The founder of Pebble, Eric Migikowskiis doing things differently with a reboot of the Pebble smartwatch brand and an AI ring. The team is small, the inventory is not built before it is sold, and there is no outside funding.
Most importantly, he says, the new company, Basic Appliances“it’s not a startup.”
“We’ve built this whole business around being a sustainable, profitable and hopefully long-term business, but not a startup,” Migicovsky told TechCrunch on the sidelines of the Consumer Electronics Show in Las Vegas last week.
“Startups are good for the world,” he explained. “You have to have money to really come up with new ideas and create something. But this is not a new idea,” Migicovsky said, referring to the smartwatch reboot. “This is an old idea. We’re just bringing it back.”
The Pebble founder said he has learned a lot from his previous efforts at building a hardware device maker, including what not to do.
Pebble, the original company that Migicovsky started, was sold to Fitbit in 2016 for about $40 million. Fitbit was later acquired by Google for $2.1 billion.
Shortly before its release, Migikowski’s team was falling apart. Christmas 2015 had put Pebble in a bind as the company had bought too much inventory.
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“Hardware is different from software. You have to predict in advance how much you’re going to sell, because you have to build the hardware,” Migicovsky explained, recalling the time things went wrong.
The Pebble team at the time estimated it would do $102 million in sales that year, but it did “only” $82 million. While that number is impressive for a smartwatch brand (especially one that isn’t Apple, Google, or Samsung), the company was left with unsold inventory that had to be sold at a discount.
Retail partners were also upset because reduced sales meant reduced profit margins. Meanwhile, Pebble didn’t have enough money to finish developing its new products. To make ends meet, the company had to make rapid layoffs and reorganize. And finally, he had to find a way out.
“I think I lost sight of why I was building Pebble,” Migicovsky admitted. “In the beginning, it was very clear. We had a Kickstarter. We put out on the web: this is what Pebble does, here’s what the features are, here’s who should be interested. And then we kind of meandered. We tried to do health tracking. We tried to do things that we didn’t see,” he said.
This time, Migicovsky aims to take a different path. The new Pebble smartwatches aren’t for everyone, he says. They’re meant to be for people like himself: a self-proclaimed “little nerd,” who just likes to hack, build, and create things. Nor is it for fitness enthusiasts or those who want a smartphone on their wrist.
“I want a companion to my phone, rather than a replacement for my phone. I want it to be more like a Swatch than a Rolex. I want it to be a little more fun, simple, playful and plastic.” Plus, he added, with Pebble’s reboot, he’s now okay with a watch that doesn’t try to do it all.
“I’m fine with a limited vision and a limited scope of what we’re trying to accomplish,” Migicovsky said.
Under the new company, Core Devices, the team announced the Pebble Time 2 smartwatch, a round-faced Pebble Round 2, and a $75 AI smart ring called the Index 01.
Notably, the company today is not going to be a large team of 180 employees like before, or a team that works with distributors. Instead, there are only five people and he sells directly to consumers on his website.
The foundation, however, remains PebbleOS, the smartwatch’s operating system, which was thankfully open sourced by Google.
Migicovsky remembers running into a Googler at a kid’s birthday party, where he got the contact information for someone who could make a call about open sourcing the smartwatch’s operating system. He sent an email to that employee, Matthieu Jeanson, asking Google to open source the operating system, and a year later, he followed through.
“I’m really grateful to Google, because what other big company in the world would do that?” Migikowski said. “I think they did it as a tribute to the Pebble community.”
Without PebbleOS, the rebooted Pebble smartwatch would have been impossible, as it took a team of 30 to 40 people working for years to build it in the first place. Recreating this from scratch was not an option.
So far, the new company structure is working. The company has sold 25,000 pre-orders for its smartwatches and about 5,000 for its newer AI ring.
Pebble pre-orders currently ship about six months out, but Migicovsky said the team will narrow that down to a few weeks. Additionally, the Pebble App Store has 15,000 watch faces and apps. In a few weeks, the team will also relaunch the SDK for developers.
Migicovsky says the group is in a “comfortable spot” where their expenses are paid and they are able to fund new projects.
That’s right — the team isn’t done yet. Migicovsky won’t detail what kind of hardware devices Core Devices might release next, but he says it will be the kind of stuff he personally wants to own.
“There are a lot of products already on the market. Nothing we make is like anything that already exists,” hints Migicovsky. “[The next products will be] fun, simple, simple stuff and it’s stuff that will make my life a little better, one block at a time. And they will work together.”
