There is big pleasure about wearable, digital self-measurement products, gathered below the rubric: “Quantified Self”. Estimated revenues from these gadgets had been $ 290 million final 12 months, forecast to double in 2014 (1). Pundits are gearing up: the New York Times published a special report final week (two) and boutique consultancies are publishing reports (3). How considerably fire is below this smoke?
As traders, when presented with a new enterprise proposal, we request ourselves: “Why this, why now?” For quantified self, the solutions to these queries are encouraging.
Why now? We’re in the midst of the smartphone revolution, and smartphones are enabling Quantified Self by supplying a strong, ubiquitous, and reasonably priced technology platform. Smartphones have created three-axis inertial positioning sensors, which enable exercise monitoring, cheap and obtainable by making a billion-unit industry. In the 1960s only 747s and nuclear submarines could afford this capability.
Plus, the intelligent telephone is a networked computer in your pocket that can record, analyze, and display data from wearable sensors, and it offers frequent suggestions, social characteristics, and gamification that contributes to success.
“Why this?” goes to demand for the solution/services: who needs this, how massive and urgent a need (the “pain”), and do they have the energy to purchase? Predicting demand, and specifically how quickly it will take place, is the massive chance level in early stage investing.
There is a great deal of soreness right here, mostly from the persistent condition epidemic that is sweeping the U.S. I’ll reiterate a few scary headline details:
- 35% of U.S. grownups are obese.
- Sedentary lifestyle promotes weight problems.
- Obesity and sedentary lifestyle are major drivers of chronic ailment: Sort II Diabetes, Cardio-vascular ailment, etc.
- In addition to its other disadvantages, continual sickness is pricey. Diabetes alone drives about 10% of U.S. healthcare expenditure.
Furthermore, wearable units are inexpensive. In simplest type they are free of charge computer software in a smartphone, like the S-Overall health software program that is free of charge with Samsung smartphones and counts actions well sufficient. The mainstream stand-alone devices value $ 100-$ 200, well inside the mass industry price tag band.
The tough query is, do wearable gadgets perform? Do they create beneficial data? Does this details adjust user behavior? And, does it remain modified? If wearable devices do not work, they will be in bottom drawers when the up coming gadget fad hits.
Answers are just starting up to come in right here. The early outcomes are usually encouraging.
• Wearable gadget penetration is substantial: 1/6th of U.S. adults own one particular. Ownership is highest amid ages 25-34 (at 25%) but it remains powerful via age 65. The marketplace falls into two segments with distinct motivation patters: “fitness” which appeals to younger grownups, and “wellness” which appeals to older grownups.
• Many customers make the tracker component of their life. Survey data indicates that about 50% of owners nonetheless use their device 12 months after buy, and the trend appears to degree off at about 40% long-term use (see graph over), which you could see as a glass about half-empty, or half-total (three).
• Individuals pay out interest to wearables. Study by Dr. Kamal Jethwani discovered that about 10% of end users are “Quantified Selfers” who keep track of their information and consider determination from it. One more twenty%-thirty% can alter conduct with some encouragement in addition to the data tracker (2).
• There is far more early proof that suggestions prospects to adjust in conduct. Dr. Rajani Larocca, a main care doctor at Massachusetts Common Hospital, conducted a modest research providing trackers to diabetes sufferers aged 50 to 70. He discovered that every single single man or woman improved activity, and about 50% were even now making use of the tracker six months later (two).
• The accuracy and scope of data created by wearable sensors in bettering quickly. Present wearables mostly record methods and exercise at evening. Some include skin temperature, resting heart price, and a tension measure derived from skin conductivity. But this can go much additional: Google Google is establishing get in touch with lenses that measure blood glucose levels, and wearables previewed at CES this 12 months give most of the data presented by a hospital patient keep track of.
Scientific studies are starting that examine the data from wearables, which is a lot far more granular data about human activity than scientists have been able to entry previously. This will solution queries like: how considerably of an boost in action, of what type (reasonable or cardio-challenging) prospects to what degree of health benefit?
And of program there are safety and privacy issues to be worked by way of. Many commenters on the New York Times report raised this situation.