Pebble Time makes perfect sense because Apple
What is a multi-million-unit-selling company doing back on Kickstarter? Because any sale they make today is a sale Apple doesn’t.
“Why the hell”, I overheard on the bus the other day, “Is Pebble doing a Kickstarter project? It’s not like they need it!”
Of course, this being Britain, and Speaking to Strangers being about as popular to leprosy or (hed) P.E, I kept my trap shut. But it’s a fair question, if you haven’t seen the inside of the electronics industry. There’s a couple of reasons why:
Yes, the Pebble Time was always going to be a tremendously popular smartwatch. But how popular? That’s a multi-million-dollar question: You don’t want to make a ton of watches that sit in a warehouse for months, but it would be worse to make too few watches, and end up missing sales.
Consumers are fickle, and some of them might end up deciding to buy a smart watch, discover that the one they want is out of stock, and buy a smart fitness tracker or a competing brand instead.
To prevent that, you need to ensure that your customers understand your strengths compared to the strengths of competing brands. And when it comes to that, Pebble have hardly been particularly shy:
A propos competing brand… You may have heard that there’s a new kid in town:
Apple’s Watch in gold. Because obviously subtlety isn’t Apple’s strong side, either.
The apple play
That’s right, Apple announced their Watch a while ago, in a move that’s very a-typical for the Cupertino outfit, who have a tendency to keep their launches notoriously close to their chests until the product is ready.
The only possible answer is this: Apple is worried.
Apple is worried because the smartwatch market is moving fast, and while some competitors are less credible than others, there’s certainly a lot of movement going on. In announcing the Watch, they’re basically invoking the Osborne Effect, but instead of cannibalising their own smartwatch sales (they can’t; they haven’t got any), they have a huge impact on the rest of the market. Think about it: How many customers are in the market today, thinking, “Oh, I’ll just hang fire until Apple announce their thing, see if it’s any good?”
In announcing their product early, Apple have basically dropped a grenade into the smartwatch market and walked away, while they figure out how to bring their own product to market — and Pebble had to find a way to respond to that.
Which they did, with great aplomb.
The Pebble response
Pebble, in turn, have their own challenge: According to their Kickstarter campaign, they can ship in May.
Which is cool, except Apple are expected to start selling their product in March, which is going to cause some headaches in the Pebble camp… Or is it?
By running a Kickstarter campaign, Pebble gets a couple of advantages.
In the short term, it’s unlikely that people want more than one smartwatch. As such, for every Kickstarter backer Pebble get, they don’t just get the money for that one sale — they also cost Apple a sale of a smartwatch.
Now, the reverse is also true — every Apple Watch sold will probably cost Pebble a sale — but there’s a notable difference in the dynamic… Apple will survive even if nobody buys a single Watch; and if that were to happen, they could buy Pebble and have a lot of pocket change left besides.
The same is probably not true for Pebble: If Apple pips them to the post, I would be very surprised if that wouldn’t spell the end for the company: Having a warehouse full of products that nobody buys isn’t the best way to keep a business afloat.
And finally: Marketing
Does Pebble need the money from a Kickstarter campaign? Probably not — but even if Apple wasn’t breathing down their proverbial necks, being able to shout things like ‘Pebble Time is the Fastest Funded Project In Kickstarter History’ from the rooftops is hardly going to harm anything.
More interestingly, the halo effect of the Pebble media storm has done some good too. If the Amazon best-seller lists and indicators on other large e-commerce sites are anything to go by, Pebble have shifted a hell of a lot of units of their original Pebble, and the Pebble Steel in the past week.
Pebble on Kickstarter? Makes perfect sense.
Haje is a pitch coach based in Silicon Valley, working with a founders all over the world to create the right starting point for productive conversations with investors — from a compelling narrative to a perfect pitch. You can find out more at Haje.me. You can also find Haje on Twitter and LinkedIn.