Pebble debacle

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Pebble, the smart watch company, shut down less than a year after their latest crowdfunding campaign. As a backer and someone who wants to see hardware crowd funding projects succeeded, this was painful to watch. Would love people’s thoughts about what happened.

It is easy to find similarities to us, like schedule delays. Of course there’s also the major difference that we are not running out of funds like they did. Still, I think there’s something to be learned from my every failure, and would love your thoughts about this one.

Edit: link. http://www.theverge.com/2016/12/7/13867158/fitbit-buys-pebble-smartwatch-acquisition-deal

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Totally unfamiliar with it, so couldn’t say. That’s too bad.

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Sad to see this happen, since the Pebble was the first Kickstarter I ever backed.

That said, after a LONG delivery delay, mine died a year later…they were good about replacing it, but then the replacement one suffered from the same exact issues within a similar time frame. I lost faith in what they could create, so I didn’t even consider getting the new versions.

I hate when companies buy out something just to kill it off. I’m still mourning the demise of the Flip Video camera!

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I love the whole crowdfunding concept, so I hate to see a company like this fail even though I never purchased anything from them. I’m just afraid that something like this makes people believe that crowdfunding doesn’t work. I believe that innovation usually comes from a handful of people who aren’t afraid to take risks or make their shareholders unhappy.

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I could be thinking of something else so feel free to correct me. I think I remember a podcast talking about how hard it would be to get everything they wanted in the new design and have it remain quick, power efficient, and cool at that size. I believe they had to rewrite the software in a different language and also deal with Bluetooth issues.
Perhaps they bit off more than they could chew in a market that was already pretty saturated?

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What surprised me about the whole this was that they were bought by Fitbit but still stopped all their production! Haha. Just surprised by that!

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There were not bought in whole. Some of their assets were bought and some of their employees were hired.

FitBit seems to have no plans for the hardware at all. It’s probably better that customers get a refund than hardware that is immediately de-supported.

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They were aiming for a general market audience but reached niche market saturation and could not break out. Personally I just never found their feature balance that interesting. I see FitBit quality tracking as table stakes to get me to wear a watch.

Obviously, some 3d printer companies have had the same niche saturation issue.

I hope materials are enough of a revenue generator (without being overpriced…) for Glowforge to succeed without needing a massive target market.

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Read an article about that this morning, absolute nightmare scenario for the backers. My first assumption was that the Apple Watch probably had a hand in killing it. Can’t believe that happened.

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Don’t underestimate the design catalogue. Silhouettes digital cutters are niche, and they have more well known competition (cricut, brother), and while they do have branded materials, I Dont think they sell that well. But their design store makes a killing at $1-3 a pop. Granted, there are probably more silhouette machines in the wild (they’re inexpensive comparatively and have been around for years), but glowforges 10k potential customers coming back month after month could be substantial.

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This.

It’s difficult, if not nearly impossible to build and then sustain a company off of a single product or two. You have a product, not a company. I don’t know the specific of Pebble, their delays, or their running out of money. But they basically just sold a product - the Pebble Watch (right?) (and I guess they had a few different SKU’s) - and that product experienced commoditization. Commoditization happens - it’s a fact of business. You can either (or both): keep pushing the envelope which slows it down (Apple did for a while, not so much anymore); be diversified.

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The saddest thing for me in the article I read was that they were offered $750M for the business by Citizen and turned it down! Now they are being sold for $40M!

I believe some of the issues were:

  • They needed greater financial backing to carry the cost of the development cycles for new products.
  • They did not have a recurring income (Proofgrade, Design Store, Product Add-ons).
  • Although early to market they suffered when Apple and Android vendors entered the market, as they did not have the marketing funds to complete in the long game.
  • They suffered product issues and development delays (heard that before - best avoided).
  • Although innovative (e-ink display) the design was not that great, especially compared against the latest high fashion devices from Apple and Samsung.

In comparison to GF, it appears many of these issues have been addressed. GF has opened up a new market (consumer/home laser cutter) but it will be interesting to see if any of the established industrial laser vendors look to enter the market, hopefully it is too large a leap for them so that GF has the market to themselves for a while (other than some niche vendors with inferior products).

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I liked the Pebble, but I always found them pretty ugly, even for a smartwatch, which is saying something.

I wonder what sort of IP Fitbit got in the acquition; I have to imagine it’s the only thing they really wanted, else they could have just done an acqui-hire.

You shouldn’t; it was very much a product of its time. It would have been discontinued soon enough thanks to the rise of smartphone video and the GoPro / action camera market.

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The biggest thing I noticed was that the market they were targeting, was a fickle choice group.

What I mean by that is, the potential purchasing group is the “flavor of the day” kind of focus. There is a popular interest in a product that could look good on an individual and had some health benefits.

For Pebble, they were a small company that had come to the market with some real dollar competition. If they had come in 2012, it would have given them greater market exposure. Because that product they made is easily duplicated and its concept tweaked, knockoffs and even real competitors could give disposable income (even commodity expense - read milk, eggs, cereal, etc) customers choices that get Peeble lost in the crowd.

It was good that Best Buy became Pebble’s first major retailer to carry the product, but by then wearables were becoming know by the mass population. Citizen was right to offer the a large amount to them, because they had the marketing capacity to beat others to the stores and probably the manufacturing power to saturate the different retailers. Kickstarter companies must look at the buyout potential when a large company sees the value of their product. Letting go is tough when it is your “baby”, but what is the long term viability compared to a business seeing the “strike while the iron is hot” product that they want to sell. Tough call.

But just like fickle choice groups of old (read - Beenie Babies, Pet Rock, dress styles of each decade), the change of the market’s “new and hot” is pretty brutal on crowded niche product manufacturers.

Just look back at the last 12 months (even 18 months), Microsoft cancelled their Band (1st gen had breakdown of wrist band materials, looks not too appealing, 2nd gen became end of product line - I owned both), sales of iWatch down so badly that Apple kept the numbers buried in group totals (until just last week), Android fitness/smart watches are available in all sorts of configurations.

Pebble had a product that probably would have done well, if it was the first to market and then released other models to appeal to new and existing customers and became the standard that competitors would state “Just like a Pebble, only {insert comparison value here}”. Fitbit is that standard for fitness wearables and look at the model/product diversification they have.

EDIT: Corrected typing/spelling of Pebble

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I disagree that their target was some fickle fashion group like you seem to imply - their first target was nerds on Kickstarter, and they did well.

They managed to get out if not first, very early on in terms of smartwatch evolution. Their biggest problem was simply that they were a small company - Kickstarter is great for getting product funding, but when you really need to throw up a million dollar ad buy to show people what your product is (smartwatches were still new concepts at the time), well, it’s not so good for that.

Combine this with manufacturing failures, constant delays getting new products out the door, etc. and you’ll see why they failed. The “fickle market” had very little to do with it - their funding and management did.

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I bought my son a Pebble for Time for Christmas and it’s too late to request a refund. Now I’m worried that the watch will become unusable a few months into 2017. This was the basis for my earlier questions regarding our ability to host an independent copy of the Glowforge server-side software.

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Fortunately, it seems like you shouldn’t have much to worry about, at least in the short term. From the pebble dev blog:

In the short term, the Pebble Developer experience remains unchanged. We’re happy to report that our transition to Fitbit gives Pebble Developers an exciting opportunity to reach and delight over 50 million users and counting. The Pebble SDK, CloudPebble, mobile apps, developer portal, appstore, timeline API, dictation service, messaging service, and firmware will all continue to operate without interruption. Further down the road, we’ll be working to phase out cloud services, providing the ability for the community to take over, where possible.

Some other dev-related info:

https://developer.pebble.com/blog/2016/12/06/developer-community-update/

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I would agree with you that the Silhouette, Cricut…catalog and ACCESSORIES (pens, cutters, backer sheets…) are the “blades” to the cutter “razor”. I would also say that I was never interested in a Cricut until they allowed me to send my own vector designs to the cutter instead of buying their art.

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The smart ass accountant in me wants to say they were spending more than they took in… simple math. However like most businesses that fail either their business model wasn’t sustainable or they weren’t keeping their eye on the financials and adjusting accordingly. In Pebbles case I don’t think their model was sustainable. They had a very small part of the wearables market with very little recurring revenue from their current customer base. Speaking of crowdfunding the L16 camera just announced another delay… their timeline has been very similar to the Glowforge.

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Not getting new models to market does really hurt a company, but look at the competition numbers:

2015Q4, 2016Q1 and 2016Q2 had 3.1%, 1.0% and 1.3% of shipped products. If their hardware isn’t getting out of the factory, it affects their presence greatly, but even with cross platform support, the competition was killing them.

I had to look up what Lenovo had (forgot they own Motorola products now), but really surprised by Garmin :thinking:

Apple gets somewhat of a pass because their uses tend to jump on the next “magical” thing. But even they have lost over 30% of the market shipments in 12 months.

Even Fitbit didn’t want Pebbles hardware platform which means that hardware is going to be sent to the IoT junkyard in a little over 3 years of active manufacturing. It is a shame that owners of a Pebble won’t be able to have full use of their watch (until the hardware gives up the ghost) because the software is now owned by Fitbit and it has been stated that functionality is going to be reduced.

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