CWHK: How long have you been in video optimization? What did you do before?
Kit Tsin: I started to develop my video optimization product in 2007, the year I founded Dao Lab by myself. But I've been in the field for a long time--I created a multi-media transcoding tool previously and sold it to a US firm.
CWHK: Why the name Dao Lab?
KT: Dao in Chinese means a unifying, ultimate law [that governs the universe]. Through this name I want people to know this is a company founded by a Chinese--and I'm not fond of names that include the word technology.
CWHK: How do you fund the company?
KT: I finance Dao Lab with money made from my previous companies, without seeking VC funds. While VCs help startups turn prototypes into products within a short time, a VC's goal is to take you to IPO--a startup's goal is to continuously enhance a product.
Having said that, I don't mean getting VC help is undesirable. But before accepting VC funds, a startup needs to understand the huge pressure it'll experience as a VC focuses on profit and loss. In addition a VC is an institutional financier which might not understand much about technology.
CWHK: While you stayed away from VCs, did you fund your initial product development by continuing to serve customers from your previous firms?
KT: I did support my previous customers--mostly mobile operators--for a short period of time [after founding Dao Lab]. But I stopped doing so in order to focus on R&D for new products.
CWHK: How does Dao Lab's video optimization product work?
KT: Contents like videos and ads have gone beyond TVs and in cinemas and are now on smartphones, tablets, and computers as well. The cost-per-bit to these devices varies, with the cost to mobile devices being the highest. Adding bandwidth doesn't help because video size is still huge--a 30-second video commercial can be as big as 17MB. Video optimization is essential.
As people now spend more time using their mobile devices, content-providers need a cost-effective way to provide video-content to mobile users. Dao Lab provides content-providers with a video optimization tool that compresses videos for cost-effective distribution to different devices while retaining video quality.
We also target outdoor broadcasting firms, publishers of digital education materials, and satellite link replacement firms that help their own customers--such as TV channels--broadcast live events to overseas markets.
CWHK: How much does it cost to use your product?
KT: We offer our product on a subscription basis, charging customers a monthly fee varying with the number of CPUs, usage volume, and complexity of customer requirements. The lowest monthly fee is less than US$1,000. Compared to a hardware encoder that costs at least HK$200,000, our product offers enormous savings.
CWHK: Who are your customers? Where are they from?
KT: Our existing local customers include The Hong Kong Economic Times, Metro Broadcast, and Oriental Press Group. There are firms trialing our product in China, Hong Kong, Taiwan, the US, and Canada.
CWHK: Who are your competitors?
KT: They include companies that make high-end video encoding hardware and firms such as Adobe and Apple that have their own video encoding software.
CWHK: How many people are working at Dao Lab? Do you have problems hiring the right people?
KT: Fewer than 10. We don't actually need many engineers to develop products, but plan to add more people with skills in technical support, sales engineering, and quality assurance. The mobile apps space has drawn many tech pros, leaving other areas of IT with talent shortage and higher hiring costs.