'Why wouldn't everyone in the world have a wearable?': Fitbit's CEO on its new products, fixing the way we sleep, and taking on Apple
- Fitbit announced the Fitbit Versa Lite on Wednesday, a less-expensive version of its popular smartwatch.
- Fitbit CEO James Park says his company's focus on affordability is part of what separates Fitbit from Apple, the current leader in the smartwatch space.
- Park sat down with Business Insider to discuss Fitbit's new products, its goal to tackle larger health issues, and more.
James Park doesn't get enough sleep.
"My Sleep Score has been terrible," the Fitbit CEO and cofounder said as he showed me a graph depicting his recent sleeping patterns. A Sleep Score of around 90 and above is considered good; Park's appears to linger in the high 60s.Sleep Score is exactly as its name implies: a feature that takes the various sleep metrics Fitbit gathers and provides users with a general assessment that illustrates what those data points actually mean. The feature has been in beta since December, and Park has been testing it himself more recently.
Park is far from being alone; more than a third of American adults do not get enough sleep on a regular basis, according to a survey published by the Centers for Disease Control and Prevention in 2016. The effects of sleep deprivation have been well-documented. Researchers have found, for example, that getting the right amount of sleep is critical for reducing the risk of cardiovascular issues, as the European Society of Cardiology found in a study published last August.
It's no surprise, then, that Fitbit is continuing to devote resources to improving the way people sleep. That will be part of the paid service Fitbit plans to launch in the second half of 2019.
Taken together, features like Sleep Score, Fitbit's upcoming paid service, and the new products it announced on Wednesday (like the $159.95 Fitbit Versa Lite) are at the heart of Fitbit's goals: expanding its user base and tackling larger health issues. When it comes to the latter, Fitbit has already said it's researching ways its products can be used to address conditions such as atrial fibrillation and sleep apnea. It also announced Fitbit Care in September, a program for employers and health plan providers.The success of these initiatives will be critical for Fitbit as Apple becomes a more formidable rival in the smartwatch and health tracking space. Apple maintained its position as the No. 1 wearable device maker worldwide in the fourth quarter of 2018, according to a new report from the International Data Corporation. Apple accounted for 27.4% of the global wearable device market, while Fitbit accounted for 9.4%. Fitbit also placed behind Xiaomi and Huawei, which were responsible for 12.% and 9.6% of the market respectively. Following its recent earnings report at the end of February, Fitbit shares plunged after the company forecast lower than expected first quarter revenue and an expected decline in average selling price.
During a recent interview with Business Insider, Park discussed Fitbit's new products, its long-term goals, and how it plans to compete with Apple.
The following conversation has been lightly edited for length and clarity.
Lisa Eadicicco: Let's start with the Fitbit Versa Lite, which you just unveiled on Wednesday. How did Fitbit decide which features to compromise on to get to that lower price point?
James Park: I don't know [if] we'd call it compromise. Curation is a better [word]. So for us, Versa was a huge success. It really allowed us to leapfrog to No. 2 in the smartwatch category. After Versa, we started to get a lot of feedback from customers, [and] we also saw a lot of actual usage data from the device. And we did additional market research and we saw that there was a clear need for a slightly simpler device at a more affordable price point. There were still a lot of barriers to purchase, especially as people became more aware of the category. They were like, "But I would buy if..." So we started figuring out what those "buts" and "ifs" were, and that resulted in the Versa Lite.
Eadicicco: You mentioned being No. 2 in the smartwatch space. Apple is No. 1. And I know that there was a lot of talk today about Fitbit as a platform, going beyond the hardware to the software and services. What is going to be the thing that propels Fitbit to being that No. 1 player in the space?
Park: For us, our whole strategy is about bringing more people onto Fitbit, and the key theme that you heard in this launch is simplicity and affordability. Again, we're all about reducing the barriers to purchase and bringing more people on. So we think that strategy should accelerate that. This year we're actually forecasting a pretty meaningful increase in the number of devices we ship year-over-year.
And then ultimately, it's not just about giving people a device, but it's providing them coaching, guidance and content. And we'll do that in the form of a paid premium offering in the second half of this year. So again it's all about more accessible affordable devices working in concert with software that knows you and helps guide you and coach you.Eadicicco: I remember [several] years ago, it seemed like one of the big challenges that the industry was facing was getting these devices smaller and cheaper while still offering really good battery life so that you can wear them to bed and track sleep. [Fitbit] has been doing that for quite a while now. So what's the next big challenge that [Fitbit] and the industry are tackling to push fitness trackers forward in the next five to 10 years?
Park: You saw us kind of hint at it, which is deepening the types of use cases that people want to buy these products for. So moving from just purely fitness and wellness into more serious health issues, whether its diabetes, hypertension, sleep disorders, mental health issues, etc. I think our devices and software have an important role to play in all of those.
Eadicicco: One thing that came to mind that [Fitbit] does somewhat uniquely is Cardio Fitness Level. It's a good example of [Fitbit] using the data it gathers to provide this broader, deeper insight about your health. Is Fitbit thinking about other ways to use data to provide new insights in a similar way?
Park: Absolutely, sleep is a big one for us. Right now we're testing out a feature called Sleep Score, which gives people a quantitative measure of how well they're sleeping. We've always provided the raw data, [like] you've spent two hours in deep sleep, REM sleep, etc. Sleep Score is something that people have been responding to pretty well.
Eadicicco: Is [Fitbit] going to be offering more features that provide tips and insights on how to improve your Sleep Score, like bedtime reminders, etc.?
Park: Yeah, a large part of that is going to come in our premium offering, where we give people coaching and guidance. There's a technique called cognitive behavioral therapy, because a lot of the challenges that people face in going to bed is psychological. So helping people work through those issues through digital therapies is another part of what we're going to offer.
For instance, with cognitive behavioral therapy, one part is that when people get into bed they just lie there. But that's not good. Your brain should think that bed is where you sleep, not where you're just lounging around. So one part of cognitive behavioral therapy is that you should only get into bed when you're absolutely tired, not when you think you should go to bed.
Eadicicco: [Fitbit] is doing a lot of work in the enterprise health space too. Do you see [Fitbit] as being more of an enterprise company or a consumer company?
Park: I think it's 50-50, and the two sides work well together. A great analogy I like to use is Johnson & Johnson. They have a lot of consumer-facing products, but they have a huge part of their business which is selling medical supplies and equipment. But people don't really know about that. But the credibility of their healthcare side is really buttressed by their consumer brand and vice versa. So that's the similar approach that we're going to take with our healthcare business and our consumer business as well.
Eadicicco: You've talked about one day using wearable devices to help detect more serious health conditions. The Apple Watch now has an electrical heart sensor in it. Has your opinion of Apple as a competitor changed now that they've introduced the ECG monitoring to the Apple Watch Series 4?
Park: Yeah I think they're definitely getting more into health and fitness, which overall for everyone is I think a good thing as long as we're all collectively working to improve people's health. But I think we'll always continue to take a differentiated and very focused approach to health and fitness that lends itself to the simplicity of our devices and affordability as well. For us, it's not just about the latest features at the highest price points. We want to make sure everyone that needs it is able to benefit from what we're doing.
Eadicicco: You've mentioned that a big goal for Fitbit is to keep bringing in new users. Now it seems like [Fitbit] has something for everyone: the Ace is for kids, the Versa Lite is for young adults that don't want to spend as much money. So who isn't buying smartwatches at this point? Who's next?
Park: Surprisingly still a lot of people. It's a very under-penetrated market. For me, the vision for Fitbit and the whole category is: Given all the use cases that we're seeing, why wouldn't everyone in the world have a wearable? The analogy that I draw is similar to the car industry decades ago. At some point seat belts and airbags weren't standard equipment, but now you wouldn't think of getting a car without those things. At some point, wearables with these types of sensors and capabilities are going to hit that point as well.
Eadicicco: From observing the industry, it feels like a lot of the innovation [in wearable technology] is happening on the software and data side. It seems like the hardware has gotten to a point where it's already cheaper [and the] the battery life good. What do you think?
Park: I think there's still innovation to be had on both. But definitely a lot of the value is now coming in the software because of all the coaching the guidance, the insights, the data, that's where the ultimate value for the user will be.
Eadicicco: If that's where the value is growing, is it going to be hard to continue selling as many devices? It makes me think of the shape the smartphone industry is in right now. I know it's not a direct comparison, but you get to this point where people are buying these devices and keeping them for longer periods of time as the software and services ecosystem gets better. Do you see that as being a challenge [for wearables] moving forward?
Park: If [you] think about the analogy of evolution, people always thought evolution was a linear path - from single-celled organisms to complex beings like people. But there's this theory of punctuated equilibrium: At some point, there's a huge explosion of diversity and advancements. I think the tech industry is like that. Even in smartphones, we think the category is matured but there's probably something out there that we don't know about that will ignite the next phase of growth. I don't think smartwatches are even close to that point, but I think the limit is our imagination in terms of what these devices can do.Eadicicco: Bonus question: What advice would you give to your 25-year-old self today?
Park: Delayed gratification is not a bad thing. It's good to be patient. As long as you have a strong vision and commitment, things will unfold over time.
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