Alexander Asseliy and Hosain Rahman Stanford University students founded the Aliph in 1998 and later it become Jawbone. Initially, it was an audio technology company and was involved in developing military-grade audio technology. Then it becomes one of the best known for selling Bluetooth headsets and Jambox speakers. Around 2011 they have changed their business model and adopt a new modest design. In April 2013, they have announced the purchase of BodyMedia maker of wearable health-tracking devices. Jawbone competitor company Health metrics research, Inc changed its name to Fitbit in October 2007. Fitbit also a producer of activity trackers, smartwatches, wireless-enabled wearable technology devices, that measure real-time data, for example, number of steps, quality of sleep, heart rate, steps climbed, and other personal metrics involved in fitness. When Jawbone followed modest designs, its failure stemmed from the company’s pivot to health and fitness-tracking devices in 2011. That began a plague of product failures and financial struggles.
Basically, Jawbone targeted customers were athletes, people who like to work out, clinicians and health care providers, health trackers, and many people on slimming diets or watching their weight, etc. The company was targeting to enhance a healthy lifestyle, daily activity, and valuable data for health. They were selling their product via retailers, website, app store, social network, and by telling the customer success stories. With customization, personalization, certifications, and quality they build the relationship with the customers. Key revenue came from the different wearables and apps they were designing. The company was also involved in designing and manufacturing new products, developing new technology, maintaining operations, and customer services. Key resources were having a huge amount of data, 230 plus patents, network system, internet of things, wristbands, UP apps including social-networking software, advanced sensors, and Bluetooth related products. The company was a partner with the acquisition of a design firm, massive health ventures, fitness-related applications including IFTTT, loseIt!, Maxwell Health, MapMyFitness, MyfitnessPal, Notch, Runkeeper, Sleepio, Wello, Capital investors, manufacturers, customer service agencies, retail partners, app developers, and trainers. Company structure cast was including manufacturing, procurement, call center, design, software development, IT cloud, compensation, maintenance, distribution, and legal matters. On the other hand, Fitbit also has more or less the same business model as the jawbone. Their targeted market products, structure, key partners, activities, and channels are almost similar. They were their biggest competitors.
Between 2014 to 2017 according to news and researchers the company faces financial and leadership issues. Mindy Mount left as a president, Alexander Asseliy resigned as a chairman of the company and from its board of directors. By early 2015, a lawsuit from manufacturer Flextronics over $20 million of payment disagreements was reportedly settled. In February 2017, Jawbone filed a lawsuit against its rival Fitbit. Jawbone sued Fitbit and five former employees in California state court over the alleged theft of trade secrets. Some of the legal proceedings are ongoing. Company core employees resigned and haired by Fitbit. Jawbone filed a lawsuit against Fitbit accusing them of hiring away employees who took confidentially and patented information along with them. There was another reason for too much cash. Top-tier venture capital firms added funds of millions of dollars in the jawbone, to lift its valuation to $3.2 billion in 2014, but it didn’t help the company to survive. According to financiers and technology, the executive’s flood of cash pouring into Silicon Valley can have the perverse effect of sustaining companies that have no future. Jawbone may be unraveling, but the company’s co-founder and CEO, Hosain Rahman, has reportedly moved to a new company called Jawbone Health Hub. The new venture will focus on health-related products and has recruited many employees from Jawbone. The Health Hub will service existing Jawbone products after the original company liquidates. But Fitbit is still running, according to the statistics from 2010 to 2019 the revenue of Fitbit was around $1.43 billion, and at the end of 2020 Google will take in this company entirely spending 2.1 billion dollars.
Jawbone was a hardware-based company, according to CBInsights has begun liquidation proceedings and the reasons behind are lack of consumer demand, high burn rate, lack of interest after initial crowdfund, product strategy, all as Jawbone entered into a legal battle with its competitors. There is another interesting cause for failure is that investors and crowdfunding sites keep putting cash in the pockets of hardware entrepreneurs. They also continue to raise funds through Kickstarter or the early-stage markets based on their aspirations to build a future consumer hardware empire. These numbers are still growing up. They are still believing in consumer hardware innovation, but the odds being stacked against them. This was also one of the reasons behind the failure of the jawbone. Challenges, struggling against dominant competitors like Fitbit and Samsung, multiple strategic shifts and failures. Team management causes them a failure as we have mentioned that many of its employees were left and they joined their competitors. The big challenge was the money problem of artificial cash flow. UP wristbands were the company’s main focus in recent years, had faced pressure from the growing competition from Fitbit and Xiaomi-backed Huami, as well as smartwatches from Apple and Samsung, while Jawbone itself has suffered from manufacturing quality issues and fumbled product launches.
For hardware start-ups, it’s important to build a consumer-ready physical product before going into the market, many start-ups figure out later that there is not a large enough market for their product. Same thing Jawbone did since they were having the competition as well. They didn’t fulfill the consumer’s need. Getting to a functional prototype is only half the battle won, the real challenge is to scale from prototype to mass production. The company was working since 1999 they were having almost 18 years of experience. They could have tried a different model to compete with their rivals. Sadly, they couldn’t succuss the battle. Here is our proposed model and we believe following this model company could have survived their loss. The first step is to identify and evaluate the seriousness of the problem. Secondly set some objectives according to the issues you are facing and then designing a project plan with all the possibilities to overcome the problem. Thirdly come the data collection and modeling for the challenges or the problems that the company is facing then the chosen model can be translated and verified. If the model is not valid or not suitable for the current situation. Then new data and more information need to be collected and needed to change the model as well. Once the model is proved and validated then it enters in fourth experimental phase to design and experiment with the products or the challenges the company is having. If there is still a problem then need to do more experiments, analysis, documentation, and reporting. In the end, if everything goes smoothly then the achieved result can be implemented to solve the issues. It can also help build team and customer loyalty and generate real revenue.
The model we have proposed above has several phases after complete each phase. It’s easy to verify the results and analyze the situation on the basis of the outcome. It could help the company make valid decisions. To protect their financial assets and resources.
In conclusion, the company's top management wasn’t able to make the right decisions at the right time. They weren’t able to create a good team to make it successful. In any organization, a team has a really big and core role to play.
