The Quantified Self

The Quantified Self

Market Overview and Proprietary Financial Intelligence

Note: this is an adopted presentation of one given at the SVB Quantified Summit in Boston on April 3, 2014

Contents• Quantified Self Defined• Key Drivers• Wearable Technology• Software & Analytics • Augmented Reality• Summary

#svbQS| April 3, 2014

Quantified Self: Defined

#svbQS | April 3, 2014

Products or services that use technology to extract and record data from everyday activities with the goal of providing information and

insight that helps users to understand or improve personal behavior.

Quantified Self: Acceleration


TECHNOLOGY ADVANCESSensors, smartphones, bluetooth low energy,

smart watches, wearables

CONSUMER BEHAVIOR

SOCIAL

Focus on self-improvement and general wellness

Connectivity to social networks,

gamification

MOBILETech-savvy,

Mobile-centricpopulation

The confluence of several key factors has driven the acceleration of this young, but rapidly growing sector

Quantified Self: Hype Curve


Technology TriggerPeak of Inflated Expectations

Trough of Disillusionment Slope of Enlightenment Plateau of Productivity

Mass-Market WearablesMass-Market SoftwareNiche-Market WearablesAnalytics Software

The Quantified Self shows great promise but is still in the early stages of maturity, adoption,

and social application

Expe

ctat

ions

Time

Note: circle size indicates relative size of markets





Mass-Market Wearables

Mass-market wearables have led the way in Quantified Self

development and adoption

Expe

ctat

ions

Time

Wearable: Acceleration


Metcalfe’s LawMoore’s Law

Ubiquitous Computing

Design Focus

Battery/Sensor Technology

Mobile Integration

Advances in cost and performance of

technologies, network effects of mobile adoption, and other factors accelerate mass-market wearables

Wearable: Market Leadership


Fitbit68%

Jawbone19%

Nike10%

All Other3%

2013 Wearable Device Sales

Mass wearables is a highly-saturated market, dominated by a few major players. Incumbents have a significant advantage over new startups with regard to sales, marketing, and distribution channels. In fact, since this

presentation was first given, even Nike chose to wind-down its FuelBand.

Mobile Hardware: Replacement


History of mobile devices provides a lesson for Quantified Self mass-

market wearables—namely that one device can do the job of many

Wearable: Cannibalization Risk


0

40

80

120

16020

02

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

Uni

ts S

old

(mm

)

Release of the first-generation iPhone marked the beginning of a stark turnaround in iPod sales

iPod vs. iPhone Device Sales


0

0.5

1

1.5

2

2.5

3

2007 2008 2009 2010 2011 2012 20130

20

40

60

80

100

120

Gar

min

PN

D S

ales

(mm

)iPhone Sales (m

m)

Smartphone vs. Personal Navigation Device SalesWearable: Replacement Risk

Advances in mobile device hardware enable mobile applications to replicate some functionality of a wearable using existing hardware.


5.3x

9x

11.3x

5.1x

2.6x 2.5x

x

2x

4x

6x

8x

10x

12x

<$5M $5M-$20M $20M-$50M $50M+0

20

40

60

80

100

120

Inve

sted

Cap

ital M

ultip

le

Revenues (mm)

Invested Capital (m

m)

Wearable: Shifting ValuesPre-2011 Median IC MultiplePre-2011 Median IC

Post-2011 Median IC MultiplePost-2011 Median IC

As evidence of saturation, post-2011 wearable technologies required more investment to reach revenue thresholds and

had lower valuations compared with previous years.





Niche-Market Wearables

Smartphone data collection isn’t feasible in every situation (e.g. smart swim goggles), providing opportunity for niche wearables

Expe

ctat

ions

Time

Mobile Hardware: Niche Catalyst


Smartphones aren’t a replacement, but rather a catalyst for acceleration

in niche-wearables—enabling the storage and analysis of personal data collected by niche-wearable devices

Niche Wearable: Stability


0

30

60

90

120

150

180

2007 2008 2009 2010 2011 2012 2013

Uni

t Sal

es (m

m)

iPhone adoption negatively impacted sales for point-and-shoot cameras, however the more niche DSLR camera sales remained stable.

iPhone vs. Camera Device Sales

Niche Wearable: Crowdfunding


$-

$100,000

$200,000

$300,000

$400,000

$500,000

0 500 1000 1500 2000 2500 3000

Cro

wdf

undi

ng $

Number of Backers

Quantified Self startups are flocking to crowdfunding platforms, particularly as a source of pre-order funding for new hardware applications, which also

demonstrate consumer demand prior to potential venture investment.

Crowdfunding Campaigns (Q2-2013 to Q4-2013)





Mass-Market Software

As hardware adoption increases data collection, software is there

to store and analyze it

Expe

ctat

ions

Time

Software: Acceleration


Social Media Integration

Smartphone HardwareUser model promotes

Viral Growth

Data recording and storage

Analytics

Device Agnostic

Growth in software has naturally followed the first wave of hardware development, but viral growth in socialization of information and

gamification should be major accelerants of this segment

Software: Device Agnostic


Mobile software is device agnostic—applications can utilize data from any wearable, creating a cross-platform

device for users

Software: Value Accretion


$2.77

$3.85 $4.00

05

1015202530354045

< 5M 5M-10M 10M-50M$0.00$0.50$1.00$1.50$2.00$2.50$3.00$3.50$4.00$4.50

Inve

sted

Cap

ital (

mm

)

Users(mm)

Value Per User

Total Invested Capital Value per User

When the community using a particular software grows, so does its value to investors (and users). This should accelerate as the

adoption of Quantified Self technologies increases.

Network Effect and Big Data


Network effects occur when applications reach a critical mass of users, and social connectivity becomes a driver of engagement. Existing

software solutions aggregate mass amounts of data, which creates opportunity for a new wave of health analytics companies.





Analytics Software

Though in the very early stages, the next major push will come

from big data analytics

Expe

ctat

ions

Time

Analytics: Next Accelerant


Big data analytics represents a tremendous growth opportunity because the tools that will be used already exist and have been

implemented in other sectors (e.g. digital advertising).

Augmented Reality:The Internet of Everything


Data will eventually be collected on

most everything, sent to, stored, and

analyzed in the cloud, and have

recommendations sent back to users

to enhance real-time decision-making

Summary


• Mass-market wearables led the way in the development and early adoption of Quantified Self technologies, but shows limited opportunity for new startups moving forward because of market saturation and replacement/cannibalization risks that have already become evident.

• Because smartphones aren’t able to collect data in every situation, we still see acceleration potential of niche wearables (e.g. smart swim goggles). Unlike with mass-wearables, smartphones will further enable—not replace—niche wearables devices.

• We are also optimistic about growth acceleration in software, due to the continual improvements in hardware enablement and the viral growth of socialization and gaming.

• As adoption of Quantified Self technologies spreads and data collection increases, we see the next big push coming from data analytics—which has already been a major factor in other markets, such as digital advertising.

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The Quantified Self