The little guys who were on their way up the mountain now have to fight for air
The wearables market is technology’s latest battleground with small upstarts like Pebble and Omate, as well as early entrances from big players like LG, Samsung, and Google. Today, with their announcement of the Apple Watch, Tim Cook officially entered the race and upped the ante with Apple Pay. With Apple in the game, can a young, upstart company like Pebble, maker of the popular Pebble Steel smart watch, go the distance? Or will the small players with early leads get trampled?
In the technology world, the winners are rarely those with the best product, but rather those who have created the most ubiquitous platform. However, established companies that offer the advantage of experience often operate from a defender mentality – protecting their market leadership and brand. Small companies like Pebble offer a challenger mindset. Less tethered to existing platforms, they are free to push boundaries and explore new possibilities.
Consider the differences in how newcomers vs. veterans tend to think and act. I studied over 400 workplace scenarios inside corporations, comparing how inexperienced versus experienced professionals approach a particular type of work. My research shows that being a rookie – facing a new problem or a challenge for the first time – can provoke top performance. In knowledge work, rookies often outperform experienced players, particularly in the realm of innovation and speed.
Rookies tend to be unencumbered, with no resources to burden them and no track record to limit their thinking or aspirations. Because they face a daunting challenge, a desperation-based learning kicks in, causing them to work both hungry and smart. They reach out seeking guidance and feedback. They operate in lean, agile cycles and learn through experimentation and improvisation. While veteran players are pacing themselves for a marathon—rookies are sprinting.
Pebble CEO, Eric Migicovsky exemplifies much of this mentality that I call “rookie smarts.” When venture funding fell short of their need in 2012, he launched a Kickstarter campaign securing a record-breaking $10-million in crowdfunded cash. Migicovsky quickly ventured out of his native Ontario to scout for talent and build a network of advisors across Silicon Valley. When the company faltered from an early bet on the Blackberry platform, he quickly course-corrected and rebuilt the device to pair with Android and iPhone handsets. Through scrappy, fast, but smart action, Pebble boasts over 400,000 users.
Rookies can certainly outperform the incumbents, but they can also flame out fast or fail to marshal the resources needed to sustain victory in the long haul.
Newcomers like Pebble have several options:
- Find a new game. Rather than to go head-to-head with the bigger, established players, upstarts like Pebble may be better suited to continue playing the challenger role but in a different corner of the market.
- Stay in the race and compete on innovation and speed. With their small size and agile cycles, start-ups may be able to move faster and build a loyal fan base for their device and platform. But, even if they can out-innovate a proven innovator like Apple, it is only a matter of time before Apple produces a more distinctly wearable device and ubiquity beats out ingenuity. Without a partner to achieve scale, they will likely become another casualty along the path of technology evolution. They will have labored to loosen the lid, and then the veteran player will move in and open the jar.
- Play on a larger team. By partnering with or being acquired by a big infrastructure player, a start-up like Pebble can combine their fast-cycle innovation and rookie smarts with the critical mass of an established company. As the market continues to consolidate around platforms, the final victors are likely to be the established companies who can acquire the upstart leaders and then embed and nurture this rookie thinking inside their own company.
With today’s announcement, it is tempting to assume Apple will repeat its winning streak and will dominate not only the e-payment market but also the wearable technology market that allows users even greater ease and visibility to these transactions. But it’s too early in the race to dismiss the challengers. If companies like Pebble are in it for the long haul, they will need to do more than just think like rookies and sprint for 26.2 miles. To win big, they need to draw on the strength of the peloton and pair their capability with the power, savvy, and resources of industry veterans – those who are defining the rules. The challengers may stand ready to change the world, but they will need the help of those who know how this world works.
Liz Wiseman is the author of Rookie Smarts: Why Learning Beats Knowing in the New Game of Work and is a former executive at Oracle Corporation.