Hi there! Today I wanted to walk you through the remarkable journey of Jawbone, a trailblazing company that went from disrupting the Bluetooth headphones market to a shocking crash leaving investors dumbfounded. This deep dive will chart Jawbone‘s ambitious pursuit of innovation across multiple product categories, eventual overexpansion, and failure to adapt in time to survive.
A Hot Startup Riding High
Jawbone entered the tech scene in 1999 with a novel mission – make Bluetooth headsets fashionable. Up till then, headaches from bulky motorcycle-esque headsets had left most consumers with a negative perception of the technology.
But Jawbone‘s 2004 patent for "earbud stabilizers" allowed it to miniaturize headsets into sleek, lightweight packages that didn‘t compromise on battery life. Paired with award-winning industrial design by Yves Béhar, Jawbone headsets became must-have gadgets for the iPhone generation.
| Year | Product | Notes |
|---|---|---|
| 2006 | Jawbone 1 | Debut headset with "Noise Shield" tech |
| 2007 | Jawbone 2 | Smaller, improved performance |
| 2009 | Jawbone Prime | Smallest/lightest headset yet |
Buoyed by this initial hot streak in audio accessories, Jawbone expanded into portable Bluetooth speakers in 2010 with Jambox. Retailing at $199 versus $50 for standard speakers, Jambox stood out with colorful, fashionable aesthetics and booming sound. An ingenious foldable design made Jambox ultraportable years before competitors caught on.
Jambox achieved runaway popularity in the pre-Alexa era for minimalist consumers wanting better audio quality than laptop speakers. This early two-pronged success in both headsets and speakers cemented Jawbone as a rising star in consumer electronics.
Flushed with confidence, Jawbone decided it wanted to disrupt an even hotter category than audio devices – fitness wearables.
A Bridge Too Far: The Move Into Fitness
In 2011, Jawbone acquired health tracking app Massive Health and spent over $100M acquiring related startups to break into wearables with a fitness wristband called UP. Launched to solid reviews that holiday season, UP Quartz became the second most popular tracker behind Fitbit.
UP‘s stylish, minimalist design ethos matched Jawbone‘s tech cred perfectly in the minds of Silicon Valley techies. But significant quality issues in the band‘s firmware coupled with inadequate customer service frustrated early adopters. Still, the initial hype was enough for Jawbone to raise $400M in 2012 at a $1.5B valuation.
Jawbone relaunched UP in 2013 with the promise of addressing those early bugs. And it continued acquiring sensor technology companies to aid an ambitious product pipeline. Media outlets crowned Jawbone as the "future king of wearables" destined to pass up Fitbit.
| Year | Funding | Details |
|---|---|---|
| 2011 | $100M | Acquire health tracking startups |
| 2012 | $400M | Reach $1.5B valuation |
| 2014 | $250M | "Future king of wearables" |
But by mid-2014, history repeated itself as crippling firmware defects in UP forced Jawbone to offer full refunds right before the critical holiday season. Burned customers fled back to the stability of Fitbit as Fitbit Flex overtook UP in market share.
The nail in the coffin came in 2015 as Jawbone failed to anticipate competition from a new entrant – the Apple Watch. With its polished software and deep iOS integration, Apple Watch rapidly dominated wearables and left no room for Jawbone‘s gaffe-prone trackers.
Despite raising $165M more in desperation funding, 90% of Jawbone employees had been laid off by 2017. With creditors owed over $100M and warehouses full of unsold UP trackers, Jawbone sold off remaining assets and entered liquidation. Just like that, a leading light in consumer tech was snuffed out.
Lessons Learned From a Fall From Grace
So what can we glean from Jawbone‘s catastrophic collapse that seemingly happened overnight? After all, it had raised nearly $1 billion in funding over 17 years from top-tier VCs. Where exactly did things go so wrong?
Don‘t stray too far from your core competency – Jawbone spent years honing beautifully designed Bluetooth headsets unmatched in the industry. But instead of building atop those strengths, it diverged heavily into fitness bands which diluted focus. If Jawbone had gradually moved into adjacent wearables markets instead of drastically leaping into new verticals, it may still be alive today.
Fix foundational cracks before expanding wider – Both times Jawbone released a new UP tracker, it was plagued by showstopping firmware bugs requiring product recalls. But instead of taking a step back to perfect core functionality around health tracking, Jawbone rushed to conquer new territory like sleep analysis. The result was a house of cards that folded at the slightest breeze.
Watch out for large new entrants – Jawbone failed to anticipate how the entry of deep-pocketed behemoths like Apple could instantly reformat the competitive landscape. Via the Apple Watch‘s strong health tracking features and iPhone sync, Apple immediately claimed a significant chunk of the casual fitness tracking pie Jawbone was betting huge on.
Of course, hindsight is 20/20. And Jawbone should still be lauded for some firsts in popularizing fitness wearables along with noise-canceling consumer headsets. But hopefully, the missteps that led to Jawbone straying from its winning formula and ultimate undoing will serve as cautionary tales for future startups tempted by unchecked expansion.
Where Wearables Are Headed
While one pioneering wearables company in Jawbone crashed and burned from mismanagement, the larger industry it helped kickstart has continued evolving:
Medical-grade tracking – Modern Apple Watches can take FDA-approved ECG heart readings on par with hospital. Startups like VivaLNK offer multi-day patches continuously tracking heart health, respiration, steps, and more.
Cross-device integration – Fitness trackers now seamlessly connect with other ecosystem devices like smart beds to offer unified sleep coaching. The lines between form factors continue blurring.
Preventative health – Wearables are increasingly moving from simply logging health data to actionable advice tailored around detected health conditions. They truly hold potential as 24/7 personalized care companions.
While Jawbone itself won‘t be along for the ride, the wearables revolution it helped spark through stylish, everyday fitness tracking continues going strong. I don‘t know about you, but I for one am excited to see how far these little computers on our wrists will take us in the 2020‘s!
Let me know in the comments what lessons you took away from Jawbone‘s startling collapse, or if you have thoughts on what the future holds for wearables. I‘m curious to hear your perspectives!
