A VC

Musings of a VC in NYC

« Eating Our Way Through Rome | Main | The Forum »

2007: User Generated Devices

Comments (31) | Posted December 29, 2006 in Venture Capital and Technology

Comments

With software and data users can *generate and modify* content. This is what gives the user the power.

With hardware the user has no power to generate or modify. It's virtually impossible for me to manufacture a new LCD screen or a wifi plugin for your camera.

The only power the user holds is how he spends his money. It'd be great if people vote for modular devices by spending their money on them, but I see no evidence that this will happen in 2007. People are looking for iPods: solid, beautiful, fully baked devices that can be souped up in the after-market. I don't see modular being a big part of the purchase decision for the average consumer.

Posted by: Parand | Dec 29, 2006 5:50:14 AM

If I'd known you were going to be in Italy, I'd have invited you up to Lake Como!

Posted by: Deirdre' Straughan | Dec 29, 2006 6:14:54 AM

I hope you're right, but I'm not optimisitc.

We can't even get apple to put replacable battery packs in iPods.

I guess the real question is how much extra would you be willing to pay for modularized personal electronics?

Posted by: Erik Schwartz | Dec 29, 2006 7:13:13 AM

If a cracked screen is a common occurrence, then sure they should be aware of this potential fallibility and design in easy replacement as you suggest. What you're positing is, I would suggest, beta testing of hardware. Real users in real situations using and crucially breaking the product.

In addition to Erik's point about the added cost of built-in personalisation, we'd also have to work out how to avoid this edging towards the anthema of design by committee.

And, of course, in reality, most people don't know what they specifically want till you give it to them.

Posted by: John Dodds | Dec 29, 2006 8:37:29 AM

Erik is spot on here - manufacturers have two choices (well, three really, but one isn't really in their interest):
1. Cheap and integrated
2. Replaceable with proprietary 'locks' on interfaces to ensure future accessory sales and product safety/quality of product use

and #3? Universal parts

We've done a lot of work in batteries and the example is a good one. All batteries are matched to the system for optimum performance, recharging, cycles, etc.

Integral batteries (like in your iPod) don't require an outer shell and can be made very cost effectively, but asking mass America to open up a device and remove batteries - well, from a product liability standpoint, ugh (I have upgraded my gen 1 iPod battery and its really not that bad - Apple doesn't want you to do it). For external/replaceable battery packs, the design of the pack is made to withstand more abuse and interface with the device (think cell phones, power tools). Most companies that employ an accessory strategy make substantial profits from that business by offering better packs, the option not to dispose the core product (there is a cost to this option in design). That said, OEM parts can be a part of that strategy from the manufacturer to the end-user.

Large companies like Canon put a lot of effort into scalable manufacturability which doesn't always line up with users poking around with the components (I've tried replacing the screen on my Canon 450 and have learned my lesson).

Like they say in the invention arena: "what is needed is a set of innovative parts manufacturers that would be willing to make available to the masses their components for sale and assembly with a retail venue that could provide the umbrella store/resources to guide consumers on how to's." A brand that comes to mind is O'Reilly's MakeZine.

Posted by: CoryS | Dec 29, 2006 8:51:39 AM

Well spoken Fred.

It probably won't be a mass phenomenon by the end of 2007 (yet), but I agree that the demand for modular "devices" is building up as we speak.

Funny enough the push for those kind of innovations, or better, enhancements these days seems to come from a small tech-savy user/fan-base not from the companies themselves.

I you're interested in mobile phones have a look at this blog; for instance.. http://www.ringnokia.com/2006/12/and_this_is_why.html

Here are some excerpts:

"..What's more upsetting is that he will never see an upgraded music player application since that would require an entire firmware upgrade. Nokia isn't going to do that. I need to start a movement at the S60 development team within Nokia. Componentize, componentize, componentize! One shouldn't need a brand spanking new firmware if you're just going to update one application!.."

"..Back on topic however, this new browser is only being included in phone running S60v3FP1; the only Nokia model running that so far is the N95. I wish Nokia took a modular approach when developing their web browser so they could offer the latest and greatest to their consumers.

The market for browsers is there, and I've already installed Opera Mini on at least 5 of my friends phones. Locking your browser into your OS is very foolish since you can't add features later on. I'm disappointed that Nokia, as well as other handset manufactures, take this approach to their devices. That once they sell them, boom the relationship is over. Sure we may get a firmware upgrade here or there to fix glaring issues, but added features? Yea right. It's a shame too since the videogame consoles out on the market right now use the connection to the net as a great tool to leverage demos, video, micro transactions, and most importantly offer new features and updates to consumers. When will handset makers learn?.."

For the full text of the posts and more along the same line see Stefan's excellent blog http://www.ringnokia.com

Also, Fred, you're idea of a modular part for your digital camera so you can send your pictures wirelessly has also been "picked up" :-}

See http://www.eye.fi/index.htm

Posted by: andydigitale | Dec 29, 2006 9:12:52 AM

As a bit of a hobbyist hardware hacker, I feel like offering a counterpoint to CoryS's point. In my experience, the less expensive the piece of consumer electronics, the more likely it is to use standard components. This time last year I made a fairly large hack to an expensive Sony DV camera and I found that nearly every chip and was custom. In addition, the entire lens & CCD assembly was highly customized, as one might imagine.

The purpose of my hack was to replace the in-built lens with standard 35mm film lenses. To get this to happen, I had to custom build a few tricky parts and spent many hours with a laser cutter and a file. Eventually, I managed to pull it off.

Zip forward to last night. I was on my way home from work and decided to start a similar project, but rather than hacking a few $k's worth of camera, I wanted to go downmarket. I dropped into RadioShack and bought a 5MP camera for under $60.
Compared to my girlfriend's Canon, which died earlier this year, this $60 camera was imminently hackable.

When it comes to ease of repair/hacking, cheaper electronic devices excel as they don't have to look far to find commodity components that were brought to market by larger manufacturers for use in more expensive products. For example, I'm willing to bet that your Canon camera uses a fairly standard Sony LCD, and if you were willing to do some digging around you could probably find a replacement.

So, in response to CoryS, the parts manufacturers are already quite innovative, in that a small number of fairly standard components make their way into many sub-pro level devices. And in response to Erik, you often pay less for devices that use these standardized parts, not more.

Posted by: josh | Dec 29, 2006 9:29:47 AM

Josh, I think you misunderstand what I'm saying.

Yes I agree, parts are common, physical interfaces and connectors are not.

Most people can't solder.

Posted by: Erik Schwartz | Dec 29, 2006 9:38:08 AM

Taking control of our devices; I’m not sure what that means, but I reckon that Fred aims for something like the open-API thing happening on the web. I think that most companies will not be willing, nor will they be able to create anything like that. What they can do, however, is listen to the consumer.
From a design point-of-view, there are several different ways to do so. We have focus-group research, which is after the fact and usually does not add much, but also ways to find out what people want and need that are more sophisticated, for example cultural probing where a small group is lead through a discovery on their own, by a package of exercises. The ‘answers’ they give to these exercises are usually not only written, but also by means of photography or collages and such. It gives the participants the things they need to express their feelings, wants and needs with regards to a particular occupation or task, without asking them for specific product ideas. When done correctly this can lead to profound insight on how to improve the user experience, and spark great innovation.

Another way that’s emerging is a sort of open-source innovation. I’ve seen several examples of this recently; a company in Holland named Favela Fabric that focuses on community driven innovation, where they build a web-based community of dedicated fans of your brand and incite discussion in it, and ask for ideas and suggestions. It’s the closest you can get to having a meaningful conversation with your customers. A CONVERSATION. Yes! Another great example is the way Slim Devices dreamed up their hi-end squeezebox together with their customers (as storied in Fast Company). I think this sort of two-way communication (as opposed to one-way: the company talking through product and advertising), especially when applied to product development and innovation is extremely powerful. Of course, there is the problem that most people don’t exactly know what they want or have trouble describing it, which is exactly why the research method it described earlier is so powerful, but whenever you’re not looking for a radical innovation but a way to please and help you customers by making the best possible product, engaging those who do know about it in a conversation is the way to go. I think more companies like Favela and SlimDevices will emerge soon, and they will make the large corporations realize that the era of spending your way to greatness in Madison Avenue is over. We need to make our products the best they can be, and thereby focus on the interaction between the consumer and the product. That includes functionality, form and handling but also branding and distribution. There are huge opportunities here; and a sea change up ahead.
[I also posted this story on my own site]

Posted by: Rik | Dec 29, 2006 10:15:04 AM

Hey Fred - you may remember we talked a year or ago about del.icio.us and FT :)

I agree with your sentiments and that 2007 will be an inflection point for what many call open source hardware. We saw the beginnings of this with O'Reilly's Make community and this has been followed by projects like Surj Patel's open source Tuxphone mobile handset, the Openmoko project and the inclusion of open source firmware in many devices. Also companies like CrowdSpirit are seeking to create the demand generation mechanisms for consumer-generated devices.

If you're around SF in late February, at ETel we can introduce you to some of the people involved in open source phones... something that promises to shake up the stagnant mobile industry and open new opportunities :)

Posted by: Imran Ali | Dec 29, 2006 10:18:26 AM

Fred,

Modularization is a great idea, and one that has been around for a long time. When I was in college (back in the late 70’s/early 80’s), everyone had a custom stereo system. You bought all your components separately and built what you wanted. The hardest part was hiding all the cords and wires.

It would be great if we could do the same thing with our devices today, using device to device direct plug in, or “snap and lock” connections (no custom cords, of course)! Sadly though, I think, for many of the reasons your readers point to above, it will be a slow evolution, and not a revolution, before we start to see device stores that resemble Build a Bear Workshops.

Posted by: Stephen L. McKay | Dec 29, 2006 11:00:34 AM

And service providers hopefully -- Verizon won't send me a SMS when I'm low on minutes for the month. Why? Doesn't make sense to them to -- they'd rather catch me with an overage. Well, that's not nice. "But sir, you can simply call #MIN (#646) and we'll send you a text with your minutes." That's great, but minutes left in my Verizon plan aren't top-of-mind with the 100's of other things occupying my mind. Be nice -- help me out, and I'll be a dedicated customer, I swear... don't make me have to call you next month when I have a bill with hundreds of dollars on it, and cuss out your poor customer service rep, even though I really should be cussing at myself, but only because of your lack of niceness. Verizon, you obviously have the software that can trigger a SMS to me when my minute balance is low -- my bank, Bank of America does it for me.

Posted by: Steve Poland | Dec 29, 2006 11:44:05 AM

ironically, canon is actually extremely good in this regard: you can order JUST the screen from Canon Repair for very little. a year ago i repaired my own broken canon camera screen for $40 and it was very easy to get said screen. (and used info found on http://www.google.com/search?q=how+to+replace+canon+screen+&ie=utf-8&oe=utf-8&rls=org.mozilla:en-US:official&client=firefox-a)

so i dont think thats the problem

the problem is likely that repair is a dead word. few people have the skill and tools to do repair anymore, & its just easier for you to go and buy a new one.

Posted by: ladyada | Dec 29, 2006 12:04:09 PM

Very good idea.. This sounds a bit like what your stealth mode investment BugLabs is about doing. Am I right?

Posted by: Emre Sokullu | Dec 29, 2006 12:07:30 PM

Would you back a venture building consumer electronics products where all of the software is open source? Open source software is key to building user modifiable products.

Or do you believe in planned obsolescence? I have at least thirty gizmos in a pile that are closed products and no longer useful to me. I was never able to get some of them working correctly at all. As I learn I am being much more careful about buying $400 closed gizmos.

If VCs stopped funding closed products, it would go a long ways towards making things more open for consumers.

Posted by: Jon Smirl | Dec 29, 2006 12:25:48 PM

@Jon: user modifiable devices? This sounds too geekish to me, do you think the end user would do that? They won't do more than changing cases of their mobile phones.. No?

Posted by: Emre Sokullu | Dec 29, 2006 12:33:34 PM

Imagine a real ecosystem built around consumer devices like cameras, watches, pda's, phones, etc. To some extent it is already happening to pda's and phones and I guess you can call flickr, shutterfly, ofoto, etc examples of it with regards to the camera but what I envision is interoperability akin to what ethernet is to networking. The example Fred used for a wifi adaptor for his camera is a good one but imagine if that uploading also incorporated some gps type data that mapped where the photo was taken, etc. I think that would be slick.

Posted by: tomo | Dec 29, 2006 12:50:29 PM

Well Mr. VC, feel free to give me and my team our $10m, and we will have your new camera next year... ;)

Posted by: Dustin | Dec 29, 2006 1:04:44 PM

I'm not sure this one is so much about the industry not letting consumers do it - the mechanics, electronics, software, and user interface for something that isn't integrated is significantly more expensive, complicated to use, harder to engineer, less reliable, and so on.

I suspect in the case of a camera, the significant costs of the device are the lens, the LCD screen, and the CCD. The actual physical connect between the LCD and the electronics is probably soldered (not a mechanical connect, thus much more reliable.)

Additionally, I think we've been shown time and time again that mass production, leading to price reduction, sweeps the market.

That said, I am pretty sure that network connectivity for devices is one of those things that will sweep the product market as soon as we hit an intersection of ease of use and consumer awareness.

Posted by: joshua schachter | Dec 29, 2006 1:24:18 PM

To Emre Sokullu, and others who commented similarly,

I don’t think Fred is talking about going deep, “under the hood“, and soldering here. What I think he means is having the ability to pop on a small external, or perhaps internal module (or two) that will enhance and customize the primary device, or make repairs simple, using “snap, click, and lock” to replace a bad screen.

Posted by: Stephen L. McKay | Dec 29, 2006 1:45:18 PM

One more thought on this, because it really is interesting to me, and something I would very much like to see.

The major problem, both logistically and contractually is getting everybody to manufacture devices that allow for universal use of customized modules (the closest thing I can think of that does this is the SLR camera, and as the owner of two Canon models, one digital, and one film, I can tell you that this interchangeability comes at a price). To do anything less than provide universal interchangeable modules, would create the “Custom Cord” dilemma, which I know is a pet peeve of Fred’s, and not without justification.

Yes, I think his will happen. The Build a Bear Workshop model I referenced earlier will be the device shop of the future, but unfortunately, it will come about in baby steps.

Posted by: Stephen L. McKay | Dec 29, 2006 2:43:01 PM

To Stephen & Schachter, et. al. - If you open the canon camera you will find that the screen is *not* soldered to the mainboard. There will be a little plastic ribbon cable that goes from the LCD to the main board on the camera. If you flip up the plastic, the ribbon comes out presto! And if you had a replacement, as suggested by ladyada, its pretty simple to repair.

The greater concern, also as raised by ladyada, is that despite being a simple procedure most consumers will not do this - and thats fine, the average consumer shouldn't expect to have to do this. The big problem is that most retailers and chains would not dare to repair the camera for you , for fear of voiding warranties and losing out on margins gained from either replacing the unit or sending it off for an expensive repair.

I can relate the story of my favorite laptop, a DEC HiNote Ultra. It was a great laptop that my father bought at a consumer show in the early 90's. When we went to pay for it, the barcode scanner misread the tag and we ended up paying well under half the price for the unit. It was a queasy ethical moment - we knew we were being way undercharged, but we let it slide...

A few months later I borrowed the laptop without my father's permission and dropped it. The machine then failed to boot and I was petrified. I took it to the central DEC servicing center and they examined it and told me that it would cost more than what we paid for it to have it repaired. I freaked; I didn't have that kind of money.

Being a tinkerer, I couldn't resist opening the case and checking out the thousands of dollars of damage. It turns out that the casing around the power supply was dented and shorted out a fuse. I unscrewed the casing, bent it back in shape and replaced the fuse. Total cost: less than a dollar. And it was fixed before my father found out.

Rather than continuing to post rambling anecdotes, Fred, I'll try to fix your camera. If Valleywag is to be trusted, your within walking distance of my place. You know where to find me.

Posted by: josh | Dec 29, 2006 2:56:12 PM

The Nokia 770 is a prime example of a user modifiable device. http://www.maemo.org/

Another on is the Linksys WRT54G. http://www.wi-fiplanet.com/tutorials/article.php/3562391

SlimDevices, http://www.slimdevices.com/

There is a large body of people in the Linux world that will do the work necessary (for free) to modify the software for these devices. the other 99% of the owners then download this new software. They don't know how to write the new code but they can figure out how to install it if some one else writes it.

This new software often turns the hardware into something new that the original manufacturer never conceived of.

There are strong communities built around these open devices, most with 1000's of participants. If you are having trouble changing the software, just send a polite message asking for help and you always get it. This is infinitely better that calling some vendor's support number and being transfered to India.

Asking for interchangable hardware at a low level is not going to happen. There are too many technical problems with it.

How about writing a post on the opinions of VCs toward open source software for VC backed consumer devices?

Posted by: Jon Smirl | Dec 29, 2006 3:48:31 PM

Wow! What a level of response you have here, Fred!

To Josh,

That’s why I emphasized logistics, and contracts. I still think the Build a Device Workshop is in our future, although distant as it may be.

Posted by: Stephen L. McKay | Dec 29, 2006 4:09:00 PM

As for the topic of users and hardware replacement. It is simply not economical to alter consumer hardware. In the US and Europe people with the skills to work on these devices bill at $100+/hr. Plus all of these devices are different so you need to keep millions of dollars worth of spare parts around. Even if you send these devices back to the factory for repair, they just split them up into a few big modules and then try to piece a working device together from the used modules. 75% of time I have sent something back I get get a brand new on in return.

Don't forget that these devices were probably assembled with unskilled $1/hr Asian labor. Consumer electronics are designed for low production costs, not repairability.

Of course you can design systems for swapping hardware pieces like the USB ports on your laptop or Bluetooth for your phone. But adding this flexibility raises the cost of the product.

I dropped my laptop and destroyed the disk. I took it to four shops for a quote. Cheapest quote I got was $450 to repair it. I only paid for $600 for the laptop. I just bought a new one and then managed to swap the disk in the old one and convert it to running Linux; it was too much hassle getting Microsoft to reactivate my Windows license.

Posted by: Jon Smirl | Dec 29, 2006 4:15:56 PM

Post a comment

This weblog only allows comments from registered users. To comment, please Sign In.

You are currently signed in as (nobody). Sign Out

Comments:

©Fred Wilson, AVC.com • • Design by UX Hero