Pebble, a hardware technology company based out of Palo Alto, California, is one of the first firms to bring smartwatches to the masses. I must admit that I have a sweet spot for Pebble, since the founder and CEO Eric Migicovsky is a Canadian like myself. To start, let me give you some quick history on Eric. He grew up in Vancouver and moved to Southern Ontario to attend the University of Waterloo in Systems Design Engineering. His first smartwatch prototype was made years ago when he was on exchange at the Netherlands’ Delft industrial school. Since then, Eric made a number of iterations until he launched a Kickstarter campaign in 2012 for Pebble. Pebble, a smartwatch that pushed notifications from your phone onto your wrist, asked for a modest $100,000 in fundraising to help bring the new product to life. By the end of the fundraising campaign on May 18th 2012, Pebble secured $10.2M – 100 times the ask, with an estimated 85,000 preorders. Pebble went on to hold the title for the most successful fundraising campaign on Kickstarter, until the Coolest Cooler, a modern, updated cooler for the 21st century, beat it last August. So Pebble is super successful now, right? Well yeah, kind of:
It has been a big year for Uber and Lyft as both companies broke into new cities, raised new capital, and continued to attract media attention for disrupting the black car and taxi market. The year also brought about large price drops for both companies. Between January and February of this year, Uber rolled out a 15-34% price drop for its UberX service in cities across the United States and Canada. Lyft responded in April with a 20% price cut after raising a new $250M fund. Such significant drops have sent the media into a frenzy – they can’t stop reporting about this “intense war”.
I’m going to argue the opposite: Uber and Lyft are more likely working in unison rather than against one another. The “price war” is an illusion to fool one into thinking that the competition is hot, when in fact, Uber and Lyft are working hard to create their own ideal market. To better understand why this is the case, we need to look at basic game theory models.