The Challenge of Developing Engaging Consumer Apps on Glass

This post was originally featured on the Pristine Blog. 

In my presentation, Glass Insights, I present the case that it will be very difficult for consumer Glass apps to make any money. There are a number of compounding reasons:

1) Low hardware volumes (Glass volumes will be at best a few percent of smartphone volumes). Consumer apps require large volumes.

2) The cost of wearing Glass, coupled with an inherent lack of use cases. Glass competes with non-consumption = smartphones. Smartphones are quite good at what they do.

3) Inability for Glass apps to create addictive, regular behaviors.

I haven't talked much about the third. It will be the focus of this post.

Massively successful mobile consumer apps have to be sticky and addictive. Without exception, every major consumer focused technology startup has thrived on a large community that's dedicated to using the app regularly. In most cases, regularly means more than once per day, if not a dozen of times per day. See Dropbox, Facebook, Foursquare, Mailbox, Pintrest, Snapchat, and Twitter as examples. Users of these services interact with them every day. These apps derive value from interaction that creates addictive, repeatable behaviors. Interactivity is key. That's exactly why Fred Wilson of Union Square Ventures passed on the opportunity to invest in Pandora. Pandora isn't conducive towards interactivity; users simply turn on Pandora and let it run in the background.

Glass is an inherently passive form factor. Apps can't be very interactive because Glass simply lacks the input mechanisms that provide the foundation for interactive apps. To recap, the input mechanisms are:

1. Trackpad (what a useless piece of unnatural, frustrating shit)

2. Voice

3. Camera

4. Accelerometer

5. Proximity sensor (wink!)

No combination of these input methods can create a compelling, engaging experiences. Glass wasn't designed to create engaging experiences. Per Google, Glass is "there when you need it, and out of sight when you don't." Glass isn't "a cool platform that you can play with on your face all day."

Moreover, humans love touching things, and Glass eschews touching in favor of voice. Voice is the best input method on Glass today, and will be until there's a 20x leap in battery technology that supports recording video all day. I think most would concur that voice is intrinsically less personal than touch, creating another barrier for addictive apps.

So Glass apps can't be engaging or interactive. Can they at least be used regularly? There's no reason they couldn't be, but I've yet to find a single regular use case for Glass that more than 2% of society would find useful. Glass presents opportunities for millions of trivial, one-off consumer use cases. But Glass simply isn't useful for 98% of people's daily activities. I recognize that there are uses for Glass in everyone of the activities presented below, but no more than 1-2% of people will actually find Glass useful in these scenarios:

Wake up, get ready for the day

Eat

Go to work / school

Go somewhere for a meeting / meal

Go to a bar / coffee shop / lounge after hours

Go to a restaurant for dinner

Go to a park / movie theatre / bowling / fun place

Come home, watch tv, talk with family / friends, eat

Prepare for sleep

I stand by my prediction: In Glass's current incarnation (screen floating in the corner of your eye, no eye tracking, no hand tracking) not a single Glass-native consumer app will exit for more than $100M.

The Challenge of Developing Contextual Consumer Apps on Glass

This post was originally featured on the Pristine Blog.

I've argued that context is king in eyeware computing. I'd like to take that one step further and clarify when apps should and shouldn't exist on Glass. They operative term in that sentence is "when."

Most of the major consumer web services on Glass (Facebook, Twitter, Gmail, CNN, NYT, etc) are content services. These services thrive because they provide users with an enormous amount of fresh content every day. Glass isn't a content driven form factor (unlike the iPad, which is very content-centric). Glass is a contextual form factor. There's a mismatch between the major consumer web services and Glass. None of them are Glass-centric. Phrased differently, would any of the apps listed above have been written Glass-first?

I like to phrase things in salient terms that Google never would, but probably should: if your Glass app isn't relevant to what the user is physically doing at a given moment in time, your app shouldn't be in view at all. My stern language is actually a superset of Google's more friendly-worded Glass development guidelines. The window of time in which relative, useful information can be presented is narrow, usually just a few seconds. This is an inherent problem for all of the traditional consumer web services, and the Glass Mirror API exacerbates this problem. These services have no way of knowing what you're doing RIGHT NOW; they are pushing information to users that have nothing to do with what the user is physically doing.

I understand Google's thinking behind the design of the Mirror API. The Mirror API makes it extremely easy to develop apps to send bundles of HTML-encoded information to the user. The problem is that that Mirror API pushes information without enough context. Both the Mirror API and natively written Android apps on Glass have no way of knowing what the user is physically doing at a given point in time, which means that the information being pushed can't be all that contextual. Yes, Glass supports geo-fencing, which provides some location-based context. Even still, location-based context rarely correlates precisely with what the user is physically doing within a given five second window. When information is pushed to Glass, it's only immediately viewable for a few seconds. Given the intrinsic latency of the Mirror API and lack of specificity provided by geo-fencing, it's practically impossible to push truly contextual information to Glass.

I've spoken to quite a few individuals that have app ideas for Glass. Glass is a unique platform with specialized marginal value. Successful Glass apps must be contextually driven and must take advantage of these unique traits. Context is king in eyeware computing. Developers that would like to make a significant sum of money must hold themselves to that standard.

The Marginal Value of Google Glass, Continued

I've been traveling the country presenting about Google Glass from the perspective of a Glass startup. As part of the presentation (available here), I present a thesis on how to think about usability on Glass, uses cases, and monetization.

The first step to thinking about usability and use cases is to define the fundamentally unique characteristics of the Glass platform. The best Glass apps will take advantage of the unique characteristics of the form factor.

The first post I ever wrote about Glass, back on February 25th, was titled The Marginal Value of Google Glass. I identified 3 unique characteristics of Glass:

1. Hands free

2. Heads up display

3. Friction free (always there)

Well, I've since identified a 4th. And it's probably one of the most obvious.

4. First person camera + microphone

Somehow I had missed it for months. I still think there may be 1-2 other unique traits that I've missed. If you can think of any, please let me know.

Pristine at MedCity Converge

I represented Pristine at the MedCity Converge conference in Philadelphia this past week. We generated a fair bit of noise in the media(here and here and here), including a few posts on MedCity News. My colleagues Tim and Dr. Travis at HIStalk mentioned it too.

The Price of Glass

This post was originally featured on the Pristine Blog. 

Google won't say anything about how they're going to price Glass for the general public upon launch, so I'll fuel the rumor mill for them. To understand how Google will price Glass, let's first look at Glass's components. Then we can think about Google's pricing strategy.

Glass is just another computer, just like smartphones and tablets. Almost every Glass component is an off-the-shelf smartphone component that's already being produced on the order of hundreds of millions of units / year. Top of the line smartphones, such as the iPhone 5, typically have a bill of materials (BOM) between $170 and $200 when they're first released. The BOM decreases over the lifecycle of the product, typically dropping 50-75% before the product is discontinued 2-3 years after launch.

Glass actually uses fewer components than most modern smartphones. Glass doesn't have cellular or GPS chips; a large, multitouch capitative Glass screen; or a large battery (Glass's battery is tiny). On the other hand, Glass has a titanium frame, and the screen technology is being produced at 1/1000th the scale of most other display technologies. Even still, Glass's BOM is less than $200. That's remarkably cheap for an entirely new class of device.

This begs the question, why is Google charging a whopping $1500 for developers to get their hands on Glass? Google isn't charging that price to recoup development costs. If they cared about recouping costs, they'd be releasing more than 10,000 units into the wild at a $1500 price point. Instead, Google is pricing Glass at $1500 for developers and beta testers so that only the committed will buy it. Google is hoping that the folks who spend $1500 will invest and develop for the platform to justify the cost of purchasing the device. That logic has mostly failed. After perusing through the Glass forums and meeting with at least 3 dozen Glass explorers over the past month, I can safely say that at least 75% of Glass explorers aren't doing anything of significance with the device. Additionally, most developers are inherently consumer oriented developers. You don't need Instagram on your face.

So how will Google price Glass for the general public? There are two ways Google could price Glass:

1) Recoup the cost of development by selling Glass with a fat 50% margin. Given how little it costs to build Glass, they could price Glass at $400-500 and capture 50% gross margins.

2) Sell the device at or near break even. In this scenario, the retail cost of Glass would be no more than $300.

For those who don't follow Google, strategy #2 seems nonsensical. Why would Google simply leave those margins on the table? The early adopters are obviously willing to pay, so why not let them pay? Well, let's look at the hardware products that Google sells today:

1) Nexus 4 - $299

2) Nexus 7 - $199

3) Nexus 10 - $399

4) Chromebook Pixel - $1299

The Nexus 4 is sold at modest margins, probably 10-15%. The Nexus 7 is sold at break even. And the Nexus 10 is probably garnering 25% margins as a premium tablet. As a high-end reference device, the Chromebook Pixel is sold with decent margins, probably about 25%.

What we can learn from Google's existing hardware strategy is that Google doesn't care about making money in hardware. For Google, hardware is a means to an end. Google only wants to monetize the app layer, and will give everything else away for free, or charge as little as possible to get users living in the Google-verse at the end of the value chain. The image below illustrates a simplified version of the value chain required to access any computing services or apps.

Google's philosophy in selling hardware without making money is simple: people don't buy computers for the sake of buying computers. They don't pay for Internet for the sake of having Internet (see Google Fiber). They pay for all of these things because they are a means to an end: apps.

Moreover, we know that Google can afford to, and is investing on 10 and 20 year timelines. Most major initiatives at Google - Android, Chrome, Fiber, Gmail, Maps, and YouTube, to name a few - were released without a direct line of sight to profitability. Many of these businesses still generate little if any direct, measurable, attributable profits. Google entered all of these businesses because it saw long term strategic value in owning these spaces. Google knew that if it owned these spaces, it would figure out monetization later.

Lastly, Google wants the concept of mass market eyeware computing to exist. Glass will present unparalleled advertising opportunities. Like the other businesses listed above, Google knows that if eyeware computing takes off, they can monetize it for years if not decades to come. The costs of getting there are immaterial for a company of Google's scale. Conversely, if Google releases Glass at a prohibitive price point and Glass fails to take off as a consumer device, Google knows that eyeware computing won't take off until they commercialize contact lens computing. Contact lenses reduce the cost of wearing Glass computing device to effectively nothing.

In summary, Google has a long background of investing billions of dollars unprofitably in visions that it believes in. Glass is one of those visions. Google has the financial backbone and grit to do whatever it takes to ensure that success. Glass will be cheaper than everyone expects.