In this episode, we wanted to know, “Once you’ve identified some promising technologies, how do you test and deploy them in the real world?” To get best practices, Innovation Leader traveled to Miami to learn from experts at Royal Caribbean. 

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Transcript 

[SPONSOR MESSAGE] 

This episode is sponsored by Kalypso, a professional services firm dedicated to helping companies discover, create, make, and sell better products with digital. With deep roots in innovation, Kalypso provides consulting, process, technology, and people-focused services to drive real value from digital transformation. Their team is so excited to work with you.  You can learn more at kalypso.com.  

[MUSIC]

Kaitlin Milliken: Hey, you’re listening to Innovation Answered, the podcast for corporate innovators. I’m Kaitlin Milliken from Innovation Leader. 

Last week, we discussed tech scouting with experts from The New York Times and Fidelity Investments. If you missed that conversation, be sure to check out last week’s show. 

In this episode, we wanted to know: Once you’ve identified some promising technologies, how do you test and deploy them in the real world? 

To find out, we went to Miami to visit Royal Caribbean Cruises. We took a tour of both the Navigator of the Seas at PortMiami before it departed for the Bahamas and of the company’s innovation lab. 

Royal Caribbean is the second largest cruise company in the world and operates for global brands, including Royal Caribbean International and Celebrity Cruises. Last year, the company carried on over 6 million passengers and 18% increase since 2014. In order to stay ahead, the Royal Caribbean team remains laser-focused on improving the guest experience with innovation. The enhanced role of digital can be felt even before vacationers leave their homes.

Joey Hasty: We learned that lots of the joy of vacationing comes in the planning part of the vacation so we make that a lot of fun. So our Royal Caribbean app is part of the digital transformation that allows planning in a super simple way from the things you’ll do on board the ship to your shore excursions that you’ll do at the destinations.

Kaitlin Milliken: That was Joey Hasty, Royal Caribbean’s Head of Innovation and Transformation. According to Joey, the night before their trip, guests can upload their photo into a database, which allows them to breeze through a facial recognition empowered boarding process. The system can identify a whole family at once while they’re in motion — no need to stop and smile for the camera. Once guests are on board their mobile devices keep them connected throughout their stay.

Joey Hasty: Then once you’re on board, finding a room is super easy. We let you open your room door with your phone, with our key card, with our WOW Band planning. The things you’ll do around the ship are also super easy. You can reserve dinner from the app you can get specific seats it shows. We like to think of it as sort of a concierge in your pocket.

Kaitlin Milliken: We’ll hear more from Joey later in the episode. First, we wanted to better understand the cruising environment. What are the challenges of the open sea, and how can digital make a difference? 

So of course we had to get on a ship. And no, this wasn’t an excuse for me to go on a cruise. It was all for journalism. Promise. I met with Josh Nakaya at PortMiami Terminal A on a Monday morning.

Josh Nakaya: Josh Nakaya, creative director and lead designer, experience design lab at Royal Caribbean Innovation.

Kaitlin Milliken: Kaitlin Milliken, Innovation Leader. Producer of podcasts and other things. 

Tourists were starting to board, handing their luggage to crew members in pressed collared shirts. We went through the crew security entrance and made our way onto the ship, The Navigator of the Seas. The first stop: the promenade.

Josh Nakaya: This is the deck where our guests will board on. So this is sort of their first exposure. They come into this, and it’s meant to evoke kind of that feeling of  a town marketplace, a gathering place, a place of entertainment, a place of commerce, retail restaurants. And so you’ll find all of those things in here. You’ll go by, as you can see, on the right, we’re looking at the guest services counter, so where people will come for any issues that they’ve got. Right next to it is our shore excursions. We’ve got a bar off to the left. Of course, people love to drink while they’re on cruise ships. So we’ve got plenty of those throughout.

Kaitlin Milliken: The promenade mirrors the cruise business itself. Both combine aspects of other industries — hospitality, food and beverage, retail, and transportation, just to name a few. When looking for best practices and approaches to emulate, the folks at Royal Caribbean turn to role models across all of these sectors.

But there are some challenges unique to cruising. One of the big considerations: the value of at sea real estate.

Josh Nakaya: As you can imagine a cruise ship, once it’s built, it’s fixed real estate, right? It’s kind of like that old joke about real estate, it’s the only thing you’re not making more of. And that’s particularly true of cruise ships. Like once that’s built, we don’t ever go like, “Hey, we should like cut that ship in half and expand it out.” It’s built. We’ll put it back in a dry dock and do changes to structure to some degree. But you have to work with what you have to work with.  So we’re always, thinking that real estate is at a premium on a cruise ship. And how do we use it as best we can? 

Kaitlin Milliken: During my tour, Josh pulled me into the ship’s theater. While the space will later be used for rehearsals and stage spectacles. Right now, the blue velvet seats are empty.

Josh Nakaya: But as I bring you in here to this open, empty, double, multi-layer theater. What do you notice about the theater right now?

Kaitlin Milliken: Oh, man, feel like this is a trick question.

Josh Nakaya:  It’s not a trick question. Just like, Is there anything going on right now in a theater? 

Kaitlin Milliken: The video? 

Josh Nakaya: Right. That’s all that’s happening. There’s a video showing kind of like, this is what your cruise will be like, maybe, right? But there’s nothing happening in here right now. So this is dead space for us right now. Dead space means like, “Hey, we got real estate we’re not using.” So we’re always thinking about, how could we use that in a different way and use that space to its fullest so that it doesn’t have either dead time or much dead time?

Kaitlin Milliken: According to Josh, the team is exploring a mixed-reality game that would bring guests into the theater when it’s not in use. In the story, participants work together to solve a mystery and unlock a physical puzzle box on the ship. Their smart phones, he says, act as a tool to help them investigate clues in the real world. 

Another unique element of the cruise industry: Ships take about five years to build. And some of the boats are older than others. Not every cruise ship has the same infrastructure for new technology. That means not every idea will end up on every Royal Caribbean ship.

Josh Nakaya: We’ve got around 60 ships in our fleet. And so not everything that we do ends up put on all of them at the same time. You know, the ships are at different levels of technological ability, capability at the time.

Kaitlin Milliken: The innovation team also has to design solutions to meet a diverse set of needs. Cruises are multi-generational. Kids, parents, and grandparents all have different comfort levels with technology.

Josh Nakaya: And when you talk about demographics, so Royal Caribbean, very family focused. So that is the line where you’re going to find a lot of multi-generational families, right? So we have to keep in mind, who we’re designing for as people, right? Because even if the ship has all the technological capabilities you could want, if the people are coming on board are like, “I don’t want to do that. At least, I don’t wanna do that on vacation,” we have to keep that in mind and say, “Okay, we need to design smartly and either have multiple modes of access, or multiple modes of service, or key minds.” Like maybe that isn’t the smartest solution to do just a pure digital thing where you  have to use your phone or something else. And so that is something that we have to constantly think about.

Kaitlin Milliken: The innovators at Royal Caribbean have to craft vacations that are fun for everyone. We wanted to know how these experiences evolved from concepts to the actual environment on the ship. So we went down the street to Royal Caribbean’s Innovation Lab. We’ll be back in the lab after this break. 

[AD JINGLE]

Kaitlin Milliken: In this episode, we take you inside innovation at Royal Caribbean. But there’s a lot of tips and best practices that didn’t make it into this podcast. I mean, I ended up with over 20 pages of notes. Luckily, you can find out more about innovation on the seven seas in our latest print magazine.

Here to share more about our magazine is Innovation Leader’s Managing Editor, Kelsey Alpaio. So Kelsey, I know this is a very special issue of the magazine. Can you tell us about the concept behind it and what’s inside?

Kelsey Alpaio: So our fall issue is all about success and failure. So half the magazine is all about success. And the second half is all about failure. And we actually have the cover so you can start reading it from either side. And then halfway through, you can flip it around and start reading about the other topic. And so, in each side, we have case studies, articles, perspectives from your peers — all about success or failure and innovation.

Kaitlin Milliken: You also wrote an article about your visit to the Nature Conservancy. What did you learn there?

Kelsey Alpaio: Yeah. So on the success side of the magazine, I wrote a feature about the Nature Conservancy, and I actually got to visit their headquarters in New York and talk with Jennifer Chin, who’s the Director of Conservation Innovation there. And we talked a lot about what success looks like at nonprofits when it comes to innovation and what for-profits can really learn from that. So it’s a really cool story.

Kaitlin Milliken: Thanks, Kelsey. Our magazine is only for Innovation Leader members. So if you don’t have a membership already, you might want to look into that. You can get both our print magazine and all of our articles on our website innovationleader.com.

[MUSIC] 

Kaitlin Milliken: And we’re back at Royal Caribbean Cruises Innovation Lab and Collaboration Center. The building that houses the innovation team is located about a mile and a half away from the company’s terminal in PortMiami. A short sidewalk connects a space to Royal Caribbean’s headquarters. 

The team brings end users and customers into the lab often to get feedback on new ideas. Most of the prototyping and testing happens on the first floor in the team’s maker space. The whir of power tools greet visitors as soon as they walk in.

[POWER TOOL NOISES]

Another notable feature: life size replica of different parts of the ship. Joey Hasty explains. 

Kaitlin Milliken: So uh, a lot of the things that you’re testing here are full size, they’re built to scale. Can you talk a little bit about that?

Joey Hasty: Sure. Well, that’s an important part of when you’re going to test with users. You can’t show them a model of the thing you want to make. We want to take them through the experience. We want them to actually experience the thing as close to scale and reality as we possibly can get when we’re dealing with stage craft. So it’s important that they’re one to one models that you can walk through for almost everything that we do.

Kaitlin Milliken: One of these full size mockups sits in the middle of the room. From the outside, it looks like a big wooden box. But when you open a door and step inside, you’re standing in a hallway that looks exactly like the ones on the ship.

Joey Hasty: This is the actual lighting that’s on the ship. This is the actual materials, because we have a new our new door locks in here. So these are RFID. You can open it with your phone, and I wanted to see it work in a real environment. It’s literally a door that opens to a state room.

Kaitlin Milliken: Oh my god.

Joey Hasty: This is a full scale mockup using actual materials. The staterooms are built in blocks like this and inserted into the ship. And so we build it sort of the same way here. So this is the final materials.

Kaitlin Milliken: The replica stateroom is complete with rolled towels and a neatly made bed. However, not everything in the lab looks as finalized. Some mockups use foam core furniture, other early prototypes are made out of cardboard, Joey points to different prototypes that later enabled Royal Caribbean’s facial recognition boarding process.

Joey Hasty: I actually have  four models of facial recognition. That lollipop is made of Styrofoam. The paper and wood version, and the final version that made it into market. What you’re looking at here is a cardboard mock up of the prototype, but we’re still able to slide an iPad in here and use it right away. And so we’re just testing shape and function. And we really played with… There were hundreds of these sorts of prototypes before we landed on the sort of shapes that we were interested in. And then we were able to add more and more fidelity. So we went from cardboard to resin, from resin to wood, from wood to aluminum.

Kaitlin Milliken: Currently deployed imports, the final version of the technology has already had a major impact. According to Hasty, the old boarding process took around 45 minutes. With the new system guest can be on deck in only three minutes. 

Getting from technological hypothesis to impact that can be really tricky. After our tour of the lab, Joey and I sat down to talk about the tech scouting process and best practices for digital innovation. 

So what’s the team’s mission at Royal Caribbean when it comes to innovation? And what’s your mandate?

Joey Hasty: Can we start off just by saying, I hate the word innovation. I hate it because in some companies that means everything, and others it means nothing. So when I walk around with that word, it’s sort of loaded. What we mean when we say innovation is the just the relentless pursuit of new product development for our crew and our guests. And I do it by chasing three key strategies and that won’t be unfamiliar to your audience: buy, partner, and build. 

Buy meaning, what investments should the company be making, especially in the technology space. We’re lucky to partner with lots of great technology companies, like Apple and Google and Samsung, and you know, the list goes on. And we are looking for synergies around products they’re trying to bring to market and experiences we’re trying to bring to our guests. And build is sort of the last and my favorite truth be known. We run an innovation lab, which is really a build lab down on the first floor of this building. When we can’t find a company out there doing it to buy or to partner with, we built it ourselves.

Kaitlin Milliken: So digital transformation is sort of a buzzword that we hear about all over the place when it comes to innovation. But it looks like Royal Caribbean is doing a lot when it comes to digital strategy. Can you talk about how your team approaches that?

Joey Hasty: Sure. So our team is part of a much larger organization that we codenamed Excalibur, and that larger team’s mission is, in fact, to bring about the digital transformation for this company. And in almost every area you could possibly imagine. That is a five year mission. And we’re about two and a half years along the way. So we’re right in the middle of that transformation. So you can see it sort of live, happening around you.

Kaitlin Milliken: Let’s talk about connected experiences when it comes to cruising. What are the different types of technology that you’re using to really create that type of experience for guests?

Joey Hasty: Oh, we are technology agnostic. I use them all. Everything you can possibly think of, from NFC, Bluetooth. In fact, if we do it right, you won’t know or even care what the technology is. 

We also use technology and our ships that are not sort of immediately obvious to the experience. Like we use artificial intelligence and in our CCTV camera system to do a couple things. We’re looking at guest movement. Now we’re not using these cameras to track identity in any way. We’re just looking to see that there are people moving about, sort of people counting, and density, and movement. And we’re using that data to understand how to design ships better in the future. 

In fact, we use that data in real time, we’ll take it we’ll move things around. Watch guests flow, again. We use it looking at tables at our restaurants, so that we can see how long after you sat down before you were greeted, and then how long after you order before the food came. And incidentally, we know how long food stays hot and at the perfect temperature we want you to enjoy it. So we know if your food arrived at that perfect temperature. And if it didn’t, we can fix it in real time.

Kaitlin Milliken: Let’s move on to the tech scouting element. How does your team scout for new technology for your projects like Excalibur and other digital innovations?

Joey Hasty: It takes a village we have a few analysts helping, but I have a director of partners and partnerships, that helps us work directly with technology companies. And that’s our biggest source. Companies like Apple, and Google, and Microsoft, and Samsung, and Panasonic are nice enough to to work directly with us and sort of help us see around corners a little better, and are willing to partner with us on products they’re bringing to market for us on our platform. And so we’ll build things together. That’s our biggest source is just direct relationships with those companies.

Kaitlin Milliken: So I’d love to hear you walk through the process, starting with where ideas come from when it comes to new technologies?

Joey Hasty: Yeah, a good idea can come from anywhere I work on innovation, I lead it, I’m a catalyst for it, but I don’t own it. That’s ridiculous. We have great ideas from the bottom up in this company. And one of my jobs here is to sort of harvest those ideas from the bottom up and get people talking about it.

So a good idea can come from anywhere. But it almost never starts with the technology. I mean, very rarely in my career is it, “This technology is great at this, let’s go do this.” It’s generally when we’re working with technology, we’re trying to bend it to our will to make it do something it was never meant to do. And that’s where we sort of get to real innovation, or put two things together that have never been put together before. That’s when we get to something really amazing.

Kaitlin Milliken: So when it comes to getting those ideas, you say they come from everywhere. Do you find people come to you? Is it your team going on ships and getting ideas from crew members? Or are they from customers?

Joey Hasty: Oh, it’s all of the above. So our guests have… I’ve never had them tell me exactly what to do. But through observation, were able to learn latent and guests needs that we’re able to go through right away. That’s exactly how facial recognition came about. Just observing the port for an hour and you learn what could be improved and should be improved. So generally through guest observation, we find really big opportunity areas.  

Through our business partners, we find the opportunities, just places they want to push through technology. We find capabilities. Through academic institutions, we find research and we’re generally smashing all that together. We have a hunch, something we believe might work. And we turn that hunch into a prototype as fast as we can, going through a brainstorm phase as fast as we can.

Kaitlin Milliken: Great. So when it comes to testing new ideas, I know you said you’re working with your hands are building things all the time. How does that typically work, that build process?

Joey Hasty: Sure, I have this dream that one day it will be a two week sprint. I keep pushing, my team will tell you, I really want to get this down to two weeks. In reality, the things that we’re trying to do tend to be bigger things that are difficult to prototype. And so we need a little more time. So we average about four weeks for this process today. 

But we go from a hunch that’s inspired by guest needs and research and technology, to brainstorm. And we try to brainstorm outside of our group. So not just our innovation team, but bring in, we think this idea pushes into food and beverage, let’s get the food and beverage team. We think this idea pushes into this operations team. Let’s bring this operations team in. And we take just like any brainstorm, we filter the best ideas based on the goal. And we imagine what we should prototype. Now we try to prototype more than one thing. So we have something to compare it off. We build a prototype, typically chicken wire and spirit. And we invite guests to come try it. So whenever we can, sometimes we do it in the lab, but I try to get that prototype out into the wild. And it’s generally, actually through the observation of that prototype in use that we get the next big idea. It’s hardly ever the interview, what worked well, what didn’t work well. But we just rinse repeat.

Kaitlin Milliken: I love to talk about metrics. We find that our listeners really want to know, what are the things you’re looking at as indicators for success? And what are you measuring throughout the process?

Joey Hasty: When I got here, I thought it was going to be super important that we deliver a certain number of projects to market. I was super worried that we would be an innovation team at a brand new company that delivered nothing. It’s easy to become that. I was reading a lot about how that’s why innovation teams fail. 

So as laser focused on that, I think we’ve indexed too far the other way, that makes me think we’re not dreaming quite big enough. And so we’re given flexibility to fail. And we’re not failing very often. So we’re really pushing into bigger areas, in different opportunities. And that could also be that this team didn’t exist before. So there was just lots of opportunity. 

So I measure what we’re bringing to market. I measure how many prototypes we’re building. I measure guest feedback. I measure the impact area we’re pushing on, doesn’t matter if we have 100 prototypes in the area. That’s not impactful to our guests or crew since that’s what we’re trying to do. So we look at those KPIs.

Kaitlin Milliken: I want to follow up on that. Did you start the innovation group? Or was it already in place?

Joey Hasty: I was employee number three, and hired everyone. I hand picked everyone. A few of my cohorts at Disney and few outside folks and built the team from scratch.

Kaitlin Milliken: That’s really interesting. We find that for a lot of teams. There’s a lot of challenges in that beginning stage. What were some of the things that you had to work through and accomplish in order to really prove your team and build confidence in it?

Joey Hasty: You know, we had it doubly bad, I think then some of your other listeners might experience. Because this organization had some false starts some sort of fits and starts with technology. So there was a big sense of technology doesn’t make anything better with the company when we got here. So we had to overcome all the bias around being an innovation team. [People] saying, “Isn’t that everyone’s job?” And yes, it is everyone’s job. So we really tried to be catalyst in that. 

We worked hard to get really great relationships with our business owners to let them know we’re here to help solve big business problems for our guests, and we designed with them, so they’re never surprised. We don’t go off in a lab and in a black box and work in a vacuum and then go, “Here’s the thing we made.” They’re working directly with us the whole process. Sometimes, they even say, “That’s enough, you don’t have to bring me to every show.”

One challenge we had was just innovating across the entire organization, because Royal Caribbean is organized differently than maybe some companies in that each cruise line has its own end to end company, each with their own CEO, CFO, top down. So we’re, of course, trying to innovate across all of them. So getting them where they would normally sort of see a little bit of competition to sort of partner was also a challenge.

Kaitlin Milliken: How did you create that collaborative environment

Joey Hasty: Really showing that technology is a democratizing force. Really leaning on how if we solve guests entrance here, it really solves it for everything. And then, having some early successes really helped when we launched facial recognition. The port team was very excited. But then the shipboard side was very excited because they got guests on an hour earlier. So really, those early wins helped a ton in just building credibility having people come and ask us for help directly.

Kaitlin Milliken: So you started small in 2017. In 2019, what’s the size of the innovation team? 

Joey Hasty: Just the innovation team is only about 24 people in total. I know that sounds really small and lean, but that’s really purposeful because everything we do we’ve never done before. So it didn’t make any sense for us to build a technology organization. Every technology will change. So we pull in those resources when we need them. We’re really project focused. So at any given time, our projects can be full of teams of… In fact, they are today full of hundreds of people. But our core team is just about 24 people.

Kaitlin Milliken: So you mentioned high success rate. There’s still that margin for error and for failure. What role do those types of things play for your team?

Joey Hasty: Oh, learnings, 100 percent. Right? Especially in the way we imagine a guest to perceive something and then how it’s really perceived. Another place, it fails that I think a lot of people get wrong, a lot of companies get wrong, is the change management. It’s actually almost never the technology. It’s almost always the crew. The enablement of everything we do is delivered by humans at the end of the day, and their acceptance and their willingness to use new tools really drives the success or failure of a project. In fact, those the little bit we do fail really ends up being an operational failure more than a technology failure.

Kaitlin Milliken: So how do you get people ready for new technology and the new things when they’re coming out? What’s the training like?

Joey Hasty: So we built a change management practice just to make sure we get this right, because we were aware that it sort of comes down to the way it’s accepted and used. So we have a whole change management practice that identifies the of the parts of the company this idea will impact to bring them in early to see it working early in the lab. In our prototypical cases, we do have something physical, it’s easy to share. We have a digital manager for each vessel. And that digital manager helps us integrate new technology with that team. And really specific training regimens depending on the technology, from a few days to a few weeks before we open it up for guest, and then we sometimes open for a limited number of guests, and sort of grow from there.

Kaitlin Milliken: So we talked about adoption from a crew and employee standpoint. Now let’s talk about the other side. How do you get guests to adopt the new things that you have available for them to interact with?

Joey Hasty: You know, that’s a really fun question to answer in our if you think about cruising as a platform, because you board the ship, and then you’re onboard the ship for a week. And so it’s sort of hard to avoid it. Aside from the app, which we need you to download to take advantage of some of the features, most things are ambient, and so you’re taking part of it just as part of the experience. There’s nothing to sort of opt into. So we get huge adoption rates. But the app, we’re proud to say, is also really hugely adopted and beloved by the guests.

Kaitlin Milliken: So Royal Caribbean is rolling out a bunch of new cruise ships in the next decade. Can you talk about that?

Joey Hasty: We’re launching a new ship every year for the next decade. And each one is a platform of just new and never before seen things that I think the world can be pretty excited about.

Kaitlin Milliken: The new ships that you’re building that are going to be rolling out, you can build them to be equipped for newer technology. The older ships that already exist, may not have that type of infrastructure from the get go. How are you solving for that?

Joey Hasty: One of the early questions we ask is, “What kind of infrastructure is required to bring this idea to bear?” Because of that question, we over index on scale. We really want to democratize whatever we do. I sort of think technology gives to the rest what the rich have, right? It just this democratizing force. And we really want that scale. 

We don’t want to build something that’s just for one ship. And one itinerary. We want something that goes across the entire fleet. So we, we look hard at… We understand our technology limitations. What we can do, and we really try to build and bring things to market that don’t require large amounts of infrastructure. So unlike some of our competitors, who are stringing, you know, cable and sensors all over the ship, we really try to do things in a more lean way.

Kaitlin Milliken: So do you have any tips when it comes to tech scouting? Or hospitality that you think other innovators listening should be aware of?

Joey Hasty: Yeah, absolutely. My biggest advice would be to work to make the technology invisible. And what I mean by that is no one wants to use facial recognition. Everyone just wants to get on board the ship. No one wants an app. People just want to drink brought to them. So whenever you can, really work to hide the technology. So it just blends into your experience. So whatever your goal is, I know not everyone has a cruise ship to hide it on, but I really found a lot of success in really understanding that people have goals and it’s never the technology that you’re bringing to bear.

Kaitlin Milliken: Testing with your end users — both employees inside the organization and customers in the wild — can help you deliver results faster with emerging technologies. 

[ACKNOWLEDGEMENTS]

You’ve been listening to Innovation Answered. This episode was written and produced by me, Kaitlin Milliken. Editorial assistance was provided by our intern Molli DeRosa. Special thanks to Joey and Josh for hosting me in Miami. You can listen to every episode of Innovation Answered on our website, innovationleader.com/podcast. While you’re there, you can also check out the latest issue of our print magazine. That includes an article on Royal Caribbean with even more great advice. If you love the show rate and review us on Apple Podcast that helps other innovators find our content. Thanks for listening and see you next time.

[SPONSOR MESSAGE]

Special thanks to Kalypso for sponsoring this episode. As an innovation leader, you know there’s a lot of hype around digital. It’s hard to navigate all the technologies, and to hone in on the areas that will have the most strategic value for your business. As a professional services firm with deep roots in innovation, Kalypso’s brand of digital is different. Their focus is practical and hands-on with knowledge is based in results. Kalypso uses this approach to help their clients build foundational digital capabilities that fundamentally transform both the way they innovate and the products they bring to market. Their team is looking for looking for digital leaders and innovators who desire real results from digital transformation. Sound like you? Get in touch with their team and learn more at kalypso.com.