The FitBit Story

and I'm talking about Fitbit. And really I'm gonna focus both on the company itself and the technology it creates. So you're gonna get both kind of a history and evolution of the company, but also how does that technology actually work. It's kind of marrying two different styles of tech stuff in one delicious tech stuff package of goodness.

So this story begins back in two thousand seven, and that is when two guys, one named James Park and one named Eric Friedman, decided that they were going to launch a company with the intent to produce fitness trackers, essentially a pedometer on steroids, something that could give lots of feedback to a person who was interested in getting fit. But to be fair, all stories really have more of a preamble than that, right, it's not just hey, today,

we decided to make a company. You have to figure out, well, what led up to that? Well, James Park attended Harvard. He was studying computer science, but he dropped out. He didn't actually graduate from Harvard, he didn't earn a degree there. After dropping out, he worked for the company Morgan Stanley and he worked there for about a year. And then Eric Friedman, he was actually at Yale. He got a graduate and postgraduate degrees actually from Yale. He was studying

computer science. They are, and the two of them co founded a company called Epis Technologies, and I'm guessing you probably never heard of it because it didn't last very long. Their focus was to create products to facilitate business to business transactions. So, in other words, um, your ordinary consumers or customers would never really come into contact with this particular company. It wasn't marketing stuff for the average consumer. This was for big companies and the transactions they make

with each other. Very different world than just going to a store and buying a product. Right. Venture capitalists invested a couple of million dollars in this technology. However, the

company just never found its footing. It eventually failed and Parks said that he felt that his inexperience in large part contributed to that failure, but that the failure itself served as a very valuable learning experience for him and for Freedom, and that they were able to take that negative experience and learn from it and attempt something new. So there might have been some valuable but harsh lessons

learned at that point. Anyway, the two of them and a couple of other alumni from a PSC Technologies decided to go on an entirely different direction with a brand new company. They created a new venture called wind Up Labs, and this time they were taking aim at online photo editing and sharing using peer to peer technology. So this

happened around two thousand two. UH. They got to work developing the tools you would need to do editing work online and to use this peer to peer technology to facilitate it, and it was successful enough for larger companies to actually take notice of them. And one of those larger companies was c net. So you're probably familiar with SEEN. They have a lot of different UH branches. The one that I'm familiar with is their website with their reviews

and their technology news. I know a couple of people who work there, but they also do other stuff as well, and one of the things they wanted to invest in was this photo editing suite, so they acquired wind Up Labs. They actually made a bid and then took ownership of the company, and both Park and Freedman went on to work for c net uh, becoming heads of various departments within c NEET, and they became further entrenched in the

world of technology. Flash forward to two thousand and six, another big company released a brand new product that got both Park and Freedman kind of excited, something that they had not really seen before that they felt had a lot of value. That company was a little company called Nintendo, and the product was the Wei video game console. Really, they were very interested in the Wei controllers, the Wei motes because they had all these motion sensors in them.

We were now entering into an era where these motion sensors were getting very small and relatively inexpensive, so you could incorporate them into totally new types of technology. You know, before they were larger, they were more expensive, they were limited in what you can do with them. But now because manufacturing processes had improved and you're looking at the economies of scale. They were suddenly a component that you could fit another stuff. And we started seeing this across

all sorts of different products, including smartphones. We started seeing those kind of technologies incorporated there. Well. They thought that this we mote motion sensor technology was really revolutionary. But they thought, this is a home console. What if we could take this capability and put it into a more portable device, and maybe it has a different aim and

video games. And that got them thinking, and eventually they came to this idea of a fitness tracker that now that you could get accelerometers and other types of sensors to a small enough form factor and make them cheap enough, you could pair them with some microprocessors and have a really robust activity tracker. So they decided that this would leave pedometers in the dust. It would set a new market, and they left c Net in two thousand seven to

form a new company and they called it Fitbit. Now that when they made this company, they didn't have any products to show off yet. They had not built anything,

they hadn't designed anything. They just had an idea. They invested their own money, and they also had friends and family and and former co workers and former clients also invested in their early start up, and they raised about four hundred thousand dollars, which originally they thought would be enough to get them to the point where they could

bringing a product to market. Later fundraising efforts got them further once they realized that four thousand dollars was not going to be enough, But that was a little bit further down the line. They had a long way to go before they actually had a physical product they could

show off. Their ideas. Sound sounded really good. They were really sound ideas, but neither co founder had any experience in the manufacturing world, so neither of them knew anything about product development or actually taking an idea and making a physical thing out of it, and as it turns out, that's really hard to do. They had to make a working prototype in order to show it off to some potential investors and also potential customers. So the original fitbit

prototype didn't look very special. It was some circuitry in a little wooden box. I think it was even made of balsa would The idea seemed really special, though, and Park and Freedmen were determined to make it work, so they needed to develop the product that could be lightweight because you wanted to be able to wear it on your body. They wanted it to be very energy efficient because you don't want to have to recharge it constantly. They wanted to aim for a price point of around

in the US dollars. That is, the original fitbit tracker that they eventually developed was a clip on device. You could clip it on pocket or a lot of the ladies would clip it on a bra strap or something along those lines. Um And it was kind of like a high tech clothes pin almost. So it had a very small, oh lead display, uh you know, organic led display, and that could show you how many steps you took. Give me a little indicator had little footprints on it too.

I'm looking at the camera that I'm talking to. I'm live streaming this particular episode, and I'm acting like it's actually another person right there. So that's interesting. But at any rate, the this little screen and show you the

number of steps you took. And it also had a Bluetooth low energy transmitter incorporated in the device in order to send information to a sinking station sinking as in synchronization, not as in sinking under the water, and you would plug that into a computer, so your device would sink whenever you got within a certain range uh and it would do so multiple times over the course of a day, so maybe every like fifteen to twenty minutes it would update,

and then you could view stats on your computer screen. Later on, with smartphones became ubiquitous and a lot of apps were developed for the fitbit, you could offload that to a smartphone and just use a Bluetooth connection between a device and your smartphone to send that information. But either way, the point was you could then view more robust information on a dashboard, either on your computer or later on on your smartphone, and it would give you a little bit better of an idea of of what

your activity actually meant. Because a predometer can tell you roughly how many steps you took, but fitbits value proposition

was that it could do more than that. So while the fitbit tracker could estimate the number of steps you were taking, that one of the things that this dashboard could do is estimate how many calories you were burning based upon the nature and duration of the movement you were making, and it did this by collecting information from a three axis accelerometer and more on that in a little bit. I'll actually explain how three axes accelerometers work. Really,

I should say just a three axis accelerometers work. And this was really what was compelling about their approach was that wasn't just a physical product that they were marketing. It was this whole marriage between software and hardware that together made it a product that people might want and

would find compelling uses for. Like this whole uh new industry of activity tracking, quantifying your activity in a way that makes sense, so that you could perhaps set goals saying I want to hit a certain milestone today, or you could just see what trends were for a week and maybe there were things that you needed to adjust.

It was a new idea really that you would be able to gather that much information and have it presented to you in a way that made sense, and that, I think, more than just the tracker itself, is what got people really interested. So let's talk about how this hardware works. Will begin with what is arguably the most

important element in fitbit technology, which is the three axis accelerometer. Uh. There are of course a lot of other components inside fitbits, and it also depends upon which fit bit model you're talking about because Fitbit offers a ton of different products, and some of them are more simple, and some of them are have all the bells and whistles. Figuratively speaking, I don't think any of Fitbit's current products actually have physical bells or whistles, So I apologize if I got

your hopes up. So, the three axis accelerometer is an interesting thing. Uh It It detects changes in motion. That's what accelerometers do. They detect changes in acceleration, and acceleration is a vector quantity, right, It has two components. It has a direction, and it has a magnitude. So an accelerometer can detect a change in the direction of motion or a change in the magnitude of motion, and a single axis accelerometer can only tell the difference in a

change in direction along one axis. So upper down is an axis. If you have a single access accelerometer and it's oriented in the up down position, it can only detect changes in direction that that an impact up or down. It cannot detect left or right. So uh, three axis means that there are three axis of directions that you're talking about, essentially up, down, left, right, and forward backward. So you can detect changes in motion and all of

these different axes. The accelerometers inside fitbits are specific types. They're called MEMS accelerometers m E m S, and that's actually an acronym. It stands for micro electro mechanical systems. And this is the fascinating thing to me. These are very very tiny. They're they're like, it looks like a regular little micro chip, like a microprocessor chip, but they actually have tiny moving parts inside of them. The accelerometers are actually based upon physical motion. Uh. And the name

tells you all the basics you need to know. Micro means we're talking wicked small here. Um, that means they're tiny. If you're not from Boston, you don't know what wicked small means. It means tiny. Electro of course, means that you have some sort of electrical or electro magnetic component to it. And mechanical tells you that, yeah, we're talking about moving parts here. It's just not you know, not just electrons zipping around. They're actually tiny little movement moving

elements to this thing. So let's start with a simple single access accelerometer. And again by access, we're talking about a specific set of directions. Um, this is all with respect to the accelerometers orientation. So let's say we've got a macro sized single access accelerometer sitting on the table. This is easier to envision. It can measure accelerator accelerative forces that are going up or down, but not left or right, or forward or backward, because it's again single access.

But the way it works is that you've got a b ace, which in the micro scale we would call a substrate. We'll just say it's the surface of a table in this case. Then you would have a spring, a pretty stiff spring, not not like a slinky, but more like maybe something you would find in a shock absorber. Attached to the spring, you would have some sort of element that would have flat protrusions extending from the sides.

So imagine like a cylinder, and along the length of the cylinder you've got these flat protrusions their plates, is what they're called. These are movable plates because they're on the cylinder, which itself is on a spring. So an emotion on the spring will make the cylinder go up and down, which means the plates, which are attached to the cylinder will also go up or down. Now, around this cylinder You've got some fixed plates mounted to a steady frame, so the frame does not move, the frame

stays stable, but those plates sandwich the moving plates. So a moving plate would slide between two fixed plates, and then you apply of different voltages to each pair of fixed plates, so you've got a difference in voltage. They're essentially capacitors in this case, they're building up a voltage differential between two plates. You've got this moving plate that's in between the two. Any motion that you transfer to that spring will they be transferred to the cylinder, and

thus the moving plates they'll move up and down. As they move up and down, that moving plate is going to get closer to the top plate, and then further away and closer to the bottom plate, and then further away. So as it moves up and down and gets closer and further away from these these fixed plates, it actually affects the capacitive value between the two. This difference in capacity value is is interpreted by the accelerometer as a change in acceleration. And I realized that this is kind

of a difficult thing to to just imagine that. I'm explaining it as best I can, but without the element of visuals. It is pretty tricky. So maybe what I can do is, um, I'll explain it analogy. I love analogies. And uh, it was lunchtime not too long ago here in Atlanta, Georgia. So I'm going to talk about sandwich. Imagine a really delicious veggie burger, and they do exist. It's easy to find a bad one, but trust me,

the good ones are out there too. Now, imagine you've got a bottom bun sitting on a table, hovering, as if by magic. About two inches above that bun is a veggie patty, and it is in fact delicious, but you can't eat it yet because I need it for this analogy. Hovering about two inches above that is the top bun. So you've got some space between the top bun, the veggie patty, and the bottom bun. Now, the two buns are fixed in space and time. Not even the

Juggernaut himself could move the two buns. They are going to remain in the positions they are in until the universe itself burns out. But the veggie patty can move up and down. It has that freedom of movement. So any motion to the table is going to make that veggie Patty either get closer to the top bun or

the bottom bun. And that's what I'm talking about. It's it's very similar with an accelerometer, except instead of veggie burger, you've got these moving plates and fixed plates, and instead of deliciousness, you have a capacitive value based upon a

voltage differential between two plates. Simple right. Anyway, you have processors that can take that data, that change in the capacitive value and interpret it as acceleration, and based upon the speed of the change and the magnitude of the change, it can make some guesses as to how much accelerative

force is being applied. So if you've ever used a fitness tracker that could tell the difference between when you were walking versus when you might be typing on a keyboard or when you're jogging down the street, it's because the accelerometer is able to interpret these differences and then present that information in a way that makes sense to you. And it's all about just looking at the math of the difference of that capacitive value, which to me is it's almost akin to magic. I'm about to go all

Arthur C. Clark in here. So that's a basic single access accelerometer, and the same thing is happening inside the sensors on the fitbit, only we're talking about a much much much smaller accelerometer, right, We're talking micro level, not macro level. And again, they don't use single axis accelerometers because that would only detect a change in acceleration along one axis. They use three axis accelerometers. So how are

those different, Well, they're not different. You just get three single axis accelerometers and then you orient them so that they have these ninety degree changes, so that you've got one that's aligned up and down, one that's the line left and right, and one that's aligned front to back, and they're all next to each other. And it doesn't you know, they're not always going to be. This is vertical, this is horizontal, and this is your your Z axis

because it all depends upon the orientation of the fitbit itself. Right, Sometimes i might have my arm way up in the air, waving it around as if in fact I just did not care. But other times I'm gonna be just hauling as fast as I can down the highway while the T one thousand is chasing me down. And the important thing is these accelerometers have to uh, detect that motion no matter what orientation my arm might be in. That's why you go with the three axis. It's much more

accurate than a single access accelerometer. And I love the fact that this technology is built on the basis of motion because it means that you yourself can go out and build an accelerometer if you want to. You can build a simple one which would really just give you an indication of changes to acceleration based upon the movement of a mass at the end of a spring. But that's technically kind of an accelerometer doesn't really give you any value, So I would argue that perhaps you can't

really call an accelerometer. It's almost more of a seizmometer. But it's still kind of cool. Uh. But yeah, with with some springs and a few other pieces of equipment, you could make a macro sized accelerometer that works on the exact same principle as these very tiny ones that you find in fitbit, And then you can marvel and the fact that it still works at the micro scale. Go ahead, marvel. You can actually marvel all the way through the next bit because it's time to take a

quick break to thank our sponsor. All right, so let's talk about other stuff with the fitbit. You know, other elements in UH in the fitbit handle actual processing of information. So you've got the sensor that's gathering information, the the three axis accelerometer. It's it's pulling info in, but that needs to be processed, right, It's just kind of raw data.

It doesn't really have any meaning to it. So we then have the other processors to kind of turn that into more interesting information that has relevance to us as users. Then you've got the low energy Bluetooth transmitter, and that is what allows the the fitbit to communicate with other devices like smartphones and sinking stations again synchronization stations UH. And they use low energy bluetooth because as you would imagine,

it doesn't require that much energy to operate. It's sending very small amounts of data, so it's not like it's having to transmit a constant stream of information. It's just little packets of information, so it doesn't take a whole lot of power to do it, and that means that it's less of a drain on battery life because that's

really important with an activity tracker. You don't. You don't want to have to take it off at the end of every day and recharge it, especially one like the fitbit that's supposed to also track how well you sleep. If you're supposed to wear it essentially twenty four hours until you actually absolutely have to charge it, you want to maximize that battery life. So that was one way they could do it was using this low energy Bluetooth approach.

And I've talked about low too, low energy Bluetooth and other podcasts, So if you want to go back to Tech Stuff archives, you can find me explaining that technology a little bit more. These days, Uh, you know, you're more likely to use a smartphone than a synchronize kind of station type device that plugs in via USB to your computer. You might still do that. I did that with my old fitbit, but these days now I just used my smartphone essentially is the computer in my pocket.

So um. But when they first launched Fitbit, smartphones were not really a big thing yet. Remember they got together to work on Fitbit in two thousand seven. That's the same year that Apple debuted the iPhone. So to me, that is the beginning of the era of the smartphone age.

Even though there were other phones that could technically be called smartphones before the iPhone, it was the iPhone that captured the public imagination so that people besides just the the tech geeks like my elf, sat up and said, Oh, that's pretty cool. I want one of those now. It was actually that that bluetooth transmitter that gave them some early problems. If you read review our interviews with the founders of Fitbit, they'd say that their company nearly died

seven times. They had seven different crises that almost killed off their company in that that first year, and one of them was they found that they were having this transmitter problem that the device wasn't able to sink properly. Because it wasn't able to transmit information properly, they weren't getting any data off of the transmitter, and they found out it was an antenna issue, and they fixed it by putting some foam behind the antenna, like propping it up,

which I can identify with. I'm old enough that I remember when we would get all of our television programming over the air, and I was the official. Hey moved the antenna a quarter inch to the left so that we can get I love Lucy on the e V So I was the piece of foam in my family anyway. Uh. These were the kind of like CLUEG solutions they had to go with early on just to get their their technology working. But the important thing was it actually did

make it work. Now, while their proof of concept was working, they discovered that that food dollars just was not going to be nearly enough to bring a product to market. They had underestimated how incredibly challenging it is to get into manufacturing. It requires creating a supply chain. You have to figure out who's going to supply the various little components that together make your product. You have to form

relationships with the various suppliers of microchips and sensors. You have to figure out what is the form factor of your product going to look like, like what is it actually going to how's the design going to be, and who's gonna make it, who's gonna cast the molds, who's going to produce the plastic. Uh. This is where I would talk about China a bit, because they had to

look at Chinese suppliers. That was one of the ways to keep costs down is that and that's what a lot of electronics companies do they look to China to produce the little various components that are then assembled together and then sold in other parts of the world. So they realized that they just did not have the money

to go through this whole process. They needed more, so they held some more rounds of venture capital fundraising, and they raised some quite a bit of money, like more than a couple of million, because by now people were starting to pay attention to what it was they were working on. But really, I think the turning point in that early time happened in September two thousand eight. So they got together in two thousand seven, they started working

on their idea. September two eight, they got an opportunity to show off that idea, show off a prototype, and explain their sales pitch, and they did an event called tech Crunch fifty uh So tech Crunch they're known for lots of stuff. They're they're great with technology news, but they also are really a launch point for startups. They give startups an opportunity to meet with people, to express what it is they are working on and to try and see if there's any interest or support out there

to continue the work. So tech Crunch fifty was a huge deal for these guys to be involved with it, and they landed a spot in that two thousand eight event. Now, going into it, they weren't exactly overwhelmed with optimism. In fact, Freedman had said, I don't think more than five people will be stupid enough to give us their credit card, a somewhat cynical statement, and part of wasn't a whole lot better. He said, Nah, you're wrong, We'll get way

more than five. I bet we'll get fifty orders five zero. Turned out that they were grossly underestimating the appeal of this Fitbit product. By the end of the day after they had presented their idea, they had two thousand pre orders, these for two guys who had not yet figured out how they were going to produce these these products. They knew how it was gonna work, they had an idea of what it needed to look like, but they did not have a manufacturing process in place yet to produce

two thousand. It did not help that Park had said that they would have the orders out by Christmas. Now the first Fitbit trackers, the original product from Fitbit was called the Tracker. There was that little clothes pin, thing that could clip onto a pocket or whatever. They shipped in December two thousand nine, so they presented in September

two eight. James Park says they'll be out in time for Christmas, and they shipped December two thousand nine, and James Park said, well, in my defense, I never said wh Christmas. Whack at ashrak. Uh. Yeah, it was kind of jokingly saying, yeah, we're a year late, but it but it came out. And honestly, that delay really illustrates what I was saying earlier that manufacturing is hard. It is difficult. It's it's something that even big companies struggle with.

And these are big companies that have been around for for decades and they're in the business of making consumer electronics. It's challenging for them and they've been doing it for decades. For two guys who had started up this company, it was way more challenging. So once you are able to crack that manufacturing problem, which is again a non trivial task,

you can go on to actually do business. And Uh, it took them a year longer than what they were anticipating, but they were able to actually ship out the fitness tracker, and as it turned out, it was incredibly popular. They got thousands and thousands of orders and immediately the value of fitbit was on the rise. So this was two thousand nine and it was met with real enthusiasm. The low energy electronics meant that the device could go on

for several days without ever needing a recharge. The dashboard side of things that that view you would get on your computer or later on your smartphone meant that the user was given so much information that was relevant to what they were doing. It had a huge appeal. One of the easiest ways to sell anything to anyone is to involve them in the the product itself, right to say, you are what makes this product special. The way you use it is reflected in the results you get, and

so it's all about you. If you want to sell me anything and you tell me it's all about me, you're well ahead of the game, because I love me. Anyway, On the back end of things, the fitbit researchers were starting to work on various algorithms to try and turn just a number that says steps into something more meaningful. So you may have noticed if you've ever used an activity tracker that you will get a notification of how

many miles you've walked in a day. Well, you can't just base that on the number of steps, because your stride is going to be a different length from someone else's stride. If you have someone who's five ft tall and someone else who is six ft six and they both walk five thousand steps, I guarantee you the six ft six inch tall guy walked further. They took the

same number of steps. But the person who is six ft six inch and I said guy, but honestly, the first person that popped in my head is a woman I know who is very tall. Their stride is longer, so they're going to cover more distance. So part of this dashboard experience was users giving information about themselves, like their height, so that the estimations could be more accurate.

Someone who's my height, which is five ft eight is not gonna be as walking as far as someone who has six ft six even if we took the same number of steps. Uh. That was the whole point. So if you want to estimate how many miles you walk, you need to know the height of the person so

that you can make that estimation. Also, with calories burning, you'd have to make estimations based upon age and other factors, and in fact, there's so many factors that a lot of people have argued that the calories burned metric that you find in various activity trackers is largely meaningless because it relies on too many unknown variables. It can only really look at things like how much activity did you do that day and how frequently did you do it?

But that doesn't necessarily translate to an easy this is how many calories you burned. That being said, it could help people when they're trying to make general kind of high level decisions about their diet, their activity levels, that sort of thing. So it really depends on how you look at the products. People who are looking at it as a almost hobbyist way to get into fitness saw value in it. People who are looking at it as saying,

you're marketing this more as a medical device. They had a lot of harsh criticism to level at fitbit, for a good reason, because medical devices have to be far more precise, far more accurate than something like an activity tracker. But a lot of people were arguing that these two camps were not talking the same language, and that Fitbit was really aiming itself more toward the hobbyist side than

the hardcore medical application side. Now it didn't hurt the fitbits popularity that they happen to have some savvy into social media as well. Right, That incorporation of the social aspect in fitbits business plan really helped a great deal. They incorporated this ability to connect with friends, and you could actually compare how many steps have I taken versus how many steps has Matt Frederick taken versus how many

steps has been Bowland taken? That kind of thing, and by comparing them, you could end up either thinking, oh, I need to get another two thousand steps in because I gotta beat this guy, or maybe you're thinking I'm way more active than those slug of beds. And it created also a competitive element to fit Bit that they weren't necessarily anticipating when they first started to implement the

social uh features in the fitbit product. But they realized that that competitive element drove people to use fitbit more and to become kind of Fitbit evangelists because they were getting out, they were doing things they wanted to earn steps. Anyone who's had an activity tracker, I guarantee you. At some point in their lives, they have said, I don't even know why I walked. I wasn't wearing my tracker. They didn't count, Like somehow those steps don't count unless

they're being quantified by the activity tracker. Well, that's great news for a company like fitbit, because it means that people need the product, or they at least think they need the product that is selling. And uh, that social element would actually come to be a problem a little bit later. I'll mention that when we get there, it's saucy. By the way, in case you're wondering, I am on the top of my fitbit friends list um by about

fifteen thousand steps per week. But to be fair, I also walked to and from work, and I lived several miles away from the office, so it's a necessity. I don't drive, so that helps me with my steps. It's not like I am super physically active compared to the people on my list. It's a matter of necessity for me. All right. You know what, let's take a moment to

talk about the awkwardness of social connectivity. You see, one of the things that bit also allowed you to do is create an exercise diary because the fitbit was really good at detecting when you were walking or when you were jogging, But a lot of the fitbits weren't waterproof, so you couldn't track your your activity when you were swimming. Many of them couldn't really tell what was going on if you were doing exercises in a gem like let's say you're getting on the elliptical, it might not be

able to track that movement. So the exercise diary feature on your dashboard allowed you to enter other activities, get an estimation of how many calories you burned doing those activities, and then you would factor all of that in for your end of the day report, saying here's how many calories you burned today. Fitbits said that as a default shared setting, meaning that if you were creating an exercise diary and you had not changed the default, you were

sharing all of that information to the general public. You might say like, I got on the elliptical for twenty five minutes and I burned this many calories, and anyone who looks at your profile could see that. But people were putting in all sorts of different entries in their exercise diaries, including times when they were getting a little romantic,

getting a little uh intimate, getting busy. In other words, Yeah, people were putting down sex as an activity in these exercise diaries and getting estimations for how many calories they burned during those activities, not necessarily realizing that by default this was being shared to everyone out there. So in two thousand eleven this information kind of got spread around.

A lot of blogs had fun with it. They talked about how fitbit was inadvertently sharing people's sex lives to anyone who was interested, and it was at that point that Fitbit decided to change that particular policy and set the default to private instead of public, And at that point we no longer saw tons of people sharing their sex lives unknowingly. If they did, they were doing it because they in in and change the setting to public from private. Oh if it ben't even win an extra stop.

They actually contacted search engines and they asked for the past diary entries to be removed from search engine indexes, so that way you couldn't just search someone's fitbit profile and use the search results to go back to an archive diary entry that you're not supposed to see. So they did take some steps to correct this problem. It was a problem that they had created by making that default public, but it was also a problem that users

created by putting in other activities on that exercise stuff. Uh. But yeah, that was a little awkward. So fitbit um learned the hard way that getting into that social game is a little tricky, kin of the same thing as getting into manufacturing is a little tricky. After all that, the team was going back to work on developing new types of Fitbit trackers. Now I'm not going to go into every single product that they've made, because that would be silly. Uh. There are a lot of them that

haven't been sold for years. They got replaced by later models. Uh, they're They're all various variations, I should say on that initial fitness tracker. Some have more components to them, but ultimately they all work in a very similar way. So it doesn't make sense for me to go into all the different types. Again, this isn't a commercial for Fitbit. This is just an episode talking about the company and

their technology and how it works. So I will talk a little bit about some of the other components that are in Fitbit devices. So the Fitbit tracker that was their first device. One of the next ones they had was the Fitbit Ultra, which was kind of an updated version of the tracker, and one of the things that

added was an altimeter. Uh. And an altimeter is something that measures altitude or distance vertically, right, the difference in vertical distance between the altimeter and some fixed object, which typically is the ground right sea level, or at least ground level. And the way it works is it doesn't measure directly the distance between it's vertical position in the ground. It measures altitude by looking at something related but different

atmospheric pressure. Now we're gonna go into some basic science time, and I know most of you are familiar with this, but you know, I always like to have a little refresher. The atmosphere that we breathe, it has weight to it, right, It's a fluid, and typically we're at the bottom of it because we're on ground level or somewhere close to it. Not all the time, obviously, but frequently. So if you ever felt that you're constantly under pressure, you kind of are,

at least from the atmosphere. But it's good because if you weren't, we wouldn't be able to breathe and you would die. So sometimes pressure as good as web saying, as you climb in elevation, as you move up a ladder, go up some stairs, climb a mountain, get in an airplane, you end up having less of this fluid above you than you did before. Right, some of that fluids now below you. The weight has decreased as you go up

because you have less atmosphere overhead. It makes sense, right, there's less pressing down on you, So there's less weight now. If you go far enough, like you climb a tall mountain, the pressure changes can be enough to actually have a physical effect on you. Most of the time, it's so subtle that we cannot detect it by ourselves. We would have to have some sort of sensitive instrument in order

to detect that change. It's also why modern jets are pressurized, because if they were unpressurized traveling at thirty ft, the atmosphere would be so thin that it would be not not not fun times, very not fun times. So you pressurize the interior of your plane for a couple of reasons. One to make breathing easier to you don't want your ear drums to blow out suddenly. Um, So it's really important same thing is true for people who are climbing mountains.

Often you are told that you have to acclimate to air pressure at certain stages of tall mountains, otherwise you run at the risk of getting sick from altitude sickness. Well, altimeters detect air pressure and changes in air pressure, and they track things like how many stairs you've climbed by

detecting those changes in air pressure. The altimeter sensor on a fitbit is sensitive enough to detect when you have changed ten feet in elevation, whether you're going ten feet up or ten feet down, but it only counts stairs climbed if you're going up. So, in other words, if the atmospheric pressure is decreasing to the point that the fitbit says, oh, this guy's gone ten feet up, they've climbed some stairs. But if it increases, indicating that you're

moving downward, it doesn't count it as stairs climbed. And that's largely because if you're going downstairs, you don't have to exert as much energy as you would if you're climbing upstairs. So really you should only be interested in how many stairs did you climb, not how many stairs did you descend. That's why it doesn't count it if you're going down. Uh. I've noticed that that my fitbit will sometimes detect a hill as a set of stairs.

So if it bit tries to determine whether you're climbing stairs versus walking up an inclined path by combining the data from the altimeter, So how much change in elevation have you experienced with the actual motion data from the three axis accelerometers which tell how frequently you're moving your arms, and can kind of with the combined data suss out whether or not you're walking upstairs or you're going up a pathway. But it turns out it's not an exact science.

So for example, yesterday it told me that I climbed seventy five flights of stairs. I definitely did not climb seventy five flights of stairs yesterday, but I did walk

up a lot of hills. So that that's the uh, you know, kind of subtlety that it can't quite tell the difference between If you were to map fitbit data against a map, like literally pair a map with the fitbit data in a way for it to take into account the geography, maybe then it would say, all right, well you didn't walk up seventy f five flights of stairs, but you did climb this amount of elevation in this

amount of time. Later, still, fitbit introduced some heart rate monitors in some of its products, and you might want to know how does that work? For example, the one I have as a charge too, it's got heart ray monitor on it. So how does this thing that I wear on my wrist tell how frequently my heartbeats? All right? So it does this through Oh, good grief, this is

gonna be a slaughter, all right. It does this through a process called photo plethism graphy, also known as PPG, which is how I'm going to refer to it for the rest of this discussion, because I think I might be able to say photo flip, photo flip this ma graphy correctly twice in my entire life, and uh, I think I just did so. Game over man. Alright. So, human blood, as I'm sure most of you are aware, is red, right well, red stuff reflects red light and

it absorbs green light really well. So anything that's red gets reflected off of red stuff, anything that's green gets absorbed by red stuff. So devices like the fitbit charged to pair a couple of light ometers that are pulsing green light with a sensor that detects reflected green light, and that's how it's able to tell how much light

is being reflected or absorbed by your blood. So it's positioned over little blood veins in your arm, and whenever it detects that a lot of light is being absorbed, it's saying, oh, blood is flowing through the vein right now. Whenever it detects a lot of light is being reflected, it says, oh, blood is not flowing through that vein right now. And by counting the number of times that this absorption and reflection pattern goes within a minute, it

gives you your heart rate. That's how it works. It's kind of cool. It's not full proof to detect heartbeats this way. Advice has to be fairly secure against the skin. So when you exercise, you tend to move around a lot. At least that's what I'm lead to understand. And uh, I'm someone who walks a lot, but i haven't really jumped into that full exercise schedule, so I'm only speaking

from second hand experience at this point. But if you're doing a lot of vigorous weightlifting or running or something. A wrist mounted activity tracker is probably going to slide around a lot, and that means it's more difficult to get an accurate reading on the heart rate UM and that actually has caused some real issues. It's actually could be potentially dangerous. Uh. Some people really push themselves very hard when they're working out. They're trying to get their

heart at a peak level for a certain amount of time. UM. Particularly people who are really trying to push their performance, and they need to know if their heart rate is exceeding safe parameters. If it's at peak for too long,

they could actually suffer some serious health problems. So Fitbit and other activity company tracker companies have come under fire from some healthcare professionals who have said, your marketing a product with certain claims that could lead someone to believe they have a level of vision akin to a medical device, but you haven't submitted your products to the kind of testing, the rigorous testing that medical devices have to go through in order to be certified as being that kind of accurate.

And uh. Again it becomes this this war of words with activity tracker and company saying this is something to help people with fitness issues, but it's not marketed as a medical device, and the medical industry saying yeah, but people are kind of treating it that way. So there's a level of responsibility you need to take, and it's kind of a back and forth. Now. By measuring a user's heart rate, fitbit can also make a little bit more of an educated guess as to how many calories

that person is burning in a day. And you probably heard about the various ranges of heart rates that indicate whether you're in a fat burning mode which is slightly elevated, or if you're in a cardio vascular exercise mode, which is a range beyond that, or if you're in peak mode, which is that other level I was talking about, or

if you're just resting. And this is actually a pretty tricky area itself, even outside of the technology sphere, there are a lot of people who argue exactly where that range should be and how accurate it is, or whether it's accurate at all, or what does it mean or is it meaningful? Uh, And I'm not going to get into that because it doesn't really have anything to do with the technology, but it does show that this is another area where there's a lot of disagreement about what

is the actual right way to go forward. But Fitbit will combine information from all these different accelerometers and altimeter and heart rate sensors in order to give you an idea of how many calories you have burned throughout the day, even though that might not be absolutely accurate. Now we're gonna talk a little bit more about the company side of Fitbit, now that we've covered the technology side quite a bit in just a second. But first let's take

another quick break to thank our sponsor. All Right, let's go back to talk about the company a little bit and how Fitbit has performed through all of this. So shortly after Fitbit took off, activity trackers became a huge deal in the electronics industry, and Fitbit enjoyed a great amount of success. Very early on, they focused on creating those products that we're feeling, filling a niche between like

and two hundred dollars. Really like the hundred and thirty and fifty dollar range was their their playground, and that also meant that they were avoiding the problems of creating higher priced luxury items that that some electronics fans were

balking at. They also decided early that they were not going to get into smart watches right away, which ended up being a smart decision because a lot of people were out there trying to create smart watches and no one was really sure what a smart watch would be or what should do apart from tell the time, and I'm sure some of them were even wondering if it

should do that. Now, Fitbit did include stuff like a watch and some of its models, so there were models after the Fitbit tracker that had a clock element to them, but you would say that it was a clock on an activity tracker, not that it was a watch that also tracked activity. So very different approach, not something that

the smart watch companies were really going after. Then they started adding other features, like you could get notifications on certain Fitbit devices, so when you paired it with a phone, if a notification came through on your phone, you might get an alert on your Fitbit. So you might miss it if your phones in your pocket, but then your wrist vibrates and you take a look and you see, oh, someone's texting me, or I just got an email or whatever it might be, or I've got a calendar event

coming up that I should pay attention to. Then Fitbit eventually did release a smart watch. They released it in and it's called the Fitbit Blaze, and that was really the first attempt to Fitbit to take aim at the

smart watch industry. But at that point they were already saying, we wanna wait to see how other companies do it and see what's working and what's not working before we attempt to do it ourselves, because right now everyone's arguing over what a smart watch should even be, So why would we make something if we're not even sure that that particular form factor is going to ever work out.

So they did launch the Blaze last year. I know that they were very proud of it, but kind of surprised that the market didn't immediately respond in a very positive way. The reviews were pretty good, but the market itself didn't respond in a very enthusiastic way, and that

frustrated people over at Fitbit. And I think largely that's again because even as could sumers, we aren't really sure what a smart watch should be, Like, what is the thing about a smart watch that's going to make it so useful that you absolutely have to have it unless you're an iPhone Apple fan? In which case you probably buy an Apple smart watch because it had Apple on it. Burn back. In two thousand, Fitbit launched its initial public offering.

It's I p O. In other words, this is the process where a privately held company switches over to a publicly traded company. It's where you issue stock and people can go and buy stock in your company. Before the stocks went on the market, before they were going to be traded, they were initially valued at twenty dollars a share. That was before trading began, but once trading began, the value actually shot up very quickly. The actual opening price

was thirty dollars forty sense. The company ended up getting evaluation of four point one billion dollars. You essentially multiply the number of shares by the share price. That gives you a rough idea of the valuation four point one billion dollars. James Park received the honor of being named one of Fortune magazines forty under forty in two thousand fifteen. He was thirty nine at the time, a year younger than me. I can't lie to you, this one hurts

a bit. I'm sure that in two thousand fourteen I was like, seriously considered for inclusion in the forty under forty, but I probably missed it by that much. But seriously, though, it was another indicator that park In Freedman had been on the very tip of the spear that was activity trackers,

that they had led that charge well. And this was also around the time that activity trackers began to dominate entire sections of the room floor at ce s every year there's an entire area that's just activity trackers, and it's enormous. Traditional companies and startups alike, we're getting into the game, and the space became really highly competitive. Fit that was benefiting from the fact that they had been in the market since it first started. But it's also

important to mention Fitbit. It's not like they were the first activity tracker of all time, but they were early enough and popular enough to become kind of the defining name in the space for a lot of people. Now there's another challenge that all activity companies have to face. Not only is there a lot of competition out there, but there's also the problem of convincing customers to buy an activity tracker if they already own an activity tracker.

So it's not just competition, but also market saturation. Activity trackers are designed to last a pretty good long while. If they died out super fast, people would be very irritated with them. So think about, you know, that whole planned obsolescence idea, That strategy of let's make something that within a couple of years you absolutely have to replace because it will be obsolete, doesn't really work so well

with activity trackers. A lot of people feel that as long as it's still working, that's good enough for them. So that means it gets harder and harder to sell more of your products. There are more people selling, so you've got a lot of competition, and a lot of your your target customers already owned one, so it's hard to commence them to go and buy a new one. That means that and make it even more complicated. Not

just activity trackers, smart watches too. Right, if you've gone in and you've bought a smart watch that happens to have some activity tracking capabilities as well as being a smart watch, that's even less reason for you to go out and buy another activity tracker. So not only was Fitbit competing against other activity trackers, but also all the smart watch companies that were building in those let's even go even more complicated. Smartphones now can act as activity trackers.

A lot of smartphones have a built in app that will count steps and maybe even do things like map how many steps you've made against a physical map, or tell you how much you've changed in altitude across the day based upon where you went. All of these different things are direct competitors or indirect competitors with activity trackers, which meant that Fitbit was facing more and more pressures from outside of its own company and had to figure

out ways to remain relevant and compelling to customers. Part of that was again aiming at people who didn't want to spend four hundred dollars five hundred dollars for a smart watch. Maybe they'd spend a hundred dollars or a hundred thirty dollars for an activity tracker, especially one that had enough features in it to set it apart from

just a predominter. But it does mean that you're constantly having to reinvent yourself and find ways of making products that are interesting and use full and intuitive, and not everything has gone smoothly. In two thousand and fourteen, the company had to issue a recall of the fitbit Force, which was one of the activity trackers that that you would wear using a wristband. In fact, most of fitbits trackers use a wristband, but not all of them. This

was one of them. There were quite a few people who reported that they were having problems like skin issues after wearing the wrist band, that it was causing them to break out in a rash or sometimes worse, into blisters. In fact, it got so bad that, according to some reports, more than nine thousand people said they were having issues, with more than two fifty of them saying that it

was blistering. And so eventually the company issued a recall and discontinued the product and refunded people their money for buying it because of these these problems. Now, the likely reason behind all this was that the wrist band had some components and that they were made out of nickel, and a lot of people have an allergy of skin allergy to nickel. Uh they can contract dermatitis if their skin is in contact with nickel for too long. I'm one of those people, and I didn't find out through

an activity tracker. Actually found out because I had a silver plated ring and the the thing that the silver was plating was a nickel core, right, it was a ring with a nickel core but silver plating, And eventually the silver on the inside the ring wore off enough where the nickel was making contact with my skin and it was a wide band ring and I started having this terrible reaction. So if I had bought one of those fitbits, I would have been one of the people

who had that that same issue. That skin irritation. Uh, is not fun. And that did not do the company any favors. Although the fact that they did issue a recall was the right thing to do, um, but it was it was not a great publicity move to have something that gives your customers blisters all over their wrists.

And then there's also been some legal battles. There was a couple of legal battles with Jawbone, which also makes activity trackers, and jaw Bone at one point alleged that fitbit had stole stolen corporate secrets from jaw Bone, that they were stealing patented work, and so they sued Fitbit. Later on, a court actually overturned the patents in question, so there was no foundation anymore for the lawsuit because the thing that had been a patented idea, the patented invention.

The patent was invalidated, so there was no longer any legal claim for that. That particular lawsuit faded away. In October, James Park appeared on the program Mad Money to say the company as a whole was going to change direction and it was going to transition from what he called a consumer electronics company to a digital healthcare company. And he went on to say that the social aspect of what the company was doing would become more important in

the future. Now, this may have been in response to a really rough year on the market in twenty sixteen. Fitbit saw their stock price drop steadily throughout the entire year. Uh the high price for a Fitbit stock over the last fifty two weeks was eighteen dollars forty three cents. Remember it was initially valued at twenty dollars before it opened on trading, back when they first went public. It went up to thirty dollars forty cents the that day, and now it's down to less than much less than

that actually today, which is March. I checked the stock price and when I checked it, it was five dollars and thirty seven cents, So pretty massive fall off in stock price. The appearance on Mad Money was interesting and that Park said that Fitbit could help employers save money on providing healthcare plans for employees, and he cited a third party study that suggested employees who opted into a Fitbit wellness plan would cost employers twenty less than employees

who did not enter the Fitbit wellness plan. So perhaps the future of fitbit is really in designing corporate wellness initiatives and the hardware will just kind of supplement that. And they've also been on acquisition tear recently. You may say that, uh that Fitbit essentially rated Pebble, because it wasn't so it wasn't like a standard acquisition. It was acquiring very specific parts of Pebble and taking just the

parts they wanted. Pebble, by the way, in case you don't know, it's a company that was known for making relatively simple but interesting smart watches and it got started originally as a crowdfunding campaign. And the smart watches use an e paper display so that they're very low power. Uh, and they were able to give you notifications from your

phone that kind of stuff. Fitbit bought out Pebbles software assets for less than forty million dollars according to Bloomberg Technology Now sadly, Pebble as a company actually had more than forty million dollars in debts, so they didn't even get as much as they needed in order to pay off their debts in this case, and Pebble had found that it was very difficult to thrive in a crowded marketplace, and it didn't help that you still have a significant

population of people who aren't even convinced that smart watches are an interesting thing to buy in the first place. So, according to Bloomberg, Fitbit sent job offers to about fort of Pebble's workforce, meaning did not get an offer to

work at Fitbit. And as someone who owns a Kickstarter edition Pebble watch, this whole thing made me very sad, not just because my watch would no longer be supported, but I really thought Pebble was something special, and there were a lot of folks who were eagerly anticipating Pebble's next product, and they were very dismayed to learn it

will never come. But such as business. In January, Fitbit acquired a another smart watch group, a company that had started up just in March sixteen called Vector, so it wasn't even a year old when Fitbit came in and acquired it. Vector's market was to create what they called affordable luxury smart watches, so their designs kind of harkened back to classic European luxury watches, but at a lower cost, and they're smart watches, not your typical quartz crystal action watches.

And like Pebble, the acquisition appears to have been a bid for the software developer talent. The founder of Vector, named Andre Petis, said as much, said that the company was acquired for this software platform and for its design team. So does that mean that Fitbit will soon produce luxury

smart watches? Probably not. They may set all of these assets to work on creating those digital health care solutions that I mentioned earlier, and I suspect will continue to see Fitbit produce activity trackers and sensors, but that these will fit into a larger package of healthcare solutions, so that way Fitbit can continue to set itself apart from all the competing activity trackers companies out there. They're not

just selling activity trackers, they're selling health itself. That's me saying that not Fitbit, and who knows, maybe in ten we will see some luxury smart watch activity trackers from Fitbit, and maybe they'll become the must have fashion accessory ofen. I wouldn't be shocked to see it happen, and I might even save up for one because I lack I lack looking all flash while tracking my steps. But we'll see.

And that's all I've got on Fitbit right now. I could have talked a little bit more about some other elements, like there was a tie where Apple sold Fitbit products in its Apple Store, and then there was a very famous time when they said they would stop doing that. But you know, honestly, that story is not as interesting as it first sounds when you hear the connotation there. And besides, I gotta save something for future episodes now

that I'm going to twice a week again. So I hope you guys enjoyed this glimpse into the company Fitbit and the explanation of how that technology works. If you have questions, comments, or suggestions for future episodes, you should let me know send me a note. You can send me an email at the address tech stuff at how stuff works dot com, or you can always contact me through Facebook or Twitter. I use the social handle text

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It also means you get to listen to the episode a couple of weeks before it even comes out, and you get to hear me make mistakes and stuff which hopefully you don't hear in the published podcast because Dylan fixes those. All right, that's it done. I'll talk to you again really soon for more on this and thousands of other topics. Is it how stuff works dot com