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INTERSECTION OF

AT THE

TECHNOLOGY & CULTURE

VOLUME 02, MAY 2013

EMERGING

BETS

For the second year, Deutsch LA’s Invention team journeyed to CES and SXSWi to wade through hundreds of new products and services. What follows is an exploration into the emerging trends and lessons, culled from that adventure, that brand marketers can apply to their own businesses.

About This Report

Invention began at Deutsch LA with the mission to solve complex business problems through means that fall outside the comfortable mold of advertising deliverables. Our team is charged with developing disruptive offerings, relationships, and business models for our clients. With that in mind, we attended two of the leading conferences relevant to our industry - CES and SXSWi - to examine startups and products that build on or extend emerging behaviors and technologies.

Startups and burgeoning products represent emerging bets at the intersection of technology and culture. Any product that a company produces is inherently a prediction for the future. CES and SXSWi represent a rare opportunity to view hundreds of those predictions in a single location, all vying for attention and adoption. From these bets, we’ve collected an overall view of rising trends and what brands and marketers can learn from those trends.

The Big Trend: The Rise of the Hardware Startup

CES, which is typically a conference for major hardware brands, was showcasing more and more startups in the hardware space this year. Conversely, SXSW Interactive, which has in the past been the launching pad for applications and software, this year showcased a number of startups (and brands) emerging in the hardware space. So why this marked attention and activity among hardware startups? We have three theories:

1. More Accessible 3D Printing: 3D printers were on

everyone’s list of top disruptions this year and we’ve begun to see a plethora of consumer-grade entrants.

2. The Internet of Things: The internet is no longer contained to just a smartphone or a computer. We’re entering an era where pretty much any object can turn into a Wi-Fi- enabled, data-sharing, communicating device.

3. Crowdfunding: The cost of prototyping has decreased but the cost of mass production is still high. Thankfully, platforms like Kickstarter and IndieGoGo allow entrepreneurs to share ideas with the world and get funding all without meeting a single VC.

PRODUCTS, STARTUPS, AND COMPANIES CONSIDERED FOR THIS RESEARCH

Startups at CES Hardware at SXSW 110 154 7 24 Number of startups who attended
Startups at CES
Hardware at SXSW
110
154
7
24
Number of startups
who attended CES
Number of startups
who attended CES in
2013, a 40% increase
over last year
Number of panels
and events around
in 2012.
hardware at SXSW
.
in 2012.
Number of panels and
events around hard-
ware at SXSW this
year, a 350% increase
over last year.

From 2012 to 2013, theres been a significant increase in hardware startups at major tech conferences.

over last year. From 2012 to 2013, theres been a significant increase in hardware startups at

Key Trends (cont’d)

Key Trends (cont’d) The CubeX is a new consumer-friendly competitor to the Makerbot. CubeX 3D: Makerbot

The CubeX is a new consumer-friendly competitor to the Makerbot.

CubeX 3D: Makerbot isn’t the only product of its kind on the market. One competitor is the CubeX 3D, which won CNET’s Best of CES award. This high-end printer, aimed at both enthusiasts and professionals, can print 15% larger objects than any other printer currently on the market. [Retails at $2,499]

Startups built on 3D Printing

Makie: A startup from the UK, Makie, creates custom dolls for young girls and a winner of the SXSW Accelerator competition. Makie allows doll they want online and have it produced just for them. Years ago, a venture like this would be almost impossible because of time and resources, but 3D printing makes it easy to make personalized creations quickly, and at a lower cost than typical manufacturing processes.

Peeko: From Rest Devices, the Peeko Monitor is the next-level baby monitor, a onesie for babies that tracks their breathing, activity, temperature, and noises. Parents can access this data on their mobile phone with an accompanying app. Peeko showcased their product at CES with 3D-printed (thanks to Makerbot) prototypes for customers to experience.

Internet of Things

In 2007, the world was wowed when the iPhone power of a computer in our pocket. Moore’s Law has since been chugging away and now storage smaller and smaller things. As a result, we’re starting to see a whole new era of connected devices, giving our houseplants the ability to tweet and our glasses the ability to project location-based information onto our retinas.

This new wave of hardware-based products launching at major conferences is leading to a shift in marketing tactics as well. Flashy booths in conference halls and free T-shirts are one thing, but hardware startups are looking for more creative ways of getting the actual product into lets you refocus images after you take them, rented out their devices to SXSW attendees for 24 hours so they could play with the product in real-world scenarios.

Google Products

Google Talking Shoes: Last year at SXSW, everyone was talking about the Nike Fuelband, a hardware product from Nike that tracks your everyday movement and helps you visualize your progress online. This year, Google took of talking sneakers that tracked activity and motivated you to keep moving with audible words of encouragement.

you to keep moving with audible words of encouragement. Authored by: Bud Caddell, Charlotte Myerberg, and

Key Trends (cont’d)

Google Glass: Toward the end of the conference, Google hosted a demonstration of Google Glass, essentially a wearable, voice- controlled smartphone that lives in the lens of eye glasses. Seeing the presenter and members of the audience wearing the device felt like a glimpse into a very distant future.

the device felt like a glimpse into a very distant future. The Memoto can be clipped

The Memoto can be clipped on to record all the moments in your day.

Wearable Technology

Memoto: Accelerator, Memoto, is a tiny, wearable camera that takes a picture every second. It takes lifestream to a whole new level. The camera also serves as a GPS so it can organize photos by location. By connecting the camera to your computer, you can browse, search, and share (quite literally) your life.

Pebble: While we’re all hearing about the rumors that Samsung and Apple will soon release “smart watch” devices, it turns out that some scrappy startups beat them to it. The Best in Show award at CES went to Pebble, an e-ink watch that can sync with your phone, and is easily customizable based on the users demand. The watch can be used for anything from monitoring a golf swing to controlling a music playlist.

Healthcare Products

Sure Response: A new service from Verizon, Sure Response is essentially a system that lets you keep track of an elderly parent, or any loved one who might need assistance. Users can push a help button and automatically deliver location information in the event of an emergency to a set caretaker, to a 911 response.

HealthID: Another product from Verizon, powered wristband that contains important personal information that you can have on you wherever you go. Your medical record, allergy, and pre-existing condition information can be wirelessly transferred to an emergency responder from the device.

transferred to an emergency responder from the device. Canopy’s Sensus Case lets users add touch functionality

Canopy’s Sensus Case lets users add touch functionality on the back and sides of their smartphone devices

Smart Device Cases

Sensus: A new product from Canopy, the Sensus Case adds touchscreen functionality to the back and right-hand side of your Apple mobile device. This lets users interact with any experience on screen without blocking the view of the screen in a more comfortable and relaxed position.

1.5M 1.125M 1M 750K 375K 0 Robot Dragonfly StickNFind Misfit Shine BugASalt Facewatch Elevation Dock
1.5M 1.125M 1M 750K 375K 0 Robot Dragonfly StickNFind Misfit Shine BugASalt Facewatch Elevation Dock
1.5M
1.125M
1M
750K
375K
0
Robot Dragonfly
StickNFind
Misfit Shine
BugASalt
Facewatch
Elevation Dock
CST-01
Galileo
Twine
Memoto
Funded on IndieGoGo
Funded on Kickstarter
Average Initial VC Investment in a Startup

Key Trends (cont’d)

“world’s thinnest watch.” After raising over $500K on Kickstarter, it went on to win many of the Best in Show awards across CES.

went on to win many of the Best in Show awards across CES. The CST-01’s E-Ink

The CST-01’s E-Ink Display

Product Add-Ons

Olloclip: Focusing on the increasingly-popular photography space, Olloclip is a 3-in-1 lens that wide-angle, and macro options. Olloclip had a big presence at SXSW, but it wasn’t exactly making its debut. It started raising money in 2011 on Kickstarter and gained enough ground to make a big splash at the tech conference this year.

StickNFind: StickNFind are Bluetooth stickers that you can put on devices so that you never lose them. The stickers come with a partnered iPhone app which serves as a sort of RADAR for these commonly misplaced items. A smart simple idea that solves a real consumer unmet need.

Connecting Digital to Physical

2013 Connecting Digital to Physical The Meter Plug: Twine: Supermechanical’s Twine Authored by: Bud Caddell,

Supermechanical’s Twine

2.22.2012 8.24.2012 2.2.2013 Nike Fuelband A bracelet that tracks a user’s daily activity, this device
2.22.2012
8.24.2012
2.2.2013
Nike Fuelband
A bracelet that tracks a
user’s daily activity, this
device interacts with Nike+
and steps or activities are
converted into Fuel Points.
Evernote Smart Notebook
Moleskine which pairs with
the Evernote App, making
all sketches and notes
searchable, forever.
Oakley AirWave
HUD embedded in Oakley’s
goggles which links to user’s
smartphones and provides
metrics feedback like the Fuel
Band.
2012
Present
6.13.2012
1.09.2013
4.11.2013
Evian Smartdrop
A prototype magnet and
subscription service that lets
families or businesses order
Disney MyMagic+
Disney rolls out testing for
a wearable bracelet with
embedded RFID tags. These
can serve as a new ticketing,
payment, and tracking
system within the park.
Heineken Smart Bottle
Heineken created a beer
bottle for Milan Design Week
that reacts to the drinker’s
Evian bottled water to their
door on the spot.
movements and environment.

What brands can learn from these trends (cont’d)

Experiment in New Spaces

Sometimes the best way for a brand to evolve is to nudge themselves into new territories that expand their business and their offerings. case, building data and phone networks) and applying it to the health space. Whether or not their products (Sure Response and HealthID) become an integral part of their business, it shows that these types of ventures can open new possibilities.

Smoke Testing as a Marketing Tool

Ideas are cheap. Execution is expensive. Just as startups use a clever video on Kickstarter to expose a new idea, we’re beginning to see brands like Oreo and Budweiser launch proof-of-concept videos that test the social waters and validate a new idea. Organizations rarely get to market with their original idea in-tact, and it’s time for brands and marketers to begin to test their assumptions before investing small fortunes in development.

Hardware Competition

Twenty years ago, monolithic companies like Xerox and IBM suddenly had to fear garage-based software startups like Apple and Microsoft. Today, with the advent of cheap 3D printing technologies and micro- funding, every business model is suddenly ripe for disruption from the garage-based hardware startup. The next few years will determine whether the infrastructure and distribution of large companies will overcome the grassroots funding and novelty of small-scale hardware developers.

The Innovation of Dead Tech

With rumors swirling that Apple and Samsung are both developing smart watches, we asked ourselves, “Who still wears a watch?” Plenty of people, it turns out. With the rise of the Internet of Things, every single device is suddenly a candidate for innovation. You may stare could be tweeting and sharing its way to a completely new price point.

MAKING INVENTION WORK FOR YOU

“Disrupt yourself before someone does it for you.” - Google

We believe that in order to survive,

organizations must myopically chase their own obsolescence. All businesses face an increasingly connected and therefore more uncertain world, and with it, we

all compete in a smaller pool,

full of more demanding and less

attentive consumers. Advertising

can

be a powerful driver of growth,

but

advertising alone cannot

steer a firm to future success.

That’s why we’ve created a department of Inventionists – a

mix of researchers, creatives,

technologists, and entrepreneurs – to help our clients experiment with new tools, products, and business models.

Our group specializes in

concepting and developing pilot programs and products that disrupt the status quo, ignite culture, and create business

change. We also help brands find their social mission and work with

the larger advertising force at

Deutsch LA to pursue that mission through interactive ideas. If you’re a business with an appetite for experimentation and marketing innovation, we’d love to partner with you.

Get

in touch.

Bud

we’d love to partner with you. Get in touch. Bud Caddell SVP, Invention bud.caddell@deutschinc.com