Jawbone Speaker Downfall: Company Forensics

this video was brought to you by us slight beam make beautiful slide presentations in no time get one free month by signing up at slab beam comm /youtube jawbone known at the beginning as Aleph come first stood out for the quality of its headphones and wireless speakers and later for its wearables the willingness to find new market niches to jump into them meant that finding investors was never a problem for this company that is what the relevant venture capital firms have always invested in by 2014 the company had raised 900 million dollars and was valued at just over 3 billion but all that money didn't help it cope with its strongest competitors including Fitbit or to deal with its customer service problems Jawbone's case was listed by CB insights as the second worst bankruptcy of AVC supported company in the u.s. so how did that happen this is startup forensics job [Music] military technology the british lebanese alexander acidly in the american son of Pakistan immigrants hussain rahman met at Stanford University and decided to create a company called Aleph comm in 1999 their goal was military technology they focused specifically on developing a device that was capable of canceling noise to make it easier for soldiers in combat to communicate clearly with each other with this concept they approached DARPA the Defense Advanced Research Projects Agency of the United States Department of Defense and closed the contract in 2002 they created a mobile phone headset called jawbone and named that the company would later adopt this headset had the ability to pretty much erase the background noise that surrounds the user so that whoever is on the other side of the line will only hear the conversation the headset increased the volume of the voice for both parties automatically eliminating the need to shout during the dialogue soon the company saw commercial value in this technology and hastened to take it to the market sales boomed and between 2007 and 2008 the company had significant profits however a cently began to have less prominence in the company and returned to london Hossein rahman became CEO success also came when driving loss allowed the use of hands-free in several US states so this favored the race for the use of wireless headphones in June 2007 aliv announced the arrival of its jawbone bluetooth headphones with noise shield noise cancellation to 157 Apple stores the devices would be sold alongside the iPhone for $119 a press release following the announcement said the combination of iPhone plus jawbone will revolutionize mobile communications by allowing customers to really talk work and play anywhere Raman the CEO said they were confident that their customers would discover that the pairing of these products offered the best experience in terms of quality and sophistication later came jawbone 2 and jawbone prime in 2009 which seen it called a very modern headset with a perfect fit which also offered better noise cancellation and better wind noise management than its predecessor the company gained confidence and decided to explore other such as wireless speakers first came Jan box in 2010 and fortune smiled again at this company because the speaker was one of the best selling products in 2011 the big jambox arrived a wireless device big Jambox offered 15 hours of use thanks to its 2600 milli amperes battery it also came equipped with a USB connector through which you could update the software a jack input and a button to pair with another device via bluetooth however it meant nothing for the company to arrive before its competitors as time went on bigger companies that could produce more and with better prices force these guys to pivot they decided to pivot into a consumer technology company but mainly aimed at monitoring physical activity and health in 2011 the company which was still called out of come officially became jawbone and opted for wearables physical activity tracking bands a market that was just beginning to flourish the arrival of the company in this market category was one of the reasons why it managed to attract abundant venture capital from recognized firms again Sequoia Anderson Horowitz Khosla Ventures and cleaner Perkins Caufield & Byers and even a sovereign fund of investment that is investment by an actual state that was when jawbone raised 900 million dollars and got that 3 billion dollar valuation a new bet after its transformation the company opted for a new bracelet called up which had an elegant and easy to wear design it was also water-resistant and had an accelerometer what could you do with this device well it was designed to track daily routines for example to know how much and how fast users walked the number of calories burned as well as the number of hours slept and the sleep quality the bracelets synchronized data to a mobile app this was introduced at a price of $99 and here comes trouble the third generation of physical activity trackers that dubbed up-3 began bringing problems to the company in 2014 first it came with a flaw that made jawbone stay out of the Christmas sales season then they ensure that the device would have a heartrate monitor which represented a whole innovation in the world of wearables it was later proven not to work very well Chris Welch a reporter from the verge tested the bracelet and said measuring the heart rate during a workout is the key that people expect in a the collectivity monitor and the up3 simply can't do it instead the company opted to offer the resting heart rate measurement ensuring that this was a good health indicator and other inconvenience users noticed was the lack of a screen to display information so it was always necessary to synchronize data with a smartphone although it was brave to take part in the wearable market jawbone failed to take hold until just four point four percent of the market pi was left to them in 2015 strong competitors began to appear including of course the Apple watch also Fitbit was on Jawbone's heels and before their IPO the company sued them before the California state court as reported by the New York Times in May 2015 Fitbit was accused of systematically looting confidential information by hiring jawbone employees who incorrectly downloaded sensitive materials shortly before leaving this case arises from the clandestine efforts of Fitbit to steal talent trade secrets and intellectual property of their main competitor the complaint continued layoffs that same year jawan closed its office in New York City and ceased 60 employees in November the excuse the same that other companies that are forced to reduce their payroll usually offer restructuring a spokesman for the company told a verge at the time that as part of our strategy to create a more aligned and successful company we made the difficult decision to reorganize the company which had an impact on our global workforce that was the second cut that jawbone was forced to make in 2015 because in June of that same year 20 people were fired the firm IDC ranked jawbone as a fifth largest wearable manufacturer which had again 4.4 percent of the market for the first quarter of 2015 Fitbit was ranked first followed by China's say o me Garmin and then Samsung for 2016 while Fitbit sent 22 million devices to its customers jawbone sent less than 20% of that from then on the province just continued coming in for the Californian company there was a financial turmoil suspension of customer service and a decrease in inventory and even the departure of many executives the company stopped manufacturing and selling its physical activity trackers in 2016 and then sold its remaining inventory to a reseller among those problems probably the most con travursel one was suspending customer service job owns stopped offering forums on its website and responding to customer inquiries with defective hardware you just can't stop supporting your customers especially if there's a warranty period even their social networks remained idle for months and several publications and sites such as the verge noticed jawbone declined to discuss the issue when confronted the end with no other options remaining in 2017 the CEO of jawbone decided to liquidate the company and jump ship but he jumped into a mothership which was jawbone health he brought some of the previous employees with this new company in May to nineteen the idea that Rahman pursued with jaw bone health seems to remain alive he intends to use personal devices artificial intelligence and other technologies to detect chronic heart problems when they are just starting to develop but jawbone one of the pioneers of wearables is nothing more than a memory of a startup that died too soon [Music] you

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Keywords: jawbone, jawbone speaker, startup mistakes, startup company, slidebean, startup forensics, caya, caya slidebean, slidebean ceo, startup failure, starting a business, startup fail, startups, entrepreneur advice, entrepreneur motivation, startup entrepreneurs, startup entrepreneurship, venture capital, startup failure stories, tips for entrepreneurs, entrepreneur motivation 2020, young entrepreneur advice, startup failures, entrepreneur, small business, small business ideas

Id: fed3-iA77YE

Length: 8min 51sec (531 seconds)

Published: Thu Feb 06 2020