Company: Occipital LLC.

INITIAL LIGHT BULB: After meeting as students at the University of Michigan, Jeffrey Powers and Vikas Reddy decided to start a business together. They launched Occipital from an office on Beaver Island, Mich., before relocating to New York in early 2008. In May 2008, the duo relocated to Boulder to participate in TechStars, a seed-stage incubator program.

"We were working on a program that would help people organize digital photos," says Powers, describing "computer vision" software capable of recognizing people's faces and landmarks. Powers and Reddy refocused the company on applications for mobile cameras earlier this year. "We decided to move on to something that we considered as big an opportunity but wouldn't require as much upfront capital," Powers says. "The mobile phone has changed into an application device, and use of mobile cameras has exploded."

After TechStars, "We intended to move back to New York," Powers says. "We only decided to make it permanent in Boulder earlier this year. There's an awesome, helpful startup community here--it's not antagonistic."

IN A NUTSHELL: "Computer vision" sits at the intersection of signal processing and artificial Intelligence, Powers says. "Our primary focus is writing software to allow mobile phones to actually see things and recognize things."

Occipital's first iPhone application, ClearCam, came out in February and has since rung up more than 850,000 downloads. "It's an app that can see between the pixels," Powers says. The software automatically snaps six shots and intelligently merges them into one picture with double the resolution of the originals. "We take the six images and break them down into a whole bunch of 'features.' Then we figure out how to precisely line them up."

The second app, a bar-code scanner dubbed RedLaser, came out on Apple's iPhone app store in May and was installed on 125,000 phones in its first four months. "We used computer vision to teach a mobile camera to cut through the blur on a UPC code," says Powers, describing it as a "software lens."

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Apple was Initially quite restrictive with developers of iPhone apps, Powers says, but the company loosened up in September. "They're expanding what developers can do. We are really pushing the limits of the iPhone's camera."

Powers and Reddy are working to license RedLaser to appropriate partners like Applied Ambiguity, the company behind Corkz, a wine-information app for the iPhone, and GoodGuide, which rates green and healthy products.

Future Occipital applications are in development, including "augmented reality" technology that augments a mobile phone's camera with bubbles identifying mountains, people and other things on the display. "There are tons of applications that are going to pop up, but they don't want to get into vision--it's hard."

THE MARKET: With more than 30 million iPhones in consumers' hands now, the market is big and getting bigger. And inexpensive digital cameras are being replaced by mobile devices: The iPhone is the source of the most pictures on the popular photo-sharing site Flickr.

FINANCING: "This was basically science fiction a few years ago, so it's hard convincing investors it is real," Powers says. "The only funding we've gotten is a tiny convertible debt and a tiny investment from TechStars. We're basically completely bootstrapped. We're on the fence if we're going to raise money to accelerate development or continue bootstrapping it."

"PEOPLE LIKE TO CALL IT 'TERMINATOR' VISION, FROM THE MOVIE. I LIKE TO CALL IT 'IRON MAN' VISION-IT'S MORE POSITIVE."

--OCCIPITAL CO-FOUNDER JEFFREY POWERS ON THE CONCEPTS OF COMPUTER VISION AND AUGMENTED REALITY