Pebble founder Eric Migicovsky wears his success well

Smartwatch company made shrewd use of crowdfunding to raise finance

 

“There’s 14 billion wrists in the world,” says Eric Migicovsky with a smile. There is a very good reason he has an interest in wrists and what can go on them: Migicovsky is the founder of Pebble, the crowdfunded start-up that is doing a good job of challenging Apple, Samsung and the established consumer electronics companies in the smartwatch space.

With its record-breaking Kickstarter campaign in 2012, Pebble was among the first companies to demonstrate the pent-up demand for wearable technology and ship a smartwatch that complemented the smartphones in our pockets. For a small, independent company based in Palo Alto, California, it is undeniably one of the great underdog technology success stories of recent years.

Speaking at the Web Summit last week, Migicovsky happily discussed how he had got to this point and how Pebble can thrive in an increasingly crowded market, especially now that Apple has set its sights on owning the wrist.

“We didn’t know what we were getting ourselves into, that was the best part,” he says in his breezy and affable style. “Naivete has a pretty big impact here: we didn’t even know how difficult it was going to be when we started doing it.”

Resistance

Netherlands

“The question is often ‘why would I need this?’, but it’s not about that, it’s about having new technology on your body that enables you to do things that you may have done before on your phone, but just do differently when it’s on your wrist. That opens up lots of new use cases,” he says.

Early prototypes convinced Migicovsky and his small team of the feasibility of the project, but an untested market and the difficulty of fundraising for hardware projects made attracting investment difficult. An earlier version of the company produced a device called the Allerta that worked with BlackBerry, but they could gain no traction

“I’m sure a lot of things put off investors,” he says. “We didn’t have a really great pitch, and we hadn’t seen any success in the space. The first tendency among investors is to doubt, and if you look retroactively, it can be hard to say what’s going to hit big.”

With the relatively small funds raised through Y Combinator dwindling, Migicovsky and his team were running out of options. “With $60,000 left in the bank account, we turned to the last resort, although now it’s often the first resort: Kickstarter,” he says.

The crowdfunding platform was only three years old at the time and largely focused on artistic projects, but the Pebble project, complete with a charmingly sincere video starring Migicovsky, was about to change the nature of the platform.

Kickstarter record

“That was the moment my life changed,” Migicovsky says. Pebble the company has since grown to a team of more than 130 people, shipped more than a million Pebble smartwatches up to the end of last year and went back to Kickstarter earlier this year to fund the second generation of the device. They only went and broke the Kickstarter record again, this time raising more than $20 million.

The evolution of the Pebble has been rapid. That first smartwatch was a cute little device, but it did look undeniably toy-like. Earlier this year, Migicovsky and his team introduced a new operating system with a so-called timeline interface, as well as the square-faced Pebble Time with colour display. In September, they unveiled the Pebble Round, a svelte device that is not only the most attractive Pebble to date, but is probably also the most attractive smartwatch yet released.

That includes most Android Wear models and the comparatively bulky Apple Watch. Finding yourself in competition with the Cupertino giant is every technology company’s worst nightmare, never mind one as small as Pebble, but Migicovsky appears unruffled by the challenge.

“Since Apple announced the Apple Watch, we have doubled our sales,” he says. “Where Apple is building the Tag or Rolex of smartwatches, we like to think we’re building the Swatch of smartwatches. Our customers are trendy, a little bit younger, looking for more of a deal, confident enough in themselves that they don’t necessarily need the most expensive thing on their wrist.”

Migicovsky is also quick to credit the sense of community that has built up around the Pebble; a significant benefit of the crowdfunding model is the enduring sense of ownership and identity the “crowd” have towards your product.

“About 35,000 developers have developed apps and watch faces for the Pebble. The watch faces have been spectacular; we never suspected that there would be an art form that’s going to grow up. Developers and designers started making really beautiful watch faces,” he says.

Spying the cheap, classic Casio on my wrist, Migicovsky hands me his Pebble Round, then pulls out his smartphone and changes the watch face on the Pebble to match that of my Casio, an impressive act of digital ventriloquism.

“We hired a lot of people from the community; many of the people who supported us on the Kickstarter now work at Pebble. We host a developer meet-up every year where we fly 50 of the top developers to San Francisco for a whole week, on us, just to hang out with cool people who are passionate about Pebble,” he says. He then adds: “And maybe hire some of them.”

Sense of community

“We’re optimistic dudes. Smartwatches are a niche at the moment, but it’s a growing niche. We’ll double this year from last year, and I’d say that we’re just scratching the surface in terms of the raw numbers of people that have interest or benefit to gain from smartwatches,” he says.

Migicovsky confidently predicts that in five to 10 years, the majority of watches people will be wearing will be “smart” in some capacity or other.

“It’s inevitable,” he says. “Whether it’s us or some other company, there’s going to be a little bit of Pebble technology in every watch.” And, as he’s keen to point out, there are a lot of wrists in the world to wear a bit of Pebble.