Fitbit is Not Yet in Shape for an IPO, wearables

Wearable technology is as very hot as the late-90s dotcom boom.

Devices as well as apps that help you track physical fitness objectives, keep an eye on the quality of your rest, or even aid identify as well as treat conditions are proliferating in the marketplace. New innovations are announced nearly daily.

With a lot of New Year’s resolutions right around the corner, Fitbit — one of the prospective leaders in the market for health and fitness trackers — was a huge holiday seller.

And Wall surface Road has actually been humming with news that Fitbit plans to do a going public (IPO) this spring.

Don’t acquire scooped in the hype!

I have actually viewed several signs showing that the firm just isn’t really happy for primetime. And also they all issue to a significant blunder most tech financiers make at all times …

Christmas Day Blunders

A major Christmas Day error rendered loads of Fitbits useless for those wishing to acquire healthy and slim down. This as well as other errors are stressing indicators that the company may not be happy to play in the large leagues.

Fitbit is an early pioneer in developing and making these products. The firm is doing an incredibly great work contending versus titans like Apple (AAPL), Google (GOOGL), and Samsung (SSNLF). Right now in 2013, Fitbit had an amazing 67 % market share for wearable physical fitness trackers.

Unfortunately, the business first came to be renowned for a significant oversight, publishing a few of its consumers’ sexual practices in a way that they acquired gotten by Google’s search engine! That was way back in 2011, and also the mistake was swiftly corrected.

And prior to work week, the business’s largest black eye was a product recall.

In February 2014, the firm recalled every solitary one of its Pressure fitness bands, over a million systems, after consumers complained about strange rashes when using the product. Nickel in the stainless-steel band as well as among the adhesives utilized to hold the item with each other were determined as the source of a lot of the rashes.

Another of the business’s prominent products, the Flex, has the very same issue, though it has actually not been recollected. Rather, the law firm included a caution label informing consumers of the potential allergens.

What’s essential to understand right here is that while the response to the adhesive was a new issue for Fitbit, sensitivity to nickel has been recognized among precious jewelry producers and also clients for over a hundred years!

Fast-forward to recently, however, and also Fitbit had a much more uncomfortable mistake …

On Christmas Day, maybe the biggest day of the year for new accounts, the Fitbit internet site went down!

For most of the day across significantly of the nation, individuals that had received a Fitbit as a present and attempted to sign up got a message claiming that the Fitbit site was down for “a little structured maintenance.” Their guarantee that “We’re still counting your steps!” was of little convenience to frustrated customers. The Fitbit is worthless if you can not produce an account and track your movements.

The web site appears to be functioning now, however potential capitalists ought to most definitely take this lapse seriously. It’s a quick suggestion that you need greater than a great item as well as a trendy marketing campaign to be an effective technology company.

If Fitbit does decide to try to go public, you needs to be very careful about buying the stock.

Can’t Build Without a Base

Investors must take an important eye to Fitbit and also ask why a company marketing arm bands didn’t understand regarding nickel allergies … Or just how the company let its website decrease on the busiest signup day of the year.

The response, “We have actually taken care of the issues, as well as we could guarantee you they will not take place once again,” shouldn’t be a sufficient solution. To me, that simply means that they haven’t prepared for the next problem.

What you should demand is some proof that the firm is placing hvac systems in place to be a successful big business, not simply a law firm with impressive technology.

This driving lesson is a good one for capitalists interested in any sort of new technology business. Customer care, distribution, internal commands, and product testing are points that can take down even the hottest product if they are done poorly.

That’s where the minefields already existing for business and their investors.

To living and investing in the future,

Greg Miller