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Google Glass
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OPPORTUNITIES & CHALLENGES FOR VENTURE INVESTORS
ALLEN MILLERCOLUMBIA BUSINESS SCHOOL
MBA INTERN, GOTHAM VENTURES
On the Brink of the Next Wave of InnovationPattern Recognition: Hardware Platforms Produce Software Innovation
2
Hardware Platform Software Innovation
?
AgendaDeck Overview
1) Trends in Wearable Technology
2) An Overview of Glass• Glass Products & Features• User Feedback & Adoption
3) Investment Opportunities• High-level Use Cases• Industries • Example Companies
4) A Case for Mass Adoption
5) Sources & References
3
Wearable technology
Google Glass
Industries & Use Cases
Companies
Historical Evolution of WearablesWEARABLE TECHNOLOGY
4
Single Function, Unconnected
Multi-function, Unconnected
Multi-function, Sometimes Connected
Multi-function, Always
Connected
1970s 1990s 2000s Today
Ex: digital or analog
watches
Ex: digital watches with enhanced
features like the G-Shock watch
Ex: iPod Applications
and the Nike+
Sensor
Ex: Nike fuel band, Google Glass
Wearable Technology Landscape Today WEARABLE TECHNOLOGY
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Wristbands Smart Watches Smart Glasses Smart Clothes
…and much, much more.
Growth ForecastsWearable Technology
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2010 2011 2012 2013 2014 2015 2016 2017 2018 $-
$2,000.00
$4,000.00
$6,000.00
$8,000.00
$10,000.00
$12,000.00
$14,000.00
Wearable Device Market Value
Year (2010-2018)
Mar
ket V
alue
(in
mill
ions
of $
)
Source: Business Insider
$2.5B market, expected to grow to $12.2B by 2018.
2013 VC investing in Wearable TechWearable Technology
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In 2013, investors put $458M into wearable companies across 49 deals.
Source: CB Insights
AgendaDeck Overview
1) Trends in Wearable Technology
2) An Overview of Glass• Glass Products & Features• User Feedback & Adoption
3) Investment Opportunities• High-level Use Cases• Industries • Example Companies
4) A Case for Mass Adoption
5) Sources & References
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Wearable technology
Google Glass
Industries & Use Cases
Companies
Hardware OverviewGlass Products and Features
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Source: Techlife
Display:• The main function is based on a mini projector, which projects onto a prism.• The prism then reflects a layer over “reality” directly onto the retina.• Equivalent of a 25 inch high definition screen from 8 feet away
Audio: Bone conduction transducer.Storage: 12 GB of usable memory, synced with Google cloud storage. Mobile Compatibility: MyGlass for Android and iOS.
Product SelectionGlass Products and Features
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ThinBold
CurvedSplit
Frames Twist on Shades
Earbuds
Source: Google
Glass Growth ForecastsUser Feedback and Adoption
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*The forecast for 2014 starts in the second quarter.Source: Business Insider
22 million represents ~7% of the U.S. Population.
2014* 2015 2016 2017 2018 -
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
Forecast: Annual Sales from 2014-2018
Year
Uni
t Sal
es
Demographics of “Glass Gravitators”User Feedback and Adoption
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Base: 657 US online adults (18+) who replied that they would be willing to wear Glass*Base: 4,657 US online adults (18+)Source: North American Technographics Consumer Technology Survey, 2013
Glass Gravitators US Online Adults*
Female 44% 51%
Gen Z (18-24) 23% 13%
Gen Y (25-33) 26% 18%
Gen X (34-48) 22% 25%
Young Boomers (48-57) 13% 18%
Household Income (mean) $83,300 $78,700
Technology Optimist 66% 48%
Own iPhone 32% 24%
Own Android phone 35% 27%
Some Challenges: Survey DataUser Feedback and Adoption
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Source: YouGov, May 2013
The majority (59%) weren’t interested a year ago.
Yes (28%)
No (59%)
Not Sure (16%)
Would you consider buying and wearing Google Glasses?
YesNoNot Sure
Some Challenges: Survey DataUser Feedback and Adoption
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Source: Surveycrest, 2013
Yes; 24%
No; 30%
Maybe; 46%
Would Google Glass Invade Privacy?
Poor,53%
Av-er-
age,24%
Excel-lent,23%
How comfortable can you be viewing things on google glass?
Source: Surveycrest, 2013
AgendaDeck Overview
1) Trends in Wearable Technology
2) An Overview of Glass• Glass Products & Features• User Feedback & Adoption
3) Investment Opportunities• High-level Use Cases• Industries • Example Companies
4) A Case for Mass Adoption
5) Sources & References
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Wearable technology
Google Glass
Industries & Use Cases
Companies
Investment OpportunitiesIndustry Overview
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Investment Timeline
Short Run
Healthcare
Fitness
Platforms
GamingLong Run
Consumer Digital Media
Advertising
Payments
News
Recruiting
Travel
Sports & Entertainment
Transportation
Education
Commerce
Will begin with a few very specific use cases—mostly “enterprise” in nature.
Once mass adoption occurs, continued permeated diffusion of mobile connectivity.
Investment OpportunitiesIndustry Overview (Current Landscape)
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Source: Compiled from Google
Of the 110 current apps, these 4 spaces are the most promising in the short run.
Healthca
re
Fitness
Gaming
Platform &
Infra
structu
re Development
Photo & Video
Financial S
ervices &
Commerce
News Aggregation
Food & Beverage
05
10152025303540
Number of Google Approved Apps by Industry (as of April 2014)
Investment OpportunitiesExample Companies
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Healthcare Sample Company: Prisine.ioCEO: Kyle SamaniLocation: Austin, Texas (pristine.io) Currently Funded: No (angel financed)
Emergency responders are using Pristine to beam in specialists in 1st person into the field and the ambulance.
Surgeons are using Pristine to livestream cases in 1st person to residents, fellows, and surgeons at medical centers across the world.
Investment OpportunitiesExample Companies
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Fitness Sample Company: LynxFit (Byte an Atom)CEO: Noble AckersonLocation: Washington D.C. (http://www.lynxfit.com) Currently Funded: No (angel financed)
1) Subscribe: Choose from carefully curated categories
of workout routines.
2) Schedule: Users can securely schedule routines
by location or by time.
3) Share: View, aggregate and share data gathered from exercise activities.
Investment OpportunitiesExample Companies
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Gaming Sample Company: Mind Pirate CEO: Shawn HardinLocation: Silicon Valley (http://mindpirate.com/) Currently Funded: Seed (Bessemer Venture Partners, Signia Venture Partners)
Developed games include: Little Bandits, Shard & Singularity.
Investment OpportunitiesIndustry Overview
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Platform & Infrastructure Sample Company: OnTheGo PlatformsCEO: Ryan FinkLocation: Portland, Oregon (https://www.otgplatforms.com/)Currently Funded: Seed (Rogue Venture Partners, Foundry Group)
OnTheGo is developing gesture recognition technology to build a platform layer that sits in between the glass hardware and Glass apps.
AgendaDeck Overview
1) Trends in Wearable Technology
2) An Overview of Glass• Glass Products & Features• User Feedback & Adoption
3) Investment Opportunities• High-level Use Cases• Industries • Example Companies
4) A Case for Mass Adoption
5) Sources & References
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Wearable technology
Google Glass
Industries & Use Cases
Companies
A Case for Mass AdoptionThree Possible Challenges to Adoption
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Product Functionality Price Point Social Norms
• Clunky, awkward feel• Weak Visual display• Wifi antena is spotty • Battery Life is too low
Missing several critical pieces of core functionality.
At $1,500, Price Point is too high for the average would-be consumer
Glass also violates a number of current social & cultural norms that could prevent broad adoption including:
• Threats to privacy• “Glasshole” perception• No established etiquette for
obtaining the consent of those being recorded.
As with most new products, successive iterations will become more aesthetically pleasing and higher in quality. As the cost of production lowers, so too will the price point.
The bigger challenge to adoption centers around social norms. I will make the case that social norms will continue changing to make Glass usage more socially acceptable.
A Case for Mass AdoptionIn the Short Run: Product & Price (Not an Issue)
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Historical Example: The Mobile Phone
Source: ASYMCO
Price Evolution Product Evolution
A Case for Mass AdoptionIn the Short Run: Core Functionality (Possibly an Issue)
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Historical Example: The Palm Pilot
Palm Had Functional Challenges The iPhone added Critical Functionality• Inability to seamlessly sync all
existing contacts, music, etc., into the device w/o manually entering
• Primitive Operating System• Poor web browsing capability
• Ability to sync iPhone contacts, songs, etc., to Mac computer with the click of a mouse
• Best-in-class OS (iOS)• Apps greatly enhance web
experience
A Case for Mass AdoptionIn the Long Run: Social Norms (The Bigger Issue)
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The more important question is whether Glass will overcome key challenges from a social perspective. Many products in the recent past have failed the “social test.”
Segway Sony Aibo Facebook Home
A Case for Mass AdoptionSocial Norms – Historical Parallels: The Mobile Phone
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Back then…• In 2000, only 28% of U.S. respondents owned a cell phone• In 2007, 82% of cell phone users expressed concerns over location tracking• Concerns over: privacy violations, waning attention spans, location tracking, etc.,
Source: American Association for Public Opinion Research, Journal for Interactive Advertising
But now…
A Case for Mass AdoptionSocial Norms—Historical Parallels: Facebook News Feed
Back then...When News Feed launched in 2006, there was a tremendous backlash among users: • Users petition for FB to remove News Feed due to
privacy concerns• CEO Mark Zuckerberg issued a public apology and
increases pricacy controls
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Share of Time Spent on FB, 2011
But now…
Sour
ce: W
ebW
ashe
d
A Case for Mass AdoptionSocial Norms: A 3-pronged Argument
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1) Social Norms are already changing. We are moving away from privacy and towards open information and continued mobility. Anyone on the Internet can already information through a number of avenues:
2) Google is poised to focus on the 2 social norms that matter most:• Control: Provide users with complete control over their personal information• Privacy: Protect privacy through an “op-in” fully secured operating system
3) Historical Parallels (Phone & Newsfeed) lean very strongly in Google’s Favor
Google is already taking steps to avoid a major flop by taking feedback from users (Explorer Program), expanding aesthetics & functionality (frames, prescription lenses, ear buds, etc.,) , opening its platform to developers (MyGlass) and investing heavily in quality supply chain partners (like Himax).
AgendaDeck Overview
1) Trends in Wearable Technology
2) An Overview of Glass• Glass Products & Features• User Feedback & Adoption
3) Investment Opportunities• High-level Use Cases• Industries • Example Companies
4) A Case for Mass Adoption
5) Sources & References
30
Wearable technolog
y
Industries & Use Cases
Companies
Sources & ReferencesWorks Cited
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Sources
AngelList
Business Insider
CB Insights
CrunchBase
Forbes
Fortune
LynxFit
Mind Pirate
NY TimesOnTheGo Platforms
Pristine
SurveyCrest
TechLife
VentureBeat
YouGov
Interviews
Glass Explorers/Entrepreneurs
Dave Cho: COO, Soko Glam
Katy Kasmai: CEO, Xocracy (Founder of Glass NYC Meetup)
Ryan Fink: CEO, OnTheGo Platforms
Tom Emrich: Co-Founder, Wearable App Review & Glass Eats
Kyle Samani: CEO, Pristine
Lindsay Macvean: COO, Facial Network
Venture Capitalists
John Burke: Founder and Partner, True Ventures
Micah Rosenblum: Partner, Founder Collective
Amit Mukherjee: Associate, New Enterprise Associates
Zak Schwarzman: Associate, Gotham Ventures
Lucas Nelson: Principal, Gotham Ventures
Special thanks to Lucas Nelson and Professor R.A. Farrokhnia (Columbia Business School).