TRANSCRIPT
EPISODE 18: ALEX CAPECELATRO
Jim Freeze Hi! And welcome. I’m Jim Freeze, and this is The ConversAItion, a podcast airing viewpoints on the impact of artificial intelligence on business and society.
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On today’s episode, we’re joined by Alex Capecelatro, co-founder and CEO of Josh.ai, the voice-controlled home automation system.
Josh.ai is reimagining the connected smart home, allowing users to manage their homes with natural voice commands. Since the onset of COVID-19, the company has seen record sales, and even closed an $11 million funding round this past April.
Alex, welcome to the ConversAItion – we’re thrilled to have you on the show.
Alex Capecelatro Thanks so much. It’s great to be here.
Jim Freeze So Alex, tell us a little bit about your background and kind of what led you to found Josh.ai.
Alex Capecelatro Sure. I’ll give a quick synopsis and then feel free to let me know if you want me to dive in any particular area. But basically, grew up in upstate New York, building websites in the early nineties, when I was a teenager, kind of spun out some little startups. I was always very entrepreneurial, but got very interested in physics and science and engineering. Ended up dropping out of high school. I moved down to Washington DC and I spent about, I think, five or six years working in different labs. I worked for NASA. I worked for the Naval Research Lab, worked for the Sandia National Lab, and just got a really sort of exciting opportunity to work with cutting edge technology, to work with really transformational stuff. The problem, though, is when you’re working for government agencies that are funded by the DOE and the DOD, the Department of Energy and Department of Defense, you can’t really talk about it.
You certainly can’t commercialize it. And I was really wanting to try to bridge that gap of innovative technology with introducing products that can really transform people’s lives. And so I kind of moved outside of the research labs, started getting involved with startups. I worked with an electric car company when it was just a few people. I ended up raising over a billion dollars. I was not a founder. I was an employee, but the company raised over a billion dollars. That was Fisker Automotive. I worked with Asex, had some great opportunities and I really got to play at the intersection of hardware, software, machine learning, design architecture, just some really exciting cross-sections. And I started my first software company back in 2010. So it’s been about 10 years that I’ve been a startup CEO, that company, I raised a small amount of money, then a slightly larger amount of money.
We built a couple of consumer apps, a lot of machine learning, artificial intelligence, ultimately sold that in 2015. And when I sold that, there were a few things that were all happening at once. I was building a home, I was reflecting on my days doing more hardcore science and having spent the last five years building a pure software company, I kind missed the physical stuff. And I was also building a network of just really smart people who I respected. And it all sort of came together, this notion of what we do today, which is building hardware and artificial intelligence in the smart home, so that you can simply walk in and have a sensor detect that you’re there, the lights turn on the thermostat changes, music starts playing. There’s so much interactivity between hardware and software and design. It’s kind of the perfect culmination of everything that I’ve always loved. And I’ve now been doing this for five years. We’ve raised 22 million to date. Really the leading company in our space with what we do and just keeps getting more and more exciting.
Jim Freeze That’s that’s pretty cool. There’s a question I wasn’t planning on asking, but I just have to. Josh.ai the brand, did you think about maybe James.ai? I’m curious as to, why Josh.ai?
Alex Capecelatro Great question. We actually started the company as J Star, which I always hated that name, but my business partner went and got business cards early on, and that was sort of the official company. But we had Josh as the code name for the virtual assistant that you would talk to. Sort of a funny story, but basically my business partner was working out with a physical trainer for about a year. And the joke was that this trainer was really good looking, trainer kind of gym body, but not always the brightest. And when you’re building AI, that’s kind of how this stuff starts is, it’s not that smart in the beginning. It gets smarter over time but in the beginning, it’s certainly not the best.
When we started thinking about what we wanted to call the product and ultimately call the company, we realized early on that this is going to be in someone’s home. This is going to be looking over the security of the house. It’s going to be helping with entertainment. It’s going to be helping with health and wellness. And so it really got us to the idea of, we liked a dog as the imagery of Josh. And so we had an icon early on the dog face, which is the logo that we have today. And as we’re thinking about names, the name Josh, which again, started as really just a code name, started to really become a perfect name of what we wanted. In that it’s very simple to remember, simple to say, it’s unalarming, unassuming, it doesn’t sound like some crazy Cortana, Alexa, Siri type name.
The other things that we thought about were traditional science fiction, always used male voices and male names. And it’s only in recent days that we’ve had more female driven artificial intelligence. And there was a lot of backlash around Siri and what Google was doing and others with telling a woman to do your laundry, basically bossing a woman around. And we like the throwback to old SciFi of going with a male voice. And then the thing that really kind of cemented the name Josh for us was I always liked to Google product names and brand names. And part of Googling is looking at Urban Dictionary and trying to figure out, is this something inappropriate? Is this something you’re not going to like? And when you Google Josh, one of the first pages that comes up is urban dictionary. And the definition is something along the lines of Josh is that fun, loving guy, really shy at first but when you get to know him, you’ll fall in love. And we just thought that was so perfect for what we’re trying to do.
Jim Freeze Well as a marketing guy, I’m always interested in branding and how individuals or companies think about branding products. I’m glad I asked that question. That’s a pretty interesting story. So, before Josh.ai, how is AI previously leveraged in a smart home? What opportunities did you see based on that?
Alex Capecelatro Yeah, so AI is a really tricky technology in general because it means something different to a lot of people. For some people it’s Jarvis from Ironman that can do anything and basically it’s magic. But for those of us in the computer science field, artificial intelligence has actually been around for 50 years. The artificial intelligence applications that all of us use every single day, online banking for example, uses a lot of artificial intelligence. And so in the home, this was really no different. There wasn’t this sentient concept of an AI that could just do anything you wanted, but there was very specific narrow AI that was solving some really interesting problems. So Nest, for example, was one of the first to introduce this. Nest came out with the learning smart thermostat as really one of the first connected IOT devices. Google ended up acquiring them for billions. It was a huge success.
But Nest basically said let’s utilize AI, which really in this case meant machine learning, to figure out how to automate setting the temperature based on routines. For example, if we see that someone typically goes to bed with their temperature at 71 degrees, but then during the day, the temperature average is 75 degrees and they forget to adjust their thermostat when they go to work, it can automatically make those changes. So there were a lot of very narrow AI applications like what Nest was doing, but it was very primitive. When we started, there was no voice control. There was no sense of a real intelligence.
And with Josh, what we wanted to do is to build not just a voice control system, which is part of AI, but a truly intelligent system where Josh will make recommendations. It’s looking now at things like air quality, it’s looking at devices that you’ve left on that are using energy, it’s looking at possible security threats like your garage was left open, or your door’s not locked. And all of those things are easy to understand in their own right. That you can have a system that lets you know that your front door is not locked, but then to send the right notification at the right time and make it really more of an intelligent assistant. That’s the thing that didn’t exist before us, that we’ve really been pioneering the way with.
Jim Freeze Yeah. I mean, you actually just started to touch on my next question, which was around some of the platform’s key capabilities. I imagine that some people, when you mentioned this concept, have trouble envisioning how they might use or benefit from something like Josh.ai. Could you talk a little bit more about that?
Alex Capecelatro Absolutely. So the simplest thing is voice control. In my mind, voice control is a small aspect of what I spend my time on, but it’s still so new to so many people. And so with Josh, the whole system is context aware. It’s room aware. I can walk into a room and I can say, “Turn on the lights, open the shades and play some music.” This system knows I’m in the kitchen. It’ll turn on the lights just in that room, it’ll open up the shades in that room. And then the command that plays the music is actually saying, okay, what time of day is it? What room am I in? What historical commands have been given? And so you don’t want to play for example, classical music when you’re working out and you don’t want to play workout music when you’re having dinner. And so the system uses a lot of context and intelligence to make a very simple command like that work.
Of course it can go well beyond voice commands. You can always use the app and you can set up all sorts of automations. So at my house, Josh reminds me every day at five o’clock to feed the dog, in case I’d forgotten. And we have conditional automations where if it’s raining or snowing, it’ll do different things. If it’s a weekend versus a weekday. So the system’s doing a lot for me automatically, but the great thing is if I know what I want, I want to watch Breaking Bad on Netflix, or I want to listen to the Beatles in the living room. All I have to do is ask and it delivers.
Jim Freeze That’s really cool. I’m also kind of curious, given this has been a weird year for everyone in every business, the pandemic has changed a lot. I’m curious what you’ve seen in the smart home. Has it grown as a result of the pandemic? Do you have customers who are making different requests or are they prioritizing things different relative to COVID that is having an impact on your business?
Alex Capecelatro 100%. I mean, this is impacting every industry. It’s impacting most everyone in some way, but interestingly, and sort of to your point, the impact is not always negative. And so with people working from home, spending more time from home, we’re actually seeing record sales with what we do and our partners. So we’re kind of the brains and the voice control in the home. But we partner with the TVs, the speakers, the lighting companies, the thermostats, all these other products. And what we’re hearing in the industry is we’re not alone in that most of us in the smart home are seeing increased sales, increased demand. Of course, depending on where you manufacture from, that can be an issue. So some folks in our industry, they’ve been out of inventory for a while. They’ve been having problems keeping stock. And then of course, just retention and hiring and growing the company, that’s always tricky.
We brought on half a dozen employees during COVID that have never met the team face-to-face. They’ve had to be trained remotely and they’re working from their house. But that’s just part of what we’re all dealing with. What’s interesting is we’ve really leaned into the notion that as people are spending more time at home, and as we care more about the health and wellness of our homes, how can we make that better? And then you couple that with the fires in California, the air quality index outside, it starts to become a really interesting opportunity to help improve people’s lives.
So we’ve introduced a bunch of wellness features. We’ve looked into partnering with a number of new companies that are focused on helping people sleep better, helping people breathe better. There’s great circadian lighting products that we’ve been working with. And so we’re thinking a lot more about in the past couple years, there was this notion of the digital nomad where you don’t own your home. You Airbnb everything, you Uber, you basically can go anywhere. But now because of COVID, it’s the opposite. People are realizing that their home is their sanctuary, their home is their safe place. How do we help them realize that through technology?
Jim Freeze Yeah, that’s really cool. One of the other things I think is really interesting about Josh.ai is that it’s based on voice control. And the reason I think it’s particularly interesting, at the company I work for where I’m CMO, Interactions, we have a very strong point of view that voice is actually growing in importance. It’s not shrinking. Could you talk a little bit about why voice control? I think others, when they hear of a product like Josh.ai, might think of controlling it from an app or some other channel or modality. Why voice?
Alex Capecelatro So this is in my honest opinion, something that we got very lucky with. Right time, right place, right technology. But when you think about transformational technologies, they need to transcend initially the early adopter, the technology-excited person that just wants the coolest, latest thing. And it needs to transcend that to be something that really the technophobe wants. The 70 year old husband, wife, couple, or the kids or just people that, for whatever reason, they just don’t want the technology around them. And voice control is arguably the most natural way to interact with your home, second to just automation.
The best is when you don’t do or say anything, it just happens automatically. But that doesn’t work too much beyond motion sensors turning on lights and whatnot. When you think about voice control, the example that I often give is homes are getting more and more complicated, and you can’t have an app for everything, a switch on the wall for everything, but just in the room that I’m in right now, I can say, turn on the lights, turn on the fan, turn on the TV, turn on the music, turn on the air conditioning, et cetera, et cetera.
There are so many things where all I have to do is say, turn on a single user interface and I’m easily able to control everything. And so in the beginning, we thought that our target customer was going to be sort of your 35 to 55, iPhone-owning, Tesla-driving wealthy technology person. And it turns out a lot of our clients are over 65 or 70. A lot of our clients really hate technology. They’re using flip phones, but they like the ease of use that voice control is able to offer. And that’s why I think it’s really taking off.
Jim Freeze Yeah. I couldn’t agree more. I mean, I think it’s such a natural modality as well as channel for interaction. So completely agree. The last topic I want to kind of touch on, and I think this is particularly relevant to a company like Josh.ai, is privacy. There are rising concerns over privacy and tech, and specifically in the home. For example, I know many folks who are adamantly opposed to having an Alexa or Google home in their house, or just some personal assistant like that, given kind of well-publicized issues of potential recording of conversations. I think it makes them nervous. Can you talk about the importance of privacy in smart home technology?
Alex Capecelatro Absolutely. Our viewpoint is that privacy is among the most important aspects. We built our company on the very thesis that I don’t want to say you can’t trust big technology, but we’ve seen time and time again, that their motivations are pulled in many different directions. Amazon is trying to target and sell you products. And Google uses data to do a lot of really interesting things and ultimately sell you ads. What we said was if we built a company on a very different business model, one in which we don’t monetize based on data, we never jeopardize someone’s privacy, but we try to simply give the best user experience and we’re going to charge for it. It means we’re not going to give away the product, but it means that the product is the product, your data and your personal information is not the product.
And so that was always a thesis of ours. We always believe that was important, but in the last couple of years, it’s actually propelled the company. And I think it’s been one of the main drivers that helped us raise our last funding round, was the notion that as more and more people have voice control and connected devices, they need to feel like they can trust it. They need to feel safe. And the idea that having one of the biggest technology companies listening in on your conversations in your bedroom or your home office, your kitchen, that’s something that a lot of people are uneasy with. And I think those companies have unfortunately shown time and time again, that they don’t always make the right decisions. They put in microphones and don’t tell you, in certain products. You find out that information is getting leaked when it’s not supposed to.
So we said part of privacy is we’re not going to send data out to the cloud if we don’t need to. We try to keep most of the information local to the home. The user’s always in control of their data. An example of this is if you have Josh in your home, you can choose to be an incognito mode where nothing gets recorded anywhere. You say, turn on the lights, the lights turn on, but there’s no history of that. It does mean that you lose a little bit of the machine learning, right? Some of the intelligence is lost when you don’t have that data, but it’s the ultimate in privacy. And then it’s up to the client to decide what are they comfortable with and where do they want to be. But to your point, I think privacy is one of the most important aspects of this technology. And it’s not that we get it right every time, but I think we think about it with every feature and every product that we launch. And I hope other companies are doing more of the same.
Jim Freeze Yeah. I love it. A business model that isn’t based on monetizing my private data. I think that is really a unique and powerful value prop, and it doesn’t surprise me that that helped you in raising your most recent round of funding. I have to tell you, this has been absolutely fascinating, Alex. I really, very much appreciate you being on The ConversAItion. Thank you very much.
Alex Capecelatro Of course. Thanks for having me.
Jim Freeze That’s all for this episode of The ConversAItion. Join us next time for an episode featuring Brian Solis, Global Innovation Evangelist at Salesforce. We’ll discuss AI’s changing role in the enterprise and learn more about what he calls “Digital Darwinism.”
This episode of The ConversAItion podcast was produced by Interactions, a Boston-area conversational AI company. I’m Jim Freeze signing off, and we’ll see you next time.
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