Eric Migicovsky at Startup School SV 2014

Hi guys, um, it's an honor to be here. I really appreciate you guys taking time out of your day to come listen to me. Um, I know that many of you may have heard about us when we launched on Kickstarter about two years ago. Um, I'm here to tell you a little bit about that but also take you four years back, um, to 2008 when I started working on this originally.

Um, so this is me, uh, in a YouTube video that I posted in 2008 showing off the very first prototype for what would become Pebble. I was an engineering student at the University of Waterloo. I was studying abroad in Europe, actually, um, at Te DELL studying industrial design. Um, in industrial design, kind of unlike engineering, everyone is always sketching, everyone's always drawing things.

Um, and as an engineer, I didn't have those same drawing skills at the time, so I started sketching things. And the first thing that I sketched was a bicycle computer that would talk to your phone. I had this weird problem. Um, everyone in Holland bikes practically every single minute of their life. Um, and I wasn't born with the gene that let me type on my phone while I was biking. Um, and so I had this brand new phone in my pocket and I wanted to see what was happening when my phone was vibrating. Who was calling me? Who was texting me? Who was emailing me?

Um, and while I technically could have just tried to pull my phone out of my pocket while biking, I probably would have ended up in the canal. So I thought of this bike computer that would show you text messages. Um, I started prototyping it. One of my friends came along and said, “Hey, you know that bike computer that you're building probably would be a little bit more useful as a watch since some people don't bike every single minute of their life.”

So I took apart a cell phone, um, the Nokia 3310, which is like one of the most popular phones in the world, ripped that apart, combined it with an Arduino, and made this super early version. You can actually see where I cracked the screen off of the phone, um, and made this first prototype myself. It wasn't beautiful; it certainly didn't work perfectly.

Um, but it showed me at least that this was something that I could use on a daily basis. I went back to the, I went back to Waterloo to finish up my final year of engineering, um, and did what I'm sure a lot of you guys do, which is pitch your heart out. This was a slide from our early deck. Um, the company at the time was called Impulse, uh, which stood for Information Pulse, and it aimed to do one thing, which was show you text messages, emails, and calls, um, right on your wrist.

I did these pitch competitions where you stand up and you talk for 45 seconds, uh, in like elevator pitch competitions, and that was actually how we funded the early stage of the company. I would win these gigantic checks, um, comically large checks, which are very difficult to cash at ATMs; you have to, like, fold them up.

Um, and the first prototypes that we built were actually funded from these pitch competitions. I borrowed some money from my parents, um, who were extremely generous at that time. I think the argument was, “Well, it's cheaper than grad school.” Um, and we built, me and a couple friends built, the very first actually working prototype.

And you notice that my prototype was the first one. This is the much better prototype that was actually built by some talented electrical engineers and computer engineers. Um, being in Waterloo, as I'm sure there's a couple Waterloo people in the crowd, um, being in Waterloo in 2008 meant one thing: Blackberry. How many of you guys remember what Blackberry is? You know, they were this really popular phone with keyboards.

Um, so you can see here the first prototype actually worked with Blackberry, and it wasn't just it worked with Blackberry; it only worked with Blackberry. So you could see there's still some wires coming out of it but, generally, it actually did the job. This is a real text message that someone sent to my Blackberry at the time, um, and it worked. It didn't look great again but it finally worked and we could show it off and began talking about it in the community. People said, “Hey, this is an interesting little project but, you know, it could actually become a company if you wanted.”

So I, um, the first step was trying to make it look a little bit better than what a couple of engineers hacked together in their spare time. We worked with an industrial designer who, again remember this is 2008, 2009, took a lot of inspiration from the smartphones of the time to build what would be, what would become our first watch, uh, Impulse.

Um, this is pen and ink marker drawings, kind of the first stage of ideation, but you can see it's starting to look a little bit less like a circuit board with bent aluminum around it and more, more like an actual, an actual watch. Um, this is mid-2009, 2010. Uh, it's a 3D printed prototype with actual electronics running inside. Um, this was the first stage that we were actually able to show it to people and they could immediately imagine what it would be like to put this product on their wrist.

That was really important because up until that time we just had our circuit board that we were shopping around to people. Um, kind of hard for people to imagine wearing a circuit board on their wrist. 3D printing was still pretty early at the time. Uh, 2009 MakerBot had just launched. Um, this was our first, you know, somewhat 3D printed, a little bit hand-painted as well.

Um, but it did a little bit of a better job at showing off what a smartwatch could be. So naturally, the next step in 2000, this is 2009, uh, end of 2009 was to launch it. You know, just like every good software company in the world, you know, you have to launch early and often and I think we took that lesson to heart from a hardware perspective as well.

So in, uh, the end of 2009 we decided to announce this product publicly to the world. Um, and I'm sure many of you read Engadget, The Verge, and that kind of stuff, and you see these occasional posts of people with, uh, posting leaked photographs or blurry photos of new products. Um, and the secret is that sometimes those are actually, you know, devices that fall off the back of a truck at the factory but other times it's actually the company themselves leaking information just to see what people think.

Um, I can't remember exactly where I heard this piece of advice but we decided to do it, and about a week before we were planning to actually launch the product to the world, I, you know, those there's tips lines at various blogs like tips at Engadget, tips at whatever. So I emailed a couple of these blogs with a render of what our product could look like.

Um, and I emailed it to Crackberry, which is one of the most popular Blackberry blogs at the time, and I said, “There's this company working on this interesting Blackberry watch. Um, would you be interested in getting a little bit more information?” And within 30 minutes the guy emailed me back, phoned me actually. He said, “I got to have more information, what is this? I saw this render! Can I run a post? I want to blog about it right this second.”

And I had to explain to him that, “No, this isn't like, I'm not actually leaking any private information. Like, it's our company, we're a little startup in Waterloo.” And he's like, “I don't care, I don't care! I still want to share this with the world.” And I said, “Sure, if you want to do that, let's do it.”

And so on October 19th, 2009, Crackberry ran this and you could see it's got that, it's got that vibe of like, “I'm not sure exactly where I got this image.” You know, it's a 3D render, but you notice the title: “First images Blackberry watches for real.” So this began an interesting little game of broken telephone, uh, on the internet.

Um, Crackberry ran this piece, Engadget ran that piece, all of a sudden everyone thought that Blackberry was coming out with a watch. Um, and it, the news spread. The culmination of the first week was really exciting. It was a reporter for, like CNBC or like that, shoving a microphone in the face of the Blackberry CEO, um, saying, “What do you think about the Blackberry watch?” And he's like, “I've got no comment, no comment.”

But it was, it was a bit wor, so it was amazing for us because we saw this massive kind of adoption of it but we still had, didn't know how to parlay that into actual, you know, people knowing that it was our product. So about a week later we followed up with all these blogs. We posted our page online, and then followed up with every single blog saying, “You know that watch that you ran last week? It's actually a startup, it's actually us.”

And we were worried, you know, would they think that, you know, we were cheating them or screwing with the system or maybe they wouldn't even post again about us. One week later we were worried, but then we forgot the cardinal rule which is everybody loves page views. And every single person ran it again! That launched us into the next stage.

We had about, um, a thousand people who were interested in the product who had signed up for a mailing list. We didn't actually take anyone's money at the time, but it was great because we got validation at least from the early Blackberry set of customers that this was something that they wanted.

So we continued building prototypes. This is our first, uh, metal, um, CNC milled prototype. There was another little fun press thing at CES. Um, uh, instead of signing up for media briefings or getting a booth or something like that, we just kind of wandered around and showed this. This was us walking into the Engadget studio and just showing it to people.

Um, and naturally they ran a story about that as well. So never, if you're looking for press, there's absolutely no wrong way to do it. You can pretty much get press any way you can try if you try really hard.

Um, we got to the point where we could actually make these devices. Um, we were based in our garage in Waterloo, behind the house that I lived at. Uh, the garage was somewhat dusty so it didn't lend itself perfectly to the assembly of miniature consumer electronics. We still had the key codes to the university. So even though we were graduated on Sundays, we kind of just, you know, broke into the university and set up our assembly line in the lab.

Um, it was great. Uh, we built the first 500 watches hands, you know, with our own hands just sitting there assembling each part of it. It gave us an immense appreciation for what goes into these little consumer electronic devices. Um, and then we, and then we started shipping them.

Uh, we didn't really, um, we didn't really promise our customers that it was anything more than an alpha grade unit. Um, in fact, the first 20 that we shipped, the backs broke off during the shipping process. So it was a really damn good thing that we didn't decide to build like 5,000 of them all at the same time, that we just built 10, 20, 50, 100 units and then shipped them out.

It was around this time that we, um, that we applied to Y Combinator. Uh, up until this point, YC had only accepted, I think, three hardware companies in the entire lifespan of YC, so it was a bit of a long shot.

Um, but we felt that we had finally latched on to something. Our first product that people were actually starting to use had amazing engagement—80% of all the people who used, who had purchased Impulse were using it every single day—and it wasn't just from the analytics but people actually told us.

They sent us emails. I have in my email inbox personal, personal threads with practically every single person who owned one of these first watches about what was good, what was bad, what needed to improve. Um, and that was an immensely close relationship that we had with our customers at the time.

When we got down to YC, we set up shop in another living room, uh, this time in Mountain View, which, uh, after having spent seven years in Ontario was amazing. I still have not changed since. Um, I've not changed out of shorts and t-shirts since I got down here.

But after seven years in either crazy hot or crazy cold climate, I got to say that Mountain View was pretty, uh, pretty perfect. Um, and the one thing that we, the one major insight that we realized, uh, this is now 2011, was after we launched our software development kit. Up until this point, we were making a watch that showed text messages, emails, calls.

At the beginning it didn't even show the time. Our first version of software didn't show the time on a smartwatch. Um, naturally the bug reports came fast and furious. My first customer, my dad emailed me and said, “Eric, you got to be able to show that time on this smartwatch!”

Um, so, so we launched a firmware upgrade the week later, and that began a cycle of kind of continuous integration of features and suggestions. But one thing that we always thought was going to be too big and we were always pushing off to the future was launching an SDK.

So in 2011 we published an SDK. We invited developers to write apps for the watch but keep in mind there were only a thousand Impulse watches in the field so we had no idea what would happen. We spent about two weeks working on an SDK and we were amazed within two or three months of launching the SDK there were over a hundred apps available for Impulse— that's one app for every 10 watches in existence.

So obviously people were not building it because they thought they would get rich or they thought that they would be able to start a company. Developers who owned those early Impulse watches were building apps because they wanted to create something that they could wear on their body. That was a new, that was a new thing at the time. There were no SDKs for devices.

Um, and this is an example of, you know, being able to customize your watch face just by tapping some buttons on your, on your Android phone at this point. Um, so we took all of these things that we learned from our customers. Uh, the first watch had a full-color OLED screen, um, which was great; it was very colorful but the battery life wasn't great. It was about 24 hours.

Um, the watch also had a screen that wasn't great outside; it would kind of get washed out when you took it out, uh, to go for a run. And it also wasn't waterproof. But the biggest problem of all was that it didn't work with iPhone. So we got down to the valley, we did YC, and we showed people our cool smartwatch and they said, “This looks great! But does it work with iPhone?” and we had to, we had to say no.

Um, so in mid-2011, iOS 5 came out which finally gave us the capability to run an application in the background when it was talking with a Bluetooth access. So we designed Pebble. We took all the feedback from Impulse and we funneled it into this new product, Pebble.

Um, we did the next logical thing, which is to shop it around on Sand Hill Road, talk to the VCs, Angel investors. Um, and we had, you know, we had this new product. We had an idea of how we could actually build something people really wanted, people were telling us that they wanted.

And we spent about a month talking to investors, you know, 20 or 30 investors, and we couldn't get one interest. We couldn't get one single investor to actually sign on the dotted line. We went back to YC, had our 20-minute session with Paul Graham. I explained our problems and he says, “No, you're not going to be able to raise money. Is there anything else you could do? You know, could you sell some software?”

This is a pretty common question that hardware entrepreneurs will get asked at some point and I had to explain, “You know, I don't think we're going to be able to turn into a software company.” Um, and he’s like, “Is there anything else you can do?” And I said, “Yeah, well we're thinking about going on this website called Kickstarter.”

And he says, “What's Kickstarter?” And so we explained and he said, “That sounds like an amazing idea; you should just do it.” So we spent a month and we built our Kickstarter page. Uh, we filmed the video ourselves starring us, our friends, and our interns.

And I don't know how many of you can pinpoint the exact moment when your life changes but I can, and it's, it's pressing this button. Um, it was 11:00 p.m. on the night, on the night before we launched when I, you know, I clicked this button and I distinctly remember wondering what would be next.

And obviously, I would never been able to predict what happens. We were trying to raise $100,000 to be able to sell 1,000 Pebble watches. We blew through that milestone in two hours. We got to our first million in 28 hours, and after 30 days we had raised $10 million from 70,000 people around the world.

Um, it was pretty ridiculous to say the least. Uh, why, why did that work? How did we do it? You know, we have some, we're able to rationalize it now looking back. I think it was because of three main things. Um, the first one being some advice that we got from Paul Buite. Paul Buite, a partner at YC, and he's also an investor in Pebble, wrote an amazing blog post several years ago that talks about a startup's product has to do three things really, really well.

And not only does your product have to be able to do three things, and preferably not more, you also have to be able to explain what those three things are. And so I think that the reason why we hit product market fit on Kickstarter was because we talked about notifications and calls being able to see those on your watch, sports and fitness—we offered users the ability to run the fitness app that they loved on their phone like RunKeeper or Strava or Endomondo and just see an instantaneous update of speed, location, distance on their wrist without having to do something like buy a Garmin watch.

And the third thing that we talked about was customization—being able to see, being able to download and install different watch faces. It had never been done before and we offered our users that ability.

Um, where we went from there was, uh, was kind of crazy. We were five people when we launched on Kickstarter. Um, none of us had ever made a consumer electronics product before. So we did what the only natural thing most people who are working on hardware do—fly to Asia. We spent, um, I personally spent, and the three people working on the hardware team spent about six months off and on living near the factory in Shenzhen, helping, um, helping build the first, the first prototypes of Pebble and then getting the production line up and running.

This is, uh, probably around like 7:00 p.m. on a Friday night figuring out how to get the glue working so that the top of the lens would actually be glued into the bottom and still be waterproof. Um, it was amazing. I think that it took, uh, you know, my mom would phone me up and she would say, “Are you sure you're okay? Like shouldn't you be a little bit more stressed? Um, you do have to ship 85,000 watches to people all around the world.” And I said, “No, no! I think, I think we've got it.”

And it was a bit of, it was a bit of blind faith. It was a bit of, you know, naive but I think we were dedicated and we knew that we had built something that people really, really wanted. So we poured all of our effort into it, and it paid off.

Um, this is the first red watch, Pebble, that popped off the assembly line. This is December 28th, 2012. Um, I wore that watch, the same watch that I pulled off the assembly line for about a year until I replaced it with a nice new Pebble Steel.

Um, but it was the first, it was the moment when I realized that all of our effort finally paid off—that we had built something that was almost exactly like what we set out to build. Um, and it was a fantastic feeling.

Uh, the team grew a lot. We, we only had around 10 or 11 people, um, by the time we actually started shipping the watch. We've now grown immensely. Um, at first it was, you know, people who didn't really know exactly what we were doing. We still don't know exactly what we're doing but we feel a lot better about doing that.

Um, we have hundreds of thousands of watches out in the world. Um, and some people may say that some people may think that I started the company solely so that I could use puns in advertising. I think they wouldn't be incorrect.

Um, but I think there's a little bit more to that. You know, I started working on wearables now about six and a half years ago. At the beginning, you know, I, I saw the other watches that were on the market. There was, there were actually other smartwatches back in 2008. Um, there was a Sony Ericsson watch that cost 399 bucks.

Um, and I was a 20, 22-year-old student. I didn't really want to spend 400 bucks on this brand new smartwatch. So I wanted to make something that was cheaper, something that was more affordable. So instead of just buying the $400 watch, I, I started an entire company to make a more affordable watch for myself.

Um, but it's interesting that the same trends are coming back now. You see Apple moving into the space; they've built an amazingly beautiful aesthetic, you know, awesome metal, sapphire, expensive watch. Um, they definitely have their perspective on where wearables are going.

You see Google coming into the space trying to take an entire smartphone and cram it onto your wrist. And then, and then us, we're going off in this slightly different but, but very important direction for building something that meshes into your life.

We build a product that works with the phone that you already have, as long as you don't have a Windows phone. Um, and, um, it has a long battery life, it works as a sports watch, it's lightweight, it's inexpensive, it's completely open, hackable.

Um, in fact, the part that I'm most excited about for the future is the community that's supporting it. There's hundreds of thousands of people around the world who have Pebble, who are hacking on it, who are building interesting things. Um, just last week, uh, one of our partners, uh, Jaone, who's, uh, Hussein's going to be on the stage in a little bit, he, um, Jaone launched an activity tracking app on Pebble that lets you do step tracking and all these other good activity tracking, but it works with the Pebbles that came out two years ago.

We're really committed to making sure that Pebble can be a growing platform that other people can hack on and that will become more and more important as time goes on. It's not something that's revolutionary; it's not going to change your life the moment that you put it on, but it becomes part of your habit, becomes part of your routine, and over time it just adds more and more value.

Some of the other amazing stories from the community are, uh, a website called, uh, the Watch Face Generator, which is this guy called Paul. He lives in Germany. He built this app, he built this website that lets anyone write their own watch face for Pebble. You just upload a bitmap or an image, you move the little hands around on the screen, and you can create your own watch face.

Over 250,000 people have done this. I believe, I, I don't know for certain, but I believe that there's more different, there's more types of watch faces available for Pebble than there are different types of watches available in the entire world. Um, that kind of thing is just kind of mind-boggling when you think about the fact that we started out six and a half years ago to make a watch just for ourselves and now there's people all around the world hacking on it, building really cool things.

Um, and it leaves me pretty, pretty damn excited for the future. So I appreciate the time, and, uh, yeah, that's a little bit about the Pebble story.