Creating Experience For The All New Beam Brush

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In the past year, we have seen a huge shift in how the tech industry, investors, and the public perceive, and act upon, hardware products.  In large part, this shift has been led by the impressive growth of wearables, which contain the popular FitBit, Jawbone UP, and now the Apple Watch and are inherently health products.

In addition, top acquirers like Google (Boston Dynamics, Nest) and Facebook (Oculus Rift) have made aggressive moves in robotics, drones, and the internet of things.  Perhaps the two coolest companies on the planet right now are Elon Musk’s SpaceX and Tesla Motors.

Beam has been sitting at the intersection of the internet of things and health tech for over 2 years now, in what I view as a particularly interesting situation.  On one hand, Beam’s vision to disrupt the dental industry requires bending the ear (and wallet) of notoriously slow moving giants, which we have experienced first-hand.  On the other, Beam is fundamentally a consumer product, and in one of the most ubiquitous categories in society.  The opportunity is clearly to first create an experience around a universally detested daily activity; one that simply does not exist today.

Here are the key tenets with which we are developing the second generation Beam Brush:

1. Nail the experience.

Achieving a beautiful and passive experience built around this mundane activity of brushing teeth is critical. Our experience must be tasteful, subtle and unobtrusive. Companies like FiftyThree and their connected Pencil have shown the whole industry how to do experience correctly by creating amazing functionality between their stylus and tablet app. As Adam Macbeth at FiftyThree put it recently: ‘great industrial design is just table stakes today; you have to create a seamless experience across software and hardware.’

2. …and tastefully bridge physical and digital.

To return to Macbeth: “The best new ideas live at the boundary between the real world and software.” One of our team’s discoveries has certainly been that people don’t want to work to get a great experience with a piece of hardware.  They want to bridge the gap between the physical and digital…the essence of interaction. It should just work.

3. Low Upfront Cost.

Beam aims to make a tremendous impact on the dental field with an array of products and services, so being able to create users in large numbers is extremely important to drive engagement in our ecosystem. Some of our core demographics are young people and middle class families who have very little disposable income to try out new tech products, even ones that they believe can help them. The initial investment is too exclusionary.

Essentially, we must remove the cost barrier for the initial purchase and drive engagement by building off the huge user base of people brushing their teeth everyday already.

We depend on people that have been buying the $3 toothbrushes at the drug store to want to level up by making a slightly larger investment with Beam.  It is much less likely that the premium market is a better fit, since premium users have likely already made a $100+ investment in a at some point.

4. Stickiness.

Come for the experience, stay for the value. After overcoming the sales barrier, keeping users engaged is a must to really build a business. One of the keys is to be unobtrusive. No one wants to think about brushing their teeth, even while they are doing it.  Trying to force social sharing, or incessant reminders to brush, are annoying and work over time to push your own users away from you.

Creating long term engagement means delighting your users by continuously offering fun challenges and compelling rewards. Uber is doing a great job of this type of variable rewards system right now.  Making rewards based on your dental engagement creates a relationship between health and incentives…without making it an overt, invasive experience.

Early on, thoughts on beam tended to revolve around a theme of the brush ‘tattling’ on your dentist, divulging just how bad you are at upkeep on your chompers. This is exactly not the point. Not only does it pit the user against the dentist like they are opposing forces, it serves to also reinforce that brushing your teeth = no fun.  Beam’s opportunity is to tell the consumer that while brushing your teeth may not be fun, it can still be made into an amazing experience.

 

Google CEO’s Crazy Toothbrush Test

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A couple weeks ago, a headline from Inc. caught my attention: Why Google’s CEO Only Buys Companies That Pass His Crazy Toothbrush Test. Larry Page talking about toothbrushes? Count me in.

The post starts by noting that Larry does not subscribe to many of the classic finance driven metrics when looking at buying a company; they then reveal the ‘toothbrush test’:

So what is it that Larry Page is really looking for, if not sales or proven performance, in a company when Google is considering an acquisition? Page will ask, “Is this something you will use once or twice per day, and does it make your life better?”

Of course, Larry Page uses the metaphor of a toothbrush, which falls into both categories, to underscore a broader point about Google’s acquisition strategy. However, Beam is inclined to look at this dynamic in the more literal sense.  In short, very few consumer products are as ubiquitous as toothbrushes, and fewer still require a daily use, or ‘touch point’.  The most rabidly popular consumer internet products of the past 20 years, sites like Facebook and Twitter, have 100s of millions of users globally, and these users log in multiple times daily to use the product.  These companies, and others that have scaled to enjoy this level of success, are considered to be among the most valuable companies in the world.

By contrast, toothbrushes have had multiple billions of users for decades, and these users tend to their teeth on a daily basis as well.  This provides the basic framework for the value that can be created with a potential base of engaged users of that magnitude. The users already exist; they are a captive audience.  The exercise from there is using this fact as an advantage. Namely, can the experience of caring for your teeth be enhanced to become entertaining, rewarding, even productive? And, what services can be stacked on top of this experience to help make your life easier, more efficient, and cost effective?

Working backward from behaviors that are already built into most people’s daily routine provides a more convenient pathway to not only changing this behavior, but more importantly harnessing it for creating impact. This simple fact serves as the fundamental building block of Beam’s foray into connected dental.

The Case for the Mass Market Hardware Device

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I recently overhead a phone conversation between two venture capitalists who were comparing Google and Samsung, specifically their newest hardware sales numbers.  The key difference between Google’s rising market share in this category versus Samsung’s stagnation was, as one VC put it, ‘because Samsung wants to sell you hardware. Google wants you to help deepen their user base and ecosystem.’ This technique gives Google the flexibility to craft an experience and a suite of products not concerned with maximizing the off the shelf margin, but instead on thinking in terms of the lifetime value of a customer.

This perfectly underscores the distinction between a hardware company (like Samsung) and a software company (like Google).  I also believe this is a key feature for the growing internet of things marketplace. Today, most IoT creators are focusing deeply on their hardware, painstakingly creating beautifully designed, engineered, and packaged devices.  Crowdfunding hits like the Misfit Shine, the Pebble Watch, and the Skully AR-1 motorcycle helmet are gorgeous and functional hardware products.  As such, hardware startups like these are able to charge a premium for these products, partially due to their differentiating features, but also because of their own costs in lower volumes.

This is the natural cadence of introducing a new device to the market: high prices and low volumes at the beginning, and over time the product matures (and competitors come in) to result in a high volume, low price good.  USB flash drives are a great example; I remember buying a 1GB flash drive in 2006 for $50. By 2009, 2GB flash drives were giveaways at job fairs and tossed in the nearest trash can.

However, the internet of things presents a unique opportunity, and challenge, for innovators.  To compete with the incumbent device in any given category (like traditional thermostats), a connected hardware device can grow volumes more quickly by introducing their product at a truly competitive price point. Nest’s thermostat was a runaway hit by all accounts, building a superior product and a superior experience.  In spite of this, I often consider the lost revenues in the huge portion of the market that Nest still today cannot effectively court. For most consumers, the chasm between a $25 regular thermostat and Nest’s $200+ connected thermostat is massive, a leap that just does not make sense for Joe Consumer, even one interested in the product.  What if a Nest thermostat was just $40 or $50? By surrendering margin upfront, Nest could plausibly have grown their customer base exponentially faster. [I know I would be a customer!]

What really keeps customers around, and therefore creating value, is the software built on a particular platform. The power of Nest isn’t industrial design, great packaging, or even their incredible UX…it’s data. Connectivity. The opportunity present for IoT makers is to grow their products at the rate that viral software platforms grow (think Facebook, Instagram, Snapchat, etc.). In this model, the digital ecosystem is built by distributing the hardware aggressively, removing the cost barrier for consumers who will default to the established and trusted brands selling cheaper and still totally functional products.  By crafting purposeful business models that take advantage of the connectivity, monetization in terms of lifetime customer value should still resemble or exceed that of selling really expensive devices to a small group of wealthy customers.

Hardware commoditization is inevitable. To me, at this stage of IoT, growth rate should be as critical as gross margin in that equation, as there are still a disappointingly thin amount of reasonably-priced connected hardware products.  Brand name wearables are $99, most connected health products are at $150 and above, Philips Hue lights are a $200+ endeavor. A concerted push for viral user growth rates, akin to what software startups call success when launching a new digital platform, should be replicated in hardware as a strategy to cement connected devices as a part of (all people’s) everyday life. Only then will IoT go from the much-hyped near future to full fruition.