By Robert Mullins – Sr. Staff Writer – CrowdFundBeat
Evidence that the wearable computers space is quickly gaining traction was on display at the Glazed Conference in San Francisco Sept. 30 that drew makers of smart watches, smart phones, music players, health and fitness devices and an abundance of people wearing Google Glass.
Attendees learned about how a rush of startups is getting into the wearable computers space, many of which interact with existing smartphones, and about how crowdfunding is helping many of these startups get off the ground.
The first ever Glazed Conference was hosted by Stained Glass Labs, a startup incubator focused on wearable computer makers. Among the companies represented were makers of wearables targeted at the health and fitness market, gaming, health care, augmented reality and smartwatches that link with a user’s smartphone.
The event was also dubbed the Glass and Wearable Platforms conference as a nod to the coming Google Glass device that interacts with someone’s Android device. At least 20 people at the conference were spotted wearing the hot new device, which was sold to a few beta users by Google in advance of the wider release of the product sometime in 2014.
And since many wearables startups are crowdfunded, one panel during the conference was devoted to obtaining crowdfunding for a project.
Exhibit A was Pebble, the maker of a smartwatch of the same name that is a veritable Swiss Army Knife of smartwatches, with features that can include SMS texting, e-mail, Caller ID, weather alerts, a music player, even a golf range finder.
Having failed to convince venture capitalists to invest in Pebble, founder and CEO Eric Migicovsky said the company went to Kickstarter to raise money from the crowd.
“We thought we would raise enough money to build about 1,000 watches, that was $100,000. We raised $10.2 million,” Migicovsky said in an interview with CrowdFundBeat. “We think we figured out what people wanted to buy.”
Pebble was cited on the Glazed panel “Crowdfunding Killers” as an example of a successful crowdfunding campaign that offers not just a product but a platform and an ecosystem in which other startups can thrive.
Rob Coneybeer, co-founder of Shasta Ventures, a VC firm, said a company like Pebble can succeed because it is a platform that software developers can build applications for to expand the usefulness of the product, much like the Apple iPhone and Google Android devices. Shasta has invested in a similar venture, a gaming platform company called Ouya.
“You want to get out there and have people aware of it and with the developers, you’re trying to solve this chicken-and-egg problem of is there going to be a platform out there and have a lot of people using it,” Coneybeer said.
Of course, you can’t set out to invent a platform with crowdfunds, said Migicovsky on the panel. He said you have to set out making a product that will be compelling to the end user. Since proving itself on Kickstarter, Pebble has received $15 million in VC money in May from Charles River Ventures, he said.
Crowdfunding is a valuable way to raise funds to develop a wearable device and to build a market of people who will buy it, said Kate Drane, hardware marketing director at Indiegogo, another popular crowdfunding site.
“You’re getting your name out there, you’re putting out your story in a concise way where people get to relate to you specifically and they get to know the story behind you,” said Drane.
A startup’s crowdfunding page lets the entrepreneur explain what their product is designed to do, what value it offers to the buyer, as well as details of their business plan. One tip, she said, is for the company to post a video on its page demonstrating the product, but it shouldn’t be too long. Drane said that for startups whose Indiegogo page includes a video of no more than three minutes in length “112 percent more money can be raised” than without one. And crowdfund investors are so supportive of the company that one of them even suggested a design change, which the company adopted.
Shasta Venture’s Coneybeer also warned those seeking crowdfunding for their wearable device to set up realistic expectations about when to promise potential contributors that the product will be ready. If your business is making a product that has to be mass-produced, it will almost inevitably take longer to make than you anticipate.
“If it’s hardware, it will be late,” he said.
Among the people soaking in all the advice at the conference was Jonathan Polley, co-founder of Spire Inc., a company hoping to bring to market a device that monitors a user’s breathing.
Monitoring breathing provides insights into a person’s stress level as a way to improve focus and productivity and control diseases such as chronic heart failure, and chronic obstructive pulmonary disease, commonly known as COPD.
Spire has already raised funds through a process called angel lists, which is a hybrid of raising money from angel investors and crowdfunding, said Holley, who added that his company plans to seek crowdfunding through Kickstarter later on.
With the angel funding, Spire hopes to bring its product close to production-ready before going to the crowd.
“I think people more and more, want to back crowdfunded things that are pretty close to being able to deliver product in their hands,” Holley explained. Our strategy was to bring on angel investment to get us to that point … and then we’ll do crowdfunding to get us over the hump and into production.”
Robert J. Mullins