Sixteen:Nine - All Digital Signage, Some Snark

Gary Mundrake, TSItouch

February 17, 2021

The 16:9 PODCAST IS SPONSORED BY SCREENFEED – DIGITAL SIGNAGE CONTENT

Gary Mundrake's company, TSItouch, has a tag line that flat out says The World Needs More Touch.

He'd like, of course, to sell the world more touch technology, but there's a larger story about his 10-year-old company's activity in the digital signage and pro AV marketplace. He and his team sell the technology, but they're also evangelists for interactive touch.

The company sells a range of touch technologies that generally get applied as retrofits to commercial displays, making them interactive. When the pandemic really started hitting about a year ago, there was a lot of debate about the future of touch screens. Would people still be willing to use them, if they were a host for contagions?

While there have been reports here and there suggesting the virus can live on a surface for a long time, the prevailing opinion from medical research is that surfaces like touchscreens present far, far less risk than one-to-one interactions with other people.

So getting things done by touchscreen is likely going to be faster, easier, better and safer than dealing one to one at an order counter.

We talk about the touch business in broad strokes, how certain technologies apply, how the past  year has been and how the next months look for TSItouch and the touch ecosystem.

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TRANSCRIPT

So Gary, thanks for joining me. Can you give me the rundown on what TSItouch is all about? 

Gary Mundrake: Thanks for having me, David. TSItouch primarily manufactures touchscreen and protective solutions for large format displays, as well as a lot of video walls. Obviously there’s some other ancillary things we do, but that's our primary focus., 

avid: Oh so that's why you call yourself touch? 

Gary Mundrake: Make sense when you think about it. 

You have this tagline on LinkedIn and elsewhere that talks about the world needing more touch. What do you mean by that? 

Gary Mundrake: Metaphorically, I guess in the age of COVID, we're all looking for more touch, just human interaction. But purely as a marketing tagline, the world needs more touch. We're trying to promote touch screens, but with a little tongue in cheek, just the world needs more touch in general. 

You have in your product line, a bunch of different kinds, there's PCAP, there's IR and there's I think ShadowSense. Why are there different types of touch overlays and how do they sort themselves and how do you know what to use for what? 

Gary Mundrake: So and we back up a little bit, I say this often I say: touch is a commodity if you think about it in the market space, it's a commoditized product. Where we differentiate is everybody wants that commoditized price, but they all want a custom solution. So when you take and compare responsiveness to features, to aesthetics, to price, you end up in a situation where one size doesn't necessarily fit all well. So while we have a run rate of all those different products, it's really matching the solution to the end customer and that means matching the touch functionality with the display functionality in the environment they plan to use it.

So you have to have that broader selection of solutions. We do a lot of touch, obviously for Samsung, NEC, LG, and those type of display manufacturers and if you look at all of these displays they have, the reason that they have more than one 55-inch display is that they have different markets and are trying to meet with it much like we have more than one type of touch solution for that 55-inch display.  

The theory being is to get the customer what suits their needs best not what we are trying to sell.

When it comes to, the one I'm most familiar with is PCAP, because that's what we use on everything from tablets to smartphones, is that by far the most demanded product? 

Gary Mundrake: In the large format market space, It's really not even close to the demand for IR. The reason for that is IR, relatively speaking is a much lower cost solution and it meets the needs of so many customers. It just meets the bill. 

When touchscreens started coming out, you can thank Steve Jobs for making them ubiquitous to the end-user. When they first started coming out, we had companies that bought touchscreens and we'd say what do you plan on doing with it? They're like, we don't know, but we just want to have a touchscreen. They were willing to buy touchscreens because they were touchscreens, not because they had an application. If you fast forward to where we are now in the market space, people view touchscreens almost like cash registers in retail and digital signage. 

The touchscreen isn't the selling feature, it's the functionality they want. They want that to be almost invisible to the fact that it's there if that makes sense. So it's about performance and cost and application. Other retail environments we operate in, where aesthetics is more important than functionality, and other environments where the price is more important than aesthetics, and then sometimes applications won't work in this environment or that won't work in that environment. 

A good example is, if you're familiar with the LG and Samsung outdoor displays that are getting fairly ubiquitous, they come on a factory-installed protective glass that prevents you from putting PCAP on it. So we use outdoor IP65 rated IR. Most people when they call you their first question is can I get a PCAP on this? Because they think that's what is the right solution? But the reality is it's not because you can't apply a PCAP to that display. So it's constantly tailoring the need but IR is consistently the go-to product for price and functionality.

So with IR, you're not going to get the degree of maybe accuracy and snappiness that you might get off of PCAP, but you can do it at far less cost. Is that a way of describing the trade-off? 

Gary Mundrake: No, the trade-off isn't really accuracy. The accuracy of IR, it’s s actually more accurate than PCAP. If you think about it, PCAP is effectively a grid of invisible wires running through the glass and most manufacturers of PCAP have a set number of wires. So you have X running vertically and X running horizontally. So on a 55-inch, the space in between that wire set is X, when you go to a 98-inch, the space in between that wire set gets much bigger, which results in a loss of fidelity. 

Whereas in IR you're adding more LEDs to the strips to accommodate for the size. So your accuracy stays linear from a 32-inch up to a 32-foot video wall. It's really the aesthetics people like PCAP because it's got that flat front aesthetic. It does give you a little bit smoother perception, but functionality. I think the IR is performing just as well. But aesthetically, it's never going to look as well. 

And with IR, just to describe it, you've got these rails that sit around the perimeter of the display right, and then it's triangulating where your finger is?

Gary Mundrake: That's correct. yeah. So you're essentially blocking light with the IR and those rails, now there are different technologies within IR, some are made better than others and then if you take something like the ShadowSense, which we mentioned earlier, which is almost a hybrid of that IR and some cameras, if you think back to the old day of the optical touch, that's no longer used, but that gives you a little bit more of fidelity and functionality beyond PCAP and IR. 

How do you handle IR outside? I'm looking outside right now, up here in Nova Scotia and we had, I think, 16 inches of snow yesterday and I'm wondering about digital street posters with all that snow sitting in the frame of this thing.

Gary Mundrake: Sure. So we actually deployed about 50 of these to the Nova Scotia ferry system about two years ago. Not Nova Scotia. The other side of Canada, British Columbia.

But that was an issue and a concern they had as well. So when we do outdoor touchscreens, it goes back to that solution that meets your needs, not what we're offering. So if you're in an environment where you're going to see snow load, then we actually integrate a heater system into the IR touchscreen with a thermostat in it. So it melts that snow that accumulates on the shelf. If you're going to be near a very wet environment, like along the coast, then we incorporate stainless steel, even though it's powder-coated it turns out powder coat doesn't really stand up to the abuse of the ocean spray for any little nick. 

So you can take a standard outdoor display and for a 55-inch, we actually make, I think it's six different products depending on the environment, they all have the exact same functionality per se, to the end-user, but the built processes are different, and the components are different depending on the application. So I think what you’ll see is, our sales team spends very little time selling and very much time consulting. It's understanding what's your application and not just your application, meaning it's retail or it's corporate, but it's the environment that it's going to operate in and all those other factors 

Is your sales team talking directly to end-users, or are you dealing much more with manufacturers and solutions providers?

Gary Mundrake: I would say that it's mostly with the solution providers, the integration companies that are all out there, but for more complicated projects, we end up working directly with the end-users through the resellers.  We actually sell directly to end-users.

Our goal is to sell through the resellers and distribution partners, but we do spend a lot of time visiting with end-users, consulting with them in conjunction with our reseller partners. 

Which makes sense. So we've been going back and forth since COVID hit and talking about the impact this was going to have on the touchscreen business, when it first bubbled up, me not knowing anywhere near as much about the touch industries as you did wonder, what this was going to mean and whether it was the end of touch screens, as we knew it, at least for a while, and that hasn't played out that way at all, has it? 

Gary Mundrake: So it has not. When COVID first hit and became really full-blown, I would say a bit of a pause. I would say that over the past 10-11 months that we've been going into this, it has been a great opportunity for other forms of interactivity to get some press and get out in the public and deal with questions like is voice going to work, is gesture gonna work, will QR codes work? And I think in some instances, there are some companies that have come out and they've done well by COVID, not implying they tried to take advantage of it. But, it gave them an opportunity for their capabilities to get some sunshine and maybe some more serious luck than they would have pre-COVID. But that being said, there's nothing that's been out there, and we look at it I would say daily, that's really come in and said, this is the game-changer.

My argument since we started this company in 2011 has been that way as long as your primary method of interfacing with your cell phone is a touch screen, that's going to be the primary method of interfacing with digital signage. When cell phones start using something else as a primary method of interface, that's when we need to really look and start really doing a shift. 

It's helped as well that the science and the findings that are coming out of all this are evolving and whereas in the early stages, there seemed to be this sense that touching things was dangerous, over time it's evolved to the realization that surfaces are not a particularly efficient carrier or host or whatever you want to call it for COVID that the risk is exponentially higher in talking one-to-one with people, right? 

Gary Mundrake: Yeah. I believe when COVID first started coming out, there was an overabundance of caution and concern and a lot of unknown and certainly, over time, it has become apparent that pathogens can pass on a surface. They always have, and always will be able to, but the probability of someone becoming infected with COVID by touching a surface is very small and the probability of you contacting COVID by touching a touchscreen is even smaller. As an example, I used a few months ago, if you can open up, pick your retail establishment and a person can get in the door. So they opened the door. They pick up products, they pick up merchandise, they pick up food, they go to the counter, they use the restroom. If you can do all those things by your touch screen is where people are going to get infected, it just doesn't make sense. I think that most markets have accepted that fact.

And some markets have made touch as the method to communicate. They went the other way. They said I can clean a touchscreen so if you don't have to talk to the person at the counter, you're not going to get a person to person transmission, because it turns out machines aren't actually breathing, coughing, or sneezing and they're fairly easy to clean, but I can't really wipe down the person at the counter. 

Yeah, I noticed that going back to April or something, there was a demo for a McDonald's in the Netherlands and they had their self-directed, self-guided ordering kiosk in place and that was their primary form of transactions for exactly that reason. McDonald's made the decision that yes, you're going to touch something, but this is way safer than talking to somebody four feet away over an ordering counter and that was my big molar to realize, “now I get why this would make more sense.”

Gary Mundrake: Yeah. Last fall, probably I guess maybe the September, October timeframe. We did, I don't know, maybe 150 screens that went into a hospital network. I don't know West Coast, entirely for visitor check-in because they didn't want visitors coming into the hospital to approach people behind the counter and they did a pretty rapid deployment of a lot of screens into that one hospital network. And by and large, it seems that larger rollout type customers, people that have been doing, I'd almost call them rolling rollouts for years, they just continued through the pandemic. They just kept doing it. Some companies that were starting to do rollouts apart of the pandemic went on pause, and now we're starting to see them reappear and reinitiate, but certainly, it impacted our business. We took about a 30% hit in revenue last year. We did keep our staff, but we took the revenue hit, but we are seeing a continued positive trend. I wouldn't say that we're back to where we were going into this but I do see that sometime April-May, we'll start seeing a real trend toward our revenue returning back to its pre-COVID days. 

Is the business, do you expect it to be the same, or has it evolved in terms of the profile of applications?

Gary Mundrake: So the touch applications haven’t really evolved that much. We, as a company have evolved a little bit. As I said, in the intro, we're primarily manufacturers of touchscreen or protective solutions. So we're seeing more emphasis on protective solutions, but also concurrent with what we've said, okay, what else can we do to bring in revenue?

When you're seeing, revenue declines and that, what else can we do? So we've started doing some kitting for customers. It turns out we sell one component of our solution, most of the time when you're installing a touchscreen, you've got a touch screen display, a player, a mount, and other attributes that go with it. And historically, we build up kits of these and ship them out to the customer. And over the past 8-10 months, we've gotten more into putting this all together. So we'll ship this project for you and we'll ship you out the whole solution to your retail store or to wherever it's going to. So they get one pallet.

 So it's kinda, it's moving away from our core business and I don't want to say that that's what we want to become. But, it offsets some of our costs. That's not a wildly profitable business, but it does offset some costs. So we do those kinds of things. But I think by and large, the market will come back to touch and we'll be doing pretty much what we were doing two years ago, two years from now. 

So I'm curious if you're seeing new kinds of applications. I wonder about things like remote meetings now that we're all trained to and conditioned to doing Zoom calls all day long and team meetings and so on. 

If I was in a Home Depot and I was trying to figure out how the hell to do something with plumbing, which is terrifying for me. If I could talk to a subject matter expert from Kohler, from the floor, I would rather do that than talk to some guy in an orange vest who may or may not know anything about plumbing and it might be just talking out of his butt.

Gary Mundrake: So there's this whole idea of doing things remotely and the example is an interesting one and it puts a lot of flavor and context around that. The issue that I think you run into in that environment is if I go into a retail store and we do a lot of displays for retail stores and some big box stores, people don't necessarily want to communicate with somebody else. That's why they want to use the touch screen. They want to be able to go in and do it at their own pace and browse their own way. 

Like you said, the guy in the orange vest may not know what he's talking about, but the people that are looking for that kind of help, they're probably not going to feel comfortable doing it over the VTC per se, they're going to do it at home before they go shop, before they go into the big box store. If I need to understand how to, I'm trying to think of something, you would go to Home Depot and not know how to do it, so what kind of hinges to put on the cabinet door? 

I think most people have researched online before they went to the store. I don't think they would get to the store and then say, “Oh, I'll go up to this kiosk. I'll hit a button,” and one the backend of that, managing that capacity loading on the back end of it. So you've got rooms full of people sitting there and I also think, by and large, people don't like talking even though we've all become, video calls are ubiquitous right now. I think by and large people don't really like talking through video machines. VTC has been around for years and years and years, right back to the days of the poly-com even the late 80s, early 90s.

So it's been around 30 years and it has a market space, but I believe people don't want to do it as a routine way to communicate. That's just my opinion. I just don't see it. I think the applications for touch that you'll see post COVID are eliminating that check-in person or adding even more density of touch into retail environments, larger box stores where you can go up to the screen and find your own inventory or find your own part. 

Prior to COVID, we were seeing a lot of it going into the dressing rooms with mirror walls. It was a pretty big uptake in that, but I think by and large people don't want to talk to other people via a camera in a public store. To me, it's the idea of using voice to communicate, get rid of your touch screen, and use voice And I always say, imagine being in the airport, you've got 300 check-in kiosks for a United airlines up there in a row. Can you imagine 300 people simultaneously trying to check in each one, yelling at their own machine? 

I say, the world needs more touch, right? We go back to where we started. People like togetherness. They like feeling together. They like feeling involved. You yelling at a machine is not very comforting.

They also like privacy. So people like to be with other people, but they like privacy. People don't want to stand there in front of a TV and talk to this machine, not knowing how loud the modulator is. So the person on the other end hears them while everybody in the store is hearing and going, who’s that tool? It's like the person that's walking around the store, talking on their cell phone, they're yelling into their phone. Now imagine that, on every aisle, a home Depot somebody's yelling, that'd be entertaining for some people. 

I think the application is more of giving people information that helps them make a buying decision on-premise and that's really where I think in the retail sector, it goes and then in more of the services sector, it's a lot of the wayfinding, the guiding, the check-in tasks that you can eliminate a person for without eliminating the experience. So when you're looking at the hospitality and those environments, they want people to have the experience. So if it comes down to just a mechanical transaction, I don't think hospitality will adopt it. But the flip side of that is, prior to COVID, cruise ships were doing a booming business with touchscreens because it was easy for people to get information: Where am I? Where's my restaurant, my bar, my casino, my pool, my room, all those things. And those kinds of things, I think will come back and I think they'll come back even stronger. Because it gives you an opportunity to review, to give someone instant information that you'd know they're looking for.

Yeah. Cruise ships actually might be safer than they used to be. Just because people will be hypersensitive now to washing their hands and doing all those sorts of things. Not that I'd go on one, but they're probably going to be safer. 

Gary Mundrake: Since we do a lot of business with cruise ships, I'm not going to say anything about cruise ships. (Laughter)

I am curious. There's a company up here in Canada that is marketing elevator buttons that are hover based. So you just have to put your finger near the button, you don't have to touch it cause therefore it's safer and I've seen a number of hover based products like that out there where it's a kind gesture and I keep looking at him and thinking 99% of the people are just going to touch it anyways, if they're a quarter inch or way, they're just going to bang it unless you have somebody right there telling them no, don't touch it.

Do you see any potential for these things? 

Gary Mundrake: No. 

Your elevator button example. How many times have you been in an elevator and somebody pushes the button and the little indicator lights up, “Okay. You selected Floor 47” and they push that same button five more times, even though they have a positive reinforcement of a button and have a back lit light, showing them it's been activated, they keep pushing it anyway.

So you're going to hover and it's going to light up and you're going to assume that worked? If you don't trust the touch, you're going to trust the hover? And to why, again, it goes back to the why, if you're in an elevator, you came from somewhere and you're going to somewhere 

You touched 20 other surfaces on the way in and out. 

Gary Mundrake: And really the elevator button that's what's going to get you? 

It's like having the giant steak and stuffed potato, and five gallons of wine and then saying I can’t have that piece of Pecan pie because I got my health to worry about here. 

Sounds like a good night though. 

Gary Mundrake: It does.

I'm curious about the touch industry as a whole. Is there a Holy grail, something that everybody wants to resolve that still needs to be figured out, or is the Touch industry where it needs to be in terms of the technology? 

Like it does what it needs to do and the big challenges are the normal stuff, like getting costs down, making it more efficient, making it snappier, or whatever?

Gary Mundrake: I think by and large, and I say this right now, and tomorrow I could be made a fool of, but I think the state of the art, it's pretty much there for what you're asking for to do. The real advances, I believe in touch are going to be in the PCAP market that we talked about earlier. If you think about your typical cell phone, that's going to say a 3.5 inch screen or whatever, so the manufacturers spend millions of dollars marrying that perfectly design touchscreen to that perfectly designed device and the interface is perfect all the time and they make millions and millions of them. Whereas we're taking a touchscreen that's made in the thousands and marrying it up to displays that many have never been married to a touch screen and maybe we're only doing it in the hundreds. 

So there's a little bit of finesse involved in adding that PCAP touch to that display and I think the real advancement will be refining that to make that less cumbersome so you don't run into issues with responsiveness in the light because you have a poorly matched solution and it removes that finesse. Now the flip side of that is as long as it requires finesse, it makes it harder for other people to mimic us. But I think that's where the real advance is, it's making that PCAP a more stable product for easier integration. 

And then ultimately of course, like everything, we get asked all the time, “if I buy a million, are they free?” Everybody wants the price to go down. Actually, that's what I tell people. I tell people frequently, even if you buy a million of these, they're never going to get it for free. Some people believe that. Yesterday, in a discussion with somebody, they said what's the price for 500? I said this is the price for 500. And they said, what's the price for 5,000? And I said, really seriously, it is not going to get free. Even if I quote you a million of them. But somehow people have that in their minds. I'm just going to keep buying it, asking for more and more until it gets to free, but it's just not going to go there.

The price will continue to decline. Obviously we've had some impact on the US with tariffs, for products coming out of Asia. Fortunately, we bring products in and out of multiple countries. We don't get hit on every product with that but I think some refinement of the PCAP technology and the price point coming down will only further saturate the market space with the products of touch.

All right. That was great. Thank you very much, Gary, for spending some time with me. I appreciate it. 

Gary Mundrake: Dave. Thanks for having us And please don't forget: the world needs even more touch. 

 

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