This article first appeared in BCBusiness Magazine on Sept 3, 2012: www.bcbusinessonline.ca/start-ups/crowd-funding-kickstarts-pebble-watch-project
While crowd-funding may not be meant for raising millions for new products, two former Vancouverites raised upward of $10 million via Kickstarter.com.
Even great ideas can’t launch themselves, and some can be quashed before they see the light of day if early investment can’t be secured. But as former Vancouver buddies Eric Migicovsky and Steve Johns have proven with their record-breaking product, the Pebble “smart” watch, the worldwide public knows what it wants and will invest accordingly.
Migicovsky is the brains behind the watch that set the online world abuzz this past spring, when it raised more than $10 million during its 36-day funding period with online crowd-funding site Kickstarter.com. Born and raised in Vancouver, Migicovsky cut his tech teeth competing in UBC science fairs and physics competitions, and he brought on Johns as the industrial designer for an early invention: a smart watch called the InPulse. New to Vancouver, Johns was in the right place at the right time. The two began to work together, and Johns has since been hired full-time to work on the Pebble.
Migicovsky, meanwhile, has moved on, settling in Palo Alto, California, earlier this year after studying systems design engineering at Queen’s University in Kingston, Ontario.
“We weren’t able to raise money,” Migicovsky recalls of the circumstances that led him to crowd-funding. “We went with Kickstarter because we had a product, we had a design, we had a prototype and we knew what it would do, so we just had to put those together.”
The duo’s experience with crowd-funding is likely the exception rather than the rule, suggests BCBusiness columnist and tech-startup consultant Brent Holliday. “Crowd-funding has a place,” Holliday explains, “but it is not to raise a million dollars or 10 million dollars.” His concern is that crowd-funding might actually dilute the talent pool and the funding available to legitimate startups. He suggests the real value of crowd-funding might lie in its ability to bring projects devoted to the “social good” online, and to bring creative ideas to market, but not necessarily to start new companies.
Kickstarter.com acts as a platform for anyone with a creative idea who is in need of funding, but backers are not necessarily philanthropists. In the case of the Pebble, supporters who pledged US$115 were essentially pre-ordering a watch at two-thirds of the projected retail cost.
The watch fills an under-explored niche, but there are other such “smart” watches on the market. The devices display information from a smartphone, while also doing all of the things an ordinary watch does. What makes the Pebble unique is that it will be released with developer tools that allow users to create apps for the watch. The goal is to continuously improve functionality as apps come online. And as Apple showed with the iPhone, developers and users are more than willing to populate a marketplace with apps if invited to do so; already, more than 3,000 developers have signed up to create apps for the Pebble.
Whether or not Pebble’s success on Kickstarter is a harbinger of crowd-funding’s arrival as a major source of startup funding, it has already changed Johns’s life now that he is able to work from home on a project he is intimately involved in, without sacrificing his home life in Vancouver.
“I have a great commute, down from an hour and a half to nil,” he says. “I get to see my daughter in the morning.”