A pebble into the pond
December 9, 2016 11:21 PM   Subscribe

In 2012 the Pebble Smartwatch, a pioneer in wearable technology, made Kickstarter history, reaching its funding goal within 2 hours, and ultimately raising over $10M from nearly 70,000 backers. On Thursday, Pebble announced that the company was ceasing operations, and the majority of the company was being sold to Fitbit, maker of fitness and activity trackers.

The announcement followed a week of speculation, and the sale for $40M represents a price much lower price than the $740M allegedly offered by watchmaker Citizen in 2015 (and turned down).

Meanwhile, Pebble has frozen its current Kickstarter campaign, announcing that that the new range of Pebbles will not be going into production, and that funds already pledged will be refunded. However, for those who have recently purchased a Pebble, there are no promises about maintaining current functionality, and no further returns or warranty support.

Engadget suggests that the shape of the acquisition - taking the software but not the Pebble hardware - risks alienating fans loyal to Pebble watches, and fails to take the maximum advantage of the buyout.

BGR argues that Pebble's failure casts doubt on Kickstarter itself: "Pebble’s shock failure leaves all sorts of questions for Kickstarter. If Pebble, with all of the cards in its favor, couldn’t run a semi-successful business with Kickstarter, I’m not sure anyone can. If we rule out serious business models, that leaves Kickstarter (and the multi-billion-dollar crowdfunding industry) looking like a cheap publicity stunt with the odd indie film or fraud. Not exactly the financial revolution we were promised."

Techcrunch's timeline of the Pebble story draws attention to the highlights and lowlights of the journey.
posted by Cheese Monster (30 comments total) 9 users marked this as a favorite
The /r/pebble subreddit has been collaborating on a chart laying out the competing devices, but there's not really anything out there that approaches their combination of slim profile, always-on display, multi-day battery life, physical controls, and a robust developer platform. So many others are super locked-down, or have janky touch/voice interfaces, or flashy OLED screens that you have to activate to see and that die after 18 hours.

Good news is, Fitbit not only won't actively brick Pebble devices, but will actually provide limited support for the platform's back-end. Even so, the community is working on open-source mirrors for the app store.

Personally, I'm just shocked at how swiftly the company's fortunes fell. A $750 million bid from Citizen just last year (rejected), down to a $70 million offer from Intel earlier this year (also rejected). Now Fitbit is scooping up their IP, patents, and (some) staff for just $40, and that's a desperation move to avoid defaulting on their debts entirely. I've heard the owners were holding out for a cool billion (a.k.a. unicorn status) -- I can't imagine how awful they must feel right now.
posted by Rhaomi at 11:47 PM on December 9, 2016 [4 favorites]

As some of you know, I do a lot of research on crowdfunding and entrepreneurship, and I think there are a number of important lessons here. (I am also a Pebble backer from the original campaign in 2012).

The first lesson is a standard one and not really crowdfunding-based: Pebble did a fairly typical startup thing, which is to ride its value all the way up, and then back down again. They launched the smartwatch category, but were too small to win, and they really should have sold to Citizen for almost 20x as much a year ago. This happens surprisingly often.

As far as crowdfunding is concerned, it works best for projects that are not too large or too small. Delivery rates are highest for projects that raise around $10-$100k, and drop off as you go a lot higher or lower. The more you raise over your goal, the bigger the delays and the larger the issues. That isn't to say that it doesn't work for very large projects (Pebble had a good run, and a lot of game companies etc have really delivered) but that the creators are far more likely to get overwhelmed when they have unexpected success.

That said, the achievement of Pebble (and Oculus, and Double Fine) is that their funding launched a new category that conventional wisdom and VC thought was dead. No one funded smart watches, VR, or adventure games anymore until they were a hit on Kickstarter. So even if a pioneer or two fails, the communities involved have actually created a world where the thing they care about actually exists. I abandoned my Pebble for an Apple Watch, a product that would not have existed without Pebble, to illustrate the point. Pebble's big sin in my mind was not selling out, but abandoning their community, since it was the crowd that backed them against the odds.

Finally, I would say that every time people look at a big project that fails they tend to say that crowdfunding has failed (which is really weird here, since Pebble did really well, but not as well as they thought). But crowdfunding really does work well overall. 91% of projects deliver on their goals, and the average project makes around $2.41 in outside revenue for every dollar they raise. For small businesses, artists, and others, crowdfunding is a lifeline. It is important to be educated about the failures, but Pebble isn't really typical.
posted by blahblahblah at 11:50 PM on December 9, 2016 [54 favorites]

Rhaomi: "Now Fitbit is scooping up their IP, patents, and (some) staff for just $40"

(Er, $40 million. They didn't fall that far.)
posted by Rhaomi at 11:57 PM on December 9, 2016 [6 favorites]

There's something very 2001 (dotcom era) about their arc.
posted by rhizome at 12:14 AM on December 10, 2016 [6 favorites]

New (and slightly disgruntled) Pebble 2 owner here. They were basically squeezed on both ends - fitness trackers on the cheap and stylish side, and the blessed Apple Watch / Android Wear on the high end - in a market that wasn't as big as anyone though it was.

It's too bad, it seems like it delivers the "right" amount of functionality - the always on screen is readable, it doesn't try to make you do silly input methods on the device, and it handles notifications decently enough. But none of these things sell all that well when you put them on a retail shelf.
posted by meowzilla at 12:19 AM on December 10, 2016 [2 favorites]

I've heard the owners were holding out for a cool billion (a.k.a. unicorn status) -- I can't imagine how awful they must feel right now.

Hopefully it might encourage others to think more realistically about their tech businesses.
posted by Coda Tronca at 2:03 AM on December 10, 2016 [2 favorites]

Good news is, Fitbit not only won't actively brick Pebble devices, but will actually provide limited support for the platform's back-end

that sounds like good news and I'm sure it probably is but personally I'm still too exuberant about Facebook acquiring Parse to fully appreciate all the other good that M&A does the software world.
posted by 7segment at 2:42 AM on December 10, 2016 [1 favorite]

Hopefully it might encourage others to think more realistically about their tech businesses.

This is just not the mindset of tech business leaders.
posted by The River Ivel at 4:12 AM on December 10, 2016 [3 favorites]

Does this really say much about Kickstarter campaigns or is it just the result of poor management? You could buy pebbles at Target! Were they always running on debt despite the millions in Kickstarter funds? None of the articles really explain why they failed. How did they fuck this up? Was it just competition from Android and Apple that squeezed them out?
posted by dis_integration at 5:09 AM on December 10, 2016

I'm more impressed by how they managed to keep it going so long against better funded, better targeted, better integrated competitors. Trying to sustain a platform in a tiny niche is never a long-term proposition. It amazes me that they didn't cash out at the first opportunity - the valuations mentioned in the OP are insane.
posted by grahamparks at 5:20 AM on December 10, 2016

Was it just competition from Android and Apple that squeezed them out?
This was likely it. When it appeared, there was nothing like it. Now you can buy a smartwatch downtown starting at the middle tens for a no-brand shitty model to an Apple or Samsung over the €400 price tag, with all sorts of styles available, from classical to the most futuristic along the way. A small company can't couldn't compete with both the cheapness of chinese no-brands unloaded on the market, as well as the superior marketing capacities of the big phone sellers like Samsung, Apple, LG, Alcatel, etc.
And considering the devaluation in such a short time, Citizen likely just sighed on relief. Until someone starts killing people with a mask and a clock drawn on the chest pointing to the 1 and 2 calling himself "The Citizen", of course.

As for kickstarter, they still released a successful product. I don't think the problem was with kickstarter (who has it's own share of problematic projects, like those that are well funded and then disappear, the overambitious and massively underfunded projects, or hundreds of me-too projects like the minimalist wallets fad a few years back), but the traditional way of making a product, value company and expect to be bought by some larger company blew up in their faces. Refusing 750 millions and then being forced to sell the company for 5% that is ridiculous.
posted by lmfsilva at 5:54 AM on December 10, 2016

I was among the first thousand Kickstarter backers the first time around. I loved that watch -- right up until one of their firmware updates (in late 2013) broke it entirely (and blocked its ability to upgrade or roll back to a working version). My customer service experience, once exhausting the update and rollback options, was them saying something akin to "Well, mystyk, you should know that first-gen products will have some issues, so it's not our problem." I haven't supported them since, and I wouldn't want to.

I still have the watch, sitting in a drawer and long-since drained of battery, complete with the "Kickstarter Limited Edition" engraving on the underside, and it serves as a constant reminder of tech fads and how their creators won't really support the people who made their success possible.
posted by mystyk at 6:20 AM on December 10, 2016 [14 favorites]

How am I going to operate my digital watch now?
posted by Devonian at 7:32 AM on December 10, 2016 [4 favorites]

I own three of them and am bummed out.

With the right combination of apps, they actively improved my life. I was reminded of meetings silently, able to reply to messages quickly at a stop light and see who was calling, all without pulling my phone from my pocket.

It wasn't a perfect product, but it made my life a little easier.
posted by donpardo at 7:33 AM on December 10, 2016 [1 favorite]

I was hugely skeptical of the whole Smartwatch idea for a while, but I decided to put my money where my mouth was and buy an original Pebble after the Apple Watch announcement.

Holy crap, I was wrong.

Pebble made the scales fall from my eyes, and revealed to me the potential in having a computer on your wrist. Sadly, it didn't work well with iOS at all, and ended up in a drawer after the month I spent with it, but the principle was there. I now use an Apple Watch, but I kept an eye on what Pebble was doing and though they were really onto something. There's a real place for an inexpensive smart watch that looks like a watch, not a fitness device. I hope FitBit takes that aspect of the Pebble and does something with it, 'cause FitBit's products all look like... fitness gear, not watches. Even their actual watch-style device.

Anyway, I have an Apple Watch now, and I like it. But it never would have happened if I couldn't walk into the Best Buy near work and throw down $99 for a Pebble.
posted by SansPoint at 7:37 AM on December 10, 2016 [2 favorites]

I blame poor leadership.
posted by oceanjesse at 7:37 AM on December 10, 2016

oceanjesse: I blame the fact that Pebble doesn't work well with iOS, which isn't Pebble's fault. A smartwatch works best when you can do something with the notifications on it, but iOS doesn't make that framework available to non-Apple Watch devices. Every time my wrist buzzed with the Pebble, I had to whip out my iPhone just to deal with it.

But if you were an Android person, man, that probably was great.
posted by SansPoint at 7:40 AM on December 10, 2016 [1 favorite]

I was an early Pebble backer, and I loved mine. It eventually died, and I decided to splurge on a Moto360... and it was night and day. To the detriment of the Pebble. Seamless integration with a phone OS. A rich ecosystem of watch apps. Color display. Much nicer fit, finish, quality of materials. Etc. Etc. Etc.

I give pebble a ton of credit (like a lot of kickstarters) for opening up a market, or proving it commercially viable. I also give them a lot snake-eyes for doing the standard startup stuff. I'm not exactly crying them a river for a $40M buyout. They'll live, somehow, even on these reduced means.

My original pebble? I think it's dead in drawer somewhere, a monument to my stupid device addiction.
posted by mrdaneri at 8:15 AM on December 10, 2016 [1 favorite]

I liked the idea of Pebble. The watches were simple and they had an active developer community. In practice every Pebble I owned had the same problem. The watch bands kept coming off. After I lost the third or fourth one when the bands detached when I was riding my bike I gave up. Good idea, mediocre to bad execution.
posted by rdr at 8:23 AM on December 10, 2016

Good news is, Fitbit not only won't actively brick Pebble devices, but will actually provide limited support for the platform's back-end
Pebble doesn't really need ~the cloud stuff~. Sure they've added features like the Timeline and voice recognition, but these are extra fluff — the core functionality works offline. I've been using Gadgetbridge instead of the official Pebble app for a while, it's great. Open source, doesn't require an account, supports the core functionality.
posted by floatboth at 10:05 AM on December 10, 2016 [2 favorites]

I'm really bummed, since I won't ever get the Time 2 now. I love the simplicity of it, and the battery life, and there isn't anything else out there that has the combination of features I want. I'll wear my Time until it dies, I guess, hoping that there will be something out at that time that will be a good replacement. I have loved it ever since I got my first KS one. But I'll never buy a Fitbit, because the focus on that is all wrong for me. So sad and annoying to have something you love just.. die....
posted by gemmy at 10:12 AM on December 10, 2016 [1 favorite]

I was interested enough to follow Pebble, but not enough to back the Kickstarter, which is a pretty low bar for me: I regularly receive packages from eastern Europe containing some useless gadget or other, a year after forgetting I backed said development. Often the technology is obselete by then, or nearly so.

I was skeptical of the Apple Watch, too, and late to the party. Mine is still quite new, but I have to admit it's become pretty "necessary" to my day. I now put my phone away a lot more often, and it sits buried in the bottom of my bag rather than in my hand 24/7, which is a godsend in itself, and I'm sure others appreciate that, too.

I like being tapped for turns or reminders without the tech being visible to anyone around me. And the constant nagging to stand up, breathe, and exercise -- complete with daily report card -- actually works on me, even if I grumble at it sometimes at the babysitting feel of the whole thing. I guess I'm easier to manipulate than I like to admit, but fine. I'm more active. Two points for Cupertino.

That said, I don't actually look at it much, so I'm not sure the fancy OLED display and touchscreen and all that even matters. If a faceless fitbit (using my phone screen for UI) could do all the same things as seamlessly while lasting a month on battery, that might be a better solution. But I think there's somewhere for the wearables market to go, some niches left in between dumb, simple fitness tracking and full-on AR goggles or Black Mirror-style iris implants.

(Which I will be backing on Kickstarter so freaking hard.)
posted by rokusan at 10:36 AM on December 10, 2016

Happy Pebble/Android user here. Battery life, reliability, visibility outdoors and input method are all superior on my Pebble compared to other smart watches I've owned or seen. I don't understand why they couldn't build a viable business on it.
posted by Triplanetary at 10:36 AM on December 10, 2016

"viable business" is hard. I own a bar in a gentrifying urban neighborhood surrounded by young folks who like to walk. It's a relatively simple business. We serve good food, beer and liquor at reasonable prices. I should be rolling in dough. I am not.

I can't imagine having to deal with national marketing, supply chain management, software maintenance, innovation and overseas manufacturing.
posted by donpardo at 10:52 AM on December 10, 2016 [2 favorites]

My Pebble Steel looks good enough to be usually mistaken for an Apple Watch, has enough charge that I can go on business and weekend trips without bringing the (tiny) charger, and is always on, which turns out to be a big deal when you need to sneak peeks at the time or notifications, which is surprisingly often during business hours. At this point I only use it for notifications, having realized that virtually everything else is better done with the phone, but the ability to have instant knowledge of emails, texts, and upcoming meetings is surprisingly much, much better than living on phone alone. Basically, the phone has become more like my laptop now, something I fish out to do something rather than a notification device. The latter stuff, of course, any smart watch can do, but the fact that my pebble has done it sturdily for years, with a bunch of low-tech battery/screen advantages that for me far outstrip the phone-does-it-anyway widgets of the Apple Watch, means I'll be sad when it finally dies and joins my Spot and Palmpilot watches in the box of dead doodads.
posted by chortly at 11:35 AM on December 10, 2016 [1 favorite]

Y'all are talking me into an Apple Watch...
posted by persona au gratin at 1:12 PM on December 10, 2016

I had backed the new version, which I now won't be getting. But have a Pebble Steel for over 2 years and love it. Really disappointed not to get the new one & looking at option for what to spend my refund on. But the big selling point about the pebble was its battery, it was great.
Took a quick look at that reddit spreadsheet, will have to go back and take a much closer look to find my new smartwatch.
posted by Fence at 1:33 PM on December 10, 2016

I recommend Apple Watch too, despite the general decline of Apple stuff recently. It's totally reliable and 1-day battery life has never been a problem. Among minor points, the mechanism for changing the strap is typically Apple-robust and takes seconds. I have the plastic strap for working out and an eBay leather one for making it look like a nice watch.
posted by Coda Tronca at 1:46 PM on December 10, 2016

Another original Pebble backer who's got a 1st-gen Apple Watch charging next to the long-drained Pebble. I still think that the body of the Pebble is a nicer design than the AW's, but that's the only way that the Pebble was ever superior, even before the AW's watchOS 2 came out and finally made the button useful.
posted by Halloween Jack at 9:32 PM on December 10, 2016 [1 favorite]

The Pebble Round still doesn't seem to have any competitors. It's such a comfortable, light, unpretentious watch. I don't want a smartwatch that can be mistaken for an Apple Watch, I want one that can be mistaken for a women's Timex, and I'll happily take the functionality and battery life hit. Argh...
posted by Salamandrous at 9:59 AM on December 11, 2016

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