Smartwatch maker Pebble has set a new crowdfunding record, raising at least $1 million in the first 49 minutes of launching its latest Pebble Time. Kickstarter originally cited 34 minutes, but this has since been corrected.
Pebble Time actually reached its funding goal of $500,000 in 17 minutes, and has, so far, raised $6.8 million in less than a day of launch. To compare, the first Pebble smartwatch reached $1 million in 27 hours. Even the Veronica Mars film, considered to be a fan favorite, took at least 4 hours to raise a million.
Update: As of 10:00 PM National Standard Time (Taiwan), or about 24 hours after the Pebble Time project launched on Kickstarter, the crowdfunding campaign has raised $8.7 million in pledges from at least 40,000 backers. That’s about $362,500 per hour or $6,041 per minute on average.
Focus on the Timeline
The new device builds upon the success of the original Pebble smartwatch, adding in a few key features aimed at improving the user experience. In particular, Pebble Time brings a new focus into the timeline. “You already plan your day around time, so it makes sense for your Pebble to be organized around the same principle,” the team says. So the watch’s operating system now lays out notifications according to chronology, rather than separated in distinct apps.
The buttons now take on a “past, present and future” functionality. The center button brings you the current time (and any current notifications). The upper button lets you review previous notifications. The bottom button lets you scroll through upcoming events.
Pebble Time retains the use of e-paper, enabling the watch to have a 7-day battery life. The new device features a color display, however. It is also 20% thinner than its predecessor. And within this thinner package is a microphone, which lets users dictate responses to text messages and emails and save voice notes.
Backers can pre-order Pebble time for $159 through the completed Early Bird promo, and currently goes for $179 apiece. The company also has other options for bundles of two, three, five, 10 and 30 watches (the latter for “distributors”).
Pebble is not exactly cash-strapped, having received $25.7 million in three rounds from investors that include CRV, ACE & Company, Tim Draper, Draper & Associates, Paul Buchheit, Mark Friedgan and Y Combinator. Pebble Technology says it is going back to its roots, “where it all started,” in launching the new product on Kickstarter. “The Kickstarter community and our early adopters believed in us before anyone else even knew we existed. You blew us away with your support and kicked off a worldwide movement!”
The underlying reasons may be deeper than this, however. It does make business sense. For one, Kickstarter has been Pebble’s most successful sales channel so far, apart from sales on its own website. The first Pebble crowdfunding campaign raised $10.26 million from almost 69,000 backers.
Secondly, pre-selling on Kickstarter means better margins for Pebble Tech. Kickstarter only gets 5% of proceeds. Payment processor Stripe gets 5%, too. This means only a 10% margin from this retail channel. Selling goods on brick-and-mortar retail channels would mean a margin of 35 to 50%, which will severely dilute Pebble’s profitability.
Meanwhile, selling on established e-commerce services like Amazon might result in reasonable margins, but it means Pebble will have no control over when it receives the money. Kickstarter lets backers pay up-front, which means more working capital for any startup, compared with having to source funds elsewhere and then marketing goods once it is already produced.
A crowdfunding bubble?
Still, 30,000 backers are not such a big market, especially considering that many of these are early adopters — people willing to pay just for the privilege of being considered on the bleeding edge. The more mainstream consumers are likely to buy products either at established retail outlets (tactile experience in buying watches, is after all, powerful), or through e-commerce giants like Amazon.
If anything, launching on Kickstarter enables the company to position itself as an underdog — especially compared with technology giants like Apple and Samsung, and it is probably hoped that doing so will endear the company to technology users hoping to see an indie effort succeed amid such competition.
For now, Pebble will have to enjoy the advantage of being able to get the funds with the exchange of a promise to build the product and ship months afterward. It’s a good way of raising capital, without necessarily being bogged down by the common investor concerns on equity and control.