you can’t check a bag without a reservation. It requires contingency planning, because you might end up in Ireland instead of Scotland. It also requires a son who works at a major airline.
But, for the last nine years, that’s how Jim and Denise, wedded for 48 years, have been spending their free time. The upside of flying standby is that sometimes you get to fly first class to Sydney. However, the downside can be a 14-hour return flight in a non-reclining seat up against the bathrooms. Sometimes they’ve waited all day at an airport for a couple seats to open up. One time in Hawaii, nothing did, and they spent an extra night, returned to the airport the next day, and caught a flight to San Jose instead of Los Angeles. Spending extra time in Hawaii sounds great, but it’s not if you’re at the airport the whole time.
Jim and Denise have traveled this way to Sidney, Seoul, Shanghai, Tokyo, Costa Rica, Italy, Amsterdam and other European cities as well as domestically. Once they flew to Nashville and enjoyed the sights for a few days before returning to the airport only to discover what looked like a half full plane turned out to be completely sold out. After a wait, they boarded a flight for Atlanta instead of Los Angeles and returned home the long way.
Jim learned to make hotel reservations on his cell phone in the short window between when the standby passengers get on board and when the flight attendants close the door. He learned to do his research ahead of time and be ready to pull the trigger. He also learned flexibility and patience. And, if what they say is true that happiness is the difference between your expectations and your reality, he’s learned the secret to happiness: temper your expectations and enjoy what life offers you.
There are some parallels to angel investing. There’s a lot of uncertainty. You sometimes end up someplace different than where you thought you were going. And, it can somehow be “affordable” and “expensive” at the same time.
Jim got started working with entrepreneurs and startups in the 1990s when he was invited to join the Business Technology Center. Located in Altadena, the BTC was created to incubate technology developed in Los Angeles County, initially starting with entrepreneurs from JPL and CalTech. A friend of his invited him to be on the Advisory Board of the BTC when it opened in 1998. As a result, Jim spent a lot of time with entrepreneurs and startups. In addition to advising the BTC, he was mentoring its startups and providing accounting and financial guidance for some of them.
Duane Peterson and Jim's brother Howard, both Founders of the Pasadena Angels, realized that the BTC was a tremendous source of IP and startup potential, but what was missing was a source of Angel investment that could support the supply of startups. That realization was the impetus for the Pasadena Angels, and the two of them drafted the legal setup, procedures and contracts.
Jim’s CPA firm began to specialize in accounting and financial management for startups, and a few of them eventually became unicorns. His connections at the BTC also led to his co-founding LA County Tech Week in partnership with Mark Lieberman, BTC Director. For seven years they put on the annual technology showcase, which was county-wide and culminated in the 2009 iteration. Jim and Mark retired from LACTW after that year as Mark moved to Oregon and Jim and Denise spent more time traveling.
Jim and Denise have three children. Brian lives in NY where his byline sometimes appears in the NYTimes. Robbie was recently promoted at the airline and has made travel easier for them over the years. And, Alan, who lives in Playa Del Rey, just had a daughter, which means that the couple now face the difficult choice of spending time spoiling their granddaughter or spoiling themselves by traveling around the world.
June '22: HavenLock (Alex Bertelli) and Anil Jha
May: Discotech (Ian Chen) and Gary Awad
April: Sashee Chandran, Seatrec and Susan Marki
March: Yezin Taha, Spine Align and Jamie Bennett
February: Phoenix Gonzalez, Repurpose and Marcus Filipovich
January: Ksenia Yudina, BeTheBeast and Larry Uhl
November '21: Roy LaManna, TotSquad and John Keatley
October: Dr. Chorom Pak of LynxBio and former president Al Schneider
September: Luk Network, Brandon Cavalier and Nancy Dandridge
July: Electrum, Jose Gomez and Julie Pantiskas
June: Ready, Set, Food, Dr. Mirianas Chachisvilis and Joseph Pitruzzelli
May: MagicLinks, Christopher Hussain and Janice Orlando
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We hope you enjoyed this edition of the Pasadena Angels Monthly Newsletter. Any suggestions for future pieces, questions or comments? Please email me at email@example.com
Dave de Csepel
Chairman, Pasadena Angels