by williwu on 8/13/13, 7:12 PM with 57 comments
by kyro on 8/13/13, 8:57 PM
The consumer health wearables market is one that exploded recently, but is now at a standstill. We have several companies (Jawbone, Nike, Fitbit) who have been selling well-designed slightly-advanced pedometers for the last few years, and others (eg Basis) that are scheduled to ship similar products very soon. There's been little innovation in this space, but the market is still enormous, and there's a ton of money to be made.
Now considering that the current products are more or less equal, the company that will win in the end is the one that can 1) first get to market with a new innovative product, 2) brand it effectively to appeal to a wider audience, and 3) develop an ecosystem around the product that leads to customer lock-in.
With these points in mind, it may make the $43 million funding round more sensible. Although one could argue that Nike has the R&D resources to out-innovate its competitors, giving them point 1, Fitbit has also been in this game for a long time. Where FitBit is currently winning is their market and ecosystem. They're marketing to a large segment of the population who just wants to develop healthy and happy living, so they push features like calorie logging and sleep tracking -- features that Nike's products lack. Nike's Fuelband, on the other hand, is geared towards a smaller more athletic market. As for ecosystem, Fibit also offers the Aria scale, which can keep track of an entire family's weights, and a whole line of Fitbit trackers geared towards various lifestyles. And for Jawbone, well, they may have the R&D strength to innovate (I don't know), but they haven't been in this game long enough to get a foothold on a segment of the market, or to develop any sort of ecosystem around their product. At this point, there is no other company that's marketing to a wider audience and that offers both the variety in product as well as complementary offerings than Fitbit.
My guess is that investors see that Fitbit is best-positioned to win this race and needed the cash injection to break the stalemate it's currently in with its competitors.
by nhangen on 8/13/13, 7:40 PM
This means they need to exit at a 'cool billion' or IPO in order to provide the return their investors are seeking.
I think Fitbit is cool, but 1b for a product that has no demonstrable uniqueness would scare the hell out of me as a founder.
I'd love to know why they went for so much.
by andrewljohnson on 8/13/13, 8:05 PM
That's why they are in business.
by jug6ernaut on 8/13/13, 7:40 PM
by ckluis on 8/13/13, 8:13 PM
Quantified self FTW.
by tehwalrus on 8/13/13, 9:04 PM
(I think I heard about someone tying it to his shoe when cycling; I'd be interested to know if that kind of thing actually works.)
by Raphmedia on 8/13/13, 11:11 PM
Makes me take so much walks. All I want is to fill those 5 little stars to have it rumble on my wrist as if I had a level.
...
Fitness too.
But levels, really. I'm grinding so much.
by ececconi on 8/13/13, 8:11 PM
by beefxq on 8/13/13, 8:22 PM
by munaf on 8/13/13, 10:05 PM
by showwebgl on 8/13/13, 8:11 PM