By: Alistair Barr and Daisuke Wakabayashi Wall Street Journal
Firm to provide support, advice to tech startups making devices
The creator of Android, the world’s largest mobile operating system, is returning to his roots in hardware.
Mr. Rubin said Playground had raised $48 million from investors including Google,Hewlett-Packard Co., electronics manufacturer Hon Hai Precision Industry Co., and other tech companies. Playground won’t invest in startups, but will take equity stakes in return for its support.
This approach is common in Silicon Valley and is known as an incubator or accelerator. Mr. Rubin described Playground as a “studio,” where inventors, tinkerers and entrepreneurs can focus on building new gadgets and not worry about other aspects of running a business.
“Our aim is to free the creators to create,” he said in an interview. “By bringing these partners to the table we can remove many of the roadblocks of bringing a great idea to market.”
Others, including PCH International and Dragon Innovation, offer to connect startups with a similar suite of resources.
Playground, PCH and Dragon highlight renewed interest by Silicon Valley in hardware startups. Plummeting prices of microchips, sensors and other components make it easier for a small company to design devices and have them made quickly and cheaply by others. The spread of wireless Internet access and the rise of cloud computing allows these devices to be controlled remotely in more useful ways.
Other investors in Playground include Redpoint Ventures, a venture-capital firm with a history of working with Mr. Rubin, China’s Tencent Holdings Ltd. and Seagate Technology PLC. Mr. Rubin declined to say how much each company is investing, or whether Playground has done any deals yet.
Google and H-P declined to comment. Hon Hai, Tencent and Seagate didn’t respond to requests for comment on Monday.
Mr. Rubin, 52 years old, is a longtime gadget tinkerer with a particular interest in robotics. He worked at Apple Inc. in the early 1990s and then at Apple-backed General Magic, which tried to develop a hand-held communication device. After a stint at online video startup WebTV, he founded Danger in 1999 to make an early smartphone called the Sidekick. He founded Android in 2004 and sold it to Google the following year.
Mr. Rubin believes that large technology ecosystems, such as the Web and mobile, emerge about once every 20 years—and Playground will help him search for the next one. “Hardware will drive future ecosystems,” he said.
For Google, an investment maintains a relationship with Mr. Rubin, who left the Internet giant last year after starting a robotics unit called Replicant. Google also is making a big push to catch leader Amazon.com Inc. in cloud computing, so access to Playground startups could yield new customers for this business.
Mr. Rubin said the investors were chosen in part for their strategic value to new companies. Hon Hai, commonly known as Foxconn, will help Playground startups manufacture products in large volume. The studio will have engineers and product experts on staff to work with Foxconn and prepare devices for production, Mr. Rubin said.
Foxconn is looking to expand beyond its mobile-handset manufacturing focus and reliance on Apple as its main customer. Investing in Playground will give the company access to new types of devices, something it has already begun to explore.
H-P, which sells computers and printers in more than 100 countries, will help Playground startups distribute their products globally, Mr. Rubin said. Google, Tencent and Seagate will help startups work with the cloud, he said. Redpoint will advise startups on financing and may invest in companies that emerge from Playground, he added. Redpoint won’t have exclusive rights to invest in these businesses, and the startups won’t be required to work with the other investors.
After Mr. Rubin left Google last year, he took the idea for Playground to Jeff Brody, a partner at Redpoint, and the venture-capital firm became the first investor in the studio. Mr. Rubin also has joined Redpoint as a venture partner and will spend at least one day a week at the firm researching and vetting potential investments in mobile and other technology sectors.
”I will have one foot on the lily pad of mobile and one foot on the future, and I can jump forward when the next ecosystem emerges,” Mr. Rubin said. “That’s a pretty good place to be.”
Source: The Wall Street Journal