OSOM Plans New Privacy-Focused Handset After Essential's Collapse

The Rise of OSOM: A New Chapter for Former Essential Employees

Last year witnessed the unfortunate collapse of Essential, a consumer electronics startup that, despite significant funding and a promising start in 2017, ultimately failed. The company’s downfall stemmed from a confluence of industry challenges, unmet expectations, and allegations leveled against its founder, Andy Rubin.

Subsequently, the Essential brand was acquired by Carl Pei, who ultimately chose to rebrand his new venture as “Nothing.” He revealed that “Essential” was actually a name considered internally during the early brainstorming phases for Nothing, explaining the trademark acquisition and clarifying there were no current plans to revive the original brand.

Introducing OSOM: A Spiritual Successor Emerges

Now, a company closely linked to Essential’s legacy, OSOM, is stepping forward. Founded by former Essential employees, OSOM has maintained a relatively low profile until recently. Today, the Cupertino, California-based firm officially confirmed long-held suspicions: they are actively developing a smartphone.

The OV1: Echoes of the Past, Focused on the Future

The planned OV1 device bears a striking aesthetic resemblance to the Essential PH1, clearly showcasing the influence of the original team. However, unlike its predecessor’s emphasis on modularity, the OV1 is being engineered with a singular, central focus: user privacy.

The device is specifically designed to empower users with enhanced control over their data privacy settings.

A Conversation with OSOM’s CEO, Jason Keats

Details surrounding the OV1 remain limited ahead of its anticipated unveiling at MWC 2022. We had the opportunity to speak with OSOM’s co-founder and CEO, Jason Keats, to gain deeper insights into the company and its forthcoming handset.

Timing and Launch Plans

TC: With the announcement just two months away?

JK: We are approximately two months from revealing the comprehensive details. We intend to make the full announcement at MWC, with shipping scheduled for summer 2022. Currently, we’re prepared to announce that we are indeed building a phone, and there’s considerable excitement surrounding it. We wanted to provide something tangible for our supporters this year, and we’re delivering just in time.

Building a Community

TC: What defines a ‘fan’ at this stage, considering the company’s discreet operations?

JK: It’s been genuinely surprising. Early on, fans of Essential were incredibly supportive, and that support has continued as we develop our future products. We anticipate attracting a significant number of traditional Android enthusiasts as well. Currently, there aren’t many flagship Android phones that offer a truly vanilla Android experience. We aim to continue that tradition, and we’ve already developed and are refining privacy-focused software.

The Core Team

TC: How many members of the original Essential team have joined OSOM?

JK: When we constructed the PH1 at Essential, our team consisted of around 30 individuals. Approximately 15 people from that original team are now with us. It represents the core group – design, engineering, product design, and software engineering.

TC: What is the total team size?

JK: Around 30 people. More than two-thirds of our team are engineers.

From Ashes to Innovation

TC: How did you initiate the process of establishing a new company from the remnants of another?

JK: Despite the shortcomings and issues that occurred at Essential, I will always commend Andy Rubin for his exceptional ability to recruit talent. He assembled an incredible team. When he informed me of the company’s closure, I immediately began considering my next steps. I didn’t want to join Google, Apple, or Amazon, but I recognized the immense potential within that existing team, who had collaborated closely and faced challenges together.

We quickly realized that a primary issue at Essential was a lack of clear focus. We understood the need for a defined purpose. The question became: what problem were we trying to solve? It became evident that privacy was not being adequately addressed, particularly by 2020.

The Need for a New Player

TC: Does the world truly need another phone company?

JK: Absolutely, yes. Specifically, one that prioritizes protecting user privacy. There’s a compelling reason for this. If we were solely a software company developing privacy software, we could release it on the Play Store for anyone to install. However, an app on a phone can be easily bypassed or disabled, as it’s not integrated into the system. That’s precisely what we’re doing. As an OEM, with access to Qualcomm’s TrustZone and system software, we can create robust, privacy-centric software that users can choose to utilize.

Convincing Consumers

TC: How challenging will it be to persuade consumers to switch to a phone with privacy as its primary selling point?

JK: In the U.S., we aren’t targeting Apple users. We’re focusing on Android users. Within that market, brand loyalty is less pronounced. People are more open to exploring alternatives. Regarding privacy, we’ve already partnered with several companies who have shared demographic data on users of their privacy-focused software and hardware. The numbers are astonishing, indicating a significant demand for privacy and a willingness to spend money on it.

Realistic Expectations

TC: What are realistic sales expectations? You’re targeting a broad market – the U.S., Canada, and Europe. The Essential numbers didn’t meet expectations.

JK: It’s interesting. When we launched Essential, our initial goal was 100,000 units in the first year. We ultimately sold nearly 300,000 units to end-users. The primary issue was that Andy Rubin raised substantial funding, creating an expectation of two million units. Achieving 100,000 units when aiming for that number, and selling 300,000, is a significant success. It depends on the metric you use. For OSOM, I would be thrilled with 200,000 units in the first year. That would ensure our long-term viability.

Lessons Learned from Essential

TC: Did external expectations contribute to the downfall of Essential?

JK: I could write a book on what went wrong. There were numerous contributing factors.

TC: Can you provide a summary?

JK: Some decisions made at the highest level were counterproductive to our success.

Funding and Future Plans

TC: It was reported that the company raised $5.6 million. What is the current fundraising status?

JK: We’ve secured $20 million. This includes investment capital and pre-orders from a channel partner. We’ve already received orders approaching our projected first-year production capacity. The majority of our investors are myself, my co-founder Wolfgang, and Canadian venture capital firms.

TC: Has there been a Series A funding round?

JK: We are currently in the process of securing a Series A round.

TC: Was Playground involved?

JK: No. We had a productive conversation with them. The team there – Bruce, Matt, and Peter – remain good friends and valuable sounding boards for our ideas.

Company Origins

TC: When was the company officially established?

JK: The articles of incorporation were officially filed on April 20, 2020.

The Meaning Behind the Name

TC: The name is pronounced “awesome,” correct? Was the name or the acronym developed first?

JK: Twenty minutes after Andy Rubin informed me that Essential was closing, I decided to start my own venture. I dislike overly conspicuous designs – all the wires, plugs, and clutter in homes. I had an idea for a different product, which we may or may not build eventually. It’s unrelated to the phone, but a unique concept. The idea was to create something that’s out of sight, out of mind. I envisioned the future of technology as depicted in Star Trek, where speaking activates a response from an unseen source. Not a device on my desk with a nine-foot cable, but something ethereal. The concept was “out of sight, out of mind.” Hence, “OSOM,” which we simply called “awesome.” I registered it from a hotel in Hong Kong.

Applying Past Lessons

TC: Are any of those initial ideas being incorporated into the current project? Obviously, privacy is the key focus.

JK: That’s certainly the underlying philosophy, influencing how we’re building our software. The goal is to maintain that “out of sight, out of mind” principle – you should trust that your devices are protecting you when you need them to.

Company Location

TC: For the time being, is this an American company?

JK: Yes. We are a Delaware C Corp, like most tech companies, likely registered at the same address.

TC: You’ve discussed incentives with the Canadian government… but will you maintain headquarters in Cupertino?

JK: Currently, that’s undecided. OSOM Products, the U.S. company, will continue to exist. However, we may relocate our headquarters to Canada.

Shared DNA

TC: What are the common threads between Essential and OSOM? Philosophical? Aesthetic?

JK: Aesthetically, absolutely. Even though the same designer, Dave Evans, and I are handling the industrial design, we didn’t initially envision it as a direct successor to the PH1. However, once we had the first prototype, it became clear that it was designed by the same team. Both in terms of materials and appearance, it’s a continuation of our collective work. Our software team, particularly those responsible for the rapid updates at Essential, are also with us at OSOM.

Marketing and Differentiation

TC: Let’s discuss advertising. How will you differentiate the brand from the multitude of phone manufacturers?

JK: I don’t want to reveal too much, as I’m very excited about our plans. However, I’ll say this: when we present the campaign ideas and initial drafts to the broader team, those who were with Essential from the beginning often remark, “Why didn’t we do this before?” We will invest in marketing to establish our unique identity. A significant portion of the funds we’ve raised will be allocated to marketing efforts.

Specifications and Pricing

TC: What can we expect in terms of specifications?

JK: This is a flagship device, both in terms of hardware and software.

TC: Is it challenging to keep the price competitive for a first hardware product?

JK: Not really. The team we brought over from Essential, particularly in supply chain management, is among the best in the industry. Our partners have been incredibly supportive, offering us exceptional rates. In some meetings, we’ve simply requested the same pricing as Apple and Google.

TC: So, pricing will be comparable to other flagships?

JK: We will be well under $1,000.