Today we cover Part 2 of hardware products that have succeeded where others failed with Ben Einstein of Bolt. In this segment we address:
- You’ve discussed Pebble’s inability to ‘cross the chasm’ and access the early & late majority, while Fitbit was able to. What were the key reasons why Fitbit succeeded where Pebble did not?
- What are your thoughts on using hardware as a Trojan Horse?
- Do you think these lessons are exclusive to hardware startups or do they apply to software as well?
- You’ve been attending CES for 10 years now and seen the evolution of Eureka Park as well as the show at large… what are some of the key observations over that period?
- Any other thoughts or advice you’d give to founders starting a hardware, IoT or connected device startup?
- Ben on Twitter
- Bolt on Twitter
- Hardware Startups Should Lower User Expectations
- What Hardware Startups can Learn from Pebble
- Part 1 of the interview with Ben
1- Narrow Customers, Low Expectations
Ben looks for companies solving a specific problem for a specific customer over those solving something a little bit for everyone. We discussed the comparison of Google Glass to Snap Spectacles, one with broad focus, the other narrow. Interestingly, from an engineering standpoint, they’re nearly identical. Radios, molded plastic, lenses, batteries, buttons and sensors. But Glass tried to be all things to all people in very general use cases. Whereas Spectacles was designed for a single purpose with a very specific function. So Google created really high user expectations whereas Snap set user expectations very low. And setting these low, yet targeted, expectations allows one to delight customers instead of disappoint.
Ben reviewed the first thing that Snap did really well… They chose a specific type of person, gen Z, for their customer. The whole experience was streamlined for a very specific user group. The product was also very specific in it’s design and function, so as to appeal to this group. Bold colors, sold on demand, in interesting vending machines, leveraging both scarcity and FOMO.
We also compared the launch of Siri w/ Echo. These products were similar in nature, but scope was very different. Apple went broad, targeting all customers with high expectations. They integrated Siri into all new phones, w/ many features. Whereas Echo went with a physical product, that sits in one place, with simple to understand functions. Launching as a platform in Siri’s case vs. launching as a product in Echo’s case.
Echo set low user expectations and increased them over time. And Ben reminded us that Amazon is often under the radar, under marketing and over delivering. Their algorithm is designed to delight people by creating much better experiences than expectation.
And Ben acknowledges that startups can not compete directly with companies like Apple and Amazon. In his example, he said that there were 1500 people working on the Echo at Amazon. But what startups can do is change the game, create unfair advantages by focusing on a specific problem. Statups do have an advantage; they are small, flexible and can approach problems in unique ways.
We also discussed the second thing that Snap did well w/ Spectacles, which we cover in key takeaway #2
2- Crossing the Chasm with Benefits, Not Features
Ben has noticed a recurring issue with failed hardware startups. They are too focused on features over benefits. Here we reviewed the example of Fitbit vs Pebble. Fitbit chose something that the mass market cares about, health and fitness. And they built a brand around the fitness use-case. The product, website and even retail locations reflect a lifestyle brand. Where Pebble focused their marketing on ‘what it is’, Fitbit’s focused on ‘what it does’.
Ben said: “Companies that sell low-cost consumer electronics must be solving a problem that early and late majority populations identify with.”
The technical, rich feature sets, in Pebble’s case, appealed to the innovators and techies. But, they could never cross the chasm and reach the market majority. These customers don’t buy for the tech, they buy for the benefit. This is evident in each company’s website. Pebble’s featuring their e-paper watch w/ the statement “Be Fit & Smart.” Fitbit’s featuring a woman, running in the rain, with the statement “Find your fit.” Benefit-oriented, brand marketing evokes emotions. And this is how the success stories have reached the mass market.
3- Just Say No to Crowdfunding
Ben is the first investor I’ve spoken with that is down on product-based or donation-based crowdfunding. He said it’s a focus issue. The founders are focused on designing a video that converts rather than creating a product that delights.
Ben said that “It’s so much more powerful to have someone give feedback on how their experience was actually using a thing vs. someone buying into the idea of a thing, which almost inevitably will let them down”
He wants to hear founders talk about the ten people that are using and loving the product. He wants to see videos of excited users talking about their experience. From his standpoint, 10 real, delighted users are much more powerful than 10,000 non-users that hit ‘Back this Campaign’.
And Ben did suggest that the most important part of this is an intense focus on how you can learn as fast as possible, as early as possible, before you ship.