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Transcript of our conversation with Eric Migicovsky:
00:00:00:00 - 00:00:18:21
With the original Pebble kind of company. We didn't raise money at the beginning. We ended up raising $10 million on Kickstarter. And then Raj and I, you know, have a good story about, like, that day of of, when the Kickstarter kind of clicked. I, like, phoned up all my friends, and Raj
was the only one to wake at 2:00 in the morning.
00:00:18:21 - 00:00:35:06
And so we went to get a hamburger or a milkshake or something like that and chatted about, like, what the hell just happened? Yeah. And I remember that and we put together a plan like that day for, you know, the next couple weeks of, of of the company. So what's the what's the exact story here. Like it. You what time did you launch it.
00:00:35:06 - 00:00:52:11
And then it was a time where you're like, oh shit, this is going to be huge. We launched at, you know, 8 a.m. or whatever in the morning, and it just like took off. And throughout that day, it was just I think we raised $600,000 in the first day. Wow. And we had intended to raised $100,000 through the whole 30 day campaign.
00:00:52:12 - 00:00:57:06
So.
00:00:57:08 - 00:01:18:06
Hey everyone, welcome to the Founders in Arms podcast with me. Immad Akhund co-founder and CEO of Mercury. And I'm Raj Suri, co-founder of Lima and Tribe. And today we have Eric Migicovsky co-founder and CEO of the original Pebble and is it called Pebble two. Again, what are you calling the new iteration? We relaunched we didn't get the Pebble brand back from Google.
00:01:18:07 - 00:01:41:22
We got the IP, so it's now called core devices. Core devices. That's great for people who don't know. Pebble was like the original smartwatch that was sold to, Fitbit. Oh. That's it. That's it. Well, actually, this is one of the new ones, so. And then how long did a break did you have between like the. Yeah, I guess you're working on Pebble initially and like now how about to Fitbit in 2016.
00:01:42:00 - 00:01:56:21
So it's been a while. It's been almost yeah nine, ten years now. So Eric and I I'm, I'm not sure if, you know, Eric and I go way back. We were in undergrad together. Oh, really? Oh, yeah. Literally the same year. He was two years below me. You were in my sister's class at your sister's? Yeah, yeah.
00:01:56:21 - 00:02:16:14
And, the system design engineering is all right. Yeah. So which is a really cool program, like, it's an engineer program where they get to work on all these different, like, aspects of engineering. You do electrical, computer science, a little bit of everything, right? Systems. Systems is the engineering program. You pick. If you can't pick which actual type of engineering you like and you just want to try them all.
00:02:16:16 - 00:02:33:05
Yes. And, it's a really cool program. And a lot of cool people come out of it, actually. So, you know, Eric is one of them. And, but but he was very entrepreneurial even in undergrad, and he worked with me on some entrepreneurial projects in undergrad. So you ready to go away conference, right? That's right.
00:02:33:05 - 00:02:58:12
Yeah, yeah, I started a conference in undergrad, which is like to help everyone, all engineers work on prioritizing and commercializing their ideas in their fourth year. And it was a it was a huge it was very successful coverage routing spiked. It was like oversubscribed is like hundreds of people showing up, typically a prequel to a lot of these hackathons that have popped up like it was a it was like a way for us to all like people who are building stuff to all get together in undergrad.
00:02:58:14 - 00:03:21:05
Yeah, I think now is probably very common, but back then it wasn't. It was, yeah, it was the seniors. So I was going to go way back and you were working on the watch basically at the end of undergrad. Right. You were tinkering on stuff at Waterloo, right? Yeah. We, used one of the labs at Waterloo to work on, the precursor to Pebble, without the actual faculty knowing.
00:03:21:05 - 00:03:43:16
And when they did find out, I have this email. That's kind of epic. It was, I think it was from. I can't remember exactly who it was in the, in the, administration, but they were like school facilities should not be used for starting companies and that kind of thing. And I was like, this is ridiculous. This is exactly the exact thing that you want people to be doing with school facilities.
00:03:43:18 - 00:04:03:13
And of course, within like a couple years after that, they started velocity. They, you know, kind of changed their view, I think a lot on on entrepreneurship. But I have this email that's kind of funny of like, you shouldn't be doing what you're doing in the lab. Yeah. Exactly. And, you know, Immad, we had Jay Shah on here a few weeks ago.
00:04:03:15 - 00:04:27:11
He, he ran velocity and Eric and Jay, you know, they're both hardware founders from Waterloo, you know? So this is like, it's a common theme. Jay's back in in hardware. It's great. Yeah. That's right. Yeah. He was on our pod. I guess the other theme is like, entrepreneurs leaving their company after selling it and then getting back into it because Steve did that with with Reddit.
00:04:27:13 - 00:04:48:15
What was your path? I guess, like, in between you were VC partner, you started another company. Yeah. Like, how did you come back to this? I came back to Pebble because I had to, I have, I think I hold the world record of being the person who's worn a smartwatch on his wrist for the longest period of time.
00:04:48:17 - 00:05:22:22
Not continuously. There's a few days, you know, here and there over the last 15 years where I didn't wear one. But effectively, I think for the last 15 or 16 years, I've worn a smartwatch and I designed Pebble originally to be the product that I dreamed of. Yeah, this was what I wanted. And when Pebble ceased to exist as a company in 2016, there was a period of time where, you know, I had a box full of pebbles that I had, exfiltrated from the company and I, you know, worked my way through them turns out, you know, nothing lasts forever.
00:05:22:22 - 00:05:44:13
Like batteries die after ten years. You know, buttons wear out everything. You know, it's a hundred different pebble watches. Have you had probably in the 20, you know, 20 to 30. That's great. Yeah. And not a not everyone has is lucky as as lucky as I am to have a box like that. And so I think, you know people you know there's still some pebble is going strong after 15 years.
00:05:44:15 - 00:06:04:03
But, you know, inevitably things break smash them. And so I had to try other smartwatches. I had to play the field. I had to try an Apple Watch. I had to try a Pixel Watch just to see if it would be an adequate replacement for what I loved about Pebble. And none of them did it. None of them did it.
00:06:04:05 - 00:06:19:21
Is it just the e-ink thing? Like, what was the thing that was missing? It's a couple things. So the first thing is I the way that I use a smartwatch is primarily as a watch. It needs to tell the time, it also needs to vibrate when I get a new notification or an email or call or whatever.
00:06:19:23 - 00:06:43:19
And I like controlling music, from my watch. Like, if, you know, I've got AirPods in, I like being able to physically reach down to my wrist and press a button, a physical button to be able to play pause, you know, skip track, that kind of thing. So what I need is an always on screen. So a screen that will like, always be visible.
00:06:43:19 - 00:07:00:06
I need to be able to tell the time, it has to have a long battery life. I don't like the idea of having another thing to charge. Like we already have enough things that we where worry about charging in our lives. I don't want yet another thing. And so Pebble always had a long battery life. It was seven days.
00:07:00:07 - 00:07:15:12
It doesn't have to do that much. Like I love my phone, I always have my phone with me. I rarely I never leave the house without my phone, so I don't need every. I don't need my watch to do everything. I don't need it to do payments. I don't need it to run tracking or, you know, cycle tracking.
00:07:15:12 - 00:07:44:09
I have my phone for that when I need to. I don't need it to play music, so I needed to tell the time. Show notifications, have a long battery life, be daylight visible. So like, I don't want a screen that kind of washes out when you're outside under direct sunlight. And I love that Pebble is hackable. You know, we had 20,000 apps on the App Store, and I just loved being able to go on the Pebble App Store and download a new watch face or, you know, see what other people had built for it.
00:07:44:11 - 00:08:04:19
And I looked at, you know, all these different products and not a single one checked all of these boxes. Garmin came the closest. Have you tried the Garmin watches? They use a simple you have a I have a Fitbit watch on oh I do. Yeah. So this one actually lasts for about 14 days. But because it does doesn't have a screen visible like you have to click to get anything to show up.
00:08:04:21 - 00:08:19:19
And it doesn't work at all in the sun. So those two things are frustrating. But I do really do like the step tracking. So I kind of disagree with you about step tracking. So we've got we've got step track. We've got basic step tracking, sleep tracking. But but me personally, I just at once I knew how many steps I walked per day.
00:08:19:19 - 00:08:42:05
I don't really check it again. And so I yeah, it's just a bit of motivation. It's actually a, a good point. Like I in this relaunch of Pebble, I'm not explicitly building for anyone except for myself. Are you also explicitly not trying to make this work packable? Like, this is like going to be just, like a bootstrapped hardware startup.
00:08:42:07 - 00:09:07:10
That's a major lesson that I learned. Like I wrote this blog post ten years after, you know, our our first Kickstarter kind of reminiscing slash retroactively looking at what happened. And I think one of the lessons that I learned is that when you're on a venture backed path, you know, it's so it's almost like a train track, like it goes in one direction and there's various stops that you have to make.
00:09:07:14 - 00:09:30:13
But in general, like you have to follow the path. With the original Pebble kind of company. We didn't raise money at the beginning. We ended up raising $10 million on Kickstarter. And then and I, you know, have a good story about like, that day of of, when the Kickstarter kind of clicked. I, like, phoned up all my friends, and Raj was the only one awake at 2:00 in the morning.
00:09:30:13 - 00:09:47:10
And so we went to get a hamburger or a milkshake or something like that and chatted about like, what the hell just happened? And then we put together a plan like that day for, you know, the next couple weeks of, of of the company. So where what's the what's the exact story here. Like it. You what time did you launch it?
00:09:47:10 - 00:10:06:03
And then it was a time where you're like, oh shit. This we launched at, you know, 8:00 Am or whatever in the morning. And it just like took off. And throughout that day, it was just, I think we raised $600,000 in the first day, and we intended to raised $100,000 through the whole 30 day campaign. So I think, like.
00:10:06:03 - 00:10:26:05
And did you tonight, did you do something to make it successful? It just like caught people's attention. It's one of those five year overnight successes. So I've been working on smartwatches since 2008, and I had gone through a couple different iterations, and eventually we got to Pebble. And at that point, you know, we still didn't have any VC backing.
00:10:26:05 - 00:10:44:09
I had a few investors who were, you know, very generous, but probably, you know, out of their mind at that at that point. And you were like, right, like 2011. And we'd gone through like, yeah, yeah. Why is it was not a big deal in 2011? Like that was just like a steady deal for us. I mean, it was the reason why it was from Canada.
00:10:44:11 - 00:11:08:16
But then like now you do like and you get 500 K from them in like three months, 2 or $320,000. Yeah, exactly. For 7% of the company. So anyone who complains about the current deal, I'm like, guys, it's a good deal. All right. So, so you have this like, I guess I wanted to ask, like, was it like a marketing trick that made that 600 K work, or was it just like it was so exciting to people because it just seemed like a really good there was no trick.
00:11:08:16 - 00:11:29:04
Like, I think I mean, there were there are a few things that I think we did well. We were very clear about what our product was like. You can you can go back to Kickstarter and see exactly what we wrote on the page. And it just said, like Pebble e-paper smartwatch for Android and iPhone. And here's, here's the 3 or 4 things that it did.
00:11:29:09 - 00:11:53:08
Here's how much it costs. Here's a couple pictures of it. Here's some video we didn't like. Have this full marketing. Like I didn't pay anyone to record the video. I filmed it myself using a camera that I borrowed from another wiki founder. The people in the video were my friends slash interns, and it wasn't this big. You know, nowadays people put like 50 K or 100 K into the launch of their Kickstarter campaign.
00:11:53:13 - 00:12:11:11
I think we really shot from the heart. This was a product that we ourselves wanted. We built it for ourselves, and we just described it as if there were other people like us who wanted to buy it. The video was very authentic. The video was very genuine. Yeah, yeah. But it was also very unusually ambitious for our Kickstarter.
00:12:11:11 - 00:12:39:23
I think that's also what got people excited though, like, oh shit, the story was also very new and so we benefited. I think like the trick, though, we didn't, you know, we didn't know about this before we did. It was that there was this undercurrent story of Kickstarter. We were the first big, gigantic Kickstarter campaign. And so not only did the press talk about Pebble, the smartwatch, they also talked about Kickstarter, the idea, and that just was gigantic for us.
00:12:40:04 - 00:13:03:21
And that's what Roger I, I don't know if you remember, talked about that first day. His his advice to me was make this into a story, make this into a big thing that people could talk about and get behind and spend the time to nurture that, rather than, I think we were talking like the, the, the decision point that I remember was, should I fly to China like that day and start manufacturing it?
00:13:03:21 - 00:13:25:19
Because I was like, Holy shit, we have to build this watch. It's like, yeah, it's right. I, I didn't know how to do it. I'd never done it before. And so I was like, should I fly to China and start getting production going? Then Roger's device was no, like, you have this lightning in a bottle, you know, spend 2 or 3 weeks just focusing energy towards this Kickstarter campaign.
00:13:26:00 - 00:13:43:12
And so instead of flying to China, I flew to New York and did the circuit of, you know, morning shows talk like I just, for the first time ever started doing PR and that paid off in spades because we got a New York Times article. We just did a ton of press, and every time there was a press hit, the numbers went up.
00:13:43:14 - 00:14:00:16
And that in turn fueled more press because they talked about the number going up. And so it was just this virtuous cycle. Absolutely. Yeah. It was that was a really special moment in time. And I think it, it, I mean, the other the other thing was like, like everyone thought Apple would eventually do a watch, right? And you were the first to it.
00:14:00:16 - 00:14:20:01
Right? So there was there's this competitive tension that also got the media thinking about this. Right. And, people realized that that the that was the next screen, right. Like we had the iPhone, the iPad, and now we're someone was talking about the watch. And so I think that was really good. I think you did really well at that time.
00:14:20:03 - 00:14:42:15
I mean, that that was like a really important inflection, not only for Pebble, but also your career. Right? As an entrepreneur. Right. You know, getting that viral moment for a consumer company or a consumer founder is really important, right? You know, at Lyft, we had those moments too. And yeah, we were lucky in that we had that chance to have a moment, but I think we had done a lot of work to get there.
00:14:42:20 - 00:15:04:20
And more importantly, we had done C and I was able to phone up people like you and other, you know, people in the Y. C network and immediately get help. When that moment struck. Yeah, yeah, that's me was really powerful. Did this five year over and I actually said, I mean, I want to touch on this point because like a lot of people have the wrong impression about consumer companies.
00:15:04:20 - 00:15:20:03
People assume like there is this really false narrative in the Valley that people like, you make a consumer product and either hits or doesn't. And then if it doesn't hit you just like give up and move on to something else and like, that's not that hasn't been true for Lyft. That wasn't true for Pebble. That wasn't true for any.
00:15:20:05 - 00:15:42:00
I think that, you know, that I really worked on that. I mean, Dropbox, is it a counterexample they the media to put it on product on Hacker News and it just blew up. Right. But but and Facebook is also another counter example, but I think there's a lot of, companies that just take a long time, you know, before they hit the reached the right time, you know, a right place, right time, you know, sort of thing.
00:15:42:02 - 00:16:07:10
The other the other thing that I've kind of reflected on is that I think I'm more of an inventor than a founder. Like, I came up with the idea for Pebble not necessarily to be a company, but because I truly wanted that product. And I think the difference in my mind is that a founder will kind of stop at nothing to make their company fantastically successful.
00:16:07:10 - 00:16:29:04
Right? And that potentially means changing the product to better suit the market or, you know, the protocols or the monetary goals of the company. But in my case, like, I didn't, I you know, I remember having those walking meetings with PG, office hours with PG, where he was like, is there? You know, things weren't going well. This was before Pebble.
00:16:29:06 - 00:16:52:06
And he was like, could we could you do something else? Could you like, could you make software? Could you make some other type of hardware? Like is there anything else you could do. Because clearly it's not working today. And I just I don't know if I said no to his face because that's, you know, harder to do. But I like it wasn't in my heart like I wanted to build this product and I wasn't going to stop.
00:16:52:08 - 00:17:12:22
And even if it wasn't successful like that, didn't really feel bad to me because I was building what I wanted. I think a lot of successful founders also like great inventors, like they really care about the thing that they're building and are building it for themselves. Right. Like, do you do you really see that as like, separate things like.
00:17:13:01 - 00:17:30:21
Yeah. No. And they're not exclusive. But I definitely see that there's some founders, especially ones that go through, I see that are a little bit more driven by, you know, they'll they'll try many different ideas and see what sticks or they'll be more willing to build for someone who isn't themselves as the primary customer. Like, I just I can't do that.
00:17:30:21 - 00:17:48:00
I can't really put myself in the shoes of someone else as easily. Yeah, I think there are different types of founders. I think, you know, there are creative founders who will do anything it takes to build a successful business, and they're flexible about the product. And there's founders are maniacal about a specific vision. Right. Which you are.
00:17:48:00 - 00:18:07:05
Right. Like a very specific vision. I feel like I am in that camp too, honestly. Like, and I think that is to my detriment in some ways to, you know, like how, you know, so like there is a real downside to doing it that way. Like, I can point to like restaurant tech, like, you know, we had the opportunity to do something like toast, right?
00:18:07:06 - 00:18:20:06
Back in those days. Right. We we could have changed the, you know, we had this idea for a tablet on every table so guests could order and pay. But we knew that restaurants also had a problem with point of sale. And we had we were there even before toast. And. But I don't want to change the product.
00:18:20:08 - 00:18:38:10
So like, I wanted the specific product to exist because that's what I wanted to use right. And but a toast to actually, I don't like talking to waiters and waitresses. I just want to. Yeah, I don't want to wait. I know that I don't like talking to them. You know, some of them, you know, are fun to talk to you, but it's like, I just don't want to wait for them and,
00:18:38:14 - 00:18:52:23
Yeah. And, and toast actually came to the idea for a similar direction, like, they, you know, they came to the idea like. Oh, yeah, we want a better experience. But then they're like, oh, restaurants don't have a good system. Let me build that instead. And I was like, that's such a boring product. I would never build it.
00:18:52:23 - 00:19:21:12
You know? It's so boring. Product. So many people are already doing it. Why even bother? Yeah, that is kind of funny. So what's the story of this kind of you getting Google to kind of open source the software. So you can build like hardware, like, you know, how did you go negotiate that? So I was I always knew that I would veer back towards Pebble because, you know, between 2016 and 2025, you know, I tried all these different watches and nothing fit.
00:19:21:18 - 00:19:44:02
And so I was like, fuck. Like, I guess I have to go back and make another product because at some point my last pebble is going to bite the dust. And so I needed a smartwatch. The problem about making hardware, and I'm sure, Raj, you can, commiserate on this is that hardware these days is mostly software. The actual hardware is relatively easy to build, say, for a smartwatch.
00:19:44:08 - 00:20:03:21
There's no R&D needed. Like, you got a circuit board, you've got to display module, you got some sensor. Was it different in 2011? Like did you use it was definitely needed to do more. You needed to do a bit more. It still wasn't rocket science, but you know, we had to teach the contract manufacturers a bit more about how to build it since no one was building smartwatches.
00:20:03:21 - 00:20:24:15
Why is it partly easier? Because of all the things you know, like you're just going back to the same factory and you're going to the same people. Primarily, it's because the factories are already set up to do this. Like when we were starting, electronic factories didn't do waterproof testing because there were no products, electronic products, kind of consumer products that were waterproof.
00:20:24:15 - 00:20:45:22
And smartwatches were really the first, even before smartphones were the first products that you would buy that that were waterproof. And so we had to set that up on the assembly line. But now every factory has a waterproof testing setup, so it's relatively easy to build the hardware. The problem is that there's no off the shelf software that runs on the type of smartwatch that I was building.
00:20:45:22 - 00:21:09:23
There's, you know, Android Wear or Google Wear or whatever, but that's more like an Android operating system that they crammed into a like a form factor on your wrist. And that's not what you remember. The specs that I wanted, that's not what I wanted out of a smartwatch. And so there is no off the shelf software that you could just download and use and run on the on the kind of watch platform that I was building.
00:21:09:23 - 00:21:34:15
And so I thought, I love Pebble, I love the operating system. I've been using it for the last nine years now. There hasn't been any software updates. It's the same software that we built in 2016 and it works. It works damn well, and it does exactly the things that I want out of it. And I knew that if I was to restart Pebble, I would want the same features.
00:21:34:17 - 00:21:57:09
And I thought about the pain of building that software. It took us 3 or 4 years, 20 person team to work on it and to build it and to kind of craft it. I the proposition of trying to do that again from scratch was very large, much harder than the hardware, probably ten times harder than building the hardware or more.
00:21:57:11 - 00:22:24:21
And that's why I never did it. I just always like, you know, hopefully someone will make another smartwatch that I like. And then in 2024, I was chatting. I can't remember who I was chatting with. I think, oh, I was at a birthday party. It was one of my kids, you know, school mates, birthday party. And I was chatting with a Googler who worked on the Fitbit acquisition, and he was pitching me on this idea.
00:22:24:21 - 00:22:50:01
He was like, yeah, you should just go to like a Google VP and just ask them to open source it. You never know what they'll say. Maybe they'll say no, maybe they'll say yes and it was a great idea. I did that and they said yes. Well, it's a Silicon Valley story right now. It took a year to work its way through the Google check boxes.
00:22:50:06 - 00:23:13:01
Why did they say yes? Like, what did they get out of it? They just like Eric's asking this. I mean, you'd have to interview the Google guys. I don't I don't know exactly what their logic was, but I could imagine like, remember, 2024 was just after Bieber mini. So Bieber Mini was an app that I made that allowed Android users to send and receive iMessages from Android.
00:23:13:03 - 00:23:35:13
Right. And that was, you know, mind bogglingly cool for Android users and for Google, because iMessage is one of the biggest limiting factors. Yeah. For people switching from iPhone to Android. Right. Like you got your blue bubbles. So you were like a hero at Google. Briefly, I think that I had fought the good fight on behalf of Android.
00:23:35:18 - 00:23:54:05
You were very public and also criticizing Apple too. Like like, oh yeah, you have to basically force congressional reviews of Apple's practices. Like, let's not minimize that, right? This was about a month after the DOJ sued Apple on our behalf as well. So yeah. Yeah, I think I had built up a little bit of karma. Did that get dropped by the way, or is that still go.
00:23:54:05 - 00:24:15:17
It's still going still way? I mean, I think when Apple I mean this is a massive tangent. But what Apple did there was like so obviously, against consumer interest and monopolistic move. Like, I cannot believe that, they have gotten away with it so far. Well, so there's there's actually two pieces of that DOJ case that are related to products that I made.
00:24:15:17 - 00:24:38:14
So one of the five items that they sued them over was beeper Mini iMessage. You know, the fact that they had closed off, this entire kind of like platform network. And the second one was smartwatches. So Apple has gone out of their way to make it difficult for third party smartwatch vendors to deliver a similar level of experience.
00:24:38:16 - 00:24:55:06
That the Apple Watch has when it's, you know, paired with an iPhone. And the DOJ sued them over that as well. And so, yeah. Oh, really? We'll see how that goes. I we'll all your companies, are going to benefit from DOJ. Are you persona non grata at Apple. You you all right? Are you ever going to be invited to a meeting?
00:24:55:06 - 00:25:17:18
I don't I don't get regular Wwdc invites. Yeah. Yeah I can imagine what is the what is the thing that an Apple Watch can do that like I get the could not new call watch will not be able to do. Is there one thing that you're like, oh, it's so annoying. Yeah, I do the primary thing is that on your Apple Watch, you can reply to notifications with your voice or by tapping on the screen.
00:25:17:20 - 00:25:39:06
And that is not, that there's no API that's provided to third parties to do that. Oh that's interesting. And, you know, they have the API since they use it internally. So of course, now both the EU and the US are investigating Apple for this. The EU actually issued a ruling in March, under this regulatory framework called the DMA, the Digital Markets Act.
00:25:39:07 - 00:26:01:07
And they mandated that Apple provide third party access to sending and receiving notifications just like the Apple Watch. Has Apple sued the EU two weeks ago. So yeah. So it's cool because now there's also a bunch of like founders working at Apple too, like, Robbie Walker Rich, who we probably know. Right. Robbie. Daniel. Right? Yeah.
00:26:01:07 - 00:26:22:06
Yeah. He was he was a coffee. He also did another company before his enter would win. Crosby. Right. Yeah. Sold to Google. But, Apple's culture is still very old school. Probably Tim Cook let. Yeah, yeah. I mean, and then the world's kind of like when you have the daring fireball guy badmouthing Apple, like, you know, you've gone a bit too far down the, down the black hole.
00:26:22:07 - 00:26:36:14
Yeah. The AI stuff is lame. The, how do you feel when you kind to go fight like these big companies? Like, do you feel energized by there? Do you find it draining? Well, I don't do it on purpose. First of all, there's no like there's no, like, career arc where I'm just, like, trying to bang my head against Apple.
00:26:36:14 - 00:26:59:18
No, I, I, I'm a consumer guy, so I love building consumer products for myself. Like I am not personally an enterprise, like I am a walking, talking person, not an enterprise. And so I build products for myself. And Apple generally builds products for consumers, right? There's not too many other companies in the world that bother to just make pure great consumer products.
00:26:59:18 - 00:27:20:13
And so I guess inevitably we're targeting the same group of people. What's your model for the new core device, like, how are you going to solve some of the problems that you had with the first Pebble with this new kind of business model? Yeah. So completely different model. I think core is a means to an end.
00:27:20:15 - 00:27:27:18
It's a vehicle for me to use to build gadgets that I personally want.
00:27:27:20 - 00:27:52:03
Like, I want a smartwatch. I'm going to build a smartwatch. Core is the mechanism that I'm using to build that. There's only three that I only have three colleagues at core. So it's a very, very small company. There's no VC backing. I've self-funded it so far. Don't you need a certain scale with hardware that, like, don't you need to produce like, 100,000 of these for it to work?
00:27:52:03 - 00:28:12:07
We're going to build a 100,000 with three people at the company. Fairly. Yeah. And did you do a Kickstarter? Did you do, like a preorder campaign? A preorder campaign? Yeah. So we sell, 25,000 so far. Oh, nice. Okay. So and that's enough scale to like, do this at a reasonable unit cost. Absolutely. I was targeting 5000, so 5000.
00:28:12:09 - 00:28:27:18
The way that I'm kind of setting up things is I think that, you know, not not to toot my own horn, but I think I could sell 5000 of anything. Like I believe that, that I'm not unique in this world, that there's other people that have a close enough kind of as long as you love me as much as I love it.
00:28:27:23 - 00:28:49:08
Yeah, as long as I'm honest with myself, I think that's. Yeah, I think, you know, like, if I were lying to myself and I made a product that I didn't like using. Yeah, I might not be able to sell that many, but if I truly made something that I myself not only wanted but also liked once I got it, I think I, you know, not too overconfident in thinking that I could sell 5000 of something.
00:28:49:08 - 00:29:17:09
So I've set up the ROI for each project that I'm working on to be ROI positive or neutral. At 5000 units sold. And when you say all these devices are just like different versions of a watch, I mean, I know you want to watch this so far. Yeah, okay. But it's different versions of a watch. You're not going to start doing glasses or some other like I did tweet out a picture of a circuit board last week that has no explanation and no, no other clues.
00:29:17:11 - 00:29:34:20
Yeah. But Erica, well, one thing that's really powerful about this new model is like, you don't have to get a bunch of inventory right? Like that. That's really a killer for a lot of hardware companies. Is that the inventory to buy inventory for, like, Christmas? And if they don't do that, they lose sales. And the you need inventory like shortly after the after the.
00:29:34:20 - 00:29:53:08
So we're doing it. But that's just the initial thing right. Like aren't you going to keep selling it afterwards maybe. I don't know. I haven't really thought that far ahead. So for the for the first product, we actually are capped at building ten 12,000 of it. The reason why is oh, let me see if I could show you the other cool part about my podcast studio.
00:29:53:08 - 00:30:26:23
Okay. So here's here's my overhead. You have a button to switch. Yeah. Here. So this is core two duo. It's showing backwards on the screen, but I think it's correct for you. Yeah. No it's good, it's good. So this is actually the front housing from a Pebble two, which is the watch that we made in 2016. And we were able to find, we were able to find a warehouse that had purchased when we went under or when we sold to, to Fitbit.
00:30:27:03 - 00:30:55:16
They had purchased some of our work in progress inventory. Do you remember whip Raj like whip. And so they had bought partially assembled Pebble two watches. Okay. And held it in their warehouse for like fucking eight years. Wow. They paid 12,000 of these. Yeah. They paid pennies on the dollar. Right. Like they're like wow. You know you never know what happens like and eight years later I went to them and I was like could I buy those from you?
00:30:55:18 - 00:31:14:02
So I bought them. That's great. So what we did is we created a new circuit board that would fit into the back house, into the back of this existing kind of frame. How much did they sell the 12,000 cases for you? I think we paid like under what we had manufactured them for. I think half of what we manufactured them for.
00:31:14:02 - 00:31:31:07
So nice. It was it was a fine deal. Everyone made money. Everyone was everyone was happy. I was happy because I didn't have to build this house again. So that's why I was able to go from we announced this product in or when I announced that we would begin making this in January, and we'll start shipping in July.
00:31:31:09 - 00:32:00:11
Wow. Five months, which is crazy for a hardware project, but it's mostly because we already had 12,000 of these cases, you know, sitting around. So you got like the software for free and the housing for free. But but going back to, you know, going back to this idea like I really wanted and, and why we could do it with three people like I really wanted to to, to reduce the risk, to reduce the, you know, chance that this wouldn't work out.
00:32:00:12 - 00:32:27:06
Because I wasn't interested in having like, Pebble peaked at having 180 employees. Right. It's a lot to manage. Yeah, it was a lot to manage. And I think again, for me the company was a means to an end. Like I loved building the product. Building the company was not my favorite part about, doing all this and, you know, getting the chance to do this again.
00:32:27:07 - 00:32:48:23
I really want to work on the things that I want to work on. Like, I'm very lucky that I can be at this point in my life where I can decide what I want to work on intentionally. And again, I wouldn't change anything about the first Pebble run like, I loved it. It was amazing. I got to work with fantastic people and it was a great run.
00:32:48:23 - 00:33:08:05
You know, we had a hell of a ride, but this time around, I can kind of actively make a decision and say, this is the part of building a company, building a product that I love working on. I want to do that. And to your point about like, well, what about after we sell the first 10,000, like, do we build more of them?
00:33:08:05 - 00:33:27:20
Do we get inventory? And I just have already decided, like, no, I don't want to go into retail. I don't want to build a lot of inventory. I don't want to have distributors. I want to have salespeople. I don't want to do any of that. I just want to build the product that's going to sit on my website, artisanal, like, let me kind of like hardware, that's for sure.
00:33:27:20 - 00:33:42:07
And I want to see if that works, because I don't know many people. I don't even know if this model like, we'll do a follow up in like a year. You could see if any of this is actually worked out, because if it has, it could be a pretty cool model for other people who are similar to me.
00:33:42:07 - 00:34:00:10
Like they have an idea they want to build a particular product, but they aren't looking to change the world. Like, I'm not trying to, you know, build this into some juggernaut or some like alternative to Apple Watch. I don't really care. Like if you want an Apple Watch, buy an Apple Watch. If you want a Pebble, buy one of these.
00:34:00:12 - 00:34:20:17
Yeah, I think the scenario might occur where it's like so popular that like, you have to do this and you have the funds to do it as well, the buy get inventory, that's a great scenario that means you're doing something right. And I think that's the right time to do it right. The wrong time to do it is when you're right, you have to raise a bunch of VC money and then buy inventory with that, with the capital to buy inventory with, right?
00:34:20:18 - 00:34:40:07
Yeah. Then it doesn't sell. You're screwed. Right? You're right. It's the founder is the one left high and dry in that scenario. Right? Yes. And so like, I'm sure there's an entrepreneur out there that is willing to take the inventory risk and do the retail stuff and like, sure, you're out there and you're watching. If you could just pass them the thing you do like tweeted me, my my DMs are open.
00:34:40:09 - 00:34:58:20
Yeah. You want a royalty deal with that. If you want to go and deal with all of this bullshit. Sure. Be my guest. But like, I'm not I'm not going to do it. But it might. You know, the thing is, like so many founders have struggled in the last 15 years with that model, right. And like I would not advise that for any founder working in consumer hardware like your own, Fitbit itself has struggled a lot.
00:34:58:20 - 00:35:17:21
You know, like even, what's the bike company, a peloton, even peloton. They had a $2 billion right down after the pandemic. Yeah. So like we I had that at a small scale. Like I had a $20 million right down on, you know, inventory that didn't sell. Right. Like garage. I'm sure you have a story of whatever they did at 2 billion.
00:35:17:21 - 00:35:48:19
So it shows that like there's there's this pitfall where what went wrong with at every stage, what this $20 million inventory. Like why didn't it sell. It's 2015. Okay. So teleport back to 2015. Things are going great. You know, we saw our revenue numbers were, $10 million in 2012, $30 million in 2013, $60 million dollars in 2014, 2015.
00:35:48:23 - 00:36:11:06
2014. And we thought we were going to double. So we had or just about double. So we had projected. I think it was like 100 mil in 2015. And if you're a hardware company in retail, like we were an Amazon Best Buy target, you know, wherever you have to build inventory ahead of time. So you have to make a guess.
00:36:11:06 - 00:36:35:17
You have to make a projection and say, well, I think this Christmas season where you sell 50% of your, you know, dollars or more, we think we're going to sell $50 million worth of product. And so we build, you know, inventory to meet that projected demand. And then the numbers start ticking through and you get daily, weekly summaries of every single Best Buy retail location.
00:36:35:19 - 00:36:55:02
And I don't know about you guys, but like I've never seen a revenue projection graph. That's correct. Not even close. Yeah, but this is brutal. Like you're you're trying to hit these numbers. You're sitting on this like there's no software where you can scale up infinitely for free or scaled down. You know, if things aren't working. Well, we were stuck at the end.
00:36:55:02 - 00:37:16:07
So I think we did $80 million in sales. In 2015, which is great, which sounds great. From 60 to 80 is amazing. Yeah, yeah, it sounds fantastic, but it wasn't 100. And so we had we didn't have $20 million worth of inventory because there's, you know, yeah, I think we had $10 million or something like of our hard costs that we had our cost.
00:37:16:09 - 00:37:36:15
Yeah. Or that we owed to the factory. And they were going to collect, you know, or try to collect. And so that was 2015 and it was Christmas 2015. Nothing like it didn't it felt very hard. It I probably I don't even remember but I, you know, Raj was we had just moved to Redwood City and Raj was around the corner then with his company.
00:37:36:16 - 00:37:57:01
So we probably, you know, I don't remember probably painful moments there. So like, you know, the company was still and we were hiring on a projection or hiring on a curve that had matched kind of our, you know, revenue rates like logical. Yeah. And you probably locked in a bunch of cost for the next year as well. Looked at a bunch of costs, had already put the plan.
00:37:57:01 - 00:38:30:02
We had just moved to a fancy new office. Yeah. Had 180 people on staff. And, you know, that's that that 2020 mill swing is all of your profit and a lot of your kind of runway for the for the next year. Yeah. That's it makes it impossible to raise at that point like impossible and raise and our, our supply chain is full of inventory, which means that if we wanted to launch our next products, they would first have to fire sale off the old product, which would then be piss off the new customers.
00:38:30:07 - 00:38:50:16
They're like, I just bought this like older one, why would I buy a new one? So there's, you know, no end in sight of problems. And so that was 20. That was 2015. Yeah. And you miss a little bit and you get this huge pain right. Like that's why consumer hardware is so hard and like, you know, I think that Eric's really, had a really interesting model to solve.
00:38:50:16 - 00:39:08:22
The I think it's particularly tricky when there's the software competition and, and like, like this isn't like, you know, selling something to babies. And there's always the X number of like, this is, you know, there's a kind of like a faddy consumer component to what we, you know, so that was another realization. We were in a hits driven business.
00:39:08:22 - 00:39:27:11
Yeah. You know, we weren't just selling exactly a tool that you use every year. And there's more people who want that tool. We had to have a hit in order to sell, like our peak sales were like the month of the launch and Christmas. There were no other peaks like the rest of the year was just kind of flat or average.
00:39:27:12 - 00:39:47:22
This also reminds me, like when Steve Jobs came back to Apple, like he was way more conservative financially the second time around, like way more conservative and like because he was scared, you know, about like these products not being a hit. So he, he was he bought much less inventory, fewer products too. Yeah. He he launched fewer products.
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