Pebble

Pebble sold 400,000 smartwatches last year, on track to double revenues in 2014

March 20, 2014: 12:29 PM ET

CEO Eric Migicovsky walks Fortune through the smartwatch maker's successful first year.

"My dream watch would be something that is just screen, but we're going to live with reality for a little while," says Pebble CEO Eric Migicovsky.

FORTUNE – If Pebble is the smartwatch category's David, surely Google is its Goliath.

This week, Google (GOOG) announced Android Wear, a version of its popular mobile operating system, with launch partners such as Motorola and its Moto 360 watch, due in the summer. When devices like the Moto 360 arrive, they'll join the massive Android community, one Gartner estimates will have 1 billion users by year's end.

"When we started working on wearables six years ago, there were few players in the space and a lot of skeptics," says Pebble CEO Eric Migicovsky  of Google's news. "It's exciting to see this market grow so quickly -- enabling more interesting use cases and keeping all of us laser-focused on creating the very best user experiences we can."

If Migicovsky doesn't seem nervous, it's because his startup is off to a solid start. The company has sold over 400,000 Pebble smart watches since January 2013. Back-of-the-envelope math estimates $60 million in revenues for that time frame. According George Zachary, a Charles River Ventures partner and Pebble investor, the company will make twice last year's revenue in 2014. (No wonder Pebble became profitable in early 2013.) There are now over 1,000 Pebble apps available, with 12,000 registered developers all-but-assuring more are on the way. Brags Zachary: "It's my fastest-growing company ever."

As revenues have ballooned, so has Pebble. The startup employs around 70, up from 45 this January, and just added two new members to management. Jeff Hyman, Apple's (AAPL) ex-Director of Hardware Engineering and Manufacturing Law, will serve as general counsel. Meanwhile, former Jawbone VP of Finance Marin Tchakarov will act as CFO.

MORE: Why Quora is purposely flouting all the latest Web trends

Migicovsky has already come a long way from the University of Waterloo in 2009, where he developed Pebble as a school project. It passed through Paul Graham's famed YCombinator, the same startup incubator that yielded Airbnb and Dropbox. But it wasn't until April 2012 when the startup joined the crowd funding site Kickstarter, that Pebble took off. Little over a month later, Pebble had raked in $10.3 million from early backers -- 100 times the original amount Migicovsky hoped for. It also raised $26 million from angels including FriendFeed co-founder Paul Buchheit and Timothy Draper, founder of the Menlo Park, Calif.-based venture capital firm Draper Fisher Jurvetson.

While many analysts are bullish on the wearable computing market, today's offerings remain scarce. Last fall, Samsung launched the Samsung Galaxy Gear, a device hobbled by poor battery life, limited device compatibility, and a wacky commercial suggesting the Gear could help men attract women. ("Oh, my god, that was kind of sad," Migicovsky concedes.) But Android-based devices will likely make wearables that much more competitive.

For now, Migicovsky is more worried about making his products better than Google shaking up the market. He's exploring technologies that could help boost Pebble's week-long battery life further and keeping tabs on newer screen displays, particularly ones made from flexible materials. "My dream watch would be something that is just screen, but we're going to live with reality for a little while," he says. Migicovsky also looks forward to a day when Pebble becomes more than an early-adopter digital accessory, when the watch can act as a central controller to some of the user's other devices: their car, items in their home and on their body. His plan is to innovate upon Pebble to the point where "if other people compete with us, they would have to do it on our terms."

In other words, Google? Game on.

Posted in:
Current Issue
  • Give the gift of Fortune
  • Get the Fortune app
  • Subscribe
Powered by WordPress.com VIP.