Speaker 1: Get in touch with technology with tech Stuff from how
Speaker 1: stuff Works dot com. Hey there, and welcome to tech Stuff.
Speaker 1: I am your host, senior writer Jonathan Strickland with how
Speaker 1: stuff Works dot Com and on many episodes of tech Stuff,
Speaker 1: I like to look at companies that are decades old,
Speaker 1: or even more than a century old in some cases.
Speaker 1: But this time I'm going to take a look at
Speaker 1: a company that just turned ten not too long ago,
Speaker 1: and I'm talking about Fitbit. And really I'm gonna focus
Speaker 1: both on the company itself and the technology it creates.
Speaker 1: So you're gonna get both kind of a history and
Speaker 1: evolution of the company, but also how does that technology
Speaker 1: actually work. It's kind of marrying two different styles of
Speaker 1: tech stuff in one delicious tech stuff package of goodness.
Speaker 1: So this story begins back in two thousand seven, and
Speaker 1: that is when two guys, one named James Park and
Speaker 1: one named Eric Friedman, decided that they were going to
Speaker 1: launch a company with the intent to produce fitness trackers,
Speaker 1: essentially a pedometer on steroids, something that could give lots
Speaker 1: of feedback to a person who was interested in getting fit.
Speaker 1: But to be fair, all stories really have more of
Speaker 1: a preamble than that, right, it's not just hey, today,
Speaker 1: we decided to make a company. You have to figure out, well,
Speaker 1: what led up to that? Well, James Park attended Harvard.
Speaker 1: He was studying computer science, but he dropped out. He
Speaker 1: didn't actually graduate from Harvard, he didn't earn a degree there.
Speaker 1: After dropping out, he worked for the company Morgan Stanley
Speaker 1: and he worked there for about a year. And then
Speaker 1: Eric Friedman, he was actually at Yale. He got a
Speaker 1: graduate and postgraduate degrees actually from Yale. He was studying
Speaker 1: computer science. They are, and the two of them co
Speaker 1: founded a company called Epis Technologies, and I'm guessing you
Speaker 1: probably never heard of it because it didn't last very long.
Speaker 1: Their focus was to create products to facilitate business to
Speaker 1: business transactions. So, in other words, um, your ordinary consumers
Speaker 1: or customers would never really come into contact with this
Speaker 1: particular company. It wasn't marketing stuff for the average consumer.
Speaker 1: This was for big companies and the transactions they make
Speaker 1: with each other. Very different world than just going to
Speaker 1: a store and buying a product. Right. Venture capitalists invested
Speaker 1: a couple of million dollars in this technology. However, the
Speaker 1: company just never found its footing. It eventually failed and
Speaker 1: Parks said that he felt that his inexperience in large
Speaker 1: part contributed to that failure, but that the failure itself
Speaker 1: served as a very valuable learning experience for him and
Speaker 1: for Freedom, and that they were able to take that
Speaker 1: negative experience and learn from it and attempt something new.
Speaker 1: So there might have been some valuable but harsh lessons
Speaker 1: learned at that point. Anyway, the two of them and
Speaker 1: a couple of other alumni from a PSC Technologies decided
Speaker 1: to go on an entirely different direction with a brand
Speaker 1: new company. They created a new venture called wind Up Labs,
Speaker 1: and this time they were taking aim at online photo
Speaker 1: editing and sharing using peer to peer technology. So this
Speaker 1: happened around two thousand two. UH. They got to work
Speaker 1: developing the tools you would need to do editing work
Speaker 1: online and to use this peer to peer technology to
Speaker 1: facilitate it, and it was successful enough for larger companies
Speaker 1: to actually take notice of them. And one of those
Speaker 1: larger companies was c net. So you're probably familiar with SEEN.
Speaker 1: They have a lot of different UH branches. The one
Speaker 1: that I'm familiar with is their website with their reviews
Speaker 1: and their technology news. I know a couple of people
Speaker 1: who work there, but they also do other stuff as well,
Speaker 1: and one of the things they wanted to invest in
Speaker 1: was this photo editing suite, so they acquired wind Up Labs.
Speaker 1: They actually made a bid and then took ownership of
Speaker 1: the company, and both Park and Freedman went on to
Speaker 1: work for c net uh, becoming heads of various departments
Speaker 1: within c NEET, and they became further entrenched in the
Speaker 1: world of technology. Flash forward to two thousand and six,
Speaker 1: another big company released a brand new product that got
Speaker 1: both Park and Freedman kind of excited, something that they
Speaker 1: had not really seen before that they felt had a
Speaker 1: lot of value. That company was a little company called Nintendo,
Speaker 1: and the product was the Wei video game console. Really,
Speaker 1: they were very interested in the Wei controllers, the Wei
Speaker 1: motes because they had all these motion sensors in them.
Speaker 1: We were now entering into an era where these motion
Speaker 1: sensors were getting very small and relatively inexpensive, so you
Speaker 1: could incorporate them into totally new types of technology. You know,
Speaker 1: before they were larger, they were more expensive, they were
Speaker 1: limited in what you can do with them. But now
Speaker 1: because manufacturing processes had improved and you're looking at the
Speaker 1: economies of scale. They were suddenly a component that you
Speaker 1: could fit another stuff. And we started seeing this across
Speaker 1: all sorts of different products, including smartphones. We started seeing
Speaker 1: those kind of technologies incorporated there. Well. They thought that
Speaker 1: this we mote motion sensor technology was really revolutionary. But
Speaker 1: they thought, this is a home console. What if we
Speaker 1: could take this capability and put it into a more
Speaker 1: portable device, and maybe it has a different aim and
Speaker 1: video games. And that got them thinking, and eventually they
Speaker 1: came to this idea of a fitness tracker that now
Speaker 1: that you could get accelerometers and other types of sensors
Speaker 1: to a small enough form factor and make them cheap enough,
Speaker 1: you could pair them with some microprocessors and have a
Speaker 1: really robust activity tracker. So they decided that this would
Speaker 1: leave pedometers in the dust. It would set a new market,
Speaker 1: and they left c Net in two thousand seven to
Speaker 1: form a new company and they called it Fitbit. Now
Speaker 1: that when they made this company, they didn't have any
Speaker 1: products to show off yet. They had not built anything,
Speaker 1: they hadn't designed anything. They just had an idea. They
Speaker 1: invested their own money, and they also had friends and
Speaker 1: family and and former co workers and former clients also
Speaker 1: invested in their early start up, and they raised about
Speaker 1: four hundred thousand dollars, which originally they thought would be
Speaker 1: enough to get them to the point where they could
Speaker 1: bringing a product to market. Later fundraising efforts got them
Speaker 1: further once they realized that four thousand dollars was not
Speaker 1: going to be enough, But that was a little bit
Speaker 1: further down the line. They had a long way to
Speaker 1: go before they actually had a physical product they could
Speaker 1: show off. Their ideas. Sound sounded really good. They were
Speaker 1: really sound ideas, but neither co founder had any experience
Speaker 1: in the manufacturing world, so neither of them knew anything
Speaker 1: about product development or actually taking an idea and making
Speaker 1: a physical thing out of it, and as it turns out,
Speaker 1: that's really hard to do. They had to make a
Speaker 1: working prototype in order to show it off to some
Speaker 1: potential investors and also potential customers. So the original fitbit
Speaker 1: prototype didn't look very special. It was some circuitry in
Speaker 1: a little wooden box. I think it was even made
Speaker 1: of balsa would The idea seemed really special, though, and
Speaker 1: Park and Freedmen were determined to make it work, so
Speaker 1: they needed to develop the product that could be lightweight
Speaker 1: because you wanted to be able to wear it on
Speaker 1: your body. They wanted it to be very energy efficient
Speaker 1: because you don't want to have to recharge it constantly.
Speaker 1: They wanted to aim for a price point of around
Speaker 1: in the US dollars. That is, the original fitbit tracker
Speaker 1: that they eventually developed was a clip on device. You
Speaker 1: could clip it on pocket or a lot of the
Speaker 1: ladies would clip it on a bra strap or something
Speaker 1: along those lines. Um And it was kind of like
Speaker 1: a high tech clothes pin almost. So it had a
Speaker 1: very small, oh lead display, uh you know, organic led display,
Speaker 1: and that could show you how many steps you took.
Speaker 1: Give me a little indicator had little footprints on it too.
Speaker 1: I'm looking at the camera that I'm talking to. I'm
Speaker 1: live streaming this particular episode, and I'm acting like it's
Speaker 1: actually another person right there. So that's interesting. But at
Speaker 1: any rate, the this little screen and show you the
Speaker 1: number of steps you took. And it also had a
Speaker 1: Bluetooth low energy transmitter incorporated in the device in order
Speaker 1: to send information to a sinking station sinking as in synchronization,
Speaker 1: not as in sinking under the water, and you would
Speaker 1: plug that into a computer, so your device would sink
Speaker 1: whenever you got within a certain range uh and it
Speaker 1: would do so multiple times over the course of a day,
Speaker 1: so maybe every like fifteen to twenty minutes it would update,
Speaker 1: and then you could view stats on your computer screen.
Speaker 1: Later on, with smartphones became ubiquitous and a lot of
Speaker 1: apps were developed for the fitbit, you could offload that
Speaker 1: to a smartphone and just use a Bluetooth connection between
Speaker 1: a device and your smartphone to send that information. But
Speaker 1: either way, the point was you could then view more
Speaker 1: robust information on a dashboard, either on your computer or
Speaker 1: later on on your smartphone, and it would give you
Speaker 1: a little bit better of an idea of of what
Speaker 1: your activity actually meant. Because a predometer can tell you
Speaker 1: roughly how many steps you took, but fitbits value proposition
Speaker 1: was that it could do more than that. So while
Speaker 1: the fitbit tracker could estimate the number of steps you
Speaker 1: were taking, that one of the things that this dashboard
Speaker 1: could do is estimate how many calories you were burning
Speaker 1: based upon the nature and duration of the movement you
Speaker 1: were making, and it did this by collecting information from
Speaker 1: a three axis accelerometer and more on that in a
Speaker 1: little bit. I'll actually explain how three axes accelerometers work. Really,
Speaker 1: I should say just a three axis accelerometers work. And
Speaker 1: this was really what was compelling about their approach was
Speaker 1: that wasn't just a physical product that they were marketing.
Speaker 1: It was this whole marriage between software and hardware that
Speaker 1: together made it a product that people might want and
Speaker 1: would find compelling uses for. Like this whole uh new
Speaker 1: industry of activity tracking, quantifying your activity in a way
Speaker 1: that makes sense, so that you could perhaps set goals
Speaker 1: saying I want to hit a certain milestone today, or
Speaker 1: you could just see what trends were for a week
Speaker 1: and maybe there were things that you needed to adjust.
Speaker 1: It was a new idea really that you would be
Speaker 1: able to gather that much information and have it presented
Speaker 1: to you in a way that made sense, and that,
Speaker 1: I think, more than just the tracker itself, is what
Speaker 1: got people really interested. So let's talk about how this
Speaker 1: hardware works. Will begin with what is arguably the most
Speaker 1: important element in fitbit technology, which is the three axis accelerometer. Uh.
Speaker 1: There are of course a lot of other components inside fitbits,
Speaker 1: and it also depends upon which fit bit model you're
Speaker 1: talking about because Fitbit offers a ton of different products,
Speaker 1: and some of them are more simple, and some of
Speaker 1: them are have all the bells and whistles. Figuratively speaking,
Speaker 1: I don't think any of Fitbit's current products actually have
Speaker 1: physical bells or whistles, So I apologize if I got
Speaker 1: your hopes up. So, the three axis accelerometer is an
Speaker 1: interesting thing. Uh It It detects changes in motion. That's
Speaker 1: what accelerometers do. They detect changes in acceleration, and acceleration
Speaker 1: is a vector quantity, right, It has two components. It
Speaker 1: has a direction, and it has a magnitude. So an
Speaker 1: accelerometer can detect a change in the direction of motion
Speaker 1: or a change in the magnitude of motion, and a
Speaker 1: single axis accelerometer can only tell the difference in a
Speaker 1: change in direction along one axis. So upper down is
Speaker 1: an axis. If you have a single access accelerometer and
Speaker 1: it's oriented in the up down position, it can only
Speaker 1: detect changes in direction that that an impact up or down.
Speaker 1: It cannot detect left or right. So uh, three axis
Speaker 1: means that there are three axis of directions that you're
Speaker 1: talking about, essentially up, down, left, right, and forward backward.
Speaker 1: So you can detect changes in motion and all of
Speaker 1: these different axes. The accelerometers inside fitbits are specific types.
Speaker 1: They're called MEMS accelerometers m E m S, and that's
Speaker 1: actually an acronym. It stands for micro electro mechanical systems.
Speaker 1: And this is the fascinating thing to me. These are
Speaker 1: very very tiny. They're they're like, it looks like a
Speaker 1: regular little micro chip, like a microprocessor chip, but they
Speaker 1: actually have tiny moving parts inside of them. The accelerometers
Speaker 1: are actually based upon physical motion. Uh. And the name
Speaker 1: tells you all the basics you need to know. Micro
Speaker 1: means we're talking wicked small here. Um, that means they're tiny.
Speaker 1: If you're not from Boston, you don't know what wicked
Speaker 1: small means. It means tiny. Electro of course, means that
Speaker 1: you have some sort of electrical or electro magnetic component
Speaker 1: to it. And mechanical tells you that, yeah, we're talking
Speaker 1: about moving parts here. It's just not you know, not
Speaker 1: just electrons zipping around. They're actually tiny little movement moving
Speaker 1: elements to this thing. So let's start with a simple
Speaker 1: single access accelerometer. And again by access, we're talking about
Speaker 1: a specific set of directions. Um, this is all with
Speaker 1: respect to the accelerometers orientation. So let's say we've got
Speaker 1: a macro sized single access accelerometer sitting on the table.
Speaker 1: This is easier to envision. It can measure accelerator accelerative
Speaker 1: forces that are going up or down, but not left
Speaker 1: or right, or forward or backward, because it's again single access.
Speaker 1: But the way it works is that you've got a
Speaker 1: b ace, which in the micro scale we would call
Speaker 1: a substrate. We'll just say it's the surface of a
Speaker 1: table in this case. Then you would have a spring,
Speaker 1: a pretty stiff spring, not not like a slinky, but
Speaker 1: more like maybe something you would find in a shock absorber.
Speaker 1: Attached to the spring, you would have some sort of
Speaker 1: element that would have flat protrusions extending from the sides.
Speaker 1: So imagine like a cylinder, and along the length of
Speaker 1: the cylinder you've got these flat protrusions their plates, is
Speaker 1: what they're called. These are movable plates because they're on
Speaker 1: the cylinder, which itself is on a spring. So an
Speaker 1: emotion on the spring will make the cylinder go up
Speaker 1: and down, which means the plates, which are attached to
Speaker 1: the cylinder will also go up or down. Now, around
Speaker 1: this cylinder You've got some fixed plates mounted to a
Speaker 1: steady frame, so the frame does not move, the frame
Speaker 1: stays stable, but those plates sandwich the moving plates. So
Speaker 1: a moving plate would slide between two fixed plates, and
Speaker 1: then you apply of different voltages to each pair of
Speaker 1: fixed plates, so you've got a difference in voltage. They're
Speaker 1: essentially capacitors in this case, they're building up a voltage
Speaker 1: differential between two plates. You've got this moving plate that's
Speaker 1: in between the two. Any motion that you transfer to
Speaker 1: that spring will they be transferred to the cylinder, and
Speaker 1: thus the moving plates they'll move up and down. As
Speaker 1: they move up and down, that moving plate is going
Speaker 1: to get closer to the top plate, and then further
Speaker 1: away and closer to the bottom plate, and then further away.
Speaker 1: So as it moves up and down and gets closer
Speaker 1: and further away from these these fixed plates, it actually
Speaker 1: affects the capacitive value between the two. This difference in
Speaker 1: capacity value is is interpreted by the accelerometer as a
Speaker 1: change in acceleration. And I realized that this is kind
Speaker 1: of a difficult thing to to just imagine that. I'm
Speaker 1: explaining it as best I can, but without the element
Speaker 1: of visuals. It is pretty tricky. So maybe what I
Speaker 1: can do is, um, I'll explain it analogy. I love analogies.
Speaker 1: And uh, it was lunchtime not too long ago here
Speaker 1: in Atlanta, Georgia. So I'm going to talk about sandwich.
Speaker 1: Imagine a really delicious veggie burger, and they do exist.
Speaker 1: It's easy to find a bad one, but trust me,
Speaker 1: the good ones are out there too. Now, imagine you've
Speaker 1: got a bottom bun sitting on a table, hovering, as
Speaker 1: if by magic. About two inches above that bun is
Speaker 1: a veggie patty, and it is in fact delicious, but
Speaker 1: you can't eat it yet because I need it for
Speaker 1: this analogy. Hovering about two inches above that is the
Speaker 1: top bun. So you've got some space between the top bun,
Speaker 1: the veggie patty, and the bottom bun. Now, the two
Speaker 1: buns are fixed in space and time. Not even the
Speaker 1: Juggernaut himself could move the two buns. They are going
Speaker 1: to remain in the positions they are in until the
Speaker 1: universe itself burns out. But the veggie patty can move
Speaker 1: up and down. It has that freedom of movement. So
Speaker 1: any motion to the table is going to make that
Speaker 1: veggie Patty either get closer to the top bun or
Speaker 1: the bottom bun. And that's what I'm talking about. It's
Speaker 1: it's very similar with an accelerometer, except instead of veggie burger,
Speaker 1: you've got these moving plates and fixed plates, and instead
Speaker 1: of deliciousness, you have a capacitive value based upon a
Speaker 1: voltage differential between two plates. Simple right. Anyway, you have
Speaker 1: processors that can take that data, that change in the
Speaker 1: capacitive value and interpret it as acceleration, and based upon
Speaker 1: the speed of the change and the magnitude of the change,
Speaker 1: it can make some guesses as to how much accelerative
Speaker 1: force is being applied. So if you've ever used a
Speaker 1: fitness tracker that could tell the difference between when you
Speaker 1: were walking versus when you might be typing on a
Speaker 1: keyboard or when you're jogging down the street, it's because
Speaker 1: the accelerometer is able to interpret these differences and then
Speaker 1: present that information in a way that makes sense to you.
Speaker 1: And it's all about just looking at the math of
Speaker 1: the difference of that capacitive value, which to me is
Speaker 1: it's almost akin to magic. I'm about to go all
Speaker 1: Arthur C. Clark in here. So that's a basic single
Speaker 1: access accelerometer, and the same thing is happening inside the
Speaker 1: sensors on the fitbit, only we're talking about a much
Speaker 1: much much smaller accelerometer, right, We're talking micro level, not
Speaker 1: macro level. And again, they don't use single axis accelerometers
Speaker 1: because that would only detect a change in acceleration along
Speaker 1: one axis. They use three axis accelerometers. So how are
Speaker 1: those different, Well, they're not different. You just get three
Speaker 1: single axis accelerometers and then you orient them so that
Speaker 1: they have these ninety degree changes, so that you've got
Speaker 1: one that's aligned up and down, one that's the line
Speaker 1: left and right, and one that's aligned front to back,
Speaker 1: and they're all next to each other. And it doesn't
Speaker 1: you know, they're not always going to be. This is vertical,
Speaker 1: this is horizontal, and this is your your Z axis
Speaker 1: because it all depends upon the orientation of the fitbit itself. Right,
Speaker 1: Sometimes i might have my arm way up in the air,
Speaker 1: waving it around as if in fact I just did
Speaker 1: not care. But other times I'm gonna be just hauling
Speaker 1: as fast as I can down the highway while the
Speaker 1: T one thousand is chasing me down. And the important
Speaker 1: thing is these accelerometers have to uh, detect that motion
Speaker 1: no matter what orientation my arm might be in. That's
Speaker 1: why you go with the three axis. It's much more
Speaker 1: accurate than a single access accelerometer. And I love the
Speaker 1: fact that this technology is built on the basis of
Speaker 1: motion because it means that you yourself can go out
Speaker 1: and build an accelerometer if you want to. You can
Speaker 1: build a simple one which would really just give you
Speaker 1: an indication of changes to acceleration based upon the movement
Speaker 1: of a mass at the end of a spring. But
Speaker 1: that's technically kind of an accelerometer doesn't really give you
Speaker 1: any value, So I would argue that perhaps you can't
Speaker 1: really call an accelerometer. It's almost more of a seizmometer.
Speaker 1: But it's still kind of cool. Uh. But yeah, with
Speaker 1: with some springs and a few other pieces of equipment,
Speaker 1: you could make a macro sized accelerometer that works on
Speaker 1: the exact same principle as these very tiny ones that
Speaker 1: you find in fitbit, And then you can marvel and
Speaker 1: the fact that it still works at the micro scale.
Speaker 1: Go ahead, marvel. You can actually marvel all the way
Speaker 1: through the next bit because it's time to take a
Speaker 1: quick break to thank our sponsor. All right, so let's
Speaker 1: talk about other stuff with the fitbit. You know, other
Speaker 1: elements in UH in the fitbit handle actual processing of information.
Speaker 1: So you've got the sensor that's gathering information, the the
Speaker 1: three axis accelerometer. It's it's pulling info in, but that
Speaker 1: needs to be processed, right, It's just kind of raw data.
Speaker 1: It doesn't really have any meaning to it. So we
Speaker 1: then have the other processors to kind of turn that
Speaker 1: into more interesting information that has relevance to us as users.
Speaker 1: Then you've got the low energy Bluetooth transmitter, and that
Speaker 1: is what allows the the fitbit to communicate with other
Speaker 1: devices like smartphones and sinking stations again synchronization stations UH.
Speaker 1: And they use low energy bluetooth because as you would imagine,
Speaker 1: it doesn't require that much energy to operate. It's sending
Speaker 1: very small amounts of data, so it's not like it's
Speaker 1: having to transmit a constant stream of information. It's just
Speaker 1: little packets of information, so it doesn't take a whole
Speaker 1: lot of power to do it, and that means that
Speaker 1: it's less of a drain on battery life because that's
Speaker 1: really important with an activity tracker. You don't. You don't
Speaker 1: want to have to take it off at the end
Speaker 1: of every day and recharge it, especially one like the
Speaker 1: fitbit that's supposed to also track how well you sleep.
Speaker 1: If you're supposed to wear it essentially twenty four hours
Speaker 1: until you actually absolutely have to charge it, you want
Speaker 1: to maximize that battery life. So that was one way
Speaker 1: they could do it was using this low energy Bluetooth approach.
Speaker 1: And I've talked about low too, low energy Bluetooth and
Speaker 1: other podcasts, So if you want to go back to
Speaker 1: Tech Stuff archives, you can find me explaining that technology
Speaker 1: a little bit more. These days, Uh, you know, you're
Speaker 1: more likely to use a smartphone than a synchronize kind
Speaker 1: of station type device that plugs in via USB to
Speaker 1: your computer. You might still do that. I did that
Speaker 1: with my old fitbit, but these days now I just
Speaker 1: used my smartphone essentially is the computer in my pocket.
Speaker 1: So um. But when they first launched Fitbit, smartphones were
Speaker 1: not really a big thing yet. Remember they got together
Speaker 1: to work on Fitbit in two thousand seven. That's the
Speaker 1: same year that Apple debuted the iPhone. So to me,
Speaker 1: that is the beginning of the era of the smartphone age.
Speaker 1: Even though there were other phones that could technically be
Speaker 1: called smartphones before the iPhone, it was the iPhone that
Speaker 1: captured the public imagination so that people besides just the
Speaker 1: the tech geeks like my elf, sat up and said, Oh,
Speaker 1: that's pretty cool. I want one of those now. It
Speaker 1: was actually that that bluetooth transmitter that gave them some
Speaker 1: early problems. If you read review our interviews with the
Speaker 1: founders of Fitbit, they'd say that their company nearly died
Speaker 1: seven times. They had seven different crises that almost killed
Speaker 1: off their company in that that first year, and one
Speaker 1: of them was they found that they were having this
Speaker 1: transmitter problem that the device wasn't able to sink properly.
Speaker 1: Because it wasn't able to transmit information properly, they weren't
Speaker 1: getting any data off of the transmitter, and they found
Speaker 1: out it was an antenna issue, and they fixed it
Speaker 1: by putting some foam behind the antenna, like propping it up,
Speaker 1: which I can identify with. I'm old enough that I
Speaker 1: remember when we would get all of our television programming
Speaker 1: over the air, and I was the official. Hey moved
Speaker 1: the antenna a quarter inch to the left so that
Speaker 1: we can get I love Lucy on the e V
Speaker 1: So I was the piece of foam in my family anyway. Uh.
Speaker 1: These were the kind of like CLUEG solutions they had
Speaker 1: to go with early on just to get their their
Speaker 1: technology working. But the important thing was it actually did
Speaker 1: make it work. Now, while their proof of concept was working,
Speaker 1: they discovered that that food dollars just was not going
Speaker 1: to be nearly enough to bring a product to market.
Speaker 1: They had underestimated how incredibly challenging it is to get
Speaker 1: into manufacturing. It requires creating a supply chain. You have
Speaker 1: to figure out who's going to supply the various little
Speaker 1: components that together make your product. You have to form
Speaker 1: relationships with the various suppliers of microchips and sensors. You
Speaker 1: have to figure out what is the form factor of
Speaker 1: your product going to look like, like what is it
Speaker 1: actually going to how's the design going to be, and
Speaker 1: who's gonna make it, who's gonna cast the molds, who's
Speaker 1: going to produce the plastic. Uh. This is where I
Speaker 1: would talk about China a bit, because they had to
Speaker 1: look at Chinese suppliers. That was one of the ways
Speaker 1: to keep costs down is that and that's what a
Speaker 1: lot of electronics companies do they look to China to
Speaker 1: produce the little various components that are then assembled together
Speaker 1: and then sold in other parts of the world. So
Speaker 1: they realized that they just did not have the money
Speaker 1: to go through this whole process. They needed more, so
Speaker 1: they held some more rounds of venture capital fundraising, and
Speaker 1: they raised some quite a bit of money, like more
Speaker 1: than a couple of million, because by now people were
Speaker 1: starting to pay attention to what it was they were
Speaker 1: working on. But really, I think the turning point in
Speaker 1: that early time happened in September two thousand eight. So
Speaker 1: they got together in two thousand seven, they started working
Speaker 1: on their idea. September two eight, they got an opportunity
Speaker 1: to show off that idea, show off a prototype, and
Speaker 1: explain their sales pitch, and they did an event called
Speaker 1: tech Crunch fifty uh So tech Crunch they're known for
Speaker 1: lots of stuff. They're they're great with technology news, but
Speaker 1: they also are really a launch point for startups. They
Speaker 1: give startups an opportunity to meet with people, to express
Speaker 1: what it is they are working on and to try
Speaker 1: and see if there's any interest or support out there
Speaker 1: to continue the work. So tech Crunch fifty was a
Speaker 1: huge deal for these guys to be involved with it,
Speaker 1: and they landed a spot in that two thousand eight event. Now,
Speaker 1: going into it, they weren't exactly overwhelmed with optimism. In fact,
Speaker 1: Freedman had said, I don't think more than five people
Speaker 1: will be stupid enough to give us their credit card,
Speaker 1: a somewhat cynical statement, and part of wasn't a whole
Speaker 1: lot better. He said, Nah, you're wrong, We'll get way
Speaker 1: more than five. I bet we'll get fifty orders five zero.
Speaker 1: Turned out that they were grossly underestimating the appeal of
Speaker 1: this Fitbit product. By the end of the day after
Speaker 1: they had presented their idea, they had two thousand pre orders,
Speaker 1: these for two guys who had not yet figured out
Speaker 1: how they were going to produce these these products. They
Speaker 1: knew how it was gonna work, they had an idea
Speaker 1: of what it needed to look like, but they did
Speaker 1: not have a manufacturing process in place yet to produce
Speaker 1: two thousand. It did not help that Park had said
Speaker 1: that they would have the orders out by Christmas. Now
Speaker 1: the first Fitbit trackers, the original product from Fitbit was
Speaker 1: called the Tracker. There was that little clothes pin, thing
Speaker 1: that could clip onto a pocket or whatever. They shipped
Speaker 1: in December two thousand nine, so they presented in September
Speaker 1: two eight. James Park says they'll be out in time
Speaker 1: for Christmas, and they shipped December two thousand nine, and
Speaker 1: James Park said, well, in my defense, I never said
Speaker 1: wh Christmas. Whack at ashrak. Uh. Yeah, it was kind
Speaker 1: of jokingly saying, yeah, we're a year late, but it
Speaker 1: but it came out. And honestly, that delay really illustrates
Speaker 1: what I was saying earlier that manufacturing is hard. It
Speaker 1: is difficult. It's it's something that even big companies struggle with.
Speaker 1: And these are big companies that have been around for
Speaker 1: for decades and they're in the business of making consumer electronics.
Speaker 1: It's challenging for them and they've been doing it for decades.
Speaker 1: For two guys who had started up this company, it
Speaker 1: was way more challenging. So once you are able to
Speaker 1: crack that manufacturing problem, which is again a non trivial task,
Speaker 1: you can go on to actually do business. And Uh,
Speaker 1: it took them a year longer than what they were anticipating,
Speaker 1: but they were able to actually ship out the fitness tracker,
Speaker 1: and as it turned out, it was incredibly popular. They
Speaker 1: got thousands and thousands of orders and immediately the value
Speaker 1: of fitbit was on the rise. So this was two
Speaker 1: thousand nine and it was met with real enthusiasm. The
Speaker 1: low energy electronics meant that the device could go on
Speaker 1: for several days without ever needing a recharge. The dashboard
Speaker 1: side of things that that view you would get on
Speaker 1: your computer or later on your smartphone meant that the
Speaker 1: user was given so much information that was relevant to
Speaker 1: what they were doing. It had a huge appeal. One
Speaker 1: of the easiest ways to sell anything to anyone is
Speaker 1: to involve them in the the product itself, right to say,
Speaker 1: you are what makes this product special. The way you
Speaker 1: use it is reflected in the results you get, and
Speaker 1: so it's all about you. If you want to sell
Speaker 1: me anything and you tell me it's all about me,
Speaker 1: you're well ahead of the game, because I love me. Anyway,
Speaker 1: On the back end of things, the fitbit researchers were
Speaker 1: starting to work on various algorithms to try and turn
Speaker 1: just a number that says steps into something more meaningful.
Speaker 1: So you may have noticed if you've ever used an
Speaker 1: activity tracker that you will get a notification of how
Speaker 1: many miles you've walked in a day. Well, you can't
Speaker 1: just base that on the number of steps, because your
Speaker 1: stride is going to be a different length from someone
Speaker 1: else's stride. If you have someone who's five ft tall
Speaker 1: and someone else who is six ft six and they
Speaker 1: both walk five thousand steps, I guarantee you the six
Speaker 1: ft six inch tall guy walked further. They took the
Speaker 1: same number of steps. But the person who is six
Speaker 1: ft six inch and I said guy, but honestly, the
Speaker 1: first person that popped in my head is a woman
Speaker 1: I know who is very tall. Their stride is longer,
Speaker 1: so they're going to cover more distance. So part of
Speaker 1: this dashboard experience was users giving information about themselves, like
Speaker 1: their height, so that the estimations could be more accurate.
Speaker 1: Someone who's my height, which is five ft eight is
Speaker 1: not gonna be as walking as far as someone who
Speaker 1: has six ft six even if we took the same
Speaker 1: number of steps. Uh. That was the whole point. So
Speaker 1: if you want to estimate how many miles you walk,
Speaker 1: you need to know the height of the person so
Speaker 1: that you can make that estimation. Also, with calories burning,
Speaker 1: you'd have to make estimations based upon age and other factors,
Speaker 1: and in fact, there's so many factors that a lot
Speaker 1: of people have argued that the calories burned metric that
Speaker 1: you find in various activity trackers is largely meaningless because
Speaker 1: it relies on too many unknown variables. It can only
Speaker 1: really look at things like how much activity did you
Speaker 1: do that day and how frequently did you do it?
Speaker 1: But that doesn't necessarily translate to an easy this is
Speaker 1: how many calories you burned. That being said, it could
Speaker 1: help people when they're trying to make general kind of
Speaker 1: high level decisions about their diet, their activity levels, that
Speaker 1: sort of thing. So it really depends on how you
Speaker 1: look at the products. People who are looking at it
Speaker 1: as a almost hobbyist way to get into fitness saw
Speaker 1: value in it. People who are looking at it as saying,
Speaker 1: you're marketing this more as a medical device. They had
Speaker 1: a lot of harsh criticism to level at fitbit, for
Speaker 1: a good reason, because medical devices have to be far
Speaker 1: more precise, far more accurate than something like an activity tracker.
Speaker 1: But a lot of people were arguing that these two
Speaker 1: camps were not talking the same language, and that Fitbit
Speaker 1: was really aiming itself more toward the hobbyist side than
Speaker 1: the hardcore medical application side. Now it didn't hurt the
Speaker 1: fitbits popularity that they happen to have some savvy into
Speaker 1: social media as well. Right, That incorporation of the social
Speaker 1: aspect in fitbits business plan really helped a great deal.
Speaker 1: They incorporated this ability to connect with friends, and you
Speaker 1: could actually compare how many steps have I taken versus
Speaker 1: how many steps has Matt Frederick taken versus how many
Speaker 1: steps has been Bowland taken? That kind of thing, and
Speaker 1: by comparing them, you could end up either thinking, oh,
Speaker 1: I need to get another two thousand steps in because
Speaker 1: I gotta beat this guy, or maybe you're thinking I'm
Speaker 1: way more active than those slug of beds. And it
Speaker 1: created also a competitive element to fit Bit that they
Speaker 1: weren't necessarily anticipating when they first started to implement the
Speaker 1: social uh features in the fitbit product. But they realized
Speaker 1: that that competitive element drove people to use fitbit more
Speaker 1: and to become kind of Fitbit evangelists because they were
Speaker 1: getting out, they were doing things they wanted to earn steps.
Speaker 1: Anyone who's had an activity tracker, I guarantee you. At
Speaker 1: some point in their lives, they have said, I don't
Speaker 1: even know why I walked. I wasn't wearing my tracker.
Speaker 1: They didn't count, Like somehow those steps don't count unless
Speaker 1: they're being quantified by the activity tracker. Well, that's great
Speaker 1: news for a company like fitbit, because it means that
Speaker 1: people need the product, or they at least think they
Speaker 1: need the product that is selling. And uh, that social
Speaker 1: element would actually come to be a problem a little
Speaker 1: bit later. I'll mention that when we get there, it's saucy.
Speaker 1: By the way, in case you're wondering, I am on
Speaker 1: the top of my fitbit friends list um by about
Speaker 1: fifteen thousand steps per week. But to be fair, I
Speaker 1: also walked to and from work, and I lived several
Speaker 1: miles away from the office, so it's a necessity. I
Speaker 1: don't drive, so that helps me with my steps. It's
Speaker 1: not like I am super physically active compared to the
Speaker 1: people on my list. It's a matter of necessity for me.
Speaker 1: All right. You know what, let's take a moment to
Speaker 1: talk about the awkwardness of social connectivity. You see, one
Speaker 1: of the things that bit also allowed you to do
Speaker 1: is create an exercise diary because the fitbit was really
Speaker 1: good at detecting when you were walking or when you
Speaker 1: were jogging, But a lot of the fitbits weren't waterproof,
Speaker 1: so you couldn't track your your activity when you were swimming.
Speaker 1: Many of them couldn't really tell what was going on
Speaker 1: if you were doing exercises in a gem like let's
Speaker 1: say you're getting on the elliptical, it might not be
Speaker 1: able to track that movement. So the exercise diary feature
Speaker 1: on your dashboard allowed you to enter other activities, get
Speaker 1: an estimation of how many calories you burned doing those activities,
Speaker 1: and then you would factor all of that in for
Speaker 1: your end of the day report, saying here's how many
Speaker 1: calories you burned today. Fitbits said that as a default
Speaker 1: shared setting, meaning that if you were creating an exercise
Speaker 1: diary and you had not changed the default, you were
Speaker 1: sharing all of that information to the general public. You
Speaker 1: might say like, I got on the elliptical for twenty
Speaker 1: five minutes and I burned this many calories, and anyone
Speaker 1: who looks at your profile could see that. But people
Speaker 1: were putting in all sorts of different entries in their
Speaker 1: exercise diaries, including times when they were getting a little romantic,
Speaker 1: getting a little uh intimate, getting busy. In other words, Yeah,
Speaker 1: people were putting down sex as an activity in these
Speaker 1: exercise diaries and getting estimations for how many calories they
Speaker 1: burned during those activities, not necessarily realizing that by default
Speaker 1: this was being shared to everyone out there. So in
Speaker 1: two thousand eleven this information kind of got spread around.
Speaker 1: A lot of blogs had fun with it. They talked
Speaker 1: about how fitbit was inadvertently sharing people's sex lives to
Speaker 1: anyone who was interested, and it was at that point
Speaker 1: that Fitbit decided to change that particular policy and set
Speaker 1: the default to private instead of public, And at that
Speaker 1: point we no longer saw tons of people sharing their
Speaker 1: sex lives unknowingly. If they did, they were doing it
Speaker 1: because they in in and change the setting to public
Speaker 1: from private. Oh if it ben't even win an extra stop.
Speaker 1: They actually contacted search engines and they asked for the
Speaker 1: past diary entries to be removed from search engine indexes,
Speaker 1: so that way you couldn't just search someone's fitbit profile
Speaker 1: and use the search results to go back to an
Speaker 1: archive diary entry that you're not supposed to see. So
Speaker 1: they did take some steps to correct this problem. It
Speaker 1: was a problem that they had created by making that
Speaker 1: default public, but it was also a problem that users
Speaker 1: created by putting in other activities on that exercise stuff. Uh.
Speaker 1: But yeah, that was a little awkward. So fitbit um
Speaker 1: learned the hard way that getting into that social game
Speaker 1: is a little tricky, kin of the same thing as
Speaker 1: getting into manufacturing is a little tricky. After all that,
Speaker 1: the team was going back to work on developing new
Speaker 1: types of Fitbit trackers. Now I'm not going to go
Speaker 1: into every single product that they've made, because that would
Speaker 1: be silly. Uh. There are a lot of them that
Speaker 1: haven't been sold for years. They got replaced by later models. Uh,
Speaker 1: they're They're all various variations, I should say on that
Speaker 1: initial fitness tracker. Some have more components to them, but
Speaker 1: ultimately they all work in a very similar way. So
Speaker 1: it doesn't make sense for me to go into all
Speaker 1: the different types. Again, this isn't a commercial for Fitbit.
Speaker 1: This is just an episode talking about the company and
Speaker 1: their technology and how it works. So I will talk
Speaker 1: a little bit about some of the other components that
Speaker 1: are in Fitbit devices. So the Fitbit tracker that was
Speaker 1: their first device. One of the next ones they had
Speaker 1: was the Fitbit Ultra, which was kind of an updated
Speaker 1: version of the tracker, and one of the things that
Speaker 1: added was an altimeter. Uh. And an altimeter is something
Speaker 1: that measures altitude or distance vertically, right, the difference in
Speaker 1: vertical distance between the altimeter and some fixed object, which
Speaker 1: typically is the ground right sea level, or at least
Speaker 1: ground level. And the way it works is it doesn't
Speaker 1: measure directly the distance between it's vertical position in the ground.
Speaker 1: It measures altitude by looking at something related but different
Speaker 1: atmospheric pressure. Now we're gonna go into some basic science time,
Speaker 1: and I know most of you are familiar with this,
Speaker 1: but you know, I always like to have a little refresher.
Speaker 1: The atmosphere that we breathe, it has weight to it, right,
Speaker 1: It's a fluid, and typically we're at the bottom of
Speaker 1: it because we're on ground level or somewhere close to it.
Speaker 1: Not all the time, obviously, but frequently. So if you
Speaker 1: ever felt that you're constantly under pressure, you kind of are,
Speaker 1: at least from the atmosphere. But it's good because if
Speaker 1: you weren't, we wouldn't be able to breathe and you
Speaker 1: would die. So sometimes pressure as good as web saying,
Speaker 1: as you climb in elevation, as you move up a ladder,
Speaker 1: go up some stairs, climb a mountain, get in an airplane,
Speaker 1: you end up having less of this fluid above you
Speaker 1: than you did before. Right, some of that fluids now
Speaker 1: below you. The weight has decreased as you go up
Speaker 1: because you have less atmosphere overhead. It makes sense, right,
Speaker 1: there's less pressing down on you, So there's less weight now.
Speaker 1: If you go far enough, like you climb a tall mountain,
Speaker 1: the pressure changes can be enough to actually have a
Speaker 1: physical effect on you. Most of the time, it's so
Speaker 1: subtle that we cannot detect it by ourselves. We would
Speaker 1: have to have some sort of sensitive instrument in order
Speaker 1: to detect that change. It's also why modern jets are pressurized,
Speaker 1: because if they were unpressurized traveling at thirty ft, the
Speaker 1: atmosphere would be so thin that it would be not
Speaker 1: not not fun times, very not fun times. So you
Speaker 1: pressurize the interior of your plane for a couple of reasons.
Speaker 1: One to make breathing easier to you don't want your
Speaker 1: ear drums to blow out suddenly. Um, So it's really
Speaker 1: important same thing is true for people who are climbing mountains.
Speaker 1: Often you are told that you have to acclimate to
Speaker 1: air pressure at certain stages of tall mountains, otherwise you
Speaker 1: run at the risk of getting sick from altitude sickness. Well,
Speaker 1: altimeters detect air pressure and changes in air pressure, and
Speaker 1: they track things like how many stairs you've climbed by
Speaker 1: detecting those changes in air pressure. The altimeter sensor on
Speaker 1: a fitbit is sensitive enough to detect when you have
Speaker 1: changed ten feet in elevation, whether you're going ten feet
Speaker 1: up or ten feet down, but it only counts stairs
Speaker 1: climbed if you're going up. So, in other words, if
Speaker 1: the atmospheric pressure is decreasing to the point that the
Speaker 1: fitbit says, oh, this guy's gone ten feet up, they've
Speaker 1: climbed some stairs. But if it increases, indicating that you're
Speaker 1: moving downward, it doesn't count it as stairs climbed. And
Speaker 1: that's largely because if you're going downstairs, you don't have
Speaker 1: to exert as much energy as you would if you're
Speaker 1: climbing upstairs. So really you should only be interested in
Speaker 1: how many stairs did you climb, not how many stairs
Speaker 1: did you descend. That's why it doesn't count it if
Speaker 1: you're going down. Uh. I've noticed that that my fitbit
Speaker 1: will sometimes detect a hill as a set of stairs.
Speaker 1: So if it bit tries to determine whether you're climbing
Speaker 1: stairs versus walking up an inclined path by combining the
Speaker 1: data from the altimeter, So how much change in elevation
Speaker 1: have you experienced with the actual motion data from the
Speaker 1: three axis accelerometers which tell how frequently you're moving your arms,
Speaker 1: and can kind of with the combined data suss out
Speaker 1: whether or not you're walking upstairs or you're going up
Speaker 1: a pathway. But it turns out it's not an exact science.
Speaker 1: So for example, yesterday it told me that I climbed
Speaker 1: seventy five flights of stairs. I definitely did not climb
Speaker 1: seventy five flights of stairs yesterday, but I did walk
Speaker 1: up a lot of hills. So that that's the uh,
Speaker 1: you know, kind of subtlety that it can't quite tell
Speaker 1: the difference between If you were to map fitbit data
Speaker 1: against a map, like literally pair a map with the
Speaker 1: fitbit data in a way for it to take into
Speaker 1: account the geography, maybe then it would say, all right,
Speaker 1: well you didn't walk up seventy f five flights of stairs,
Speaker 1: but you did climb this amount of elevation in this
Speaker 1: amount of time. Later, still, fitbit introduced some heart rate
Speaker 1: monitors in some of its products, and you might want
Speaker 1: to know how does that work? For example, the one
Speaker 1: I have as a charge too, it's got heart ray
Speaker 1: monitor on it. So how does this thing that I
Speaker 1: wear on my wrist tell how frequently my heartbeats? All right?
Speaker 1: So it does this through Oh, good grief, this is
Speaker 1: gonna be a slaughter, all right. It does this through
Speaker 1: a process called photo plethism graphy, also known as PPG,
Speaker 1: which is how I'm going to refer to it for
Speaker 1: the rest of this discussion, because I think I might
Speaker 1: be able to say photo flip, photo flip this ma
Speaker 1: graphy correctly twice in my entire life, and uh, I
Speaker 1: think I just did so. Game over man. Alright. So,
Speaker 1: human blood, as I'm sure most of you are aware,
Speaker 1: is red, right well, red stuff reflects red light and
Speaker 1: it absorbs green light really well. So anything that's red
Speaker 1: gets reflected off of red stuff, anything that's green gets
Speaker 1: absorbed by red stuff. So devices like the fitbit charged
Speaker 1: to pair a couple of light ometers that are pulsing
Speaker 1: green light with a sensor that detects reflected green light,
Speaker 1: and that's how it's able to tell how much light
Speaker 1: is being reflected or absorbed by your blood. So it's
Speaker 1: positioned over little blood veins in your arm, and whenever
Speaker 1: it detects that a lot of light is being absorbed,
Speaker 1: it's saying, oh, blood is flowing through the vein right now.
Speaker 1: Whenever it detects a lot of light is being reflected,
Speaker 1: it says, oh, blood is not flowing through that vein
Speaker 1: right now. And by counting the number of times that
Speaker 1: this absorption and reflection pattern goes within a minute, it
Speaker 1: gives you your heart rate. That's how it works. It's
Speaker 1: kind of cool. It's not full proof to detect heartbeats
Speaker 1: this way. Advice has to be fairly secure against the skin.
Speaker 1: So when you exercise, you tend to move around a lot.
Speaker 1: At least that's what I'm lead to understand. And uh,
Speaker 1: I'm someone who walks a lot, but i haven't really
Speaker 1: jumped into that full exercise schedule, so I'm only speaking
Speaker 1: from second hand experience at this point. But if you're
Speaker 1: doing a lot of vigorous weightlifting or running or something.
Speaker 1: A wrist mounted activity tracker is probably going to slide
Speaker 1: around a lot, and that means it's more difficult to
Speaker 1: get an accurate reading on the heart rate UM and
Speaker 1: that actually has caused some real issues. It's actually could
Speaker 1: be potentially dangerous. Uh. Some people really push themselves very
Speaker 1: hard when they're working out. They're trying to get their
Speaker 1: heart at a peak level for a certain amount of time. UM.
Speaker 1: Particularly people who are really trying to push their performance,
Speaker 1: and they need to know if their heart rate is
Speaker 1: exceeding safe parameters. If it's at peak for too long,
Speaker 1: they could actually suffer some serious health problems. So Fitbit
Speaker 1: and other activity company tracker companies have come under fire
Speaker 1: from some healthcare professionals who have said, your marketing a
Speaker 1: product with certain claims that could lead someone to believe
Speaker 1: they have a level of vision akin to a medical device,
Speaker 1: but you haven't submitted your products to the kind of testing,
Speaker 1: the rigorous testing that medical devices have to go through
Speaker 1: in order to be certified as being that kind of accurate.
Speaker 1: And uh. Again it becomes this this war of words
Speaker 1: with activity tracker and company saying this is something to
Speaker 1: help people with fitness issues, but it's not marketed as
Speaker 1: a medical device, and the medical industry saying yeah, but
Speaker 1: people are kind of treating it that way. So there's
Speaker 1: a level of responsibility you need to take, and it's
Speaker 1: kind of a back and forth. Now. By measuring a
Speaker 1: user's heart rate, fitbit can also make a little bit
Speaker 1: more of an educated guess as to how many calories
Speaker 1: that person is burning in a day. And you probably
Speaker 1: heard about the various ranges of heart rates that indicate
Speaker 1: whether you're in a fat burning mode which is slightly elevated,
Speaker 1: or if you're in a cardio vascular exercise mode, which
Speaker 1: is a range beyond that, or if you're in peak mode,
Speaker 1: which is that other level I was talking about, or
Speaker 1: if you're just resting. And this is actually a pretty
Speaker 1: tricky area itself, even outside of the technology sphere, there
Speaker 1: are a lot of people who argue exactly where that
Speaker 1: range should be and how accurate it is, or whether
Speaker 1: it's accurate at all, or what does it mean or
Speaker 1: is it meaningful? Uh, And I'm not going to get
Speaker 1: into that because it doesn't really have anything to do
Speaker 1: with the technology, but it does show that this is
Speaker 1: another area where there's a lot of disagreement about what
Speaker 1: is the actual right way to go forward. But Fitbit
Speaker 1: will combine information from all these different accelerometers and altimeter
Speaker 1: and heart rate sensors in order to give you an
Speaker 1: idea of how many calories you have burned throughout the day,
Speaker 1: even though that might not be absolutely accurate. Now we're
Speaker 1: gonna talk a little bit more about the company side
Speaker 1: of Fitbit, now that we've covered the technology side quite
Speaker 1: a bit in just a second. But first let's take
Speaker 1: another quick break to thank our sponsor. All Right, let's
Speaker 1: go back to talk about the company a little bit
Speaker 1: and how Fitbit has performed through all of this. So
Speaker 1: shortly after Fitbit took off, activity trackers became a huge
Speaker 1: deal in the electronics industry, and Fitbit enjoyed a great
Speaker 1: amount of success. Very early on, they focused on creating
Speaker 1: those products that we're feeling, filling a niche between like
Speaker 1: and two hundred dollars. Really like the hundred and thirty
Speaker 1: and fifty dollar range was their their playground, and that
Speaker 1: also meant that they were avoiding the problems of creating
Speaker 1: higher priced luxury items that that some electronics fans were
Speaker 1: balking at. They also decided early that they were not
Speaker 1: going to get into smart watches right away, which ended
Speaker 1: up being a smart decision because a lot of people
Speaker 1: were out there trying to create smart watches and no
Speaker 1: one was really sure what a smart watch would be
Speaker 1: or what should do apart from tell the time, and
Speaker 1: I'm sure some of them were even wondering if it
Speaker 1: should do that. Now, Fitbit did include stuff like a
Speaker 1: watch and some of its models, so there were models
Speaker 1: after the Fitbit tracker that had a clock element to them,
Speaker 1: but you would say that it was a clock on
Speaker 1: an activity tracker, not that it was a watch that
Speaker 1: also tracked activity. So very different approach, not something that
Speaker 1: the smart watch companies were really going after. Then they
Speaker 1: started adding other features, like you could get notifications on
Speaker 1: certain Fitbit devices, so when you paired it with a phone,
Speaker 1: if a notification came through on your phone, you might
Speaker 1: get an alert on your Fitbit. So you might miss
Speaker 1: it if your phones in your pocket, but then your
Speaker 1: wrist vibrates and you take a look and you see, oh,
Speaker 1: someone's texting me, or I just got an email or
Speaker 1: whatever it might be, or I've got a calendar event
Speaker 1: coming up that I should pay attention to. Then Fitbit
Speaker 1: eventually did release a smart watch. They released it in
Speaker 1: and it's called the Fitbit Blaze, and that was really
Speaker 1: the first attempt to Fitbit to take aim at the
Speaker 1: smart watch industry. But at that point they were already saying,
Speaker 1: we wanna wait to see how other companies do it
Speaker 1: and see what's working and what's not working before we
Speaker 1: attempt to do it ourselves, because right now everyone's arguing
Speaker 1: over what a smart watch should even be, So why
Speaker 1: would we make something if we're not even sure that
Speaker 1: that particular form factor is going to ever work out.
Speaker 1: So they did launch the Blaze last year. I know
Speaker 1: that they were very proud of it, but kind of
Speaker 1: surprised that the market didn't immediately respond in a very
Speaker 1: positive way. The reviews were pretty good, but the market
Speaker 1: itself didn't respond in a very enthusiastic way, and that
Speaker 1: frustrated people over at Fitbit. And I think largely that's
Speaker 1: again because even as could sumers, we aren't really sure
Speaker 1: what a smart watch should be, Like, what is the
Speaker 1: thing about a smart watch that's going to make it
Speaker 1: so useful that you absolutely have to have it unless
Speaker 1: you're an iPhone Apple fan? In which case you probably
Speaker 1: buy an Apple smart watch because it had Apple on it.
Speaker 1: Burn back. In two thousand, Fitbit launched its initial public offering.
Speaker 1: It's I p O. In other words, this is the
Speaker 1: process where a privately held company switches over to a
Speaker 1: publicly traded company. It's where you issue stock and people
Speaker 1: can go and buy stock in your company. Before the
Speaker 1: stocks went on the market, before they were going to
Speaker 1: be traded, they were initially valued at twenty dollars a share.
Speaker 1: That was before trading began, but once trading began, the
Speaker 1: value actually shot up very quickly. The actual opening price
Speaker 1: was thirty dollars forty sense. The company ended up getting
Speaker 1: evaluation of four point one billion dollars. You essentially multiply
Speaker 1: the number of shares by the share price. That gives
Speaker 1: you a rough idea of the valuation four point one
Speaker 1: billion dollars. James Park received the honor of being named
Speaker 1: one of Fortune magazines forty under forty in two thousand fifteen.
Speaker 1: He was thirty nine at the time, a year younger
Speaker 1: than me. I can't lie to you, this one hurts
Speaker 1: a bit. I'm sure that in two thousand fourteen I
Speaker 1: was like, seriously considered for inclusion in the forty under forty,
Speaker 1: but I probably missed it by that much. But seriously, though,
Speaker 1: it was another indicator that park In Freedman had been
Speaker 1: on the very tip of the spear that was activity trackers,
Speaker 1: that they had led that charge well. And this was
Speaker 1: also around the time that activity trackers began to dominate
Speaker 1: entire sections of the room floor at ce s every
Speaker 1: year there's an entire area that's just activity trackers, and
Speaker 1: it's enormous. Traditional companies and startups alike, we're getting into
Speaker 1: the game, and the space became really highly competitive. Fit
Speaker 1: that was benefiting from the fact that they had been
Speaker 1: in the market since it first started. But it's also
Speaker 1: important to mention Fitbit. It's not like they were the
Speaker 1: first activity tracker of all time, but they were early
Speaker 1: enough and popular enough to become kind of the defining
Speaker 1: name in the space for a lot of people. Now
Speaker 1: there's another challenge that all activity companies have to face.
Speaker 1: Not only is there a lot of competition out there,
Speaker 1: but there's also the problem of convincing customers to buy
Speaker 1: an activity tracker if they already own an activity tracker.
Speaker 1: So it's not just competition, but also market saturation. Activity
Speaker 1: trackers are designed to last a pretty good long while.
Speaker 1: If they died out super fast, people would be very
Speaker 1: irritated with them. So think about, you know, that whole
Speaker 1: planned obsolescence idea, That strategy of let's make something that
Speaker 1: within a couple of years you absolutely have to replace
Speaker 1: because it will be obsolete, doesn't really work so well
Speaker 1: with activity trackers. A lot of people feel that as
Speaker 1: long as it's still working, that's good enough for them.
Speaker 1: So that means it gets harder and harder to sell
Speaker 1: more of your products. There are more people selling, so
Speaker 1: you've got a lot of competition, and a lot of
Speaker 1: your your target customers already owned one, so it's hard
Speaker 1: to commence them to go and buy a new one.
Speaker 1: That means that and make it even more complicated. Not
Speaker 1: just activity trackers, smart watches too. Right, if you've gone
Speaker 1: in and you've bought a smart watch that happens to
Speaker 1: have some activity tracking capabilities as well as being a
Speaker 1: smart watch, that's even less reason for you to go
Speaker 1: out and buy another activity tracker. So not only was
Speaker 1: Fitbit competing against other activity trackers, but also all the
Speaker 1: smart watch companies that were building in those let's even
Speaker 1: go even more complicated. Smartphones now can act as activity trackers.
Speaker 1: A lot of smartphones have a built in app that
Speaker 1: will count steps and maybe even do things like map
Speaker 1: how many steps you've made against a physical map, or
Speaker 1: tell you how much you've changed in altitude across the
Speaker 1: day based upon where you went. All of these different
Speaker 1: things are direct competitors or indirect competitors with activity trackers,
Speaker 1: which meant that Fitbit was facing more and more pressures
Speaker 1: from outside of its own company and had to figure
Speaker 1: out ways to remain relevant and compelling to customers. Part
Speaker 1: of that was again aiming at people who didn't want
Speaker 1: to spend four hundred dollars five hundred dollars for a
Speaker 1: smart watch. Maybe they'd spend a hundred dollars or a
Speaker 1: hundred thirty dollars for an activity tracker, especially one that
Speaker 1: had enough features in it to set it apart from
Speaker 1: just a predominter. But it does mean that you're constantly
Speaker 1: having to reinvent yourself and find ways of making products
Speaker 1: that are interesting and use full and intuitive, and not
Speaker 1: everything has gone smoothly. In two thousand and fourteen, the
Speaker 1: company had to issue a recall of the fitbit Force,
Speaker 1: which was one of the activity trackers that that you
Speaker 1: would wear using a wristband. In fact, most of fitbits
Speaker 1: trackers use a wristband, but not all of them. This
Speaker 1: was one of them. There were quite a few people
Speaker 1: who reported that they were having problems like skin issues
Speaker 1: after wearing the wrist band, that it was causing them
Speaker 1: to break out in a rash or sometimes worse, into blisters.
Speaker 1: In fact, it got so bad that, according to some reports,
Speaker 1: more than nine thousand people said they were having issues,
Speaker 1: with more than two fifty of them saying that it
Speaker 1: was blistering. And so eventually the company issued a recall
Speaker 1: and discontinued the product and refunded people their money for
Speaker 1: buying it because of these these problems. Now, the likely
Speaker 1: reason behind all this was that the wrist band had
Speaker 1: some components and that they were made out of nickel,
Speaker 1: and a lot of people have an allergy of skin
Speaker 1: allergy to nickel. Uh they can contract dermatitis if their
Speaker 1: skin is in contact with nickel for too long. I'm
Speaker 1: one of those people, and I didn't find out through
Speaker 1: an activity tracker. Actually found out because I had a
Speaker 1: silver plated ring and the the thing that the silver
Speaker 1: was plating was a nickel core, right, it was a
Speaker 1: ring with a nickel core but silver plating, And eventually
Speaker 1: the silver on the inside the ring wore off enough
Speaker 1: where the nickel was making contact with my skin and
Speaker 1: it was a wide band ring and I started having
Speaker 1: this terrible reaction. So if I had bought one of
Speaker 1: those fitbits, I would have been one of the people
Speaker 1: who had that that same issue. That skin irritation. Uh,
Speaker 1: is not fun. And that did not do the company
Speaker 1: any favors. Although the fact that they did issue a
Speaker 1: recall was the right thing to do, um, but it
Speaker 1: was it was not a great publicity move to have
Speaker 1: something that gives your customers blisters all over their wrists.
Speaker 1: And then there's also been some legal battles. There was
Speaker 1: a couple of legal battles with Jawbone, which also makes
Speaker 1: activity trackers, and jaw Bone at one point alleged that
Speaker 1: fitbit had stole stolen corporate secrets from jaw Bone, that
Speaker 1: they were stealing patented work, and so they sued Fitbit.
Speaker 1: Later on, a court actually overturned the patents in question,
Speaker 1: so there was no foundation anymore for the lawsuit because
Speaker 1: the thing that had been a patented idea, the patented invention.
Speaker 1: The patent was invalidated, so there was no longer any
Speaker 1: legal claim for that. That particular lawsuit faded away. In October,
Speaker 1: James Park appeared on the program Mad Money to say
Speaker 1: the company as a whole was going to change direction
Speaker 1: and it was going to transition from what he called
Speaker 1: a consumer electronics company to a digital healthcare company. And
Speaker 1: he went on to say that the social aspect of
Speaker 1: what the company was doing would become more important in
Speaker 1: the future. Now, this may have been in response to
Speaker 1: a really rough year on the market in twenty sixteen.
Speaker 1: Fitbit saw their stock price drop steadily throughout the entire year.
Speaker 1: Uh the high price for a Fitbit stock over the
Speaker 1: last fifty two weeks was eighteen dollars forty three cents.
Speaker 1: Remember it was initially valued at twenty dollars before it
Speaker 1: opened on trading, back when they first went public. It
Speaker 1: went up to thirty dollars forty cents the that day,
Speaker 1: and now it's down to less than much less than
Speaker 1: that actually today, which is March. I checked the stock
Speaker 1: price and when I checked it, it was five dollars
Speaker 1: and thirty seven cents, So pretty massive fall off in
Speaker 1: stock price. The appearance on Mad Money was interesting and
Speaker 1: that Park said that Fitbit could help employers save money
Speaker 1: on providing healthcare plans for employees, and he cited a
Speaker 1: third party study that suggested employees who opted into a
Speaker 1: Fitbit wellness plan would cost employers twenty less than employees
Speaker 1: who did not enter the Fitbit wellness plan. So perhaps
Speaker 1: the future of fitbit is really in designing corporate wellness
Speaker 1: initiatives and the hardware will just kind of supplement that.
Speaker 1: And they've also been on acquisition tear recently. You may
Speaker 1: say that, uh that Fitbit essentially rated Pebble, because it
Speaker 1: wasn't so it wasn't like a standard acquisition. It was
Speaker 1: acquiring very specific parts of Pebble and taking just the
Speaker 1: parts they wanted. Pebble, by the way, in case you
Speaker 1: don't know, it's a company that was known for making
Speaker 1: relatively simple but interesting smart watches and it got started
Speaker 1: originally as a crowdfunding campaign. And the smart watches use
Speaker 1: an e paper display so that they're very low power. Uh,
Speaker 1: and they were able to give you notifications from your
Speaker 1: phone that kind of stuff. Fitbit bought out Pebbles software
Speaker 1: assets for less than forty million dollars according to Bloomberg
Speaker 1: Technology Now sadly, Pebble as a company actually had more
Speaker 1: than forty million dollars in debts, so they didn't even
Speaker 1: get as much as they needed in order to pay
Speaker 1: off their debts in this case, and Pebble had found
Speaker 1: that it was very difficult to thrive in a crowded marketplace,
Speaker 1: and it didn't help that you still have a significant
Speaker 1: population of people who aren't even convinced that smart watches
Speaker 1: are an interesting thing to buy in the first place. So,
Speaker 1: according to Bloomberg, Fitbit sent job offers to about fort
Speaker 1: of Pebble's workforce, meaning did not get an offer to
Speaker 1: work at Fitbit. And as someone who owns a Kickstarter
Speaker 1: edition Pebble watch, this whole thing made me very sad,
Speaker 1: not just because my watch would no longer be supported,
Speaker 1: but I really thought Pebble was something special, and there
Speaker 1: were a lot of folks who were eagerly anticipating Pebble's
Speaker 1: next product, and they were very dismayed to learn it
Speaker 1: will never come. But such as business. In January, Fitbit
Speaker 1: acquired a another smart watch group, a company that had
Speaker 1: started up just in March sixteen called Vector, so it
Speaker 1: wasn't even a year old when Fitbit came in and
Speaker 1: acquired it. Vector's market was to create what they called
Speaker 1: affordable luxury smart watches, so their designs kind of harkened
Speaker 1: back to classic European luxury watches, but at a lower cost,
Speaker 1: and they're smart watches, not your typical quartz crystal action watches.
Speaker 1: And like Pebble, the acquisition appears to have been a
Speaker 1: bid for the software developer talent. The founder of Vector,
Speaker 1: named Andre Petis, said as much, said that the company
Speaker 1: was acquired for this software platform and for its design team.
Speaker 1: So does that mean that Fitbit will soon produce luxury
Speaker 1: smart watches? Probably not. They may set all of these
Speaker 1: assets to work on creating those digital health care solutions
Speaker 1: that I mentioned earlier, and I suspect will continue to
Speaker 1: see Fitbit produce activity trackers and sensors, but that these
Speaker 1: will fit into a larger package of healthcare solutions, so
Speaker 1: that way Fitbit can continue to set itself apart from
Speaker 1: all the competing activity trackers companies out there. They're not
Speaker 1: just selling activity trackers, they're selling health itself. That's me
Speaker 1: saying that not Fitbit, and who knows, maybe in ten
Speaker 1: we will see some luxury smart watch activity trackers from Fitbit,
Speaker 1: and maybe they'll become the must have fashion accessory ofen.
Speaker 1: I wouldn't be shocked to see it happen, and I
Speaker 1: might even save up for one because I lack I
Speaker 1: lack looking all flash while tracking my steps. But we'll see.
Speaker 1: And that's all I've got on Fitbit right now. I
Speaker 1: could have talked a little bit more about some other elements,
Speaker 1: like there was a tie where Apple sold Fitbit products
Speaker 1: in its Apple Store, and then there was a very
Speaker 1: famous time when they said they would stop doing that.
Speaker 1: But you know, honestly, that story is not as interesting
Speaker 1: as it first sounds when you hear the connotation there.
Speaker 1: And besides, I gotta save something for future episodes now
Speaker 1: that I'm going to twice a week again. So I
Speaker 1: hope you guys enjoyed this glimpse into the company Fitbit
Speaker 1: and the explanation of how that technology works. If you
Speaker 1: have questions, comments, or suggestions for future episodes, you should
Speaker 1: let me know send me a note. You can send
Speaker 1: me an email at the address tech stuff at how
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Speaker 1: It also means you get to listen to the episode
Speaker 1: a couple of weeks before it even comes out, and
Speaker 1: you get to hear me make mistakes and stuff which
Speaker 1: hopefully you don't hear in the published podcast because Dylan
Speaker 1: fixes those. All right, that's it done. I'll talk to
Speaker 1: you again really soon for more on this and thousands
Speaker 1: of other topics. Is it how stuff works dot com