Monday, March 10, 2008

The Long Tail of Gadgets

Peter Semmelhack-Founder/CEO, Bug Labs.
Father refuses to use an ATM.
Home Depot as a platform, beginning of diy model.
Has own version of Long Tail, the Pizza Tail.
Idea began after 9/11 when he wanted a gps device in NYC.
Difficult to bring a gadget to market feasibly.
Gadgets are a hit based business, you have to sell millions if you want to price it at a reasonable price point.
Wal-Mart and Best Buy are basically dictating prices.
Toshiba lost HD-DVD wars. Stock actually went up upon that announcement.
Sony PS3 troubles.
Nokia pretty successful company. 30% of 07 revenue came from products releases in Q4. How many companies can actually be this successful?
"I want control."-Semmelhack
Old model-especially when you see how things work in the software space.
Enable users to build what they want. Shouldn't have to go out and buy $15,000 proprietary systems.
Make world of atoms behave like world of bits. Open source and open models are powerful ways to motivate people.
It was difficult to get suppliers to even supply chips because they weren't going to buy huge quantities.
If you want a platform play in hardware you have to have a company. Lego has provided a platform for robotics with Mindstorms. People can focus on what they really care about. Gadgets give us something we want in the form of data. Mindstorms community. Begins to look like the software model. "You can take that model and apply it to other areas."
Being cheese (Long Tail) will be profitable.
Bug Labs puts braille on their devices. 2 millions completely blind people in the U.S. The blind can use a gps device to navigate the environment(GPS trecker knockoff).
The future is connected. Social networks made up of devices. Facebook of gadgets. Going to based on open platforms; both hardware and software. Microsoft would not be successful if they started out today. Everything is moving towards open source. The community is more valuable than the revenue stream. "We want to be radical." Everything on Bugs Labs is open source-EVERYTHING. Friends with Red Hat founder, they made $5 million giving away free software. Bug Labs will resemble the Linux model. "There is nothing stopping someone from knocking us off." They want to become profitable by providing services around the platform. They have a community of developers who will create software for their hardware platform.
There is nothing stopping someone from creating software for Bug hardware that can be ported out to other platforms. "Writing it once and spreading it."
In the existing world, its difficult to start out with an idea and actually get it to market. Its getting cheaper to build electronics. Right now there is only one market in consumer electronics, but Semmelhack thinks that there is another one. The community will solve a lot of the problems in terms of optimizing the product. If someone comes up with better power management software you can download it to improve your device.
The modules are accessible via url. Semmelhack demonstrated this by hooking up the camera and taking a picture of the audience. You can access other people's devices through http.

Semmelhack was an excellent panelist. He talked a lot about the importance of The Long Tail business model and how important the open source community is.

1 comment:

Clayton Grant said...

I think this is an interesting point that there are so many gadgets out there today that anything "new" is essentially a knock off of something old, it's just been upgraded. People can, and I think should, continiously build on one device and keep upgrading it into something everyone and every platform can use. Everything seems to be leading to open source where people can create what they want and gain recognition through the Long Tail model. Like you said, you have to sell millions to be successful and you have to let people know your product is out there and that it is something worth while.