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Monday, October 26, 2009


The Inside Story Behind Pleo’s Rise, Fall, and Resurrection

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[NOTE: For impatient Pleo owners dying to know about repairs, warranty service, batteries, chargers and more. You'll find the interview with Derek further down the page]

Today I had an amazing 1-hour conversation with Derek Dotson, one of the original founders of Ugobe and is now the COO of Innvo Labs and Innvo Labs Limited, a subsidiary of Jetta Company, Ltd. Jetta is the company that acquired the rights to all things Pleo at the June bankruptcy proceedings this year and has relaunched Pleo under the Innvo Labs Corporation name. In the interview you will see Innvo Lab’s aggressive commitment to taking care of Ugobe’s original customers, and learn about their plans for the Pleo line and beyond. But first, a rare peek behind the scenes of the rise, fall, and resurrection of the baby robot dinosaur that took the world by storm, and was almost lost forever; a story that includes the trials and tribulations of Pleo's unsung guardian angel, Derek Dotson.

Behind The Scenes

Derek and Caleb Chung met a year before Ugobe even announced plans for Pleo. Derek and Caleb had worked on Mattel Miracle Moves Baby, which is how they met. The Takara Corporation out of Japan wanted a robot dinosaur built and they approached Caleb about the project. When Derek talked to him about the project, Caleb said he didn’t want to make just another toy dinosaur and instead wanted to build something that felt almost real. The Takara representative was to return in 3 days, and during that period of Derek and Caleb met and discussed the possibility of making Pleo. (Interesting side note. Originally Pleo was going to be only 3 ½ inches tall and 7 ½ inches long with a head the size of a walnut).

The Takara representative loved the concept and gave them seed money to build a proof of concept model. With that money they built robot walkers that were about the size they wanted Pleo to be. The walkers were servo driven proto-robots that had a torso, shoulders, legs and knees. They built their own telemetry suit to teach the walker how to move. They didn’t use a standard motion capture suit because they needed a suit that had the same movement limitations as the walker. This would force the suit’s operator, the talented and acrobatic Caleb Chung, not to make moves the walker’s geometry and mechanics could not support. The walkers were attached to a computer that had learning algorithms. They analyzed Caleb’s movements via the suit’s sensors, and learned how to move the walker’s servos in a manner that mimicked Caleb’s movements, giving the walkers a realistic animal gait.

Takara loved the walkers and financed the embryonic stage of the project. Derek and Caleb worked furiously for 6 weeks and managed to turn out some prototype walkers that worked. Unfortunately Takara’s parent company forced them to drop the project and the rights to Pleo returned to Derek and Caleb. At this point, Caleb told Derek that if he could raise some money, he could “have half of Pleo”. According to Derek, Caleb was ready to drop the project and told him to try and raise some money, so he spent about a year showing the walkers to people in pursuit of extra financing and they eventually ended up with equal ownership packages in Ugobe when the company was created.

The Rise of Pleo

About this time, Bob Christopher, who later became Ugobe’s first CEO, entered the stage since he had been working with them on another project to create a new kind of PDA. He helped raise funding from several angel investors in chunks as small as $25k to $50k per investor. By the time the prototype were being built they were out of money and were about to go under. During this time he bankrolled the project using his own funds, a decision that was not popular at home, and kept the project alive until the first round of venture capital appeared. Derek went to China and had the first full body prototype of Pleo built, which is when CTO John Sosoka and the other groups arrived. (Note: The PDA project was later dropped when Apple’s iPhone came out and they could see the handwriting on the wall.)

The Fall

Around November of 2008, Derek went back to Boise to help in the effort to save Ugobe. Doug Swanson was brought in as CEO to try and save the company. Doug did a terrific job trying to save Ugobe but despite his Herculean efforts, it became obvious to him that the company could not be saved or as Derek put it “it was like arranging chairs on the Titanic”. There was too much overhead and too much bad debt. There was no way an investor would put any more money into them since the company just didn’t make sense on paper any longer.

Ugobe did sell a huge chunk of Pleos, grossing about 20 million dollars in sales, but the company that had grown up around Pleo was just too expensive to keep going. Had it been a better economy then it is possible they could have achieved the sales growth they needed to continue. But the reality was that the current economic climate required a company a lot leaner to survive it. Ugobe was a heavyweight company poised for explosive growth and burdened with all the associated expenses and overhead that implies, so they needed a huge explosion in sales. Derek still believes Ugobe would have survived and done well if they could have raised their last round of funds. Despite Pleo's admirable sales it was not enough for Ugobe to stay operational and bankruptcy soon followed.

The Resurrection

Derek spoke to Jetta, the company that did the actual manufacturing for Ugobe, about trying to acquire the rights to Pleo at the bankruptcy auction. Jetta agreed that they should participate and joined the bidding. They never thought they would win since there was talk of another company that was bidding richly at the auction. As fate and possibly luck would have it, that company was unreachable near the end of the auction and they won, bringing Pleo back home to Derek. After analyzing all of Pleo’s weaknesses, they came up with an improved design that fixed them and relaunched Pleo under the Innvo Labs name. (read the interview for the details).

Conclusion (interview follows)

Existing and new customers will want to pay special attention to the questions regarding service and warranty on Pleos old and new, and what the differences are in hardware and software between the old Ugobe Pleos and the new Innvo Labs ones. In conclusion, I came away from the interview extremely encouraged about Pleo's bright new future, both for my fellow owners and myself. Derek said repeatedly during the interview that they have the financial resources to weather the current tough economic times, and I look forward to seeing them execute their 10-year plan for Pleo and the other new robot pets that they will create in the future.

[NOTE: This is not a direct transcript. The questions and answers were edited for readability but without affecting the content in a material way.]

The Interview

RO: Who is Innvo Labs and how do they fit in with Jetta?

DD: Jetta Company Limited does robotics manufacturing in a wide range of industries. Innvo Labs Corporation and Innvo Labs Limited were created by Jetta specifically to support Pleo and its descendants.

RO: Ugobe going extinct was quite a shock to people and some people are nervous about buying a new Pleo because of this. What can you tell me about Innvo Labs that will make people feel confident about your company's future?

DD: Innvo Labs has the financial resources to survive the dips and valleys of the global economy. When Innvo Labs first met to talk about Pleo after the action we were told to work on a 10-year plan. Ugobe grossed $20 million in sales of Pleo but the company was too large to be profitable, they were preparing to be a big company and their expenses were very high. In contrast Innvo Labs has adopted a factory-to-web distribution model that allows them to deliver and support Pleo with significantly less overhead, giving the company staying power. Innvo Labs intends to be conservative in their company plans to make sure they will be around for the long term. However, we are committed to continually updating and making improvements to Pleo.

RO: What fixes and features do the new Pleos have that the old ones didn't (hardware and software)?

DD: The fixes in the new Pleos now sold online at the Pleoworld online store are:

  • The problem with neck wires breaking which affected some Pleos has been fixed
  • The problem of the skin separating has been fixed
  • The premature wearing of the paint from Pleo’s skin and teeth has been fixed. The new paint should last 3 times longer than the old one.
  • The packaging Pleo comes in no longer uses Styrofoam and is biodegradable making it friendly to the environment
  • The battery chargers have a new switch with two positions, one for regular charging and another that uses a special charging mode created specifically for those batteries that don’t charge properly. It drains the battery completely and then “force” charges it for 16 hours. This should bring many of the problem batteries back to life, although some batteries aren’t salvageable because they’re just plain dead. Also, the charger can use the old A/C adapter and it can charge the old Ugobe batteries too.

As for hardware improvements, due to a change in the hearing system Pleo responds better to your voice when it comes to figuring out where you are (left or right of him).

I would also like to point out that we have done a complete redesign of the Pleoworld web site. The site navigation has been improved and the customer experience with the online store is much better.

RO: Will Innvo Labs offer warranty support for new Pleos bought at retail outlets other than the Pleo World online store?

DD: We will definitely support all Pleos that are still under warranty, whether they were bought from the Pleoworld online store or through other retailers such as Amazon, etc. People that bought their Pleos (new in box) through auction sites like eBay will need to provide proof of purchase so they should get the original invoice/paperwork from the seller. In these cases, the warranty will begin when the buyer receives their Pleo so they don’t have to worry about the seller sitting on a unit for a long time. We are processing Ugobe Pleo RMA’s even now. Note, it is important that people understand that if they have a Ugobe Pleo, as opposed to one of the new Innvo Labs Pleos, they will receive another brand new Ugobe Pleo as a replacement and not one of the new upgraded ones.

RO: What about the people that sent their Pleos in for service right when Ugobe went bankrupt, and never got them back?

DD: All they need is their RMA number and we will send them a replacement (Ugobe) Pleo. Rafael is processing RMA’s even now. He used to be in customer service at Ugobe. He has joined Innvo Labs and is doing a terrific job taking care of people.

RO: Will Innvo Labs offer repair service for old Pleos bought at retail outlets other than the Pleo World online store?

DD: Absolutely. We have the Reincarnation program. You send in an old Ugobe Pleo and you get one of the new upgraded Innvo Labs Pleos. The cost is $245 USD.

RO: Will you transfer the personality too? (Pleo’s learned behaviors and traits).

DD: That’s under investigation at the moment and currently we are not doing that. We will try to do that in the future if we can.

RO: Is the PDK that was never released by Ugobe available now?

DD: Absolutely. You can download it off the Pleo World web site.

RO: How long is the warranty offered on Pleo World Pleos?

DD: 90 days which is the same as it was before.

RO: Will Pleo work with the existing 3rd party software tools like MySkit?

DD: We have not done any testing ourselves but if they worked with the old Pleos, they should work with the new ones since the computing architecture is the same.

RO: Are there plans for any new accessories or new Pleo models?

DD: I can talk about the 2010 Pleo model. That model will look the same as Pleo does now except it will have a new paint job and eye color to differentiate it from the current Pleos. Over the coming year we intend to give Pleo more depth to his personality and utilize the sensors better. For example, Pleo doesn’t do a whole lot with the camera in his nose right now. It’s not the hardware since the camera is a good quality camera. However there’s a lot of room for improvement in the software. An example of a specific feature people want badly is getting Pleo to come to you. The 2010 model will do that. Also, Pleo uses power more efficiently which will lead to longer play times. To make Pleo more realistic, Pleo will develop certain character biases at birth so that everyone’s Pleo will be different. As for the sensors, the reason why they are currently underutilized is due to a bottleneck in the serial bus that connects them to Pleo’s processor resources. That’s something we can fix without drastically altering Pleo’s architecture. Once that happens, we can do more with them when it comes to Pleo’s hearing, vision, etc. Beyond 2010 there will certainly be new creatures other than baby robot dinosaurs.

RO: Thank you for your time Derek. We will all be watching with great anticipation.

DD: You’re welcome.

- Will the new Pleo be as loud and as slow as the old Pleo?
- How will the camera work better than currently implemented in the old Pleo? Hackers have had to install new cameras, new hardware and software to barely work with old Pleos.
- Will the animation capabilities be better in the new Pleo?
- How exactly will each Pleo be unique and “learn”?
- Ugobe over hyped their Pleo by saying it could do all kinds of things it was not able to do – hearing, seeing, walking, intelligence. How will the New Pleo live up to our expectations?
- How was Jetta able to fix the “skin” and “painting problems” now when they were unable to do so during manufacturing Pleo?
- Why is it so expensive to trade in for a new Pleo? Ugobe sold Pleo’s manufactured by Jetta that did not deliver on its promises or expectations. How can we be sure the “new” Pleo’s are better?
- Who is Derek? Why have we not heard about him before in all the stories written about Ugobe? He now sounds like the inventor and the main person behind the product and company…
This is highly self-serving interview of Derek. Bob Christopher joined in early 2005 or maybe even earlier. You seem to have left out about 3 years of history; like the fact that they missed Christmas twice and only made it on the third go around, and that by a technicality. Where was Derek, whom I never once met, during that time? Also during that time, the world went from buoyant to bleak and the MSRP nearly doubled.

If you think Derek is so great because he brought in Doug Swanson, Oy vey is mir! The only time I heard from Doug was when he had a totally unrealistic bailout plan to offer, and there were no takers. That the founders seem to have made off with the company and the investors left hanging, that's not going to be very pretty the next time the founders go looking for early stage money.

Interesting technology, dysfunctional management, dysfunctional Board.
Apparantly, the new Pleo 2010 is better than the old one.

Do you have any trade-in strategies/policy?

Where can I buy a new battery for replacement in Hong Kong? My Pleo has died for months just because of the problem battery!
Does anyone know why my enquires made to are replied to from a Yahoo address. I would have expected a reply from a address. Anyone know anything about this? Is the Yahoo replay fake or real? Please advise.
I was a Series B investor in Ugobe, giving the minimum $20,000 in what I knew was a risky investment. Not so much as a thank you letter came, not even a complimentary Pleo for my huge chunk of money. Not even a 'we are sorry we failed' letter or anything else at their demise.

All I received was a stock certificate, serves me right for thinking I should invest in something that seemed interesting to me. I thought Bob Christopher had a good reputation, plus some others on the management team, which is I why I felt okay with the investment.

Anyone involved in Ugobe's original management team can shove Pleo right up their you know what.

As a personal investor I felt completely out of the loop and never once appreciated for giving them my hard earned money.
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