Interview with Eric Kanagy, CEO of RedPost

RedPost is a small start-up software, and out of necessity, hardware company, based in Goshen, Indiana. The company first came to national attention thanks to its DIY digital picture frame kit, which includes a 19-inch LCD screen, a mini PC with wireless networking capabilities, and Linux, making the kit totally configurable and a tinkerer’s dream. But, it turns out, the digital frame kit is just a means to an end. The plan, according to CEO Eric Kanagy, is to develop the software backbone to create low-cost digital signage networks. Kanagy recently took some time to speak with us about RedPost’s genesis, future, and its commitment to sustainable practices.

Tell me about how you decided to start RedPost. What was the impetus?
What it came down to was that I couldn’t find anyone else doing what I was looking for. I had looked at this whole idea about 4 years ago and LCD prices were too high at that point. I was working for a local non-profit arts organization and was trying to think of ways that we could get the word out about the theater that we were doing and so looked at building a system like what is now RedPost/Goshen. Then, it was far too expensive.

This past fall, I started looking at it again … (and found that) LCD prices were half of what they were and then started looking into the digital signage market itself. Everything was very expensive, very proprietary, closed. Nothing was really what I would want in a digital signage system, which would be able to do whatever I wanted.

What was your background before starting the company?
I was a computer science major in college and I worked a summer for Transmeta out in Silicon Valley right at the height of the boom, right before the bubble burst. I worked for another tech company, a start-up, in Charlottesville, Virginia. I was developing software, web-based software. I have a pretty heavy tech background.

How many people are at RedPost right now?
There are three of us. Myself and two software designers.

As I understand it, you’ve got two projects going on right now, RedPost/Kit and RedPost Goshen.
Yeah. It’s all the same platform. Really calling the kit a digital picture frame is kind of a lie, in that it’s really so much more than that. It’s not just a digital photo frame, it’s using Firefox, so you can show any kind of web content on your screen.

What’s the interface for that? Is it an onscreen interface or would people hook up a USB keyboard?
The computer boots off a flash drive. And on that flash drive is a text configuration file. In that text file, you can set different settings, as far as pulling images from a local drive, pulling over the web, what’s the timing of your images, etc. All that feeds into a JavaScript in Firefox. You can really set it up however you like. We’re working on some really nice Web 2.0 software that would allow you to manage as many screens as you have.

That sounds like the kind of thing that would sit at the heart of distributed digital signage network.
Yeah, exactly. This whole idea of a Linux-based photo frame is something that lots of people have thought of, that lots of people have done. We’ve just made it really easy — having a kit with all the pieces there that looks really nice. Nobody’s done that yet. But lots of people have messed around with (DIY digital frames) in the Linux world.

The original idea that got you thinking about this was digital signage and after that came the idea of selling a kit?
Yeah. Google’s mantra is release early, release often. So (the kit is) kind of like an early release of our whole platform. Sort of a beta version of it. There is a demand for it. I’ve sold 14 so far.

How long has in been available?
Two and a half weeks, three weeks. Selling 100 a week would be crazy, but if we could start selling 5 to 10 a week, that would be great.

For people who may not have been to your site, can you explain what the RedPost/Goshen project is and how that works?
It’s a very localized system, a network of eight screens. There’s going to be two more in the fall. They rotate through upcoming event posters. So local artists and event planners go to the website, sign up for an account, pay $9, and then upload a poster. Then the poster sits in the system for two weeks. What’s unique about it is that it’s very, very localized. It’s a very small system, in a small town.

And what’s the response in the community been like?
The response has been great. I just put (an LCD) in last week at a local supermarket. That’s one of our best locations so far. People are really excited about being able to spread the word about their events in a way that they haven’t been able to before. If you compare the bulletin board to the RedPost system, when you go to a bulletin board there’s so much content there and a lot of it is outdated. It’s overwhelming. Unless you’re looking for something very specific, you just don’t look at a bulletin board.

Are the people putting their event flyers into the system reporting that it’s driving more people to their events?
I send out a survey after each poster expires. Overall, I wouldn’t say it’s had a huge impact on many events, but it’s reinforced the marketing. It’s helped remind people that something’s happening. It’s helped reach some new people in some new places that wouldn’t have heard of it otherwise. It’s not the be-all-end-all solution to marketing your arts event, but it’s something that can strengthen your event. And as people learn to look at these screens for this kind of content, it should continue to improve attendance.

Do you have to worry at all about installing the LCD panels all around town? Is there an issue of theft or graffiti or anything like that?
We haven’t had any problems like that. I think that’s the nature of being in a small town. We’re using security screws instead of regular screws, so you have to have a special bit to take them apart. There is the capability to put Plexiglas or some sort of barrier in front of the LCD screen, but we haven’t done that. The screens are so cheap that it wouldn’t be very expensive to insure them. And if one goes, you’re not out a couple thousand bucks. It’s just a couple hundred.

What other kinds of places besides the supermarket are the screens posted in?
A farmer’s market, a coffee shop, a chamber of commerce, the local college, the local retirement center, a local bar. Kind of a variety of locations, different demographics, different age groups.

How will you decide when or if to add more screens in Goshen?
There are 10 paid for and ready to go, so there will be two more going in. What I’m doing now is working with a local non-profit that runs a website called Artseverywhere.com. That website is a regional art-event information website. So what would be great — and this is what I’m proposing to them — is that they take over the system and we expand it to the surrounding 3 or 4 counties that they’re covering with their website, tie it into their website, so you sign up (to list) your event on their website, which is free, and then, as an option, you can choose to put your poster into the RedPost system. That would be a lot more powerful because then you’re reaching audiences all over the region.

What’s the process for serving the content to the panels? Is it an RSS feed?
You can just point your screen to a URL and then Firefox loads that URL. On the server side we have a JavaScript that updates itself every hour. It queries the server to see if there’s an updated list of images and if there is, it downloads the new ones.

Is it your plan to expand the signage network beyond Goshen and the surrounding counties to other cities?
We’re a software company. We don’t want to be in the ad sales business. We’re building the hardware right now because I couldn’t find it anywhere else. Our focus is making really good software. We’re selling hardware right now, but if China could make it cheaper and at the same quality, that would be great. I would rather sell the (digital signage) system to people. I’ve already talked to several people who want to do an ad network. Somebody else wanted to do kind of the same thing, an arts information based network. People have these ideas and we just want to help them do what they want to do.

Given that you want to be a software company, are you envisioning a big future for digital signage?
The digital signage market is growing incredibly right now. It’s sort of right at the beginning of the growth curve, or we’re headed up it. No one else that I’ve found in the market is targeting the low end. Everyone is going with the high-end, big plasma screens, expensive software. So I think there is a lot of room for our approach, which is cheaper, simpler, easier to use.

What factors will spur greater adoption of digital signage?
I think cost is a huge thing. The big retail stores can affords the plasma screens all over because they have the money to do that, but mom and pop retail stores can’t afford to put $2,000-$4,000 into each screen. Have you seen Minority Report? That kind of digital signage can’t be done unless it’s really cheap. Unless the future world is just incredibly wealthy!

What information do you have about the people who are buying the kits?
I sold two to Germany, one to the UK. The rest are in the US. Several of (the customers) are buying them to test them out to see if they want to buy more. One was from an ad agency. They wanted to use it in their entryway. They wanted something smaller than a plasma screen. People who get what (the kit) can be used for have all these ideas.

How are you funding the company?
That’s part of why the kit is here. It’s the whole bootstrapping method. If I can sell enough kits, then I can keep from having to sell parts of the company to investors. And with the kind of web development tools that exist — Ruby on Rails, which is what we’re using — we can develop quickly something that’s high quality, without tons and tons of manpower. My hope is that I can continue to sell enough kits to fund our operations for a while. And then once we have that software, I can start selling larger-scale systems and get that recurring software revenue.

One thing that struck me as interesting about your website was the discussion about total cost decision-making. Can you explain that?
A lot of companies still aren’t accounting for the kinds of costs that younger generations are going to have to be paying for. I very much believe in capitalism, believe in the system, but I think you have to account for the total cost of what we’re doing. So we can’t just dump a lot of sludge in a river if we’re not accounting for what it’s going to cost to clean it up. Maybe instead of dumping the sludge it’s actually cheaper to process it because long term that cost will be lower. Then that’s what you should be doing.

Operationally, how does that play into the business? How does that impact the decisions you make or the vendors that you choose?
I’m actually paying more than I was initially (for the mini PCs), but part of that cost decision is that the company I’m getting them from now is so much better to work with that it takes less of my time. And long term they’re going to give us better service and better quality parts. While the per-unit costs may be higher initially, long term I’m thinking the costs will be lower. We’re trying to recycle as much as possible. Electronics are really nasty things; there’s not very much you can do as a small company.

There’s a local company, Herman Miller, based up in Michigan. They make furniture like the Aeron chair. What they’ve done is they’ve gone to their suppliers — and they’re big enough that they can do this — and said we want you to take out all the toxic chemicals from your process. The suppliers initially said no, we can’t do that, and then figured out that they could. Being able to exert that kind of pressure on suppliers longer term would be great. But we’re just doing what we can on a small scale.

Do you worry that trying to have that kind of principle going into the decision making may ultimately create costs for you that are unsustainable?
If those costs aren’t sustainable, then what we’re doing isn’t going to work. So we have to sustain those costs. It’s not really even a choice in my mind. If we go under because we can’t support those kinds of costs, then what we’re doing wasn’t sustainable to begin with.

What does the name of the company mean?
I just made it up! My last company was a video production company called Ever Blue. I don’t know if it’s something with colors that I like. But it was kind of the idea of reading and the color red. And post is sort of referring to … you take your poster and you tack it on. It’s that whole concept of a very simple way of communicating with people. But I just kind of combined them and Googled it and nobody else had it.

What are you envisioning for the next 6-12-18 months for the business? What do you hope to accomplish?
I hope to survive through next week (laughs). It’s always a battle between short term and long term, trying to weight today with next week with next month. Eighteen months, it’s really hard to look out that far. Six months? I’d like to have our software up and running and be able to start selling larger-scale systems. To provide something that makes it easy for the non-Linux-geek to buy one of these and put it on their wall in their living room.

There are all kinds of things we could start adding on to the kit. It’s just going to evolve and to a certain extent, I have to trust the users to help me make those decisions. However people want to use these, that’s what I want to provide, fill that need that they have. That’s why I wanted to get the kit out. Even if it’s not necessarily easy to use at this point, I wanted to get that user feedback and know how people are using them and what they’re using them for and what kind of things they need. I don’t want to push on them my idea of what the best thing is.

Given that some of the other companies that are selling digital frames are Kodak, Samsung, and people like that, how do you hope to compete against global brands?
It’s actually reassuring to me that the big names like Kodak and Samsung (are in the market). Most of those companies are very slow to innovate and slow to move. It just doesn’t worry me. They don’t get the whole open source thing. They want to keep things closed, they want to lock the revenue models in. I think you’re a stronger company if you open yourself up to that competition, if you stay innovative.

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