Where the money and attention are going. The first generation of Quantified Self apps was all about viewing your data and storing it online in a vault or graphs…somewhere, usually proprietary. Your Pebble, Fitbit, or Jawbone tracked, you crunched the numbers and found the meaning. At the same time, there are wellness companies like Welltok, ShapeUp, Keas, Virgin HealthMiles, and RedBrick Health, usually working with companies or insurers, that use various methods (money, gamification, other rewards) to influence lifestyle and improve a person’s health in a quantified, verifiable, but general way. What’s happened? There are now apps that combine both data and behavior change, focusing on a specific but important (again) condition, coach to change behavior and verify results rigorously through clinical trials. Some, like Omada Health, prove through those clinical trials that their program successfully changes pre-diabetic indicators, such as weight loss, decrease cholesterol and improved glucose control–without medication. This results in big savings for insurance companies, one reason why a $50 million Series C was led by Cigna. Another model is to work with pharmaceutical companies to better guide treatment. Propeller Health with its asthma/COPD inhaler tracker is partnering with pharma GlaxoSmithKline on a digital platform to better manage lung patient usage, and surely this will go through a clinical trial. We will be seeing more of this type of convergence in medical apps. (The rebooted Jawbone Health Hub is moving in this exact direction.) The Forbes article, while short, is written by someone who knows the business of apps– the co-founder of the AppNext distribution/monetization platform. He does achieve his aim in making us think differently about the potential of ‘health apps’.
Confirming the decline of the fitness tracker/wearables business, Jawbone is finally over and done. Their liquidation this week was initially reported by The Information (subscription only) and that co-founder/CEO Hosain Rahman has started a new company, Jawbone Health Hub. JHH will work on medical software and hardware, as well as eventually servicing the buggy existing Jawbone products† which were sold off to a third party last September. JHH is also reportedly hiring many former Jawbone staff and on job boards such as Glassdoor.
Jawbone’s demise comes after a troubled 18 months, starting with a $165 million private equity raise in January 2016 led by the Kuwait Investment Authority, rumors of financial problems, repositioning into clinical medical monitoring, and abandoning what was left of consumer market support. There is also the continuing saga of court actions with Fitbit over trade secrets, employee poachings, and IP–all additional reasons for the founder to walk away. The only value left in Jawbone is that IP which includes BodyMedia patents and anything left that wasn’t voided by a court. Fitbit shares are also sinking, currently trading at a near 52-week low of just above $5.
‘Death by overfunding’? Updated During its lifetime from wireless audio speaker innovator Aliphcom to wearables leader with the Jawbone UP, Jawbone raised $938 million (Crunchbase), and at one point was valued at $3 billion. An interesting take from a Reuters article was that one consensus among Silicon Valley tech funders was that the company would have been far easier to acquire had it raised less money. Jawbone ranks only behind solar tech Solyndra among largest failures among venture-backed companies. (The difference, of course, was that Jawbone didn’t take $500 million of public stimulus money, as Solyndra did before it failed.)
The words ‘Chapter 7’ have not been included in reports but Sherwood Partners, a busy Mountain View CA financial restructuring company that has wound down plenty of startups through unicorns, was reported to be in charge of the liquidation process plus any remaining legal actions with Fitbit. None of the usual sources have been able to obtain statements from Mr. Rahman and ‘the information’ remains limited. The Verge, TechCrunch, Business Insider
†Editor Charles’ struggles with seven personal Jawbone UPs were often typical of the user experience.
Philips Healthcare added London-based pregnancy app developer Health & Parenting for an undisclosed sum. Its most popular app is Pregnancy + (and ++), with 12 million downloads via the Apple Store and Google Play, but others are Baby + for all things baby-rearing, and Baby Name Genius to Find That Ideal Name. It will fold into and diversify Philips’ existing uGrow digital parenting platform which includes the Avent smart baby monitor and smart ear thermometer and leverages the open infrastructure of Philips’ Health Suite Digital Platform. One wonders at the flood of data flowing from these apps to these devices and what Philips will do with all these points. Release, MedCityNews
Roche acquired Austrian partner mySugr, a management tool that promises to ‘make diabetes suck less’. Last year they added Roche’s Accu-Chek Connect blood glucose monitor to its chosen device connect and sync list. mySugr features an app for users to log their meals, exercise, glucose levels, and mood. It also captures pictures of user snacks and unleashes “a diabetes monster” avatar when the food choices are poor based on their glucose levels. Terms were not disclosed. MedCityNews
Telecare/monitoring company VRI quietly acquired Healthcom from Woodbridge International. Healthcom’s primary area is care transition management using medical alerts, telehealth, and medication management for payers, government agencies and care partners. Originally positioned as a partnership June 30 on VRI’s website, Globe Newswire confirmed the sale a week later. Terms (again) were not disclosed.
Manchester’s PushDoctor telemedicine app raised $26.1 million in Series B financing from Accelerated Digital Ventures and Draper Esprit plus Oxford Capital Partners, Partech Ventures, and Seventure Partners. This added to their $10.1 million Series A raise in January 2016. PushDoctor connects UK patients with NHS-registered GPs for virtual visits costing only £20. Unlike US-based tele-docs, Push Doctor issues prescriptions, makes doctor-led referrals to other health providers and specialists, and helps manage repeat prescriptions. Their founder also has an eye on managing long-term conditions, short-term illnesses, fitness, and nutrition. Their major UK competitors are Babylon Health (which recently raised £50 million for its triage app), Ada Health, and Your.MD. Crunchbase, TechCrunch, Mobihealthnews
Pioneering fitness incentive app Pact (founded 2011) announced its closing by end of August. Originally a ‘get thee to the gym’ app, it branched out into healthy food (eat more vegetables!) and tracking meals with MyFitnessPal. Pact never truly emerged from seed funding. A rare stumble by Khosla Ventures, which led a 2014 bag-of-skittles round of $1.5 million. Mobihealthnews, Crunchbase
Jawbone closed out the week by liquidating and transubstantiating into Jawbone Health Hub. More on this here.
It looks like the long-running Jawbone v. Fitbit trade secrets show will continue in California Superior Court. Judge Richard Ulmer on Friday (24 Mar) in San Francisco ruled that the scope of the Jawbone-initiated lawsuit, charging that Fitbit and five former Jawbone employees stole trade secrets, was far larger than the dismissal handed down last October by the US International Trade Commission (ITC) in Washington, DC, rejecting Fitbit’s claim. To Bloomberg Technology, a Jawbone spokesperson crowed, “We look forward now to focusing on presenting our case to a California jury, which will not be bound by the strict procedural limitations that we faced in the ITC. We will push the case to trial as quickly as possible and are confident that justice will be done.” Fitbit is expected to appeal, but this is not good news for them if this drags out–their share price is down 72 percent from a year ago (Marketwatch)–and threatens their IP which is key to a pivot to the clinical monitoring market.
A sidebar to this is Business Insider’s recent report that one of Jawbone’s law firms, Susman Godfrey LLP, has withdrawn from three pending cases citing ‘professional considerations’, remaining on two. This Editor cannot confirm whether Susman Godfrey is representing Jawbone in the above case, as Plainsite records indicate that Skadden Arps is their counsel. The California courts website has not been updated for the case (Aliphcom Inc. v. Fitbit Inc., CGC15-546004). Previous TTA coverage 9 Feb.
Remember the Quantified Selfer’s fascination with sleep tracking and all those sleep-specific devices that went away, taking their investors’ millions with them? Fitbit and many smartwatches work with apps to give the wearer feedback on their sleep hygiene, but the devices and apps themselves can deliver faulty information. This is according to a study published in the Journal of Clinical Sleep Medicine called “Orthosomnia: Are Some Patients Taking the Quantified Self Too Far?” (abstract) by Kelly Glazer Baron, MD with researchers from the Feinberg School of Medicine at Northwestern University. “The patients’ inferred correlation between sleep tracker data and daytime fatigue may become a perfectionistic quest for the ideal sleep in order to optimize daytime function. To the patients, sleep tracker data often feels more consistent with their experience of sleep than validated techniques, such as polysomnography or actigraphy.” (more…)
While most industry observers are perceiving Jawbone’s abandoning the consumer fitness tracker market, repositioning into the clinical B2B2C vitals market, and seeking fresh financing as a last-ditch effort to save the company, Jawbone continues to be highly active in one place–court. Last week, Jawbone filed a lawsuit against Fitbit and five former employees in California state court for theft of trade secrets and has rebutted Fitbit’s motion to dismiss in a 27-page filing. According to Fortune’s account of the lawsuit, Jawbone’s filing states: “Each of the defendants has been, for more than five months, the subject of a criminal grand jury investigation regarding theft of Jawbone’s trade secrets that is being conducted by the Department of Justice and the Department of Homeland Security,” a charge that Fitbit calls ‘fictional’ and false. The court hearing in San Francisco is 15 February.
The legal skirmishing, which largely has gone Fitbit’s way [TTA 27 July] in the US International Trade Commission, indicates that Jawbone is still spending money to protect what is left of value in the company–its patents and intellectual property (whatever hasn’t been voided). Jawbone $100 million ‘gem’: the BodyMedia patents acquired in 2013 [TTA 30 Apr 13]. BodyMedia had FDA Class II clearance but a clunky form factor. This IP is a critical save if they want to go clinical. Fitbit’s shares continue to go down, an indicator that the mud is rising. Also Bloomberg with video.
Jawbone out of the consumer fitness tracker business, going to clinical model, raising funds: report
Confirming reports from various sources last year [TTA 21 Dec] and prior (July) is a report in TechCrunch confirming what we already guessed: Jawbone is out of the consumer fitness tracker market, is aiming at a B2B2C market of health providers, and needs to raise a lot more money.
Key points in the article:
- It intends to market a “health product and accompanying set of services sold primarily to clinicians and health providers working with patients”
- It’s seeking additional funding from investors. TechCrunch‘s sources claim that is at an advanced stage, but no closings as of yet.
We noted in December that research/analytics company CB Insights calculated that 2015 wearable computing (a broader category that includes smartwatches) investment funding fell 63 percent from 2014 to a level comparable to 2012-13, in large part due to the cooling of the fitness segment. TechCrunch’s end of year report from eMarketer and other sources also noted that 2016 sales growth of the wearables sector, forecast at 60 percent, only achieved 25 percent growth and will be equally weak in 2017. Lack of demand, lack of loyalty (most fitness bands are discarded after 3-6 months), unreliable (TechCrunch makes much of customer displeasure), their looks and generally useless (in a clinical sense) data and the greater versatility (and appearance) of smartwatches for those who want them, are all factors. There’s a disenchantment here (‘who needs ’em?’) that mass marketing can’t overcome.
It is worthwhile reflecting that Jawbone, which started off in 1997 as an audio technology company, has burned through over $980 million in 14 funding rounds, generously provided by various VC luminaries of Silicon Valley. (One wonders how much equity is even left in the company, a la ‘The Producers’) (more…)
The first in a series of brief projections for 2017. Fitness wearables aren’t even lukewarm anymore, and it’s visible in consolidation and the nay-saying articles. In late November, Fitbit bought one of the pioneers, Pebble, for a cut price of $40 million (TechCrunch). Fitbit shares are also cut price at below $7.50, whereas the 2015 IPO debuted at $50. Editor Charles’ favorite, Jawbone, is moribund; the springtime rumors of company sale and shutdown of the fitness band line have not been contradicted since [TTA 27 July]. Research/analytics company CB Insights calculated that 2015 wearable computing (a broader category) investment funding fell 63 percent from 2014 to a level comparable to 2012-13, in large part due to the cooling of the fitness segment.
A sure sign that fitness bands have chilled is negative play in the consumer press. ‘My fitness band has made me fat’, spun off the JAMA article [TTA 28 Sep], is now the theme of hilarious ‘dieters gone wild’ articles like this from the New York Post (warning, eye bleach photos!). But The Sun (UK) waves a warning flag that the information could be sold, sent to your employer or insurance company to profile and/or discriminate against you, or cyberhacked. All this can knock a pricey band off the Christmas shopping list. And no, it hasn’t shifted to smartwatches as most insiders predicted, as smartwatch sales have leveled off–as expected–until their functionality and appearance improve to justify their high price.
What’s in our crystal ball? Clinical-quality and specialized wearables will rise from these ashes.
- Doctors are simply not interested in the current poor quality of data generated by current wearables–‘it’s worthless, Jim!’ ZDNet’s much-discussed article on this subject paradoxically stresses this, then focuses in on the clinical quality data generated by startup VivaLnk’s eSkin for temperature and stress. Clinical quality data is what is required for a health and wellness research partnership like the one recently announced by RTI and Validic.
- Industry buzz is that Fitbit bought Pebble for its better IP, apps and stable of developers, not its smartwatch hardware, and that IP includes clinical quality measurement. Other biosensor companies on the rise according to CB Insights are Thync, Thalmic Labs, YBrain and mCube.
- In specialty wearables, there’s the recent funding success of Owlet, the High Cute Factor baby monitor sock. Lifebeam transfers multiple sensing technology to helmets and hats for richer data.
And if sensor patches develop with speed, in two to three years they may eliminate all of these!
The shock waves are reverberating through the wearables industry, but it is likely less than it seems. The JAMA study being cited was testing the hypothesis that technology could assist a weight loss program, and also what type of technology did best. The subject group of 471 at the University of Pittsburgh was young–18-35, prime for a wearable–overweight to moderately obese, and tracked for 24 months between 2010 and 2012 (!) The participants were started on a group weight loss program supported with calls and texts for the first six months, then randomized into two groups that monitored their diet and fitness either through a fitness tracker plus website (enhanced intervention group), or those using a website only (standard intervention). Both groups lost weight but the enhanced/fitness tracker group lost 5.29 pounds less than the website-only group.
The caveats: According to Mobihealthnews, the fitness band used was BodyMedia SenseWear, which was acquired by Jawbone and as they noted, put out of business. Fitness bands now also look and feel different than this early generation. Mobile tracking apps are now the standard versus going online which was necessary four years ago–a huge jump in convenience. But tracking itself may change behavior. The authors speculate that tracking data might actually demotivate people, or that activity ‘congratulations’ may lead to a bit of cheating. But they should try it with up to date trackers. Also Healthcare Dive and Reuters
Fitbit may succeed in blocking Jawbone from selling in US? The Jawbone wins [TTA 27 July] in the US International Trade Commission court was apparently reversed due to a judge’s error for two Fitbit patents, and this may open the way for Fitbit to further block Jawbone. An additional California court action on infringement and misappropriation on trade secrets by Jawbone is headed for court in 2017. Mobihealthnews…..Maybe texting is enough? Dr Joseph Kvedar seems to think so for simple medication adherence and reminders, with reasons like the easy scaling of text messaging in EHRs, but prefers installing an app to deliver them due to the downsides of plain text messaging such as HIPAA and security. Thus we return to the logic of the desktop unit days (e.g. Health Buddy, Viterion) but delivered via smartphone. CHealthBlog….550 US primary care docs say no reimbursement, no telehealth (actually telemedicine). Usage in the past year was a scant 15 percent, with higher usage in Federally designated ‘safety net’ clinics (FQHCs) and HMOs versus PCMHs and ACOs where reimbursement by Medicare, Medicaid and private payers is far chancier. The survey was conducted by their association, the American Association of Family Physicians (AAFP). mHealthIntelligence….iHealth Andon Group buys France’s eDevice for $106 million. The aim seems to be integration of eDevice’s backend infrastructure to iHealth’s RPM devices. Mobihealthnews….A analysis of what went wrong at HealthSpot is in the new publication Telehealth & Medicine Today. A summary is that they had a business model that started out on point quite a while ago (2010) but then competitors and fresh technology ate their lunch (Editor’s term). They didn’t pivot to fit, moved too slowly and were overly wedded to their business model. A big problem was scaling costly kiosks and not finding the right places for them. While initially impressive, there was something all too elephantine about HealthSpot from the start. Our Readers interested in a Trip Down Memory Lane may read our collection of articles from 2013 here which pointed out most of the above….In the industry moves department, Peter Radsliff, whom this Editor worked with briefly on AgeTek-The Aging Technology Alliance (apparently defunct), has joined Arrayent, an IoT developer, as VP Marketing. Now that tells us something! Congrats to Peter!
And finally for a good long, but not light, read, this article in The Atlantic will give you a chilling glimpse of front-line medicine attempting to heal the carnage in Syria, using WhatsApp, texts and the simplest forms of telemedicine. A dedicated group of primarily Syrian-American doctors on a WhatsApp volunteer group called Madaya Medical Consultants uses it to perform consults with the minimal medical resources available in Syria. And yes, they know what Aleppo is.
Mobihealthnews provides a recap of the past four years of patent actions pitting company against company in the hushed but deadly rings of the US Patent and Trademark Office (USPTO) and the US International Trade Commission. On the fight card: the never-ending American Well-Teladoc bout (Teladoc winning every decision so far by a knockout [TTA 18 June]–a second American Well patent being invalidated on 25 August); CardioNet vs MedTel, which the former won but has had to chase the latter out of the arena and down the street to collect; Fitbit-Jawbone which has gone both ways [TTA 27 July]; and the long trail of blood, sweat and Unintended Consequences around Bosch Healthcare’s heavyweight IP pursuit against mainly flyweight early-stage companies (not noting, as we did, their apparent ‘draws’ vs Philips and Viterion, then owned by Bayer).
The Reader will note our tracking Bosch’s activities go back to 2012 (here, here and here). Moreover, with Mr Tim Rowan of Home Care Technology, we broke the news of Bosch’s demise in June 2015, drawing the conclusion that their offense versus Cardiocom’s patents (now in Medtronic’s cardiac division) directly led to the invalidation of their key patents, IP–and the very basis of the company’s existence. See the 19 June 2015 article and our recap one year later in reviewing AW-Teladoc. (Any similar phrasing or conclusions within the Mobihealthnews article, we will leave to our Readers to decide!)
The wearables war continues, and the Law of Unintended Consequences seems unbreakable. This one was decided in a US International Trade Commission court, with the judge ruling that the three patents in question “don’t cover ideas eligible for protection” and dismissed the August trial between Fitbit and Jawbone. This is a reversal of fortune for the two competitors as a similar patent challenge to Jawbone was won by Fitbit back in April in the same court. In the new ruling, the judge said that Fitbit “seek(s) a monopoly on the abstract ideas of collecting and monitoring sleep and other health-related data.”
The skirmishing has a deeper context. Jawbone has accused Fitbit of hiring former employees and purloining trade secrets like product design and marketing plans, and alleges that the suits were “brought improperly by Fitbit in an attempt to burden Jawbone with having to defend invalid patents in multiple venues.” Fitbit reportedly has 300 patents, so that is a lot of defending for a company that has issues of its own. Jawbone has struggled in past months with its products, with various (and contradictory) reports indicating it’s exiting the wearable business, working on a new wearable and selling its audio business (which has also been crushed by competition.) Undoubtedly this will continue as Fitbit plans to challenge the ruling. Your Editor suspects that their legal and IP offense/defense activity is a substantial budget line for them. Bloomberg (20 July and April), The Verge
Update: Jawbone is rumored to be up for sale, with reports that they have approached at least one hardware manufacturer about a purchase. Reportedly they missed an August payment to a business partner. Investor BlackRock has marked down their shares, formerly valued at $5.97 a share, to less than a single penny. Since 1999, Jawbone has had funding of over $900 million. 9to5Mac, The Verge Even the much-publicized hiring of high-profile exec Adam Pellegrini from Walgreens to Fitbit to lead digital health has a Jawbone twist, as both the former and latter were partners. MedCityNews
Funding’s up, but the digital darlings have changed. The stock market and tech sector may have been uncertain kicking off 2016, but digital health wasn’t. Rock Health’s first report for 2016 exudes optimism. Compared to the same quarter in 2015, funding increased nearly 50 percent to $981.3 million, the highest amount since 2011. But the devil may be in the details:
- Five deals accounted for 56 percent of the volume (in descending order: Flatiron Health (clinical intel for cancer care), Jawbone, HealthLine (consumer health info), Health Catalyst (data warehousing) and Higi, an odd little kiosk + consumer engagement program nationally placed in Rite Aid stores–odd enough to gain $40 million in its first venture round
- Seed and Series A raises were still well over half–54 percent, over the 50 percent in 2015
- Later stage deals (Series D and above) shrank to 13 percent in 2016 from 35 percent
- Top categories also demonstrated the fickleness of funding favorites. Only two categories in the top six were carry-overs from 2015: wearables (driven by Jawbone) and consumer engagement. New favorites: analytics/big data, population health management, consumer health information and EHR/clinical workflow.
- There were no venture-backed IPOs in the quarter, and public company performance was down (9 percent y/y)
The new picture favors what to do with the data–finding trends and putting them to use both consumer and clinical sides. And exits were popular as well: 187 was the Rock Health count, with fitness wear Asics‘ acquisition of the Runkeeper fitness wearable and provider One Medical acquiring the Rise app. Will the trend continue in 2nd quarter? Stay tuned….Rock Health Q1 Update
This editor’s recent blogs on Jawbone’s UPs do not make pleasant reading so now I’ve reached my “lemonade point” – ie I am on my 7UP (or should that be seventh UP?) – it seemed only fair to advise readers that I have had my second UP3 for over a month and it still works! As I took my previous one in the shower – as is recommended – and it packed up very quickly, for this one I’m avoiding all water contact. Perhaps that’s the secret?
I was reminded of this by this recent piece in ZD-net grumbling about tracker data loss – Jawbone, alongside Misfit, were the two quoted. That is an experience I have yet to have, although at present if anything I have the reverse with my sleep times being doubled resulting in 14+ hour daily sleeps.
Apart from this relatively minor glitch (compared to previous rather more terminal ones), I am almost at the point of being impressed. The new software automatically detects sleep, so no need to remember to tell it when you are going to bed, and the heart rate monitor produces some very interesting results. Once you work out how to put it on so it doesn’t keep falling off, it’s much less obtrusive that the original UP open bracelet, too. If it keeps going like this for another eleven months, I fear I might even start recommending it!
The interest in fitness bands has quantifiably and substantially diminished since January, according to Argus Insights’ survey of online consumer reviews (!)–and since the debut of Apple Watch. And while Fitbit maintains its leadership in the band category (sorry Jawbone, though Editor Charles won’t be), the rising preference is for smartwatches like the Apple Watch and Android wear such as the Moto 360 and the LG Watch Urbane (pictured). While there’s a substantial price difference between smartwatches (~$350 versus under $150), and both Apple Watch and LG’s watches (versus LG bands) have limited fitness capability, there’s few new developments in fitness bands to create excitement. There have been enough problems with fitness band reliability, breakage, rising prices and a boredom with design to diminish interest while new brands enter the market, and smartwatch prices come down slightly. For the price, users also want more out of their watches. Neil Versel in MedCityNews.
Updated: Apple Watch, with 3.6 million units sold in 2nd quarter was immediately behind Fitbit with 4.4 million, according to IDC’s Worldwide Quarterly Wearable Device Tracker. 2 of every 3 smart wearables (capable of running third-party apps) was an Apple Watch. Another sign of the coming divide between fitness bands (which will be sold on price and fitness focus) and smartwatches (which will be sold on versatility as well as fitness justifying the higher price). IDC release
Also by Mr Versel is a memorial to telemedicine pioneer Dr ‘Red’ Duke. As a surgical resident at Parkland Hospital, he was on the team which saved the life of Texas Governor John Connally, shot with President John Kennedy in November 1963.