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Comment by replicatorblog | Hacker News Reader

I'd ascribe the failure to the commodification of the fitness tracker and increasingly platform-driven smart speaker space. Here are some companies that have raised big rounds recently:

+ SimpliSafe raised $57M from Sequoia

+ Ring raised $100M+ from DFJ

+ Formlabs raised $50M from Foundry

+ Sphero raised $23M in April

+ Anki raised $52.5M in PE

I'm not sure what the future holds for Anki/Sphero, but the first three examples have what GoPro/FitBit didn't — a clear recurring business model. This is a good blog post on the subject:

https://blog.bolt.io/the-3-business-models-that-matter-for-c...

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>SimpliSafe

We use SimpliSafe at work. It solves far more problems than the "commodity hardware" issue. It solves the alarm ecosystem and shitty contracts that legacy carriers like ADT trap you into. It's definitely a good model going forward, as you noted.

EDIT: Additionally, it solves a "boring" problem, which not many companies want to tackle. Yet there's tons and tons of stable recurring revenue in this space that requires almost no additional innovation. Just stability, no-bullshit, and good customer service.

> Just stability, no-bullshit, and good customer service.

VC mechanics are the opposite of this, they are built for hype-based financial engineering to sell companies to richer and richer investor groups. Product and revenue is secondary.

> stability, no-bullshit, and good customer service

I'm interning at a recently (12 months ago) acquired standout in the e-commerce provider field, and yesterday I was at a talk where the CTO/co-founder attributed their now multibillion dollar business to the exact same thing.

There are plenty of dumb problems that people just want to not worry about.

I will say, the downside is they spent about 7 or 8 years before going public, and another 4-5 before being acquired (for about 4.5x their IPO price). It wasn't quick money, because you can't prove stability in a year or two, but it is a very powerful business model.

I would argue that Ring is the primary consumer success that the VCs are looking at right now. Everything else is not looking good.

Simplisafe raised the $57m in 2014 and seems to have been able to make a sustainable business without VC money. Form Labs is seemingly (with the rest of 3D printing) moving away from consumer to B2B focus.

I find Sphero/Anki raises surprising and wouldn't be surprised if they had Chinese Funds leading the rounds.

I love my Sphero BB8. Cutest little toy I've ever had. I can't see them taking over the world though, that's a big round comparatively I would think

Sphero is worth it simply because of connections, they're in Disney's Incubator program (2014):

https://thewaltdisneycompany.com/the-walt-disney-company-ann...

Which pretty much assures increased growth as they produce more toys for Disney IP. Who knows they could also be using the tech in their parks or for production purposes.

Do you think Disney creates characters to help with toy sales? I know that was a thing in the days of GI Joe.

The blog post is from Aug. 2015 and asks:

> What makes today’s hardware successes like GoPro, Arista, Fitbit, Nest, Dropcam, Zayo, and Oculus different?

GoPro, Fitbit, Nest, Dropcam (part of Nest) are struggling. Hardware is hard.

Yes, hardware is hard. Consumer discretionary hardware is especially hard. Expect ups and downs. Just because a company is struggling now doesn't mean its success is over. (I know that's not exactly what you were saying; just thought your comment could use that clarifying follow up.)

Can somebody provide more context about Nest's struggles?

I understand that their new products may not be selling that well (lots of cash for a CO detector / camera / etc) but what about the thermostat business where they have partnerships with most every energy provider and their setup process / support is great? What articles did I miss?

I ask because of self-interest: I just installed a couple and I appreciate them, and I'd hate to see the software support fall by the wayside / be decommissioned by their parent company.

EDIT: I'm reading about not enough revenue on the acquisition price and leadership issues, but I find it hard to believe a company with a solid thermostat product being sold in outlets across the country would collapse, especially given the current utility partnership incentives. That said, I've been surprised before.

Three problems. First selling to Google automatically put Nest into the "Are they going to sell my home data" category. Denials to the contrary that's Google's business model for everything so naturally people assume it's going to happen.

Second rush to market for their smoke detector Protect caused a debacle when it was discovered it was far too easy to silence a real alarm so they were all recalled, etc.

Third Nest has no relationship or respect in the home HVAC industry. Pretty much every HVAC tech and owner I've spoken to has a strong dislike for Nest. And while installing the Nest isn't that hard eventually everyone is going to have HVAC issues that need professional repair and people will get an earful about their Nest. This gets around quickly.

Of course now there's more competition also by traditional HVAC companies like Honeywell. Although I had a Nest in my previous house when I purchased a smart thermostat for my son for his house warming I purchased a Honeywell just for the reasons above.

Thanks for this summary. My HVAC company does not install Nests and recommended a Honeywell on their end as a smart thermostat. I'd be interested to hear why the techs hate it so much as I've had a good experience so far and having one in the house wouldn't preclude you from doing anything with regard to replacing the actual systems involved. Thanks again for the thoughtful reply.

Why are you talking about GoPro and FitBit in the past tense?

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