(This post was first published on Forbes)
Back in the pre-internet days, a friend of mine owned a key ring which beeped when he whistled. It was one of those small, affordable, quirky, fun or useful electronic devices that we call gadgets.
Fast forward to the present. Smartwatch pioneer Pebble was acquired by Fitbit earlier this month, whose stock is down 75% year-on-year, and had to dismiss most of its staff and discontinue its products. Many took it as a bad omen for gadgets.
Farhad Manjoo at The New York Times collected evidence: the drone startup 3D Robotics gave up making hardware, Makerbot fell short on its ‘3d print everything’ promise, many crowdfunded projects failed, like AR bike helmet Skully which went bankrupt.
The future sounded bleak. Gadgets makers would either be copied by some unscrupulous manufacturer in China or dominated by large companies. Some, like Mark Wilson at Fast Company, recommended not to buy smart gadgets for Christmas. But Ashley Carman at The Verge, which had announced the come-back of gadgets, wrote a response pronouncing gadgetsvery much alive, quoting Kickstarter-born VR headset Oculus (acquired by Facebook), sound systems maker Sonos, Snap’s Spectacles and a few more.
So what is it? Are gadgets both alive and dead at the same time?
As a partner at HAX, which invest in dozens of hardware startups for a living, ranging from consumer devices to robotics and health tech devices, I would say we’re entering a golden age for gadgets. Here’s why.
The First Ice Age of Gadgets
First, there is no denying the situation The New York Times article pointed out. Companies need to keep innovating to survive. Apple would not be around if they had allowed the first iPhone to be the last. Where there was one category champion, like Fitbit, many competitors are cropping up, and Chinese companies are at the forefront.
Xiaomi single-handedly commoditized many product categories, from smartphones to $15 fitness bands, to action cameras for half the price of a GoPro. While those are mostly sold in China for now, the clock is ticking for Western incumbents; they will need to keep innovating to avoid extinction.
A Cambrian Explosion
The Economist called it in 2014 for software; it has now spread to hardware startups. Hundreds of them are getting started and funded worldwide. Why is this happening?
First, prototyping has become faster and cheaper, and crowdfunding can help promote, validate and finance early projects.
Second, manufacturing is now possible at a faster pace, lower cost and smaller scale, thanks to Shenzhen. This goes from getting same-day components, PCBs or 3D prints at the prototyping stage, to a super-efficient supply chain of enormous size. Every time we buy a smartphone we effectively invest in the local ecosystem, which trains factory workers and tooling experts, and finances better and better machines. Those advantages are a critical aspect to enable early stage startups and the “long tail” of niche products (pioneered by the Shanzhai movement) to get to market.
Success attracts competition. When investing in startups, you look for competitive advantages. It could come from science (e.g. medicine, physics, material science), software (e.g. computer vision, machine learning, artificial intelligence, big data) or a community (of users or developers).
Yet, ideas are in the air and a startup is almost never alone tackling a problem. This is where speed and costs matter. Get your product to market six months or a year before competition with Shenzhen-optimized costs, then you have a much stronger chance of long-term success. With suppliers available 24/7 on WeChat, China moves at startup speed.
One would be mistaken thinking China is only about low-cost and copycats. In an unlikely twist of fate, Chris Anderson, founder of 3D Robotics and author of “The Long Tail,” who had found a great niche market with the long tail of drone hobbyists, caused its own demise by entering the high-end imagery drone category and going head-to-head with the long tail’s “big head”: DJI. And DJI was not only the world leader in imagery drones, but also a Chinese company, based in Shenzhen. It is the mere frontrunner of a wave of Chinese global startups.
Re-Imagining Consumer Gadgets
With the costs of creation dropping, the possibilities that opened up are truly infinite. To give one specific example, let us consider headphones and earphones.
In recent years, design — with Beats or even cat-ear headphones — and noise canceling have been the main innovations. What could be done to go further?
Many are not famous yet, but innovation is going in all directions.
Many are not famous yet, but innovation is going in all directions. There’s Ossic (spatial audio), and Nura (a HAX startup making headphones with ‘personal equalizer’ technology), which were mentioned in Kickstarter’s Tech Predictions for 2017.
Every time we think the category is finished, something new and exciting comes up. Those products look like simple gadgets, but they involve deep tech in acoustics, materials science or neuroscience. Where did they push further their prototypes and find the factories to help them produce those unprecedented products? You guessed it: China.
The novelty in gadgets is thus not simply their variety, but also that the bar keeps rising. Even China’s aspiring “Beats,” the headphone maker FIIL, co-founded by local rock star Wang Feng, is pushing the tech envelope by including a heart rate monitor and more.
The Upcoming Age Of ‘AIoT’
There are many paths to product re-invention. The future might be a mix of personalized, smarter and niche products. This might lead first to a great divergence, followed by a convergence into more integrated products. We might see products evolve from passive to connected, to autonomous, from Internet of Things to the age of AIoT (Artificial Intelligence of Things).
Today, we see the premise of this next wave with Vi, “bio-sensing earphones” that include an AI-based personal trainer. With embeddable computers as low as $9, we are able to revisit almost every product. Get a regular chair for $1000 or a smart one for $1,050. We are getting closer and closer to the visions described in the sci-fi movie HER, or of the anticipation series Black Mirror, where an implanted ‘grain’ can record and replay everything you see and hear.
How To Prepare For Next Christmas
If you wonder how you can best witness the upcoming wave of gadgets, CES might have the best showcase of innovations. Sure, some might be fads, or mere attempts, but supporting early versions allow for the later and greater versions to exist. Apple quality doesn’t come on day one.
Now, will the 2017 sensation be a STEM toy like Airblock’s modular drone, or a health device such as Lief, the smart patch to fight stress? Will you see it at the TechCrunch Hardware Battlefield? Will it be a Kickstarter project, a French tech startup, or a China-enabled one, or even fully Chinese startup?
What is certain is that the long tail of gadgets has grown, and that the golden age of gadgets has just started.