Pebble, once the crown jewel of Kickstarter, has officially folded as a viable company. They have sold some assets to Fitbit, and are in the process of refunding any outstanding Kickstarter orders. This is a sad day, since Pebble was an early smartwatch pioneer, and made some excellent watches. Unfortunately, having a good product isn’t the same as running a good company.
Hindsight is 20/20, but there were some red flags in Pebble right from the start. They were deeply delayed in shipping the original Pebble, which is common with Kickstarter but still not a great sign. Pebble was able to ship the Pebble Steel relatively quickly, but then they returned to Kickstarter for the Time/Time Steel release, with both of those taking quite a bit of time between Kickstarter and shipping. While they were still shipping/taking orders for the Time Steel, they then released the Time Round on their site, not through Kickstarter. This actually caused them to offer discounts/refunds to Time Steel buyers who backed them via Kickstarter, hadn’t yet received or were just receiving their Steels, since the Time Round was a such a similar product. However, they returned to Kickstarter again for the Time 2/Pebble 2/Core release, which has now been canceled as a result of their insolvency and sale of assets. Basically, Pebble spent more time delaying their shipping than actually shipping product. They did manage to get Pebbles into Best Buy and Target, but this caused some tensions because Pebbles were showing up for retail sale ahead of Kickstarter backers receiving their devices. In a nutshell, Pebble was never able to figure out how to get ahead of manufacturing costs.
On top of that, Pebble seemed to think the solution was to keep releasing more and more new devices. They debuted on Kickstarter in April of 2012, so in a little over four years, Pebble released 8 distinct products, each with multiple color and/or size variations. They couldn’t ship products on time, but they offered a huge selection! They also made things more complicated by trying to encourage hardware developers to make “smart bands” that could add GPS, heart rate monitoring, etc., all items that the Pebbles lacked at the time. Instead of focusing on one or two products, Pebble just kept trying to pump out more and more, in an attempt to cover every possible idea. This clearly spread them far too thin, which was probably why they had to keep getting money fronted via Kickstarter to manufacture new product. Pebble was running the company on the large-scale equivalent of paycheck to paycheck, and unfortunately, they couldn’t quite stretch far enough.
If I’m being harsh on Pebble, it’s because it seems like they died more from their own missteps than market pressures alone. Compare Pebble to Misfit, another wearables company that started with crowdfunding (via Indiegogo). The Misfit Shine was a simple fitness tracker and a huge hit for Indiegogo, but Misfit was able to move beyond crowdfunding for their later products. Misfit also took their time with future products, rolling things out fairly slowly. The Shine started funding in 2012 and was sold in 2013. In 2014, Misfit released a cheaper follow-up (the Flash), and then in 2015 they dropped the price of the Flash and stuck their toe into home automation. Then they were acquired by Fossil at the end of 2015. So in the same 4 year period that Pebble was slamming out products left and right, Misfit was focusing on one product, then two, then a handful more that were all linked together. That’s a far more conservative approach, but it also meant Misfit didn’t need to keep using crowdfunding, and it’s worth noting that Misfit sold to Fossil for $260 million. On just about every metric, Misfit is a better example of crowdsourced success than Pebble, and I think a big part of that was the slower, more measured approach Misfit took to spending money on new hardware.
Pebble’s new owners, Fitbit, have a similar story. They started with one tracker, then moved on to the Zip and the One, followed by the Flex and the Force. When the Force had an allergy issue and was recalled, they took close to a year to release follow-up devices, and only just updated the Flex in 2016, after several years on the market. So Fitbit, a company that by all metrics was significantly more successful than Pebble, and is probably the most successful fitness tracker company worldwide, took a very measured approach to hardware as well. They didn’t pump out a slew of trackers until they had a good handle on the market, and even when they did flood the market, they did it as a market leader. So when Fitbit went from three devices to six (Zip, One, Flex, Charge, Charge HR, Surge), they did it with enough clout to get sold in practically every major retailer. Off the top of my head, I’ve stumbled across prominent Fitbit displays in Macy’s, Microsoft Store, Best Buy, Target, Kohls, Brookstone, Verizon Wireless, Bed Bath and Beyond, and Buy Buy Baby. Fitbit is beyond ubiquitous, but even then, they kept their product line fairly tight until they had their hardware and software aligned and working well.
Both Fitbit and Misfit were successful where Pebble was not because they had more focus. I had a Pebble, and I loved it, but the reality is that Pebble diluted themselves. We won’t know everything about what happened at Pebble until someone writes a tell-all, but if Pebble had simply stuck with four products — the Pebble Original, Pebble Steel, Pebble Time, and Pebble Time Steel — maybe they wouldn’t have been so overextended. Instead of pouring money into developing ancillary products like the Pebble Core, they could have just focused on keeping the Time and Time Steel relevant for another year and bought themselves more time to gain traction in the marketplace. They could have reached out to developers who were disappointed that Motorola and others seemed to be holding off on Android Wear for 2017, or monetized their app store and further supported developers and created a revenue stream for themselves. Maybe none of this would have made a difference, but it would have likely cost them a lot less, and it might very well have helped them sell the whole company instead of just pieces.
No matter what could have happened, the end result here is that Pebble had a great product with no momentum and an over-reliance on crowdsourcing, a messy situation that took them from Kickstarter royalty to unfortunate failure … let’s just hope Fitbit is able to use the Pebble bits they purchased in the next iteration of Fitbits!