How Osmo decides to make its tangible, high-tech toys

A huge number of toys today include high-tech and interactive components that keep kids in front of screens. But when it comes to health and educational development, multiple studies have found that kids benefit from things like building with blocks, playing with both hands and looking away from screens for 20 seconds at least every 20 minutes.

A startup called Osmo, which launched at TechCrunch’s Startup Battlefield in 2013, has dedicated itself to designing toys that bridge the digital and physical. “Kids won’t stop being obsessed with smartphones and tablets,” says CEO and co-founder Pramod Sharma. Instead, his company finds ways to keep them engaged with their physical environment, while they keep a screen nearby.

TechCrunch went behind the scenes at the company’s Palo Alto headquarters to see how Osmo decides to build a new toy or game. One innovation engine at Osmo is the company’s semi-annual DREAMWEEK Hackathon, a five-day brainstorming, design and development exercise for employees only.

At the hackathon, employees who don’t normally work together every day get together to create new toys, games or extensions to add to Osmo’s existing product line.

One of Osmo’s popular products is an interactive version of Tangrams, which asks kids to rearrange geometric pieces to form the shape of an animal, or another image displayed on an iPad screen. Another is a word game that asks kids to take letter-tiles from a pile and place them in front of a tablet or smartphone to reveal the word hidden behind blanks on the screen. In person, multiple players scramble to place letters that will complete each word.

Osmo’s software uses the camera of a tablet or smartphone to see how each player is progressing. The Osmo Tangrams app can see when a player has successfully pieced together a desired image, for example, and the Osmo Words app can congratulate the player who just completed a word.

To end its internal hackathon, Osmo convenes a final demo day where employees observe each other’s pitches, and decide as a group which concept will proceed to full development. The decision is not a vote from executives or judges who are subject-matter experts, but is more democratic. An executive’s vote may break a tie, however.

Sharma told TechCrunch that even though “internal hackathons” seem like the domain of larger companies, such as Facebook, Google or Microsoft, Osmo decided to start running these about 3 years ago to ensure that as the company grows, it maintains a close-knit feeling among employees, and to reinforce the idea that innovation can and should come from everyone involved at the company, not just a special team.

At its most recent hackathon, TechCrunch saw concepts presented that ranged from a physical, card-trading game, to a build-your-own-hero app, and an app to help parents connect with and learn about their own kids, emotionally and socially. But the most recent winning concept was a multi-player feature that will make games like Words playable between friends, or groups, who are far apart. Kids who became besties at summer camp can keep competing with each other after they go home to their respective towns with Words multi-player.

While her team’s concept did not win the vote to become the company’s next product, Osmo user experience designer Duygu Daniels said, “During our day today we have a bunch of ideas… This is a dedicated week where we get to execute on them and be in that spirit of innovation in a really intense way.” She, and other Osmo employees, said they look forward to the internal hackathon all year.