Thalmic Labs: Canada’s hottest startup

As a country of small businesses, it’s no surprise that Canada is positively dripping with technology startups. The ironic problem is it can be difficult for any one company to stand out from the crowd.

That’s not an issue for Thalmic Labs. Talk to experts for their opinions on which is the country’s hottest startup right now and the Waterloo, Ont.-based company’s name keeps coming up.

And for good reason. The company in June announced the close of its $14.5 million Series A funding round, led by Spark Capital and Intel Capital, the investment arm of the microprocessor giant. Founded by a trio of University of Waterloo students just last year, Thalmic is now up to 40 employees as it gears up for the launch of its first product in early 2014, the Myo armband.

The $149 armband is like a portable version of Microsoft’s Kinect, or the gesture-recognition device that plugs into the Xbox 360 game console, in that it allows the wearer to interact with his or her computer, smartphone or other device through hand motions. But unlike the Kinect, it doesn’t require an additional camera or sensor to detect those motions. The Myo instead reads electrical activity in the wearer’s arm muscles when figuring out what to do.

One potential application would be to use it in a boardroom meeting to control a PowerPoint presentation. Rather than staying in one spot, say behind the projector, the presenter could walk around the room and control the slide show with gestures.

“You can’t do that with camera systems, you have to stay in front of them,” says Stephen Lake, one of the three co-founders and currently its chief executive.

Lake is humbled by the attention his company is getting, but he’s also confident that his upcoming product will indeed be a standout.

“It’s kind of in a class of its own. It’s a merger of gesture control and wearable tech,” he says.

This summer Thalmic attracted a pair of veteran executives from Waterloo’s biggest tech operation, BlackBerry. Mike Galbraith, former senior vice-president of operations at the embattled smartphone maker, and David Perston, former senior director of product outsourcing, came on board as chief financial officer and vice-president of manufacturing, respectively.

The exclamation point to an already big year came last week, when Popular Mechanics magazine named the Myo to its annual “Breakthrough Awards,” a list that also includes the MakerBot 3D scanner and Microsoft’s upcoming Xbox One video game console.

The armband is the product of two years of work by the three founders, which includes Lake, Matthew Bailey and Aaron Grant. The trio formed their company a week after graduating from the University of Waterloo in 2012, where they studied mechatronics, or a field that combines mechanical, electrical and computer engineering. They chose “Thalmic” as their name as a play on thalamus, or the part of the brain that processes sensory information. It was apt for a device based on electromyography, or the study of muscles.

Wearable technology is hot now, given the excitement this year over devices such as Google Glass and Samsung’s Galaxy Gear smartwatch. The Myo fits into the overall category, but it’s different from the other devices, Lake says, because it’s an actual interface that controls things, rather than just a heads-up display like Glass or a smartphone appendage like smartwatches.

The potential for new computing inputs, rather than just display devices, is what drew Intel’s interest – and investment dollars.

“User interfaces continue to evolve and make digital computing devices more invaluable in our day-to-day lives,” said Arvind Sodhani, president of Intel Capital and Intel executive vice-president. “Thalmic Labs, with its new innovation in gesture and wearable technology, is making possible entirely new capabilities and consumer experiences on ultrabooks and tablets.”

Mark Evans, a marketing consultant for startups (Thalmic is not one of his clients), says the company’s success so far is endemic of the larger scene in general, which is functioning well despite the continuing implosion of BlackBerry.

“In many respects, Thalmic Labs reflects how the Canadian landscape is really starting to gain a lot of momentum,” he says. “It's a great example of innovative technology driven by entrepreneurs looking to build something bold and impactful.”

For his part, Lake is trying to build an operation that’s uniquely Canadian – a mish-mash of experience and influences that’s akin to the country’s own multicultural nature. The company has employees who have previously worked at IBM, Google and even game maker Zynga, which is making for a unique corporate culture and style.

“There isn’t one company we’re trying to model necessarily,” he says. “We’re just trying to take what we think fits for us and little bits and pieces that we’ve seen have worked elsewhere.”