Exclusive interview for SPINOFF.COM with Mikhail Svarichevsky, CTO at Wayray SA, about the fіrst truе augmеntеd rеаlіtу cаr nаvіgаtіon sуstеm
Nаvіon іs thе fіrst Truе Аugmеntеd Rеаlіtу cаr nаvіgаtіon sуstеm thаt аpplіеs аеronаutіcаl prіncіplеs to lаnd nаvіgаtіon. Just lіkе іn а vіdеo gаmе, the driver follows thе grееn аrrow, dіrеctіons, trіp dеtаіls аnd а routе ovеrvіеw іn front of the cаr to rеаch the dеstіnаtіon. It became possible due to the technology of Truе Hologrаphу. Іt аllows Nаvіon to dіsplау vіrtuаl іndіcаtors еxаctlу whеrе the driver nееds thеm to bе — on thе roаd аhеаd. Thе sуstеm is smаrt, sаfе, аnd fіt for аlmost аnу cаr. No hеаdgеаr or еуеwеаr rеquіrеd.
S.O.C.: Mikhail, SPINOFF.COM team and I are so grateful that you agreed to spend this hour speaking with us and sharing your insights about WayRay. First of all, I would like to express my respect and admiration to your team. WayRay impressed us all. Your product is a breakthrough in the sphere of navigation systems. At first, I would like you to say a few words about your background, your previous experience, and how did you join the WayRay team?
Mikhail Svarichevsky: I’m a CTO in WayRay and I joined the team as it typically happens at the very beginning of the company. The founder of the company Vitaliy Ponomarev approached me when he had this idea of creating the holographic head of display for automobiles, but of course, he had this idea and I had to find out how to make this happen. We had a scientific advisor and we had to go from there.
S.O.C.: We deal with science spinoffs, which came out from the world leading universities. The scientific background is of great importance for us. Who is your scientific advisor?
Mikhail Svarichevsky: Of course, at the very beginning, I had absolutely no background in holography and the same applies to every member of our optical team. There is a little demand for holography and especially with such requirement as we have. There is some market for security true augmented reality like the holograms you see in the passports or on money, but those are completely different types of true augmented reality, they have different requirements and in some sense, they are much simpler and you can’t just go to the market and find someone who is making holographic optical elements. We found the consultants and after we had proven that this is working we managed to raise funds and grow the team quickly. It was the year of 2014. That was the first prototype, which used polymer true augmented reality what is similar to what we have right now. Earlier prototypes used conventional optics like mirrors and lenses. Those prototypes are much simpler and they can’t represent the current technological idea.
S.O.C.: It is not a secret that the development of a new technology and its subsequent commercialization presupposes some problem and addresses unmet needs. Respectively, what problem did you intend to solve by creating your technology/product? What results did you plan to achieve?
Mikhail Svarichevsky: The idea of the head of display is that currently you have the car with the head of display, which is quite a bit of a premium, so the head of displays are not available for everybody. It is a very expensive option in very expensive cars. Regular users are rarely able to afford it. There are the reasons for that because the commercial head of displays are expensive to the manufacturers due to windshield differences and geometrical differences in different cars, so every car requires some customization of the commercial head of display. The other problem is that the head of displays you can buy right now in the market have a rather small field of view, which means the image they display is quite small; they display rather small signs like “turn in 200 m.” Our goal was to display much larger field of view and relate the road, relate to the real objects, so you can display the path you want to go right on the road in the augmented reality mode. That was the idea. Four years ago that was unthinkable. Currently, we see that some manufacturers are trying to use the conventional optics, but the optical systems are really huge and it may be even more expensive and even less available for the end users.
Another problem is the distance to the visual image. Conventional head of displays are showing image quite close to the driver. Typically about 2 to 3 meters, sometimes even 1 meter, so the image you see is really close. If you want to display the augmented reality and to reduce the time needed to refocus your eye from different distances, because it always takes time, you have to display image quite farther away like about 7, 10 or 15 meters depending on the situation, so our solution was the first offering large field of view and large projecting distance.
S.O.C.: What about the competitors? What are their results? What are the USP of your product and fundamental difference from other technologies that tried to solve this problem before you?
Mikhail Svarichevsky: There are numerous competitors making the conventional head of displays. So, what’s the idea, how the head of display is constructed? The idea is that if you want to make it look like the object is far away from you, the rays of light from it should be almost parallel, so the optical device making those parallel rays of light is called collimator and in conventional head of displays the collimator is made of the lenses or mirrors, the curved mirrors. Those lenses are hidden in the dashboard and then the image is reflected off the windshield. There are some tricks like wedge PVB film required to avoid double imaging, but you cannot stick it in every car in every windshield and expect it to work, but it works and the problem is that the optical system is quite far away from the driver, that makes it really large or on the other side it limits the field of view, that is why those conventional head of displays typically have 5 by 2 degrees field of view, which is really small image and literally all the competitors making that kind of head of displays and there is slightly more modern approach, which uses the curved reflector, so instead of reflecting it off the windshield, which has form, which is not optimized for the head of display, they place additional piece of glass specifically designed for this head of display. So you look not only through the windshield but also through the combined glass. Sometimes those head of displays offer a slightly wider field of view, but still, they require looking through two glasses and this is not very convenient. There are dozens of companies counting the Chinese ones trying to make those head of displays, but they are limited in the field of view and the projection distance. If we turn to the technological difference, in our case the holographic optical element is embedded or glued to the windshield, which means that the last optical element doing the whole optical work is on the windshield that is the projection unit is much smaller. This holographic optical element has a very high transparency, so there is the requirement for the windshield transparency and we passed them with a really large margin because the holographic optical element is active for the only very specific angle of incidence for light.
S.O.C.: For spinoff companies, their intellectual property is a key to success. The investors pay particular attention to it. What key intellectual property does your company have?
Mikhail Svarichevsky: Of course, if there is no IP the technology will be worthless, so we work on protecting this. There is quite a number or patents already applied; few of them are public yet. It is a very long procedure and we have numerous patents on various stages.
S.O.C.: Our investors always ask what is the investment structure of the company? Do you still own the controlling stake in your company?
Mikhail Svarichevsky: As we are quite old start up, we are more than 4 years old, the structure is quite complex. Both I and the founder have shares and several investment funds and inventors have shares, but I cannot give you any specifics of course. The only public investment event we had last year when we received 18 million from Alibaba Group in China. That was the largest investment for today. The controlling stake is still inside our company.
S.O.C.: We wonder what is the actual addressable market for your invention and what are the current competitors there? This is very important to show the investors the uniqueness of WayRay.
Mikhail Svarichevsky: Of course, our main market is automotive and we have a tremendous amount of cars manufactured every year and we already preparing for self-driving cars of the future, for example, our CS 2017 prototype. In some 10-15 years from now, some optimists say even earlier no one will be really required to drive a car personally and for self-driving car you need a different kind of head of displays, more for entertainment and to bring some confidence to the passengers, like to show that the car is seen, the obstacles are seen, etc. There is a large market in the automotive industry that not ends with the conventional navigators for drivers when the drivers are gone. We are ready for that already. Another thing is that we are working on a number of ideas. That is obvious that the head of displays are used for airplanes and helicopters, but we are not going there as we are a commercial company and this area is military heavy and of course it’s a no go for us. We are always thinking where we can apply this idea in the market and there are few ideas how to make it into home entertainment device or for advertisement or for a personal pocket device. So this technology has some applications in side areas. Maybe at this stage, these are less attractive commercially than the automotive industry, but still we are working on that and actually, this will give us some of the market.
S.O.C.: Have you started sales already? Do you have contracts signed with automobile manufacturers at this stage?
Mikhail Svarichevsky: There are two approaches to make it into market. One is after market and the second one is through car manufacturers. And we are going in both of them so our fraction product is NAVION, which we are working on right now, which is closing to the end of the development cycle. As for the car manufacturers, we have contracts with quite a number of them, so for every major car manufacturer you have ever heard we most likely have talked to them and have some sort of the relationships with them on making it into the car, but of course the work with the car manufacturers is quite a slow process. Sometimes they have really long time scales for the development. Now they might be working on the cars which will be sold in 2025, for example.
S.O.C.: Which markets do you plan to approach?
Mikhail Svarichevsky: Our very first priorities are USA and China. Initially, it was the USA, but now we see that China is growing really fast and now we have a lot of presence in China and we understand this market much better now and we see it's getting more attractive and of course Europe. That would cover most of our effort.
S.O.C.: Do you have some partners in these countries?
Mikhail Svarichevsky: We already have the sales team and we have people working on the product in the USA and China and of course as we are working with many car manufacturers, they are placed around the world in the USA, in Europe, China. So we have a lot of activity in all those regions.
S.O.C.: Do you have some strategy? Do you plan to work through the distributors or open your offices?
Mikhail Svarichevsky: We are already the multinational company, we have offices in many countries. we have people working for us, and we are always considering where we need the sales people, technical people to help with manufacturing and where we need to have engineering. Every country has its own strength and weakness and, for example, China is getting more expensive like 5 years ago it was a cheap country, cheaper than Russia in terms of labor cost. Now the cost is rising really fast and the highly skilled labor is getting more expensive. In the nearest future, we plan to grow the Chinese office, because our product is going to be manufactured in China and that requires a lot of over side and also the Chinese engineers have more experience in designing electronics just because they do it on a daily basis. There are a lot of design houses working on arm platforms making very complicated systems really fast. There is always some sort of a split: we did like more generic parts in China and more project tailored parts in Russia. We’ll see how it goes, where is more efficient.
S.O.C.: By the way, I know you are originally from Russia, but you moved and created your main office in Switzerland. Now you are based there, right?
Mikhail Svarichevsky: Yes, and the idea is that any hi-tech company cannot be bound to one country. You cannot have all the manufacturing and engineering in one country, so that is why it was impossible to have it all in Russia and it was never an intention. We have the main office in Switzerland, R&D in Moscow and production plant in China. We are going to open office elsewhere as needed to support our day to day operations. Currently, the bulk of engineering is happening in Russia, but where is more efficient we do it in the specific country like USA or China.
S.O.C.: The investors will want to get a clear picture of how many rounds of investments have you completed? Are you seeking for the investments at the moment? What is the volume and time limits? What milestones will the financing get you to? What did you plan to use the invested funds for?
Mikhail Svarichevsky: We had several investors in the early stages at the time when the company was very small. Then we had a large round of 18 million with Alibaba Group. That allowed us to grow our team considerably to about 140 people right now and as every start up we are looking for the next round in the foreseeable future. The intention is that the next round might be the last one. We can look at something like USD 50 million. The idea is that high volume manufacturing is quite an expensive process if we go to really large contract manufacturer we cannot go to him and say: “Hey, we need 1 thousand units manufactured”. That’s never going to happen; your volume has to be down. That means that the volume should be high like hundred thousand units or more and if you multiply hundred thousand units by abstract USD 100 you’ll already have to spend USD 10 mln. not counting any taxes or logistics.
S.O.C.: And the last question, could you specify the most convenient way you would like to receive inquiries from potential investors?
Mikhail Svarichevsky: We have e-mail for investor relations.
S.O.C.: Thank you for your time and sharing insights. I wish you success with your product and hope soon we’ll see the way ray on the passing by cars.