New electronics often face a marketing thicket
Last month, entrepreneur Dave Sukoff flew to Los Angeles to demo his product, a digital media player called the Sookbox, for a group of Hollywood notables at the Independent Spirit Awards. It was an opportunity to give away a $2,000 product to anyone who requested it. Sukoff was thrilled when actor Chris Tucker stopped by and was able to instantly call up Tucker’s movie “Rush Hour” on the screen. About 10 of the Spirit Awards attendees told Sukoff they’d love it if he’d send them a complimentary Sookbox.
It was a glamorous trip for Sukoff, but it also hinted at the rough reality of getting a new consumer electronics company off the ground. Even after giving away $20,000 worth of products to a coterie of taste-makers, Sukoff says, the eight-person Cambridge start-up is still trying to figure out its “go-to-market strategy.” Like an indie filmmaker trying to understand whether it makes more sense to try to get onto multiplex screens or go straight to iTunes, entrepreneurs developing electronics products have to place a bet about whether BestBuy or Amazon or something else is the best route to reach consumers.
“It’s hard to find the right place to market these new products, once you are beyond the early adopters who don’t require much education,” says Dave Dickinson, most recently the chief executive of Zeo, a Newton start-up that made a bedside system to monitor sleep quality. Then there’s the issue of trying to sell products at a price that will appeal to consumers, and giving retail partners their cut.
The result, says Dickinson, is “a tightrope walk over a river of alligators.” Zeo laid off its last 12 employees in December, and Dickinson is now trying to sell its assets.
Luckily, there are bushy-tailed entrepreneurs undaunted by the challenges of making a dent in the consumer electronics universe, to paraphrase the late Steve Jobs.
Sukoff says he was simply compelled to solve a problem for consumers: delivering video from Internet services like Hulu, Netflix, or YouTube to any television in the house. So starting in 2011, he began designing a box — and necessary software — that would link the Internet to all the TVs and stereos in a home.
Sukoff’s team is now building the first 50 Sookboxes by hand. And they’re designing a less expensive version they hope will retail for closer to $1,000. So far, the company has subsisted on “well under $1 million” in funding, Sukoff says. One possibility for reaching consumers is KickStarter, the website that enables consumers to preorder first-of-a-kind products, providing the developer with money to manufacture them.
A Concord company, Isabella Products, raised $7.5 million and in 2010 began selling a digital picture frame with a built-in wireless link for sending and receiving photos. The Vizit initially sold for $279, but a monthly service fee was also mandatory. The product wasn’t a big hit, and the company now sells the Vizit frame as a digital signage solution for businesses.
In 2010, Isabella started showing off a rugged tablet computer designed for kids. The Fable is targeted at ages 3 to 10, offering e-books, apps, and video content from such partners as PBS and Houghton-Mifflin. Isabella chief executive Matthew Growney says the company hopes to start selling the Fable in time for the back-to-school season this year, at $129 for consumers or $99 for educational institutions.
“You can buy three Fables for the price of one iPad Mini,” he says. “And it is designed to withstand being thrown across the street by a 5-year-old throwing a fit.”
A Boston start-up called Litl began selling a light-weight laptop computer called the Webbook in 2009. It was priced initially at $699, and Litl marketing executive James Gardner says the company sold “multiple thousands” of them. “I wouldn’t say we failed,” he says. “We just didn’t succeed on the Apple scale.”
The company changed its strategy and now makes an app called Woven for accessing digital photo albums on phones and Internet-linked televisions.
The region’s two leaders in consumer electronics are home audio pioneer Bose Corp. of Framingham and iRobot, the Beford maker of robots that clean carpets, gutters, and swimming pools.
One newcomer to watch will be Lilliputian Systems , a Wilmington company that has raised a staggering $140 million over more than a decade to develop a portable power system that uses butane as a fuel to recharge such devices as phones or digital cameras. Lilliputian’s Nectar power system will be priced at $300 when it shows up at Brookstone stores this summer, and each fuel cartridge will cost $10.
The product is being pitched to road warriors who may not want to carry multiple charging cables or constantly hunt for electrical outlets.
The sleep monitoring start-up Zeo had its own Hollywood moment when morning show host Regis Philbin tried out its system on the air in 2009. But just two days after Sookbox displayed its product at the Spirit Awards last month, Zeo co-founder Benjamin Rubin held “a company wake,” at his South Boston condo. About 40 people who’d once worked at Zeo showed up.
Consumer electronics businesses, Rubin says, consume more capital than software or Internet companies. And it is much slower to make improvements to a product while it is being designed or after it has launched.
But, he says, “you have an advantage, because you won’t have a million people doing the same thing. You don’t have 50 guys with an app that looks similar.”
Rubin is serving as a mentor to a new program in Boston, Bolt, which seeks to help consumer electronics entrepreneurs launch their first products over the course of six months.
“I would happily do it again,” Rubin says of entering the consumer electronics sphere. But as its happens, Rubin’s new start-up is an Internet company.
Correction: An earlier version of this story had an incorrect spelling for Dave Sukoff’s name.