LISNR CEO Rodney Williams revolutionizes the role of sound in IoT
Rodney Williams, CEO and co-founder of LISNR, discusses why ultrasonic audio technology will allow for entirely new networks of sound to change our IoT interactions – from unlocking our cars to redeeming concert tickets. Chatting with Samsung NEXT’s Head of Content, Ryan Lawler, he also shares advice for entrepreneurs, his views on developing company culture, and his experience building a corporation outside of a major tech hub.
Ryan Lawler: I’m here with Rodney Williams from LISNR. You’re founder and CEO, right?
Rodney Williams: Yes. I think the title is still correct.
Ryan: Yeah. Tell me a little bit about LISNR and what you do.
Rodney: Great. We actually create software that transmits data using sound. The sound is inaudible to the human but think of it as a wireless protocol for data transmission just using your speaker and your microphone.
Ryan: So it’s kind of like a dog whistle or something where it’s a frequency that the human ear can’t hear.
Rodney: Think of it as an extremely smart dog whistle.
Rodney: But yes, it’s something like a dog whistle. Most of the use cases are really just point to point, short range, wireless transmission, but that’s everything from the potential to your key, your wallet, your card, or the way you get marketing messages based on where you are. It’s an entirely new network based off of sound.
Ryan: Gotcha. Tell me a little bit about how you got started and how you came to this problem, how you decide to start using sound in this way for these different use cases.
Rodney: Well, prior to LISNR, I was actually at P&G. One of the core problems with any marketer is understanding audience measurement down the device. Audio measurement data is very generalized. The initial concept was, could I use sound to kind of notify each device from an audience measurement perspective? Now, the interesting thing about that is that’s a click. Clicks turn into ones and zeros. Ones and zeros turns into data and all of a sudden, we were transmitting data using sound. I think we always listen to our customers, which was always asking to do more because of the potential. I just think five years later, the market has kind of built its way around.
Ryan: Right. So when you got started five or six years ago … It was like 2012 I think?
Ryan: Okay. You got started and you were focused primarily on music brands and people like that. Tell me about that experience, how you signed people up, how you got them interested in using this for measurement.
Rodney: Yeah. As a startup, I think you have to focus and the technology wasn’t developed as advanced as it is today. So it was a very simple ID. It wasn’t data over audio. The core business with that was that we placed these IDs in music and we placed these IDs at music events like festivals and the initial concept was really around triggering additional content based on your listening behavior wherever you may be. I like to think of it as imagine if BuzzFeed was to pop up based on music around you. The power of it was that we were using this technology to kind of power that experience. That’s how we initially launched the product.
Ryan: Got it. Then, gradually over time, you’ve expanded this to involve a lot of different other use cases and applications. Tell me about that transition and how you started to realize this is really powerful. This is something that we can use outside of just music and activation, that type of thing.
Rodney: You know, I think even in 2012, our vision was to create more connections, more connections and more places than never before. It didn’t say anything about sound and it didn’t say anything about music. Connections, you may think it’s just audience measurement, but connections was us understanding how all of our devices connect more efficiently. That was not always our long tail vision. I think that we picked certain products or services in certain industries to address. In the beginning, we actually went from music to broadcast. We went from broadcast to sports, customers like the Cleveland Cavaliers to Dallas Cowboys. Then we leveraged sports to become the ticket. We announced earlier last year Ticketmaster will actually transmit ticketing data using sound as an alternative to QR codes of NFC. Once we were transmitting sensitive data like a ticket, then we’re moving into payments. We announced that Synchrony Financial using us in the payment space not too long ago. That’s kind of the transition, but it was planned.
Ryan: Got it. Got it. How did you even come to the idea of using sound as this way of transmitting data?
Rodney: I think personally I just like to think that it’s just natural. I was born deaf so I’m still 50% deaf in one of my ears. I don’t think it’s a coincidence that the company is called LISNR. Outside of that, let’s just get to the facts. I think it was … What we thought and I think it’s coming true is that this concept of the internet of sound is building around us, the Google Alexa, the home assistant. We now have more microphones and speakers on us and around us than ever before. The internet of sound had already existed. I just thought that there was a bandwidth of data or opportunity within the near ultrasonic range and we went for it.
Ryan: Got it. From a sound or technology perspective, what’s involved in terms of just getting people signed up or getting people to use this? I imagine that a lot of your consumer use cases, they don’t even realize that the backend is being powered by your technology.
Rodney: Yeah. I mean we’re an enterprise technology so we sell to big technology companies. We’re like a tier two or tier three provider. The end service that a consumer may use, you may or may not know. In most cases, we go after certain industries. Unfortunately and fortunately, it’s pretty wide. I mean we have a single SDK. We have an API. It lives and breathes on any mobile device, any electronic. We kind of selling our services depending on the use case.
Ryan: When you talk about founding this company, you come from P&G, you come from the corporate world, you come from the brand and marketing world, and then you take this entrepreneurial journey. What was that like going from working for someone else to working for yourself and being your own boss and moving into being an entrepreneur?
Rodney: Honestly, I don’t think anything’s changed. I think at P&G, I remember my interview. I was actually applying for a finance job and somehow I got into marketing. They said, “Do you know marketing?” I said, “Let’s generalize it a little bit. I think I’m a problem solver and I think you have problems and I think what’s unique about me is I can actually go out and fix them.” That’s all we’re doing as a startup in building a technology. I think we’re addressing problems quicker and faster than others and then we’re going to execute faster than others. That’s the way that we’re going to continue to lead this data over audio world.
Ryan: Right. I think you have an interesting story. This start out is kind of like a project. This was like a Startup Bus thing, right?
Rodney: Well, I didn’t know startups.
Rodney: It was a competition called the Startup Bus on the way to South by Southwest in 2012. I took two weeks off and hopped on a bus and that’s how I met my co-founders. Then three months later, we raised $850,000. That’s how it happened.
Ryan: That’s kind of crazy.
Ryan: One of the other things that I think is interesting about your story is that your based or at least originally your HQ was in Cincinnati, right? So what was it like founding a company outside of the major tech hubs like Silicon Valley or New York or even Seattle and saying, “This is where we’re going to place our stake in the ground.”?
Rodney: Yeah. I just never believed in regions being able to … I think regions can be a catalyst but I think ambition and inspiration on technology can live and breathe anywhere. I think there’s great talent anywhere. In the beginning, we used to deal with that. How did this technology start in that city led by this type of group? It was just very unique, but I think that uniqueness has allowed us to attract a very unique set of talent to Cincinnati and ultimately led to us innovating better than the market, which is … We’re still excited to be there.
Ryan: Yeah. Just from a talent perspective, are you finding people in market? Are you recruiting them from outside of market and then selling them on Cincinnati as a great place to live? What’s the recruiting standpoint look like?
Rodney: I think it’s both. I mean this isn’t easy tech. We’re not building something very simple. Number one, I think we attract engineers that are passionate about audio, digital signal processing, and the ability to create and build things that have never been built before. We tend to attract engineers from around the world that actually want to work for us. The last engineer, took him from Israel. I think that’s number one. I think Cincinnati is unique and we can great talent there. We also have an office in San Francisco that’s growing. We want great talent and I do think great talent can be from anywhere so we’re not specifically looking in a particular region.
Ryan: Got it. How about raising money? I feel like it might be a lot easier if you’re closer to where most of the investors are. It’s just my understanding there aren’t a ton of investors in the Cincinnati area.
Rodney: Hey, investors. No, there’s not. I probably have an investor from 12 states.
Rodney: I think you got to get on the road and you got to get it done. It’s not a lot in the Midwest, but that’s okay. I only have one Silicon Valley investor and that’s Intel. I mean we have raised over $20 million to date, so yeah, it’s a challenge, but I think if you have a great product, I think people will come.
Ryan: Got it. From a sales process standpoint, what’s the pitch to these enterprise businesses to adopt your technology?
Rodney: You know, I think the pitch has changed. We now have competitors and we have a really big competitor and Google has created an audio product. Our product market fit conversations tends to be a lot less. Nowadays, it’s I want to use this to transmit a credit card for a better point of sales system. I want to use this to access the vehicle because I think it may be a cheaper solution. Then at that moment, we’re educating them on the technology. I think our pitch today is much more about education and what the technology can enable because it’s starting to be a buzzword about using data or using audio to transmit data. The other piece about this is I am a marketer by trade. I mean at the end of the day, there’s about 20,000 searches for a data over audio solution on any given week. That’s already there. We today only capture about 30% of that. That equates to 80% of our leads. If I can increase that or double that, you can see how we can start to grow the business. Hopefully that answers your question.
Ryan: Yeah. No, we’re getting there. I’m kind of curious how the market’s changed. I think that you’re speaking to this a little bit. When you first started this project five or six years ago, it seems like it was very new. Now you do have competitors. Is it just the market is catching up to you? Is it that people are just more aware and educated of the capabilities of this technology?
Rodney: Yeah. If we can bucket this technology, it’s what I like to call the internet of sound. There’s a group of companies that’s carving out a new internet of sound market. As we all gain more customers and adoption, awareness starts to pick up. Awareness is great for a new technology. This is a new invention. That’s the most important piece that have changed. I think the pitch is still the same and the way I pitch is very similar to when Steve Jobs talked about the iPod, he didn’t tell you how much space. He said, “I’m going to be 1,000 songs in your pocket.” If I’m in a meeting and we’re talking about a payment solution, every other way that you actually use to pay something else 10% to 30% of the time. That’s a defect rate. I’m going to introduce a technology that has a defect rate of less than a half a percent. That’s a significantly improved consumer experience. We can talk about why and how and devices and hardware, but at the end of the day, if you’re in the business of faster transactions, I’m in the business of giving you a solution to have the better consumer experience. That’s the pitch.
Ryan: Got it. Right now it’s primarily on mobile, right? I feel like there’s more devices out there that want to connect with each other, that want to talk to each other. What’s the outlook look like for that and how does that affect your technology?
Rodney: Mobile devices definitely. We will be in cars. We announced some of the work that we’re doing with Jaguar and Land Rover. We’re in turnstiles with Ticketmaster. We’re in hardware. I think that we will start to be applied to a lot of Bluetooth devices and speakers for faster quick pairing, so wifi Bluetooth pairing. The good thing is I think we can cross over 100 million devices in 2018.
Ryan: Walk me through some of the actual consumer use cases or what it might look like for user. You mentioned turnstiles. You mentioned cars, Land Rover. How are those actually enabled? What’s the user experience?
Rodney: Yeah. The funny thing is that I can answer the question, but better yet, if you were going to your favorite concert, how would you want to enter?
Ryan: Oh, I’d like to just walk right in as opposed to having someone have to scan my phone or even just carrying a paper ticket that needs to be scanned, something like that.
Rodney: That’s what we’re enabling. See that’s an easy sell, right? No, I mean I think that’s the future. The only reason why you’re using a ticket is because it’s just an old process. The only reason why you’re scanning is it’s an old process. If I can identify who you are as you approach a gate, I don’t need you to pull out your phone anymore. Have a great day. That’s the type of experiences that we’re bringing to life. When you talk about some of the work that we’re doing in the auto, it’s about walking up to the vehicle, the door opens. It’s about sitting down and the car understands what seat you’re in. You automatically pair. It’s interesting when you start to sell based on the consumer experience but the consumer doesn’t care. You don’t care that it’s using sound. You’re so happy that you walked into an event without a line and you’re faster, you’re getting to whatever event you want to get to better.
Ryan: The big selling point is really just about failure rate or you’re much less likely to fail than Bluetooth for instance. There’s a lot of Bluetooth connectivity between devices, I feel like, right now. Right? Just in terms of pairing or whatever.
Rodney: The connected world, I mean Bluetooth is 30 plus years old. Better yet, the bar code is 50 plus years old. When was the key invented? You’re comparing a technology that was created in the last five years with a technology that was created 30 years ago. Bluetooth has inherent issues, pairing and syncing is the most notable. I have to pair and sync. How many times does something fail a pairing in a 10 time loop? It’s going to fail 10 to 30% of the time. We have been okay with that for a long time. The introduction of LISNR is removing a lot of that complexity. Even in some cases, we’re going to make Bluetooth work better. That’s the business that we’re in.
Ryan: Got it. You’ve raised a bunch of money to date, right? You’ve raised, you said, north of 20 million. What did that look like just in terms of the first 800k, 850k, then the first series A and how you went into each of those processes?
Rodney: I mean they’re all very different. You almost feel like you’re selling something completely different as well. I just think at every stage of the company, the investors are looking for a different thing. It’s important that you build a track record that gets you there. Personally, I don’t think anything has changed. I think that we are, if anything, we’re accelerating how we fix problems, whether that’s a customer problem now because we have customers and they’re trying to launch. In the beginning, it was a marketing problem or communication problem. Or in the beginning, maybe it was a product problem. The product just wasn’t working correctly. All of these things, I think the moment we get it right, the moment this thing accelerates to the levels that we are anticipating.
Ryan: Got it. For first time entrepreneurs, what advice to you have to them just getting started? What would you tell someone who’s looking at you and says, “You’ve been successful so far. How can I replicate that?”?
Rodney: Yeah. I mean the first question I usually ask is, “What are you scared of?” I think that’s a really personal question but most people are scared of failing or scared of not living up to some expectation. I think you got to throw it out the door. Well, I think if you really want to go after it because I think failure is going to be how you learn the fastest. I think doing things wrong is a positive. I think over the six years I’ve grown so much because I’ve almost burnt the ship almost, all the time. That has just allowed me to grow to become who I am today and it’s still allowing me to grow. The other advice I would always say is listen but not listen for what that person is saying, listen for why they’re saying it. If an investor says, “I think there’s an issue with your go to market plan.” Or, “I think there’s an issue with your pricing model,” or whatever the case may be. You can get stuck there and he may give you advice and that may or may not be the right advice, but you got to take step back and say that, “If he’s questioning this, then he has an issue and this is a risk that I have to mitigate.” I have to bring in some level of expertise or some level of answer to help mitigate his risk and that’s really the question any investor is asking about risk mitigation. I think that’s really important because sometimes you can get emotional about your project or your startup or your technology.
Ryan: Right. How do you deal with just the emotional struggle of being an entrepreneur? I’m sure that you’ve been through a series of ups and downs over the course of the years. I feel like every entrepreneur has to, right? Things might not work out as well as they wanted from a product standpoint. Maybe a potential customer falls through. Maybe you didn’t get that investor that you were really hoping for.
Rodney: I actually think you need to remove emotion completely. I think there’s only one emotion that needs to be at your company and that’s passion. I think everything else needs to be … You need to make decisions based off of facts and data and conversation, whatever else, but you don’t want to ever make a decision off of emotion. You don’t ever want to react emotionally. At LISNR, that’s something that we actually spread throughout the organization. It usually gets to what type of culture we’re building. I always say, “Well, we’re building an army. We’re not friends. We’re not family members. That’s not what LISNR is about.” I always give the army analogy because think about opposing an enemy. I want the best sharpshooter. I want the best medic. We shouldn’t be friends. I want the best sharpshooter. We should all come from all over the world but we’re opposing one enemy. I think that’s the approach that we take. What that allows us to do is mesh a whole bunch of different cultures and ages and everybody is fighting for an ultimate vision and at the same time, we’re passionate about that purpose. We’re not making emotional decisions against each other or about each other or about a loss. No highs, no lows. We’re going to stay in the middle.
Ryan: When you talk about building an army and this common enemy, what is that? Is that competitors? Is that lack of understanding about the technology?
Rodney: It’s just everybody else. It’s everybody else. We’re a household name and so we’re a product that is penetrated to market. You’re either pro LISNR or you’re not. That’s it. If you’re not at the gas station pitching to the gas attendant because you just are that passionate, then you didn’t get it. I want everyone looking at everyone as you’re either on our side or you’re not. I just think that’s really important when we’re going up against the giants that we are going up against.
Ryan: When you talk about building the culture of the team, I find it really fascinating just to look at how things change as companies grow. It’s one thing to have a culture when you’re three or four or five people. It’s a whole other thing when you take that step function up to 20, 25. It’s a whole other thing when you go to 50 to 100. How are you dealing with that and making sure that everyone continues to be focused on this common goal?
Rodney: Yeah. The good thing, I think I’m kind of polarizing.
Ryan: You know what you’re getting into if you’re signing up with Rodney.
Rodney: I think you know what you’re getting into at this stage. I think I’ve done a decent job at attracting management that are completely different and we work very well together. It becomes a model. It’s duplicated at every level. They don’t necessarily need to understand my culture. They probably just need to understand their manager’s culture because their manager’s manager’s culture is my culture. You know what? This is my first time doing it. We’re at 40 employees. It’s okay now. It may break at 100. I don’t know. I hope so. I love breaking things at this point. I do think we created some process to make sure at that stage, we have a whole planning and interview process. It’s really important to identify that passion about what we do. It’s really important for you to think that you’re great at what you’re doing. That’s really important, confidence. I mean I think we’re starting to develop process to make sure that we continue to maintain that type of talent for folks that come in the company.
Ryan: I’m sure one of the things that you probably bump up against, maybe with investors or maybe even with potential customers, is that you are a non-technical founder, right? I feel like there’s a lot of skepticism about people that have never done product or don’t really know how to code themselves. How do you speak to that or how do you overcome those questions that people might have?
Rodney: Yeah. I mean the way I answer it is I usually say something like, “I think most great founders are non-technical.” There’s a laundry list of that. We can talk about it. As an investor, I think they should do their research before me. Anyway, I think there’s other things that’s more important. When we do get into that conversation, my entire career is a track record of fixing problems and inspiring people and working with people. I did it at the world’s largest advertiser. Prior to that, I was in the government. Prior to that, I did four degrees by 24. Prior to that, I was the team captain. Prior to that, I won the state championship. It’s the same guy. It’s the same guy that just want to go out and do his best and has the ability to learn and communicate and have fun. When someone asks me what makes me believe that I can do this, I usually say I’m still doing everything that I’ve always been doing. Just because you’re new to me is the only thing new here, but I’ve believed in myself way before we ever met.
Ryan: Awesome. Well, I want to thank you for joining us, Rodney. If someone wants to find out more about LISNR, connect with you as a potential customer, or join your team, where can they find you and your company?
Rodney: Yeah. LISNR.com. I’m @RodneyDWilliams, pretty much at every handle. I would love for you guys to join our team. It’s a pleasure. Thank you.
Ryan: Excellent. Thank you.