Wanted to share some quick thoughts after a great week at CES 2015 in Las Vegas:
1. There is an incredible amount of innovation happening in Consumer Electronics
At my first CES in 2011, the handful of startups that participated were spread out in weird spaces in other halls. This year, startups effectively took over the Sands Expo Hall at the Venetian and filled it. True-backed companies had an incredible showing (Fitbit, Narrative, Makerbot, Ring, Valencell each had big booths with lots of traffic) and the space was packed in general.
2. Lots of Widgets, How Many Platforms?
Lots and lots of new connected products on the market (if it exists, you can connect it via Bluetooth or Wifi – ie connected tennis ball counter, connected insole, etc) Most have raised investor capital + crowdfunding, which comes with exit and growth expectations. Even with reduced costs, consumer electronic businesses are still hard and still have many of the same risks related to fashion risk, cyclicality, exposure to change in consumer preference, and amount of capital necessary to scale relative to market size.
3. Tons of upside if correct
Done correctly, I think the upside for the right companies is potentially larger than expected. Consumers LOVE some of these products in intense ways – we definitely have seen it at Fitbit and Makerbot and starting to see it at Ring. (“Captures the Imagination”) Similarly, the retail channel wants more of these products and are re-arranging the store to create space for the best ones. Potentially most important, he big manufacturers are working to move earlier in the lifecycle of new companies and using their balance sheet to help finance inventory (which can be incredibly helpful in the transition from Series A to Series B.)