Misfit, Pebble Partnership Brings Activity Tracking to Smartwatch

This morning, Misfit, maker of the activity-tracking device Shine, announced a partnership with Pebble, bringing its technology to the company’s namesake watch. Now, Pebble watch wearers who download the Misfit app can skip wearing a separate tracker altogether, but still record their activity, measure progress, and compete with friends.

It may seem odd for a hardware company like Misfit to give users the functionality of their hardware without asking them to purchase it, but to founder and CEO Sonny Vu, it makes total sense. “We really view our value and what’s special about Misfit as our technology and our science, not so much our hardware,” he says. “In many ways, Shine is a reference design for the data science and sensor algorithms. But then it just kind of took off unexpectedly.”

Back in 2012, Misfit held a Kickstarter campaign to see if consumers would be willing to pay $100 for something Vu saw as a fancy pedometer. They were hoping to raise $100,000 in 30 days. They did it in nine and a half hours, without any PR. “Not bad for someone who’s an unknown player in a supposedly crowded space,” he says. “We keep doing Shine because it’s worked out for us, but our vision has always been to have our technology in as many places as possible. Right now we’re limited by our hardware and our brand because nobody knows who we are.”

Two years after the Kickstarter campaign, the company has raised around $23.5 million from investors including Founders Fund, Khosla Ventures, and Horizon Ventures, and it sold more than 300,000 Shines in the first six months after the product hit shelves late last year.

Vu sees the Pebble partnership as the first of many, and hopes to develop relationships with other hardware and software makers. Two years after I first profiled Misfit, I caught up with Vu to talk about the utility of wearables, crowding in the sector, and the four products the company plans to release over the next four quarters. Here is a lightly edited version of our conversation.

Xconomy: What prompted the partnership with Pebble?

Sonny Vu: Our vision is whether you’re an app developer, a smartwatch maker, or device maker of some other type and you need algorithms to turn sensor data into useful and meaningful information and insights, then come to us. Basically, Pebble is our first “Hello world, we’re doing this now.” And that’s why we’re excited about it. We love the Pebble watch; it’s a really cool product, and we love being able to provide this functionality to a ton of people. Those people don’t have to even buy a Shine. That’s not what we’re about. We’re not about selling a bunch of Shines. If you want to buy our hardware, we love it. We make a little bit of money. But no one really makes that much money on hardware anyways.

X: So now any activity that your Shine tracks will show up on your Pebble smartwatch?

SV: Now if you have a Pebble watch, you can have a little app that runs on the watch that looks just like the Shine. It’s a virtual Shine on your Pebble. Our algorithms are running in the Pebble watch and the Pebble acts as an activity tracker. If you have that, why would you buy a Shine or a Fitbit? You wouldn’t. But you wouldn’t anyway if you have a smartwatch. All smartwatches have accelerometers in them.

For us it’s a kind of a win-win situation. Most people aren’t going to buy an activity tracker anyway. Let’s offer them this capability that they really wanted instead of forcing them to buy two products. That’s not necessary. The world doesn’t need that. Consumers want as few products as possible.

X: What does Misfit get out of it?

SV: Data. While I can’t disclose the exact terms of the agreement with Pebble, one of the things that we do get is the user data. People use the Shine app on Pebble and that data gets transferred over to Misfit. With that data, now we can learn all sorts of things, and we can improve our science in immeasurable ways. So better science, better understanding of users, better insights. With those insights, with the data, with the better science, we can start to answer questions that we didn’t even know how to ask. That’s really where a lot of the value is going to come in.

We’ll make hardware for a long time. We love making hardware. But our hardware really is an enabler for us to gather information and provide services, that kind of thing

X: What should we expect next from Misfit?

SV: Our first product happens to be a wearable. Actually, our first two products that we’ve raised money for—the next one is a wearable product we haven’t talked about yet. Shine, we call it “product zero” because we never intended to release it. But we’re being opportunistic and reactive to the market because we saw how other products in this category have taken off. We said, “That doesn’t seem so hard. We’re pretty good at industrial design. Let’s just blow people away. Let’s do something with really awesome design and software.” That’s why we did Shine.

We’re probably still going to release two other wearable products, probably later this year. I’ll keep you posted.

The other area we’re really excited about is connected devices in the home. Whether it’s home automation or home devices, or whatnot. Those are really interesting to us. To be able to connect to other things. To make other things in your home connected.

We’ll have two more wearable products and two smart home products. So, we have four products coming out in the next four quarters.

X: There’s been a lot of brouhaha over whether wearables are overblown, and in some cases a bit of a backlash against them. Have you felt that at all?

SV: The market is in a frenzy. It’s not crowded. Crowded means that there’s no space for new entrants. And that’s just not true. Let’s think in terms of criticality. If there’s a critical function that needs to be covered, and it’s covered by a lot of people, that’s a crowded market. None of the functionality that we have right now is really all that compelling. …What that indicates is that we’re just really early. It’s like 1997 for the Internet.

We’re seeing single- and dual-function activity devices, and I think they’re going to transform into multi-function wearable devices, namely smartwatches, and they will start to incorporate more life-critical functions, such as identity and payment, and controls. That’s what we’re going to start to see. Safety. Medical devices. But activity tracking and heart-rate monitoring and all that stuff, and alerts, is a good start. But I think it’s just a start.

I’m biased, obviously, but I do think Shine does stand a chance of surviving. It is the only one that doesn’t require charging. It is one of very few that is waterproof to 50 meters. It’s one of very few that is really beautiful.


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