When Eric Migicovsky took the stage at the Consumer Electronics Show this morning, he looked nervous in comparison with the slick executives who had preceded him from giants such as Samsung and Intel.
“It’s the first time that I’ve ever attended a press conference,” he confessed, as he launched the Pebble smart watch, a device that can display notifications from, and be used to control, a smartphone. The device has an e-paper screen and displays notifications such as text messages and incoming calls, and can also control some phone functions, such as music playback.
Migicovsky’s company is more than just another small player at the gadget fest. It could be a bellwether for crowdfunding, where entrepreneurs fund their companies via many small donations from individuals instead of turning to professional investors. Although many Kickstarter projects have attracted substantial funding, few have resulted in real commercial products.
The Pebble is the most successful project in the history of Kickstarter and crowdfunding. Last May it reached a final total of just over $10 million from 68,929 backers—exceeding the team’s original goal of $100,000 by a hundred times. Those backers paid sums ranging from $1 to $10,000, lured by the promise of seeing the stylish smart watch become a reality.
Migicovsky showed the results in Las Vegas today, demonstrating to journalists how he could choose from a range of different watch faces, control the music playing on his phone, and read incoming text messages from a Pebble watch. The watch is being mass-produced in Asia, at a rate of 15,000 per week, said Migicovsky, and the product will start shipping on January 23 to backers who contributed $99 or more to Pebble’s Kickstarter campaign. Thousands of other people have preordered the device for $150, and those orders will be fulfilled after backers have received theirs.
The Pebble watch has a black and white e-paper screen measuring 1.6 inches along the diagonal, and is capable of showing smooth animation. It connects to Android and Apple smartphones via Bluetooth and a companion app. Any Android app can push notifications to a Pebble watch, while a limitation of Apple’s iOS software means that only some core notifications, including text messages and e-mails, can be passed along. Migicovsky said that his favorite use case for his product was changing the tracks playing from his phone while walking around the house, and even from inside the shower.
Migicovsky reflected on how the success of his Kickstarter campaign had changed things for his company, which now has eight full-time staff. The project originally pledged to deliver a watch in fall 2012, but changed its plans after raising so much money on Kickstarter. “The delays came from us shifting from a hacked-together, rudimentary device to a full-blown consumer electronics project,” said Migicovsky. “We feel that the three-and-a-half-month delay will be worth it. It’s been an interesting journey.”
Migicovsky hacked together his first smart watch in his dorm room at the University of Waterloo, in Canada, around five years ago, and gained entry to the influential Ycombinator startup incubator in 2011. However, after struggling with the challenges of product development, the company was forced to turn to Kickstarter after raising only around $375,000 from investors, not enough to support large-scale development and manufacturing.
Migicovsky intended his $100,000 Kickstarter campaign to fund a small run of Pebble watches manufactured in San Jose, California, that could drive buzz and attract the investment needed to build a mass-market gadget company. The unexpected success of the campaign led him to change his plans, taking longer on product development and going straight into large-scale overseas manufacturing of a commercial product.
Pebble’s reaching CES should be a welcome boost for the reputation of crowdfunding and Kickstarter, which has been dogged in recent months by reports of some funders feeling ripped off by poorly planned projects that fell short of their initial optimistic promises. Kickstarter has modified its terms and designs to try to mitigate such problems.
Although Pebble’s backers will at least get the watch they paid for, the company’s long-term success in the highly competitive consumer electronics business is far from assured.