Quantified Self and Wearables Market Overview and Proprietary Financial Intelligence

1. 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

2. Contents
• Quantified Self Defined
• Key Drivers
• Wearable Technology
• Software & Analytics
• Augmented Reality
• Summary
#svbQS| April 3, 2014

3. 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.

4. Quantified Self: Acceleration
#svbQS | April 3, 2014
TECHNOLOGY
ADVANCES
Sensors, smartphones,
bluetooth low energy,
smart watches, wearables
CONSUMER
BEHAVIOR
SOCIAL
Focus on self-
improvement and
general wellness
Connectivity to
social networks,
gamification
MOBILE
Tech-savvy,
Mobile-centric
population
The confluence of
several key factors
has driven the
acceleration of this
young, but rapidly
growing sector

5. Quantified Self: Hype Curve
#svbQS | April 3, 2014
Technology Trigger
Peak of Inflated Expectations
Trough of Disillusionment Slope of Enlightenment Plateau of Productivity
Mass-Market Wearables
Mass-Market Software
Niche-Market Wearables
Analytics Software
The Quantified Self shows great
promise but is still in the early
stages of maturity, adoption,
and social application
Expectations
Time
Note: circle size indicates relative size of markets

6. Quantified Self: Hype Curve
#svbQS | April 3, 2014
Technology Trigger
Peak of Inflated Expectations
Trough of Disillusionment Slope of Enlightenment Plateau of Productivity
Mass-Market Wearables
Mass-market wearables have
led the way in Quantified Self
development and adoption
Expectations
Time

7. Wearable: Acceleration
#svbQS | April 3, 2014
Metcalfe’s Law
Moore’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

8. Wearable: Market Leadership
#svbQS | April 3, 2014
Fitbit
68%
Jawbone
19%
Nike
10%
All Other
3%
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.

9. Mobile Hardware: Replacement
#svbQS | April 3, 2014
History of mobile devices provides a
lesson for Quantified Self mass-
market wearables—namely that one
device can do the job of many

10. Wearable: Cannibalization Risk
#svbQS | April 3, 2014
0
40
80
120
160
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
UnitsSold(mm)
Release of the first-generation iPhone marked the
beginning of a stark turnaround in iPod sales
iPod vs. iPhone Device Sales

11. #svbQS | April 3, 2014
0
0.5
1
1.5
2
2.5
3
2007 2008 2009 2010 2011 2012 2013
0
20
40
60
80
100
120
GarminPNDSales(mm)
iPhoneSales(mm)
Smartphone vs. Personal Navigation Device Sales
Wearable: Replacement Risk
Advances in mobile device hardware enable mobile applications to
replicate some functionality of a wearable using existing hardware.

12. #svbQS | April 3, 2014
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
InvestedCapitalMultiple
Revenues (mm)
InvestedCapital(mm)
Wearable: Shifting Values
Pre-2011 Median IC Multiple
Pre-2011 Median IC
Post-2011 Median IC Multiple
Post-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.

13. Quantified Self: Hype Curve
#svbQS | April 3, 2014
Technology Trigger
Peak of Inflated Expectations
Trough of Disillusionment Slope of Enlightenment Plateau of Productivity
Niche-Market Wearables
Smartphone data collection isn’t
feasible in every situation (e.g.
smart swim goggles), providing
opportunity for niche wearables
Expectations
Time

14. Mobile Hardware: Niche Catalyst
#svbQS | April 3, 2014
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

15. Niche Wearable: Stability
#svbQS | April 3, 2014
0
30
60
90
120
150
180
2007 2008 2009 2010 2011 2012 2013
UnitSales(mm)
iPhone adoption negatively impacted sales for point-and-shoot
cameras, however the more niche DSLR camera sales remained stable.
iPhone vs. Camera Device Sales

16. Niche Wearable: Crowdfunding
#svbQS | April 3, 2014
$-
$100,000
$200,000
$300,000
$400,000
$500,000
0 500 1000 1500 2000 2500 3000
Crowdfunding$
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)

17. Quantified Self: Hype Curve
#svbQS | April 3, 2014
Technology Trigger
Peak of Inflated Expectations
Trough of Disillusionment Slope of Enlightenment Plateau of Productivity
Mass-Market Software
As hardware adoption increases
data collection, software is there
to store and analyze it
Expectations
Time

18. Software: Acceleration
#svbQS | April 3, 2014
Social Media Integration
Smartphone Hardware
User 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

19. Software: Device Agnostic
#svbQS | April 3, 2014
Mobile software is device agnostic—
applications can utilize data from any
wearable, creating a cross-platform
device for users

20. Software: Value Accretion
#svbQS | April 3, 2014
$2.77
$3.85
$4.00
0
5
10
15
20
25
30
35
40
45
< 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
InvestedCapital(mm)
Users(mm)
ValuePerUser
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.

21. Network Effect and Big Data
#svbQS | April 3, 2014
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.

22. Quantified Self: Hype Curve
#svbQS | April 3, 2014
Technology Trigger
Peak of Inflated Expectations
Trough of Disillusionment Slope of Enlightenment Plateau of Productivity
Analytics Software
Though in the very early stages,
the next major push will come
from big data analytics
Expectations
Time

23. Analytics: Next Accelerant
#svbQS | April 3, 2014
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).

24. Augmented Reality:
The Internet of Everything
#svbQS | April 3, 2014
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

25. Summary
#svbQS | April 3, 2014
• 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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