We haven’t had a gadget story in a while, this is one and perhaps more than that. Not about Kindle 2, I haven’t tried it yet, but still somewhat related as we’re jumping again into the paper and screen topic.  Ebooks deal with one kind of electronic ink, the one used to display text.  Another kind is offered by Tablet PCs.  That PC sub-species has struggled for years and now enjoys a niche in vertical applications such as data collection/transmission/display in hospitals or for insurance adjusters.  The dream of writing on a computer tablet as pleasantly and flexibly as we write on paper and magically transcribing our scratches into machine text is still a dream.

But, thankfully, dreamers don’t give up.  They try another aproach.

In 1996, Christer Fåhraeus got an idea: sprinkle dots on paper, put a camera on a ballpoint pen, add a microprocessor and storage.  The dots are faintly visible to the human eye and sprayed according to a code, not randomly.  The pen uses the encoded dots to orient itself and record movement as I write.  Later, connected to a computer, the flow of pen coordinates translates into a reproduction of my handwriting on the page.  That is the founding idea of Anoto, a Swedish company, listed on the Stockholm Stock Exchange since 2000.

Anoto’s idea is an ingenious one: you keep using pen and paper and get a digitized copy of your notes into your computer.  The best, or at least the good, of both worlds.  The concept captured the imagination of many.  But what about the wallets?

There, the story isn’t as grand as one would have hoped. In 2007, Anoto’s revenue reached $20M worldwide, a modest rebound after years of declining sales; losses amounted to $1M and the cash burn reached $6M, all approximate amounts.

Years ago, in 2002, after I left its board of directors, my Logitech friends got excited by Anoto’s technology and reached a combined licensing and packaging deal for the company’s chips and intellectual property.  (The deal went on to include Logitech acquiring 10% of Anto for $15M in 2003.)  I bought the pen, used it and soon gave up.  I found the physical device clunky and the software buggy.  Sorry.  The package included physical notebooks with interesting attempts at handwriting to text translation.  For example, you could enter a date in a special field on the page, or an email address.  “Interesting”, as we say in VC vernacular, meaning the opposite.  It didn’t work well enough.  Logitech tried again with their io2 Pen, to no avail, the product didn’t “take” and is no longer featured on the company’s website.  I searched for ways to get the special notebooks with the magic dots, tried many approaches, no joy.  No luck at Amazon either but other sites such as eBay still offer Logitech pens and digital paper.

Always hopeful, my wife uses another adjective, I just bought another incarnation of Anoto’s idea, a Livescribe Pulse pen, a couple of notebooks and ink cartridges.  All available on Amazon.  The Mac version of the software is still in beta form but, while occasionally cranky, is serviceable enough.  You take notes, you connect the pen, there is a USB dock and charger, your notes appear on the screen.  My notes are complete, with correct page numbers, without having to tell the pen which page I wrote on.  Actually, you tell the pen once (by touching a designated spot) you’re going to use a specific notebook and that’s it.  You can use several notebooks and pages, the pen doesn’t lose its (your) place.  You can go back to a page you’ve wrote on and add notes, drawings, it all works.  No erasing, however, there’s no electronic piece rubber.  (Geeks will edit the transcribed document in PDF form...)  So far so good, my pen is offset by about a millimeter down from paper to computer, text right on a paper line is shifted down on the screen.  Livescribe customer support is helping debug the problem and offered to replace the pen if needed.

There is more.

I’ll skip over features such as a calculator printed on magic paper, you touch the digits and division sign and the result appears on the pen’s display.  Same for scientific of financial functions.  A clever use of the encoding dots (and a likely contribution from one of the founder’s previous company, Leapfrog).  Is it “because they can”, you know the unprintable joke, or is it actually useful?

Much more interesting, really this time, is the audio recording function. Tap the Record icon at the bottom of the page and the pen’s two microphones record sound as you write.  There is a full complement of Pause, Stop and other related icons.  You see the point, not just written notes but a recording of the meeting or course.  With the pen, Livescribe supplies a set of earbuds also serving as a binaural microphone, complete with a neck lanyard.  With the lanyard, the microphone can be worn inconspicuously around the neck, looking like “off” iPod earphones. Once you upload the notes to your computer, the audio recording will visually synch with the written text using green ink to follow the temporal progression.

I have mixed feeling about the recording feature. You don’t need the more visible external “earbuds” microphones, the ones inside the pen don’t work as well but still record better than I expected.  This gets us into delicate areas of, at the very least, courtesy, protocol, or deeper into questions of privacy.
So far so good.  The pen can work several days without recharge, the smaller (half-page, fashionable moleskine-style) notebooks are convenient, I can sit in my car and take notes while on a conference call – but not driving...  Or “depose” and entrepreneur and file my notes later.

The next step will be printing magic paper, this seems possible from a Windows PC, less from a Mac, not clear from a virtual machine.  (I just tried, no success yet, I’d need an HP printer and a notebook “baptized” by the Windows version of the software.) Besides lesser contortions for printing loose leaves and a “real” version of Mac software, I’d like to see a simpler charging/connecting procedure.  Today, you need a special USB-connected dock.  Why not simplify and make it a standard mini-USB cable similar to the one you use for cameras and, more and more, for phones such as Blackberry, Android and Motorola?  This avoids panic if you forget the special dock when going on a trip with your laptop.  And, as electronics progress, we can hope for a smaller pen.  The current one is thinner than the earlier Logitech models but still is viewed as unwieldy by some users.

Lastly, it looks like Livescribe is getting more money from its VCs, a new round of more than $10M as of February 9th.  In today’s gloomy climate, this is a vote of confidence for the founders, they come from Palm and Leapfrog.  Also, concurrent with the latest VC funding, Livescribe got relief on $2.5M it owed Anoto.  The money appears to be owed in relation to Anoto’s transferring its US business to Livescribe. Is it, the digital pen, going to “work” this time?
On the negative side, we have the economy and a history of disappointments in mainstream applications, as opposed to vertical, specialized form-filling niches.
On the plus side, today’s implementation looks more polished, more useful with synched audio recording and playback and a few additional applets.
I just wished Livescribe’s PR firm hadn’t convinced the founders to call their product a “mobile computing platform”.  Does the man on the street know what that is?  How about a digital pen?  See, I write, you talk.  Now you see it on paper, now you see and hear it on the computer. — JLG

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