Mobile app design for smartphones may be one of the best industries for starting a business right now, but that doesn’t mean it’s easy. Take it from Jeffrey Powers and Vikas Reddy, co-founders of Occipital, a technology start-up in Boulder, Colorado. The business has developed RedLaser, the best-selling iPhone app that lets users scan barcodes.
The University of Michigan engineering alumni have been in the business since the halcyon days of 2008. Back then, the two pitched an idea for an app that would allow a camera phone to recognize paper receipts, which a user could scan and use to track spending. Unfortunately, their advisers at seed-stage incubator TechStars hated it. The problem? “At the time, the iPhone was barely getting started and people were like, ‘You’re not going to be able to get people to look at their phones all of the time,” says Powers. Oh, how times have changed.
Powers and Reddy eventually produced an idea that got a thumbs-up: an app that lets iPhone users scan barcodes and search the Web for product prices. Say you’re in Best Buy and want to make sure you’re getting the best price on the latest season of The Office. Just scan the barcode and let RedLaser do the comparison shopping for you. Since debuting in May 2009, RedLaser has been downloaded more than two million times, mostly at $2 a pop (Apple takes 30 percent of that), making it one of the most popular paid-iPhone apps on the market.
But along the way, Reddy and Powers had to deal with Apple’s strict rules for developers, and the experience wasn’t always a pleasant one. In a Newsweek op-ed in November, Reddy vented: “Despite having the most usable smart phone on the market, Apple may have the most restrictive app store. If things do not improve, the next batch of Silicon Valley success stories may be about people writing for Google's Android platform, an Apple competitor that lets developers try almost anything.” Ouch. But that didn’t get RedLaser kicked out of the App store. Rather, Apple has solicited advice from Powers and Reddy on how to create a more developer-friendly policy for the use of the iPhone’s camera. In April of this year, Apple even featured RedLaser in a TV commercial, further popularizing the app.
Powers and Reddy have no intention of being one-hit wonders. They are already looking to the future. In June, they sold RedLaser to eBay for an undisclosed amount, but kept Occipital as a standalone business with the idea that they would develop new apps. With the proceeds of the sale, Occipital was able to add three new employees and is “refocused on what we do best as a company – computer vision,” the partners said on their blog announcing the deal.
Who knows? Maybe they can revisit that receipt scanning idea. “It would be funny to repeat it now, two years later,” muses Powers. “They’d probably be like, ‘Brilliant idea. Go for it.’”