The Pebble is arguably one of the best-known smartwatches in the world, writes George Jijiashvili (pictured) of CCS Insight . Since its release in January 2013, it has been credited with creating mainstream interest in smartwatches. It also one of the most successful examples of crowd-funding.
Crowd-funding is the process of attracting big sums in small amounts from a group of people – typically through the internet. As a practice, crowd-funding has exploded in recent years thanks to emergence of sites like Indiegogo and Kickstarter.
The phenomenon is fuelling innovation and helping entrepreneurs realise their dreams remarkably fast. For example, in 2013, a 19-year-old Canadian entrepreneur successfully funded his stand-alone smartwatch, the Neptune Pine, meeting the $100,000 funding target within the ? rst 24 hours. In short, turning to the public for money has become a viable form of funding for start-ups looking for initial sources of ?nance.There are two primary types of crowd-funding: equity-based, where backers receive a share of the business, and reward-based, where backers get merchandise or products.
Reward-based crowd-funding platforms have been particularly popular, largely driven by the aforementioned Indiegogo and Kickstarter. Any individual or company can submit ideas and concepts to these platforms in the hope of gaining public backing. Reward-based crowd-funding tends to be more prevalent than the equity-based model, thanks to the appeal of (hopefully) receiving something in exchange for a pledge.
The crowd-funding movement has shown how research and development can be democratised. The "wisdom of the crowd" can bring about products that would otherwise have never seen the light of day. It has also shown that major device manufacturers are not the only force behind innovation in the wearables market.
Seeing this interest in smartwatches, more major device manufacturers started to look into the segment. Back in 2013 Samsung brought out its Galaxy Gear and Sony released a second iteration of its SmartWatch device. Now in mid-2014, the smartwatch market is beginning to get crowded. There is already talk of third iterations of the Samsung and Sony devices. Qualcomm has released its Toq smartwatch design and many other big players have announced they are working on smartwatches or will release one soon. Chinese wholesalers have also started to stock a big variety of Shenzhen-produced smartwatches. The smartwatch market is still in its early stages, and might develop in startling ways, but the early in? uence of crowd-funding has helped shaped some important ? rst steps.
Crowd-funding has opened up opportunities for innovators to experiment and explore new areas. The most popular crowd-funded wearable devices have been ‘wristwear’, but more recent wearable concepts are trying to challenge that dominance. For example, Logbar's Ring is a piece of smart jewellery that promises to send inputs to connected devices through hand gestures.Other crowd-funding campaigns aim to expand this experimentation even further. MetaWear is a tiny circuit board that the company claims will let developers create production-ready wearables in 30 minutes or less.
Crowd-funding is not a panacea. Even when millions are raised, delayed delivery dates, in?ated expectations and disappointment are still common features of many projects. But when crowd-funding goes right, and if a product or idea is innovative and receives enthusiastic backing, its creators can not only raise their own pro?le, they can open up opportunities in new areas. This new phenomenon is changing the way products are developed. And, ultimately, it is playing an increasing role in shaping the products that industries like mobile sell.
George Jijiashvili is CCS Insight’s lead analyst on wearables. More information on the company’s wearable service can be found at: ww.ccsinsight.com/our-services/wearables.