From Kickstarter to CES: The Pebble Success Story

| Analysis

LAS VEGAS - The Pebble team is living the startup dream. They unveiled their iPhone and Android-connected smartwatch on Kickstarter and quickly sold 85,000 units, have commitments from customers for thousands more, and just hosted their fist ever press event at CES. Despite delays that forced the company to push the watch's launch out be several months, the company has kept the hype and interest up and is finally ready to start making good on its promises by shipping its coveted watch to early investors.

Pebble's Eric Migicovsky shows off the company's smartwatch at CESPebble's Eric Migicovsky shows off the company's smartwatch at CES

Eric Migicovsky, Pebble's lead engineer, spoke at the company's first ever press event at the 2013 Consumer Electronics Show in Las Vegas to a room packed with journalists, bloggers and analysts. Mr. Migicovsky gave everyone their first look at the watch and promised the first production units will ship to early Kickstarter investors on January 23.

The US$150 Pebble smartwatch is the latest in wearable technology gadgets. It uses Bluetooth to display information from your iPhone or Android smartphone, and uses its own custom operating system that supports third-party apps for customizing its functions. It's water proof, has a 7-day rechargeable battery, a 1.26-inch display, and the company offers the watch in several colors.

Pebble has been very open with its Kickstarter investors during the development process, and even let its fans vote on the watch colors. After 16,000 votes, the company settled on black, white, red, grey, and orange.

By taking the Kickstarter route instead of seeking traditional investors, Pebble continued on its own path and made some decisions that they potentially wouldn't have if the company had to deal with the wants and concerns regular financial backers bring to the table. They chose to scrap their original manufacturing plans when they saw how quickly interest in the watch exploded, took extra time to refine the watch case design, and included features -- like Bluetooth 4.0, and ambient light sensor, and a magnetometer -- that may not be used when the first units get to customers, but eventually will come to life thanks to software updates and new apps.

"We tried to future-proof Pebble," Mr. Migicovsky said. "Our future updates will be software, not hardware."

That's good news for early adopters worried about the potential sting of fast hardware upgrades that quickly leave them with an outdated and feature limited product -- a fate many buyers face when they get in on the ground floor with a new product.

Pebble is also working on its own cloud-based push notification system to give developers more control over the information their apps push to the watch, and they committed to releasing software updates every two or three weeks to add promised features that may not be available when the first units ship.

With the ability to make about 15,000 units a week, Mr. Migicovsky expects the company can fill all of its initial orders in about eight weeks, and he said they have "tens of thousands" of pre-order commitments, too.

That interest translates into the potential for big success, assuming Pebble can keep its manufacturing process running smoothly, and the watch meets buyer's expectations. It also makes Pebble a perfect example of what can happen when everything with a Kickstater project goes right. The Pebble team started their watch project in a garage and less than a year later stood on stage at CES showing off the finished product.

Demand for the Pebble smartwatch is so high it'll take weeks to ship all of its initial orders, and new customers seem willing to wait for several more weeks to get one on their wrist, too.

Pebble's success is will no doubt inspire other budding entrepreneurs to try out Kickstarter in hopes of making it big, too, which means it won't be long before we're hearing new Kickstarter projects referred to as the next Pebble. Assuming those projects are great, Kickstarter will probably be just fine with that.

Pebble's plans now that its smartwatch is finally ready to ship may not be as sexy as a brand new product, but they're equally important. For now, they'll focus on software to enhance the watch while getting third-party developers on board. Eventually, however, they'll probably come up with a new product idea again, and it's a safe bet there'll be plenty of people ready to line up for whatever that happens to be.

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