Technology is our friend: What I learned from Wearable Wednesday
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October 9, 2014

What I learned from Wearable Wednesday

Thanks to the one and only Maks, I had the opportunity to visit BMW-hosted "Wearable Wednesday", conducted by Wearable World, yesterday night in Munich. Although Dr.Steven Althaus, Director Brand Management and Marketing Services at BMW and host of the night, is known to be highly affine for such topics and credibly stated that BMW has a “genetically inherent interest” for any new technology, it is already a sign for how much momentum the general topic of wearable technology has gained when a company like BMW hosts such an event – anyone who knows corporations of that size (over 75bn Euros in revenue, close to 8bn Euros in profit), knows that this typically happens at a stage where the question is no longer ‘if’, but only ‘when’. Wearables obviously have passed that stage already.

Still, it is very tough to get your head around this topic since opportunities seem endless, the innovation speed is breathtaking and every new estimate adds another dozen of billions to the market volume expected to be reached in only a few years from now. And there's tons of demo videos with emotional music building up, trying to show the daily life of normal people, seamlessly integrating with the hottest and coolest in technology. And you hear speakers who tell you that if you do not excel in this area, someone else will – and will acquire you or destroy you in this or that form. Reminds you of something? We’ve been through phases like these a couple of times before. And in these phases, there’s this one Bill Gates quote that - in my eyes - has proven to be very accurate:

I think it applies here, too. The world will be different in 10 years. But probably not in two. So my first learning of the night was that although the possibilities are endless and everyone else seems so advanced and involved and better-positioned, we can keep our cool. There might be some industries that need to panic right now (personally I believe that this applies to some parts of Switzerland [German blog]), but most established corporations should calmly develop their strategy and activities (which is far away from ignoring wearable tech). Maybe they can even leapfrog the one or the other technology cycle. Look at Swatch – during the late 90s, they were forerunners in the digital area, even launched a watch that would try and introduce an “internet time” suitable for a connected world that does not know physical boundaries and therefore no time zones. They even had a watch that featured a built-in Ski-Pass. And although they announced that they will enter this market, no one even mentioned their name yesterday. Not on stage, but also not in any of the talks that I was involved in afterwards. So being first does not necessarily mean having a pole position for a time when a new technology or innovation unfolds its full power. This may apply to businesses with a built-in network mechanic that will have to lead to oligopolies when they establish and reach a critical size – but not all of the business models in wearable tech are laid out like these.
The NetatmoJune, a wearable that looks like a simple piece of jewellery but counts UV light exposure, advising you how long you could stay in the sun per day and therefore preventing your skin from aging or even worse developments, consists of a single purpose device and an app. This may be a good business today and may help scale Netatmo as a whole, but its business model does not include any lock-in or first mover advantage as such – a better, nicer, cheaper, cooler device may destroy this business - or a "device" with a smarter model. Just like a friend recently told me that his kids, 11 and 9 years old, asked for smartphones - and did not know what the term “Nokia” stands for. Never heard of it. Something like 10 years after a world market share well above 75% in mobile phones. They missed the effect that a networked business model - providing a platform for other businesses to participate - would have on the whole market, later proven by Apple and Android.
From a business model perspective, the only European presentation of the night was the most impressive one to me. Not only the awesome crowdfunding story – asking for 260.000 USD, collecting 3,4mn on Kickstarter – and not only the gorgeous device itself, but first and foremost how the business is planned: From the very beginning as an ecosystem. 

I learned from Redg Snodgrass’ introductory talk that an easy way to look at wearables would be to always concentrate on their ability to collect data (sensors) and their ability to display data (output), and that this flow of data input, then some software doing something smart with it, and then an output of data in a way that it connects with human beings and their needs and interests will be the magic that will make wearables change the world.

And then there’s this guy, based in Munich, presenting Dash, basically a wireless in ear headphone, that stores 4GB of data (for example music), combines a huge variety of sensors that can measure your body vitals, keep track of your performances and whatnot and will speak to you as an output channel – and it is not set up as a device plus some app, but it comes with an SDK, so developers can use it (development kit is sold out, and they said that over 2500 developers connected with the company to explore the product only from the Kickstarter campaign) to start competing over which use case for a device like that might be the one that creates this magic that I tried to describe above.
Here, a first mover effect might be decisive already – for Bragi, the company that produces and sells the Dash. The great side effect of this is that, just like an Apple Watch or Android Wearables (that both had remarkeably little airtime on stage), it allows established companies to participate in this area, create skills, generate learnings, find out about customer demand from a pure software side. App development all the way - just like BMW already seems to have an Apple Watch app in place (but their demo unfortunately was skipped) . And if the past has tought us something, then that in very, very few cases, not matter if it’s BMW, Nutella, Pampers or Deutsche Telekom, will a proprietary device from a single company succeed in a world where networking and scale will drive innovation, market development and customer adoption.

Established companies will have to take their time, before setting up venture funds, acquiring start ups and start panic-driven product developments, to integrate all this in their digital transformation plans and start experimenting in these “early” marketplaces. Still, my gut feeling is that we need more of these “Wearable Wednesday”-type of events. More contact to these hackers, developers, hardware freaks and tinkerers – and more people in the traditional industries that they can talk to on eye level. So once again – Kudos BMW for making this possible.  More companies need that “healthy paranoia” that Dr. Steven Althaus described as a state of mind within BMW: Constantly watching out for technology and market developments and assessing where they could form a threat of your traditional business is done by many companies – but only few translate this thought into embracing new tech with curiosity and an open mind. And I am pretty sure this is the most promising way to do it.