WEBVTT - The Origin of Pebble 0:00:04.120 --> 0:00:07.160 Get in touch with technology with tech Stuff from how 0:00:07.200 --> 0:00:13.720 stuff works dot com. Hey there, and welcome to tech Stuff. 0:00:13.760 --> 0:00:16.599 I'm your host, Jonathan Strickland. I'm an executive producer with 0:00:16.640 --> 0:00:20.240 how Stuff Works and I love all things tech and 0:00:20.520 --> 0:00:23.880 long time listeners of tech Stuff have heard me and 0:00:24.079 --> 0:00:27.960 probably some of my co hosts of tech Stuff's past 0:00:28.480 --> 0:00:32.440 talk about the Pebble smart watch. That's a device I 0:00:32.560 --> 0:00:36.440 ultimately chose to purchase for myself, though I did so 0:00:36.600 --> 0:00:40.760 after the famous first Kickstarter campaign. I did it as 0:00:40.800 --> 0:00:43.800 a pre order. But that being said, the cherry red 0:00:43.920 --> 0:00:46.559 edition I have does say Kickstarter Edition on the back 0:00:46.600 --> 0:00:51.320 of it, you know. So that's what's up. But the 0:00:51.479 --> 0:00:55.600 company Pebble no longer exists. In fact, it hasn't existed 0:00:55.600 --> 0:00:59.760 since the end of the first watches shipped in twenty 0:00:59.800 --> 0:01:03.600 three teen, and then three years later the company had disappeared, 0:01:03.960 --> 0:01:07.679 most of it getting gobbled up by Fitbit. So today 0:01:07.800 --> 0:01:10.680 I want to talk about the story behind Pebble and 0:01:10.720 --> 0:01:13.640 the technology that made the watches work, as well as 0:01:13.720 --> 0:01:16.080 what went wrong, and that'll be our next episode is 0:01:16.160 --> 0:01:19.800 sort of the death of Pebble. What caused the company 0:01:19.840 --> 0:01:25.039 to collapse because in the beginning at least once the 0:01:25.120 --> 0:01:29.880 actual Pebble smart watch entered into the scene, it looked 0:01:29.880 --> 0:01:33.520 like everything was gonna be rosy for the company. But 0:01:33.600 --> 0:01:35.760 I get ahead of myself. Let's start at the very beginning, 0:01:36.200 --> 0:01:38.600 and that is a story that begins with its founder, 0:01:39.240 --> 0:01:43.640 which was a guy named Eric Midjyakovsky, and Midchakovsky grew 0:01:43.720 --> 0:01:49.360 up in Canada. He attended the University of Waterloo. I'm sorry, 0:01:49.520 --> 0:01:53.120 I'm not allowed to sing, Abba Tari tells me, it's 0:01:53.160 --> 0:01:57.760 against our protocol. But he studied engineering at the University 0:01:57.760 --> 0:02:02.240 of Waterloo, including stuff like robe botics and system engineering, 0:02:02.280 --> 0:02:06.800 so really, you know, light subject matter. He spent a 0:02:07.400 --> 0:02:11.360 one semester in the Netherlands on a special industrial design 0:02:11.480 --> 0:02:14.560 engineering program in two thousand eight as part of the studies, 0:02:15.080 --> 0:02:18.400 and it was while he was there that apparently he 0:02:18.440 --> 0:02:22.200 started to get the idea for a wearable computer. And 0:02:22.240 --> 0:02:25.679 when you think about the history of computers, seems to 0:02:25.880 --> 0:02:30.520 point us toward a wearable device in our future if 0:02:30.560 --> 0:02:33.720 you think about it, because let's let's just take a 0:02:33.720 --> 0:02:37.280 moment here. The very first computers were enormous, right, these 0:02:37.320 --> 0:02:42.040 gigantic machines that some of them were electro mechanical computers 0:02:42.040 --> 0:02:44.200 in the early early days. They would take up an 0:02:44.320 --> 0:02:47.440 entire room or sometimes an entire floor of a building, 0:02:47.800 --> 0:02:51.560 and they were limited in purpose. They couldn't do just anything. 0:02:51.600 --> 0:02:55.040 They had a pretty strict set of limitations of what 0:02:55.080 --> 0:02:57.960 they could and could not do. His early computers could 0:02:58.000 --> 0:03:00.760 be first stuff like you know, computing ballists six, information 0:03:00.840 --> 0:03:05.919 for the war. Over time, you started to see mainframe computers, 0:03:06.160 --> 0:03:08.680 where you would have a centralized mainframe computer and a 0:03:08.680 --> 0:03:11.800 bunch of dumb terminals attached to it, which would allow 0:03:11.880 --> 0:03:15.440 multiple people to access the computing power of a mainframe, 0:03:15.880 --> 0:03:18.840 and you saw more general purpose computing in this era. 0:03:19.200 --> 0:03:22.680 Programming was not easy during the main frame era. Computing 0:03:22.680 --> 0:03:24.880 in general was not easy during the main frame era, 0:03:25.000 --> 0:03:28.520 but it did open up access to more people. At 0:03:28.560 --> 0:03:33.160 that point, that era gave way to the mini computer, which, 0:03:33.200 --> 0:03:35.760 despite what the name suggests, was still a pretty big 0:03:35.800 --> 0:03:39.680 honkin style of computer. It was, however, more versatile, and 0:03:39.720 --> 0:03:42.800 it took up less space, like instead of the size 0:03:42.800 --> 0:03:45.080 of a room, it was sort of the size of 0:03:45.120 --> 0:03:50.080 a filing cabinet or a desk, but still pretty darn big. 0:03:50.440 --> 0:03:54.240 The development of the transistor allowed for maturization, so we 0:03:54.280 --> 0:03:58.560 started to see smaller and smaller components for these, which 0:03:58.560 --> 0:04:01.360 allowed us to shrink the size of a computer down, 0:04:01.400 --> 0:04:05.520 and Gordon Moore observed that the technological and economic push 0:04:05.640 --> 0:04:09.080 for more transistors per square inch of silicon would result 0:04:09.120 --> 0:04:12.720 in progressively smaller and more powerful machines. And then by 0:04:12.760 --> 0:04:15.680 the nineteen seventies we saw the micro computer, which we 0:04:15.720 --> 0:04:18.840 would now think of as your your standard desktop. And 0:04:18.920 --> 0:04:21.760 then the laptop came along in the nineteen eighties, and 0:04:21.800 --> 0:04:24.800 the smartphone would really pop up in the two thousands. 0:04:25.400 --> 0:04:30.440 So the general trend was to move from large special 0:04:30.480 --> 0:04:35.159 purpose devices too smaller general purpose devices capable of doing 0:04:35.200 --> 0:04:38.560 lots of little things. So if you keep following that line, 0:04:38.680 --> 0:04:42.000 you could easily come to the conclusion that Midchaikovski had reached, 0:04:42.000 --> 0:04:47.120 which was that wearable computers are the future. He started 0:04:47.120 --> 0:04:49.680 to think about this while he was in the Netherlands, 0:04:49.760 --> 0:04:52.839 and according to the story uh he was riding a 0:04:52.839 --> 0:04:56.040 bicycle pretty much everywhere, and like a lot of folks, 0:04:56.040 --> 0:04:59.640 he had become very much attached to his phone. He 0:05:00.120 --> 0:05:03.719 stayed in contact with friends and family back over in Canada. 0:05:03.839 --> 0:05:06.120 With his phone. He would get messages all the time, 0:05:06.560 --> 0:05:08.680 but he said, You know, checking your phone means that 0:05:08.720 --> 0:05:10.400 you have to pull it out of a pocket repeatedly, 0:05:10.400 --> 0:05:12.599 and if you're riding a bicycle everywhere, that's not really 0:05:12.640 --> 0:05:14.880 convenient all the time. You know, you come to a 0:05:14.960 --> 0:05:17.200 stop and then you have to shuffle around to try 0:05:17.240 --> 0:05:19.560 and reach into your pocket, pull out your phone, look 0:05:19.600 --> 0:05:22.640 to see if there's anything notable there, and then either 0:05:22.720 --> 0:05:25.080 act on it or put your phone away. It's a hassle, 0:05:25.440 --> 0:05:27.920 So wouldn't it be nice, he thought, if you could 0:05:27.920 --> 0:05:30.880 just wear a device on your wrist or or something 0:05:30.960 --> 0:05:33.880 like that, and just take a quick glance to see 0:05:33.880 --> 0:05:36.480 if you have any notifications that you should respond to. 0:05:37.120 --> 0:05:39.920 Maybe you get an alert if there's an incoming message 0:05:40.040 --> 0:05:43.080 or an incoming phone call, and maybe you even see 0:05:43.160 --> 0:05:45.320 who it is that's reaching out to you, or perhaps 0:05:45.320 --> 0:05:48.760 you can even read the full incoming message and then 0:05:48.800 --> 0:05:51.360 decide what to do from that point. And maybe it's 0:05:51.360 --> 0:05:54.040 worth it to stop someplace and pull out your phone 0:05:54.080 --> 0:05:57.159 and return a message or return a call. This thought 0:05:57.279 --> 0:06:00.840 inspired Eric to get to work on a design for 0:06:00.880 --> 0:06:03.400 such a device, and he started off with a very 0:06:03.680 --> 0:06:07.560 broad proof of concept, and this was not even remotely 0:06:07.640 --> 0:06:10.760 going to resemble something that would become a consumer product. 0:06:10.760 --> 0:06:14.279 He just wanted to figure out, can I make this work? 0:06:14.360 --> 0:06:16.880 Can I make something that can do what I'm thinking 0:06:17.200 --> 0:06:19.800 it should be able to do? And I'll worry about 0:06:19.880 --> 0:06:24.919 refining that design later. So is what I want to 0:06:25.000 --> 0:06:28.880 do possible? He gets to work, He goes back to 0:06:29.000 --> 0:06:32.000 his room in the Netherlands, and he starts to build 0:06:32.000 --> 0:06:35.880 a device. And he uses essentially an electronic breadboard, some 0:06:35.960 --> 0:06:40.400 guts from a Nokia thirty three cell phone, and an 0:06:40.480 --> 0:06:44.599 Arduino micro controller as his um as his collection of 0:06:44.640 --> 0:06:47.200 materials to build this proof of concept. And just in 0:06:47.240 --> 0:06:50.320 case you're wondering what all that is, a breadboard is 0:06:50.400 --> 0:06:54.039 the foundation for building circuits. It's frequently used in the 0:06:54.120 --> 0:06:58.599 design and prototype stage of building a device. Typically we 0:06:58.720 --> 0:07:01.719 use the term to talk about a specific subset of 0:07:01.760 --> 0:07:07.200 bread boards. Uh. These are platforms that allow for solderless connections. 0:07:07.240 --> 0:07:10.400 Mean you don't have to solder wires together and make 0:07:10.800 --> 0:07:14.160 permanent connections. You can it's sort of plug and play. 0:07:14.200 --> 0:07:17.120 So you plug elements into this bread board that connect 0:07:17.120 --> 0:07:20.000 to each other and form a circuit, and you test 0:07:20.040 --> 0:07:22.120 it and if it works great, and if it doesn't work, 0:07:22.160 --> 0:07:25.120 you can easily swap stuff out and replace it with 0:07:25.200 --> 0:07:28.520 other stuff to build a circuit that works better, or 0:07:28.680 --> 0:07:32.040 maybe just plane works. Sometimes you build a circuit and 0:07:32.080 --> 0:07:34.240 nothing happens, and you have to go through the whole 0:07:34.240 --> 0:07:36.040 thing and say, well, where did I mess up? But 0:07:36.120 --> 0:07:39.360 this allows you to rapidly test different designs and debug 0:07:39.440 --> 0:07:43.160 those designs very quickly before you move from a sort 0:07:43.200 --> 0:07:47.119 of proof of concept into a prototype model or a 0:07:47.120 --> 0:07:50.960 a an early production model. The Nokia thirty three ten 0:07:51.040 --> 0:07:53.560 stuff is pretty easy to understand. He needed some sort 0:07:53.560 --> 0:07:55.920 of cell phone components to create a device that could 0:07:55.920 --> 0:08:00.800 receive messages and send notifications of things like incoming calls, 0:08:00.840 --> 0:08:04.640 that sort of stuff. The Arduino micro controller's kind of 0:08:04.680 --> 0:08:09.240 like the brains of this device. Micro Controllers are essentially 0:08:09.680 --> 0:08:14.960 computers that are on a single integrated circuit, and they 0:08:15.040 --> 0:08:18.880 typically have a CPU which has also access to some 0:08:19.160 --> 0:08:22.400 random access memory, so some memories also on the micro 0:08:22.440 --> 0:08:27.000 controller chip and it can accept data from inputs, it 0:08:27.040 --> 0:08:30.520 can perform operations on that data and then send the 0:08:30.600 --> 0:08:36.520 resulting now transformed information through outputs. And the reason being 0:08:36.559 --> 0:08:38.280 very vague about this is because they can be put 0:08:38.320 --> 0:08:40.760 to all sorts of different uses. They tend to be 0:08:40.880 --> 0:08:45.559 great special purpose computers. They're different from desktops and laptops. 0:08:45.600 --> 0:08:47.840 Those are general purpose computers. You can do lots of 0:08:47.840 --> 0:08:51.000 different stuff on those, like you can run productivity software, 0:08:51.040 --> 0:08:53.920 you can play video games, you can check social media networks, 0:08:53.920 --> 0:08:57.000 that kind of stuff. Um, micro controllers are meant to 0:08:57.200 --> 0:09:01.080 be much more focused. And the flip side of that 0:09:01.280 --> 0:09:03.520 is while they are more focused and can do fewer things, 0:09:03.520 --> 0:09:05.160 they tend to be able to do those few things 0:09:05.240 --> 0:09:10.480 really really well. Now, the Arduino is a programmable micro controller, 0:09:10.600 --> 0:09:12.920 so you can actually reprogram in our dwin know to 0:09:13.000 --> 0:09:18.400 be really good at different tasks, not simultaneously necessarily, but 0:09:18.559 --> 0:09:21.000 you could use in our dw know in one set 0:09:21.080 --> 0:09:23.320 up and then say, well that was fun, but now 0:09:23.360 --> 0:09:26.040 I'm gonna break it all down. I'm gonna retrieve the Arduino. 0:09:26.320 --> 0:09:30.280 I'm gonna completely rewrite it the programming too, that our dwino, 0:09:30.360 --> 0:09:32.319 and now I'm going to put it into a totally 0:09:32.400 --> 0:09:36.280 different implementation. And you can do that. Some micro controllers 0:09:36.600 --> 0:09:42.600 are more geared toward a very specific purpose and you 0:09:42.640 --> 0:09:46.680 can't You can't easily reprogram them to do something different. 0:09:47.080 --> 0:09:49.600 They're just meant to do whatever it was they were 0:09:49.640 --> 0:09:53.880 designed to do whatever system they were designed to work within. Now, 0:09:53.920 --> 0:09:56.040 this was back in two thousand and eight when he 0:09:56.040 --> 0:09:58.760 starts working on this, when he's in the Netherlands, and 0:09:58.840 --> 0:10:02.360 keep in mind, two thousand eight was a very different 0:10:02.800 --> 0:10:07.320 technological landscape from what we see today. In in two 0:10:07.320 --> 0:10:10.800 thousand eight, when Midchakovsky began to work out this idea, 0:10:11.160 --> 0:10:14.680 the iPhone wasn't yet a year old. It had debuted 0:10:14.679 --> 0:10:17.160 in two thousand seven, and the app store for the 0:10:17.160 --> 0:10:21.360 iPhone would not launch until June two thousand eight, and 0:10:21.559 --> 0:10:25.280 a commercial release for Google Android wouldn't appear until the 0:10:25.320 --> 0:10:27.640 fall of two thousand eight. There was a version of 0:10:27.720 --> 0:10:30.520 Android that had been out in Badeau since two thousand seven, 0:10:31.240 --> 0:10:34.079 but the general public really didn't have access to Google 0:10:34.120 --> 0:10:39.040 Android until the fall of two thousand eight. So Korski 0:10:39.679 --> 0:10:42.800 wasn't really looking at iOS or Android as the foundation 0:10:42.840 --> 0:10:45.280 for his project when he first got started. He was 0:10:45.400 --> 0:10:50.520 instead looking at BlackBerry from Research in Motion. He was 0:10:50.559 --> 0:10:53.400 looking at that because it was a smartphone that was 0:10:53.880 --> 0:10:57.240 really the most popular in the United States at that time. 0:10:57.840 --> 0:11:00.760 In North America at that time, it was most frequently 0:11:00.800 --> 0:11:04.319 associated with corporate executives. Everyone thought of BlackBerrys as being 0:11:04.400 --> 0:11:08.559 sort of the white collar smartphone, but this was an 0:11:08.640 --> 0:11:11.840 arrow in the smartphone and not really started to filter 0:11:12.040 --> 0:11:17.000 into the general population beyond early adopters with Apple's iPhone, 0:11:17.000 --> 0:11:19.079 and even then, like I said, there was no app store. 0:11:19.600 --> 0:11:23.280 So Midschakovski would move forward with developing a smart watch 0:11:23.640 --> 0:11:27.640 that could connect to a BlackBerry phone via Bluetooth, and 0:11:27.679 --> 0:11:30.520 he formed a company for this purpose. That company was 0:11:30.600 --> 0:11:34.320 called Alert to a L L E R T A, which, 0:11:34.320 --> 0:11:37.240 as I understand it now, is also the name for 0:11:37.320 --> 0:11:41.559 an allergy medication. But his focus was to build a 0:11:41.600 --> 0:11:45.960 working consumer smart watch product, and the product's name would 0:11:46.040 --> 0:11:52.920 ultimately be known as Impulse. I in Pulse and Mischakovsky 0:11:52.960 --> 0:11:57.040 would participate in a program called Velocity or Vella City 0:11:57.080 --> 0:11:59.560 if you wanted to say it the way that some 0:11:59.600 --> 0:12:02.600 people spell it, because it's V E L O big 0:12:02.679 --> 0:12:05.520 C I T y um. But I've also seen it 0:12:05.600 --> 0:12:08.880 spelled just like Velocity. Anyway, he was attending this. This 0:12:08.960 --> 0:12:12.680 is a program that actually is overseen by the University 0:12:12.679 --> 0:12:16.360 of Waterloo, and Velocity is a startup incubator, so that 0:12:16.360 --> 0:12:18.560 means it's a space where students can actually work on 0:12:18.640 --> 0:12:21.960 ideas for startup businesses. They can get a bit of 0:12:22.200 --> 0:12:26.160 a boost invisibility to potential investors. They can learn lessons 0:12:26.160 --> 0:12:30.160 about how to form good business plans, what sort of 0:12:30.160 --> 0:12:32.800 strategies you need to follow follow, what sort of things 0:12:32.800 --> 0:12:34.880 do you need to look out for as potential pitfalls, 0:12:35.280 --> 0:12:38.760 as well as perhaps get a chance to meet some people, 0:12:38.920 --> 0:12:41.200 influential people who might be able to pour some money 0:12:41.240 --> 0:12:43.240 into your idea if they think it's a really good one. 0:12:44.120 --> 0:12:47.040 Midchakovsky learned how to create a pitch for his ideas 0:12:47.080 --> 0:12:49.680 to potential investors at this program, and he would later 0:12:49.720 --> 0:12:55.560 come back and give guest lectures for students who were 0:12:55.559 --> 0:12:59.839 in the Velocity program at the University of Waterloo. Minschakovsky 0:12:59.920 --> 0:13:02.920 be and to lay foundations for some of the features 0:13:02.920 --> 0:13:05.679 he would later incorporate into Pebble. He built a smart 0:13:05.679 --> 0:13:08.679 watch that could display not just the time, but notifications 0:13:08.720 --> 0:13:12.760 from a BlackBerry phone, including BlackBerry messages UH and complete 0:13:12.800 --> 0:13:15.280 messages of that, not just a notification that you got one, 0:13:15.320 --> 0:13:17.160 but you could actually read the message on the phone 0:13:17.200 --> 0:13:20.840 on the watch rather And by two thousand nine, Alerta 0:13:20.960 --> 0:13:24.360 was taking pre orders for the Impulse smart watch. The 0:13:24.400 --> 0:13:27.840 Invulse was compatible with BlackBerry devices and was pitched as 0:13:27.880 --> 0:13:31.439 a companion device, not a smartphone on your wrist, nothing 0:13:31.480 --> 0:13:35.760 like that, non official research in motion gadget, uh And 0:13:35.960 --> 0:13:40.440 it boasted a one point three inch oh Lad color display, 0:13:40.440 --> 0:13:44.160 had Bluetooth connectivity at a micro USB port for charging, 0:13:44.440 --> 0:13:47.880 had a little vibrating motor for alerts and notifications, and 0:13:47.920 --> 0:13:51.280 the battery life, according to Alerta, was approximately four days 0:13:51.400 --> 0:13:55.240 of normal use. It was priced at about one fifty 0:13:55.320 --> 0:13:58.320 dollars at pre order, which is not bad for a 0:13:58.360 --> 0:14:01.480 smart watch. So this was kind of setting the ground 0:14:01.960 --> 0:14:09.239 for the next phase in Eric's quest to create wearable computers, 0:14:09.840 --> 0:14:11.920 which of course would be the Pebble. I'll talk about 0:14:11.960 --> 0:14:13.760 that more in just a second, but first let's take 0:14:13.800 --> 0:14:24.320 a quick break to thank our sponsor. By the beginning 0:14:24.320 --> 0:14:27.600 of two thousand eleven, Alerta had created app support for 0:14:27.640 --> 0:14:31.160 the Impulse which would allow developers to build their own 0:14:31.200 --> 0:14:34.680 apps for the hardware, and developers did that. You could 0:14:34.720 --> 0:14:38.000 do exciting stuff with your Impulse smart watch, like control 0:14:38.040 --> 0:14:41.160 of PowerPoint presentation, all from the convenience of your watch, 0:14:41.920 --> 0:14:44.360 but sales were still not going crazy. It was a 0:14:44.400 --> 0:14:47.160 neat proof of concept. It was a neat project for 0:14:47.200 --> 0:14:51.280 developers to work on, but they weren't really reaching very 0:14:51.320 --> 0:14:55.600 many actual customers. Later, in two thousand eleven, Alerta got 0:14:55.640 --> 0:15:00.560 to participate in a Y Combinator session. And why Combinator 0:15:00.640 --> 0:15:04.640 calls itself an accelerator, it's similar to Velocity in many ways. 0:15:04.680 --> 0:15:08.760 So it's a similar organization where startups are invited to participate. 0:15:09.120 --> 0:15:11.960 They can work with experts for three months to develop 0:15:12.000 --> 0:15:15.160 business plans, they can meet with potential investors, they can 0:15:15.240 --> 0:15:18.360 pitch their ideas, and so forth. In two thousand eleven, 0:15:18.480 --> 0:15:21.600 Midyakovsky's Alerta was part of this group, and at one 0:15:21.640 --> 0:15:26.920 point investors Uri Milner and Ron Conway promised every startup 0:15:26.920 --> 0:15:31.120 participating in that round of the Y Combinator a one 0:15:31.160 --> 0:15:35.760 hundred fifty thousand dollar investment. Midyakovsky was able to secure 0:15:35.920 --> 0:15:39.600 another hundred fifty thousand on top of that, and while 0:15:39.720 --> 0:15:44.440 three hundred thousand dollars is a princely sum, it's actually 0:15:44.480 --> 0:15:47.560 not all that much when you remember that Midyakovsky's business 0:15:47.600 --> 0:15:53.200 included producing hardware, not just software, not a service. It 0:15:53.320 --> 0:15:56.960 meant that you had to build something. According to Midyakovski, 0:15:57.240 --> 0:16:00.280 it was this hardware focus that actually discouraged a lot 0:16:00.320 --> 0:16:03.760 of investors from supporting him because hardware was seen as 0:16:03.760 --> 0:16:06.920 a pretty big risk on investment, and there's no surprise there. 0:16:07.280 --> 0:16:10.680 Keep in mind hardware is really tricky to pull off. 0:16:11.040 --> 0:16:13.960 You can prototype quickly with stuff like three D printers, 0:16:14.040 --> 0:16:17.120 right like, you can print off design after design after 0:16:17.160 --> 0:16:19.120 design and figure out which one you like. But when 0:16:19.120 --> 0:16:22.760 it comes to making actual production models the stuff that 0:16:22.800 --> 0:16:27.040 you're going to sell in stores or online, you need 0:16:27.080 --> 0:16:32.040 a facility capable of producing quality stuff in large quantities. 0:16:32.480 --> 0:16:34.120 And you also have to figure out where you're going 0:16:34.160 --> 0:16:37.320 to buy the various components that go into your product, 0:16:37.440 --> 0:16:41.520 like the CPUs and the Bluetooth adapters and screens and 0:16:41.960 --> 0:16:45.160 batteries and all this kind of stuff. So in many cases, 0:16:45.560 --> 0:16:49.000 the most cost effective approach is to look to China. 0:16:49.520 --> 0:16:55.000 China's manufacturing facilities are efficient, they're modernized. Wages in China 0:16:55.080 --> 0:16:58.240 are lower than many other nations, although there are several 0:16:58.280 --> 0:17:01.720 Asian countries near China to have even lower wages. And 0:17:01.800 --> 0:17:04.000 someday I'm going to have to do a full episode 0:17:04.280 --> 0:17:09.600 about China's manufacturing industry because so many of the products 0:17:09.600 --> 0:17:13.520 that we enjoy and depend upon are either made in China, 0:17:13.720 --> 0:17:16.359 or they have components that are made in China. And 0:17:16.400 --> 0:17:19.600 this is a pretty complicated issue, not just logistically but 0:17:19.680 --> 0:17:22.760 also ethically, but that's a discussion for another time. We're 0:17:22.800 --> 0:17:25.880 not going to get into it here. So Midchakovsky's team 0:17:26.240 --> 0:17:29.000 was actually working on a much smaller scale. So while 0:17:29.040 --> 0:17:32.480 they could have looked to China to produce stuff, the 0:17:32.600 --> 0:17:34.840 numbers that they were producing, the number of units they 0:17:34.840 --> 0:17:38.520 were producing were small enough where that really didn't need 0:17:38.600 --> 0:17:41.919 to be a huge concern. So instead they opted to 0:17:42.040 --> 0:17:45.840 use a local factory and a garage as the assembly 0:17:45.880 --> 0:17:48.840 points for the Impulse Watch. They would actually physically put 0:17:48.880 --> 0:17:52.680 stuff together in a garage themselves, and at the scale 0:17:52.720 --> 0:17:55.120 they were working at, this made the most sense. They 0:17:55.119 --> 0:17:58.960 didn't need to move up another level. So once you've 0:17:58.960 --> 0:18:02.000 determined where stuff is going to come from, you have 0:18:02.040 --> 0:18:04.520 to make agreements with all the different parties and set 0:18:04.600 --> 0:18:07.359 up as a supply chains that you know you you 0:18:07.400 --> 0:18:10.880 can get the different components on a regular basis when 0:18:10.880 --> 0:18:13.719 you need them. Components need to go from one end 0:18:13.720 --> 0:18:15.199 to ty to the next in order to put it 0:18:15.240 --> 0:18:17.879 together into a final product. All of that eventually has 0:18:17.920 --> 0:18:21.919 to be shipped to some sort of distribution center. Usually 0:18:22.520 --> 0:18:27.119 on a very small operation like the original Alert to Impulse, 0:18:27.400 --> 0:18:29.120 you could probably do this all out of a home, 0:18:29.160 --> 0:18:32.560 and in fact they did. But if you grow, then 0:18:32.640 --> 0:18:35.600 you need to kind of delegate that to like a 0:18:35.640 --> 0:18:39.560 distribution center, because it will be much more efficient. But 0:18:39.640 --> 0:18:42.919 lots of stuff can go wrong in this model. Right 0:18:42.960 --> 0:18:45.280 when you're working with hardware, there's so many different points 0:18:45.280 --> 0:18:49.040 of failure. If some company along the supply chain has 0:18:49.080 --> 0:18:53.640 a shortage that holds everything up. If the manufacturing facility 0:18:53.720 --> 0:18:56.840 breaks down, that holds everything up. If they're shipping delays 0:18:56.920 --> 0:19:01.159 that holds everything up. There's so many different stential fail 0:19:01.240 --> 0:19:05.000 points that a lot of investors shy away from putting 0:19:05.000 --> 0:19:08.680 money into hardware based businesses because the risk is seen 0:19:08.720 --> 0:19:11.080 as being too great, Like, yeah, you might make your 0:19:11.080 --> 0:19:13.479 money back, but there are a lot of different ways 0:19:13.560 --> 0:19:17.360 you could lose your money. And so that's what they 0:19:17.359 --> 0:19:20.600 were discovering with this y combinator. They were able to get, 0:19:20.680 --> 0:19:23.119 you know, three dollars in funding, and that's nothing to 0:19:23.119 --> 0:19:26.560 sneeze at, but it was a small amount when you 0:19:26.560 --> 0:19:31.320 think how much goes into just producing a product. So 0:19:31.359 --> 0:19:34.359 the Impulse did not exactly set the world by Storm, 0:19:34.680 --> 0:19:38.640 which didn't help things, right, Uh, it would add support 0:19:38.920 --> 0:19:41.840 for the Android operating system by the time it came out, 0:19:41.920 --> 0:19:44.680 so it wasn't just a BlackBerry device by the time 0:19:44.720 --> 0:19:47.359 it debuted, but it wasn't getting a lot of buzz 0:19:47.480 --> 0:19:51.520 or notice outside of like BlackBerry forums. You can do 0:19:51.560 --> 0:19:55.000 a search today on alerta Impulse, and a lot of 0:19:55.040 --> 0:19:59.680 those hits you're going to see are from forums like Crackberry, 0:20:00.040 --> 0:20:04.960 which are that's a BlackBerry like, not an advocacy group, 0:20:04.960 --> 0:20:08.720 but like a fan group or enthusiast group if you 0:20:08.800 --> 0:20:11.520 prefer its enthusiasts of Blackberries. So there are a lot 0:20:11.560 --> 0:20:14.520 of articles and forum posts over there, but in your 0:20:14.560 --> 0:20:18.600 general text space, there wasn't as much talk going on. 0:20:19.080 --> 0:20:23.119 The company only sold around one units, and that's no 0:20:23.240 --> 0:20:26.000 way to run a business. You're not going to be 0:20:26.080 --> 0:20:28.960 able to sustain a business that way. So Midchakovsky went 0:20:29.000 --> 0:20:31.120 back to the drawing board and he and his team 0:20:31.160 --> 0:20:33.600 decided that they should try again with a new approach 0:20:33.760 --> 0:20:36.600 on smart watches. They're gonna get rid of the color screen, 0:20:36.640 --> 0:20:40.120 they're gonna go monochromatic. They go within a battery friendly 0:20:40.280 --> 0:20:44.000 e paper technology, which would greatly extend the lifespan of 0:20:44.040 --> 0:20:46.520 the watch. Between charges, you could go a week without 0:20:46.560 --> 0:20:50.280 having to charge the thing. They wanted to ensure interoperability 0:20:50.359 --> 0:20:53.880 with iOS and Android, to make sure they built out 0:20:53.880 --> 0:20:56.200 an app that would work on both of those platforms, 0:20:56.240 --> 0:20:58.680 because they were both gaining huge amounts of market share 0:20:58.720 --> 0:21:01.040 in those early days. They wanted to make sure that 0:21:01.080 --> 0:21:05.600 the platform was developer friendly, that they gave tools for 0:21:05.600 --> 0:21:10.439 people to make apps for these watches and encouraged it, 0:21:10.480 --> 0:21:13.880 and that that would help support the sales. They wanted 0:21:13.880 --> 0:21:16.679 to make it water resistant, uh, and they didn't want 0:21:16.720 --> 0:21:18.840 to go to bonkers with features. They didn't want to 0:21:18.880 --> 0:21:23.439 throw in so many features that navigation would become difficult 0:21:24.080 --> 0:21:26.840 or it would end up obscuring some of the more 0:21:26.880 --> 0:21:30.000 important things that this watch could do. And the new 0:21:30.040 --> 0:21:33.680 product needed a new name. Midchakovski's team decided to call 0:21:33.760 --> 0:21:36.720 their new project Pebble, and eventually the company would be 0:21:36.760 --> 0:21:39.560 called that too. But how are they going to get 0:21:39.560 --> 0:21:46.000 the money needed to go through the whole process of design, prototyping, refining, 0:21:46.080 --> 0:21:50.200 and manufacturing such a smart watch. And the answer turned 0:21:50.240 --> 0:21:55.280 out to be a fairly young emerging platform for raising 0:21:55.359 --> 0:21:59.760 cash that would be Kickstarter. Now the original Pebble Kickstarter 0:22:00.040 --> 0:22:02.800 campaign because there were other ones that we'll talk about 0:22:02.840 --> 0:22:07.160 in the next episode. Launched in the spring of twelve, 0:22:07.720 --> 0:22:11.000 the kick started campaign showed off the new smart watch design, 0:22:11.480 --> 0:22:15.440 complete with different watch faces, and a discussion about developers 0:22:15.520 --> 0:22:19.240 and future features for the smart watch. Early backers could 0:22:19.240 --> 0:22:23.240 contribute ars, and in return they would get a black 0:22:23.280 --> 0:22:26.719 Pebble watch, which retailed for or was going to retail 0:22:26.800 --> 0:22:30.280 for one fifty dollars. Only two hundred backers would be 0:22:30.280 --> 0:22:32.440 allowed to get a watch at that price. Once those 0:22:32.560 --> 0:22:36.679 ran out, then you could pledge for an amount of 0:22:36.680 --> 0:22:39.080 a hundred fifteen dollars and get a black watch. You're 0:22:39.119 --> 0:22:42.199 still getting a significant discount. If you wanted one an 0:22:42.280 --> 0:22:46.159 arctic white or cherry red, then it would cost a 0:22:46.280 --> 0:22:50.160 hundred dollars. They also said that they would hold a 0:22:50.320 --> 0:22:54.240 vote and backers could vote on what other color would 0:22:54.240 --> 0:22:57.080 be offered on top of Arctic white or cherry red. 0:22:57.320 --> 0:23:02.600 The campaign's goal was set at one thousand dollars. They 0:23:02.680 --> 0:23:05.760 reached it in the first two hours of the campaign 0:23:05.760 --> 0:23:10.160 going live. By the end of the campaign, the fundraiser 0:23:10.359 --> 0:23:14.040 had hit more than ten million, two hundred sixty six 0:23:14.200 --> 0:23:20.720 thousand dollars. All told, backers ordered nearly sixty nine thousand watches. 0:23:21.240 --> 0:23:24.879 Midchakovsky actually chose to conclude the campaign more than a 0:23:24.920 --> 0:23:27.400 week early to make sure he and his team would 0:23:27.440 --> 0:23:29.159 be able to meet the commitment they had made with 0:23:29.200 --> 0:23:32.200 this campaign, and it looked like Midchakovsky had found the 0:23:32.240 --> 0:23:35.800 solution to his funding problem. But as it turns out, 0:23:36.800 --> 0:23:43.800 it would ultimately just be like a a peak, but 0:23:44.160 --> 0:23:47.320 not an indication of how the company was going to 0:23:47.400 --> 0:23:50.239 perform from that point forward. I'll explain more in just 0:23:50.320 --> 0:23:52.840 a second, but first let's take another quick break to 0:23:52.920 --> 0:24:03.280