My Turn: How We Built a Successful iPhone App

By Vikas Reddy

When my friend Jeff and I met in 2003, we were just a couple of nerdy engineering students looking up to the Google guys and dreaming of our own tech glory someday. It felt a long way off when we founded Occipital in 2008. With an emphasis on computer vision—trying to make computers see—we pecked away in a cramped office above a hardware store on Michigan's Beaver Island. A $12,000 investment kept us afloat, and Apple's new App Store—a virtual clearinghouse where developers like us can connect with iPhone users—gave us a market. But more than a year in, we still didn't have a big idea.

One day Jeff picked up a copy of Scientific American and noticed the bar code. That's when it hit us: a bar-code scanner. If our lives were a movie, here's where you would find the montage set to '80s music: we moved in to a former deli in Boulder, Colo., where—amid the sneeze guards and industrial refrigerator—we worked all day, drank black coffee all night, and dreamed of not eating Ramen noodles at every meal. When we stopped three months later, we had basement complexions, greasy hair, and RedLaser: a program that turns any iPhone into a bar-code scanner that checks prices. That means iPhone owners this holiday season can walk (or run, but, we hope, not push and shove) down any retail aisle scanning items on their lists. And before they buy, they can run a search for the retailer with the lowest price. Prior to us, no one had figured out how to do this well without a special lens.

But perhaps the biggest rush—bigger than the first time we price-checked a box of Froot Loops with a cell phone—was seeing RedLaser become one of the bestselling apps on the market. In September our daily sales doubled from 75 to 150 units, then doubled again to 300, and kept doubling until we were in the top five, raking in more than $500,000—enough to keep us chasing the dream. But our profits almost never materialized. When we launched RedLaser in May, it performed terribly for users. We had a software fix ready to go, but Apple suddenly—and maddeningly—began rejecting part of our code because of a policy change that lasted for three months.

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. That matters for guys like us because bar codes are just the beginning. We want the phones running our software to be seeing, sensing, communicating machines providing people with information on the go. Why not make a cell phone that can see the world like people do? The software we're working on now will allow your phone to recognize its surroundings in seconds. Of course, even if it works, we may never become the Google guys. So far, we're still about $37 billion short.

Reddy cofounded Occipital with Jeffrey Powers.