Tracing the Steps of Fitbit | 6

0:06Not every beloved brand in the world can make it into a season of business wars. We tell the sprawling decades-long tales of industry and innovation, which means lots of big-money players don't make the cut. For every Pizza Hut or Domino's, there's a Little Caesars or a Papa John's that doesn't get the marquee treatment. That's why this year on Business Wars, we're going to periodically spotlight the insurgent brands, the innovators, and the early adopters that sometimes get forgotten in the Wall Street whack-a-mole of big business. And today, we're bringing you a wearable tech company that once upon a time was inescapable.

0:43Fitbit was a pioneer in the development of health monitors and smartwatches, but was lapped many times over by the now iconic Apple Watch. The hype may have fizzled, but without Fitbit, the winners of the wearable market may never have achieved the enormous success that immortalized them in our culture. And as we gear up for our season on Apple versus Samsung in the battle over smartwatches, we have to go back to the early years of the industry. These days, it seems like everybody and their dog has a smartwatch of some kind, tracking steps and workouts while also fielding calls and texts. But before Apple and Samsung took over our wrists, there was Fitbit.

1:22Soon, that small clip-on became a slide-on, a wristband, that is. Later, Fitbit morphed into what we know today, an affordable device for monitoring a slew of wellness markers. And without Fitbit's innovations in health tracking, Well, the major tech companies like Apple and Samsung would have been looking at a very different landscape or perhaps never entered into it. There's a rich history here. So to walk us through it, we called up a couple of Fitbit OGs. Wired Magazine senior editor Michael Colori and senior writer Lauren Good are co-hosts of Wired's Gadget Lab podcast. They've been covering Fitbit since the beginning and are helping us trace the steps the company took to become one of the most enduring pioneers of the wearable world.

2:10Stick around for this special episode of Business Wars.

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4:55Steps tracking has become so commonplace today. Even if you don't have a smartwatch, your smartphone's health app is probably counting for you. There was a time when that wasn't the case, of course. In the 1960s, pedometers took off in Japan as a way to get citizens moving, following the development of the bullet train and expanded highway systems. In 1964, a Japanese company started selling a pedometer whose name translated to 10 ,000 steps. And that is where the global standard for daily steps was born. Pedometers didn't really catch on in the U.S., though, and were basically something you only saw in gym class, and then probably never again.

5:37But all that changed with Fitbit. In the mid-2000s, software engineers James Park and Eric Friedman were worried about not moving enough during their day-to-day lives. So they did what any tech developer would do, launched a hardware startup to solve the problem. And Lauren Good, senior writer at Wired, says the timing could not have been better. So initially, like when Fitbit was first founded in 2007, it probably was little more than just a really, you know, fancy pedometer. but by the time that Fitbit's first actual product launched in 2009, people were getting more comfortable with the idea of running apps on their phone and using all kinds of little gadgets that would use Bluetooth to connect, you know, a gadget to an app on your phone.

6:24And so Fitbit's timing was kind of impeccable, even though the product itself wasn't, you know, anything that was like so advanced that it would blow anyone away. It just happened to be a thing that hit a certain market for people who wanted to be less sedentary at the same time that we're also starting to stare into our phones a lot more. There was also a growing call to track all of your biometrics, not just for health reasons, but to optimize your life. The notion of the quantified self was first coined by Wired writers Gary Wolf and Kevin Kelly in 2007. Here's Wolf making a pitch in a TED Talk in 2010 for why all the data collection isn't just navel-gazing, but rather helping us meet a higher purpose.

7:07We know that numbers are useful for us when we advertise, manage, govern, search. I'm going to talk about how they're useful when we reflect, learn, remember, and want to improve. The self isn't the only thing. It's not even most things. The self is just our operation center, our consciousness, our moral compass. So if we want to act more effectively in the world, we have to get to know ourselves better. And Wired senior editor Michael Colore was an early adopter of the quantified self and the original Fitbit. I didn't test it. I bought one. And it was the very first one. And it clipped onto my shirt, and I mostly used it to hit 10 ,000 steps.

7:53The big thing that Fitbit did for me was it, first of all, showed me how active I was. but it also allowed me to log my weight and log my sleep. Now, it wasn't like tracking my sleep, but in the app, you know, as the app was updated a couple of times, I remember you were able to put in things like your caloric intake and your weight for the day and the amount of sleep that you were getting. And those things, I think, really went a long way to giving us users a picture of our health on our devices and in the browser. That was really something that was only available to people who maybe had hired a nutritionist or had a bunch of sensors already.

8:32So it really sort of took that high-tech way of looking at what your body is doing and collapsed it down to something that was very easily digestible by regular people like us. The small clip-on device synced wirelessly with your computer and later your smartphone, as Lauren mentioned, so you could see your data without physically plugging anything in. As high-priced gadgets became more of a status symbol, wearable tech like the Fitbit found success appealing to the millions of eager trend hounds around the world. When Fitbits first came out, people would wear them around and they were kind of fashionable.

9:07Like other people would see you wearing one and they would point at it and they would say, ooh, is that a Fitbit? And it would be sort of a conversation starter. So because they were cool and because wearing one was sort of a signal that you were like a very technologically aware and plugged into the culture individual, then it became easier for people to understand why they would want one, right? It was like they thought it might be useful to them, but then also if it sort of gave them a bit of fashion flair, then they would be more willing to adopt it. So I think adoption really sped up quickly because of that.

9:40Eventually, Fitbit ditched the clip and took wristband form, which is when it really started taking off in the mainstream. Fitbit became kind of the Kleenex of fitness trackers where people would refer to it and everyone knew what kind of device you were talking about. But even though it had recognition, it also looked kind of like a little bracelet on your wrist. So it wasn't something that was totally ugly or totally obtrusive. It just felt like you were wearing a wristband that happened to spit out cool data about your health. There was also friendly or maybe not so friendly competition built into the device, which also made it kind of addicting.

10:17Fitbit was very good at building out little social interactions within the app where you could give a friend, you know, a virtual high five of sorts for accomplishing their goals that day. Or you could challenge a friend to, you know, meet their 10 ,000 step goal for the day. And both of you, even if you were not in the same location, could compete in that way. There were app integrations. So you could share what you did on Fitbit that day with, you know, a sort of serious fitness app like Strava and port your data over there and compete in that way. Fitbit eventually made a scale, a Wi-Fi connected scale.

10:52So if you were using Fitbit because you had set a weight goal for yourself, you could hop on the scale, get your weight. It would be wirelessly sent to the Fitbit app. And then you could compare that with the exercise you did that day and see if you were working towards your weight goals. this is all part of the gamified self and people got really addicted to it because that's what we do as humans and all of a sudden you're thinking i didn't get in 10 000 steps for the day i better go take the garbage out just to close that ring or do whatever it is i'm trying to do of course once fitbit started blowing up so did the competition with the nike plus fuel band and the Lark.

11:30The Nike Plus Fuel Band, designed for anyone who wants to be more active. It measures your daily activity, every move you make, and turns it into Nike Fuel. Your life is an overwhelming to-do list. Your Lark Life is a healthy, simplified way to help you live smarter. Lark Life is a smart band and app that helps you improve exercise, sleep, diet, and overall productivity. ShowMe, the Chinese company, had the Mi Band. These are all things that, you know, basically did the same thing. They were glorified pedometers, and they all gave the similar style of data that a Fitbit would give you, which is like about as accurate as you need, but not crazy accurate.

12:17But really, the experience is about the software. It was about what was on your phone. And I think that's a thing that Fitbit did really, really well that nobody else was really able to match for a long time. Like a lot of these competitors, the hardware was easy enough to make. You can make it attractive. You can make it waterproof. But when it synced to your phone, the experience of looking at the data on your phone wasn't always as nice as it was in Fitbit. I remember the Nike fuel band had like points and like, what are the points? If I play basketball for an hour, I get a certain number of points or if I run a 5K, I get a certain number of points.

12:54What do the points get me? What do I win? It was so confusing. And it was really, the only reason they were doing it was because they needed a way to differentiate their band from everybody else's band. And there was Fitbit's arch rival Jawbone, an audio-turned wearables company that dropped the Jawbone up wristband in 2011 and declared its own business war with Fitbit, who was leading the wearables market at the time. Jawbone was a really interesting company because in the early 2000s, they were already pretty established as a really legitimate audio company. And they made these speakers that became some of the best-selling Bluetooth speakers in the United States, the Jambox.

13:38And years later, they made a decision as a company that would ultimately be pretty pivotal and lead to the company's demise. which is they decided to pivot into this wearable market. They decided to make a wristband that was going to compete with Fitbit. And like a lot of the other wearable makers, were putting some additional sensors or features into the software that were supposed to differentiate it from Fitbit. The two companies ended up getting into some pretty contentious legal fights around intellectual property. And at the same time, Jawbone, they had some major product defects. And it turns out that they just put basically all of their eggs in the wrong basket.

14:18Jawbone continued to try to raise funding to keep the company afloat. And eventually it entered bankruptcy. So Fitbit certainly emerged as the winner there, even though Fitbit itself, in order to be sustained as a company, eventually had to be acquired. Wearable company Jawbone accused Fitbit of poaching employees for trade secrets and violating six Jawbone patents. But none of the six patents even made it to the trial. They were either withdrawn or invalidated as evidence, leading the judge to rule no party has been shown to have misappropriated any trade secret. Fitbit CEO James Park used some even stronger language, saying the suit was a desperate attempt by Jawbone to disrupt Fitbit's momentum to compensate for their own lack of success in the market.

15:04As Jawbone was biting the dust, things seemed pretty good for Fitbit. They'd been selling millions of devices per year and took the company public in May 2015, at which point the wearables craze was in full force. Fitbit had gone from selling 1.3 million devices in 2011 to 10.4 million in 2014, a massive and impressive jump for a new gadget. There was a confluence of events in the hardware market, too, that happened around this time where you had a lot of people now who were using the iPhone or smartphones like it that supported apps. People were comfortable using Wi-Fi and Bluetooth to wirelessly connect to external gadgets.

15:46And the sensors within these products were becoming widely available and relatively cheap. So if you were a hardware maker, whether you're an established company or whether you're a hardware upstart, and you're thinking, okay, how can I make a product that sort of sits at the intersection of all of these trends going on in technology. I have a certain amount of available capital. I want to make something that has a high margin and promises like a certain reward for people and also gets them into the software, which could be a source of recurring revenue. That was part of what was driving this movement around all the different wearables.

16:23With wearables at their peak, there was another company jumping in to take a bite out of Fitbit's market share, one that would change the game completely. More on that after the break.

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18:16Hey, welcome back. Lauren Good and Michael Colore are guiding us through the history of Fitbit, a company that had first mover advantage, but was about to get a real taste of enduring competition. But we're not quite finished yet. We have one more thing.

18:37It was time for the Apple Watch. Apple Watch is the most personal device we've ever created. We set out to make the best watch in the world. You know, usually Apple is the one leading the trends, but with the Apple Watch, it seemed like, I think a lot of people saw this as building on Fitbit's innovations instead of the other way around. Mike, when did you notice the Apple Watch starting to overtake Fitbit? But honestly, right away, when it came out, the way that interactions worked, the fact that it had this beautiful touchscreen and it had some very innovative ways of interacting with things on the screen, like twisting the crown, flipping and spinning your fingers on the screen.

19:25It was novel. It was very Apple. It felt a lot like an iPhone. So if you're already an iPhone person, which, you know, everybody who buys an Apple Watch is also an iPhone person, then it really felt native to the experience. It felt like an extension of your phone. And also, I think as soon as people got a taste of having access to their telephone calls and their text messages and their most used apps on their wrist, they never really wanted to go back. Then again, there was still a place for Fitbit in the wearables market. And a lot of that boiled down to price and purpose. Michael explains it like this.

20:03I think that when people are looking for a smartwatch, they're looking for something that gives them a lot of data that they can look at on their wrist, and interactions on their wrist, notifications on their wrist. When they're looking for a fitness wearable, they're looking for something else. They're looking for something that they basically just put on, forget about it, And then later, they sync it up to their phone and they get all the data about how far they walked that day, how quickly they ran the 5K. You know, it's not necessarily stuff that you need to look at all the time. So I do think there are two sort of different markets there.

20:41Obviously, a lot of people buy an Apple Watch and use it as a fitness wearable and little else. But I do think that there's a big market for people who just want something just to tell me how I did later. I don't need to, you know, call my sister and book a flight on my wrist. At the same time the Apple Watch was rising, another small but mighty wearable was setting. You could consider it the smartwatch that started it all. Hi, my name is Eric. This is my smartphone. And this is my Pebble. Pebble is a watch that you can customize. It runs a lot of cool and useful apps. You see, it connects wirelessly by Bluetooth to any iPhone or Android smartphone.

21:20And it lets you interact with apps without having to pick up your phone. In May of 2012, three years before the Apple Watch hit the market, the founders of Pebble started a Kickstarter campaign to fund their own watch, which could connect to smartphones and show incoming calls, texts, Facebook messages, tweets, and give weather information. Pebble was a really interesting story because, well, one, what they were offering right out the gate was a smartwatch, not, you know, a wristband that tracked your steps. and two because pebble was crowdfunded so its founder eric midzikovsky he's a canadian systems engineer and he and his team launched a kickstarter campaign to fund this very nerdy vision of a smartwatch that they had and the kickstarter campaign was massively successful the company raised millions of dollars so they were actually able to put out this smartwatch just based on the fact that people seemed excited about it and were willing to put some bucks into it early on.

22:17So the first Pebble had this e-ink display, kind of like the display on a Kindle, but instead it's on your wrist. Lauren says it was easy to read too. Very readable and bright light, very low power consumption. So the battery life would last a long time. And one of the promises that the company made was that it would work with both iPhone and Android and that the software development kit, the SDK that they would be footing out to app makers would be open source. So Eric Mijakovsky and his team have always been big open source advocates. And they were sort of early on basically laying down the stakes for Apple and like just saying, look, we know if and when the Apple Watch comes out, which everyone at the time was calling the iWatch, it's going to be relegated to Apple users and iPhone users.

23:07Here's a smartwatch that's going to be open to everyone. And that was part of their marketing behind it too. But Pebble was short-lived. By 2016, the company had run out of money due to low profits and high expenses. They attempted to break into the health and productivity space, but couldn't quite stick the landing. However, Michael and Lauren explain how that dedicated fan base wasn't going down without a little rebellion. The interesting thing that happened when that company went under is that because all of the code had been released into the open source, developers out on the internet around the world kept it alive.

23:45So for two or three years beyond Pebble folding, you could still see people walking around wearing the watches and keeping them updated, introducing new functionality to this basically dead system, all because of that open source software developers kit. That's right. They called it the rebel. The rebel. Yeah. It was a zombie smartwatch, I guess. Yes, it was. Podcast host Jason Howell of Tech News Weekly describes the case for the rebel. Here is a perfect example of old technology that very well could have died, but instead a community built up around it and keeps it going. And so it's perfectly usable.

24:20It proves day after day that this technology is actually still usable. Just because the people that created it decided or had to shut it down for whatever their reasons were doesn't mean that that ends up in a landfill automatically. You can actually use it. Somebody has a use for it. Fitbit ended up acquiring Pebble's tech around the same time Apple's smartwatch was going gangbusters. And here's where things really start to come full circle. One of the things that I like to say about Pebble and Fitbit and Google now is that it's one of the nerdiest turduckens that exists out there. Because the Pebble code was acquired by Fitbit, which then was acquired by Google.

25:02And so somewhere embedded in that code in a Google smartwatch or a Fitbit is actually the Pebble watch. So it's just kind of this technology nested into each other. A smartwatch inside a smartwatch inside a smartwatch. Sounds like a bit of wearables inception, huh? Although Pebble itself didn't make it, that Turducken code is alive and well. When we come back, we'll dive deeper into Google's acquisition of Fitbit in 2019 and how that's affecting the future of wearables. Stay with us.

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