Why did Jawbone fail? A post-mortem on the rise and fall of a wearables pioneer
In the fast-paced world of consumer tech, companies can go from industry darlings to bankrupt has-beens practically overnight. Few companies illustrate this better than Jawbone, makers of the UP fitness tracker. In the span of just a few years, Jawbone went from being valued at over $3 billion to liquidating its assets in 2017.
So what happened? How did such a promising company crash and burn so quickly? As an intrepid tech journalist, I decided to investigate the story behind Jawbone’s dramatic downfall. Here’s an inside look at the myriad of factors that led to Jawbone’s undoing.
The Promising Early Days
Jawbone entered the scene in 1999 as AliphCom, an audio technology startup focused on noise-cancelling tech. They made a splash with their high-end Bluetooth headsets, popularized by their stylish design and ability to eliminate background noise during calls.
Buoyed by the success of their audio products, the company set its sights on the burgeoning health and fitness market. In 2011, Jawbone acquired BodyMedia, a company that made wearable health trackers. Later that year, Jawbone released its first product under the UP brand – the UP wristband.
The original UP wristband was a smash hit, allowing users to track their movement, sleep, and nutrition. With its stylish, flexible design and companion mobile app, it kicked off the wearables revolution years before Fitbit and Apple entered the market. For a moment, it looked like Jawbone had a surefire hit on its hands that would lead them to industry dominance.
Lack of Focus Led to Missed Opportunities
Jawbone’s promising early traction with the UP quickly fizzled out due to a lack of focus and clear long-term strategy. Despite having a head start on competitors, Jawbone failed to capitalize on the popularity of its initial UP bracelet to expand its line into a suite of health-tracking wearables.
In 2013, Jawbone released the UP24 – an updated version of their bracelet with Bluetooth syncing capabilities. But past that incremental upgrade, Jawbone relied too heavily on their one flagship product rather than expanding into smartwatches and other form factors.
While Jawbone languished with just their UP bracelet, competitors moved quickly to claim territory. Fitbit released its lineup of fitness trackers, while Apple jumped into wearables in 2015 with the Apple Watch. In just a few short years, Jawbone had squandered their first-mover advantage.
Manufacturing and Quality Control Issues
In addition to strategic missteps, Jawbone fumbled the execution of its flagship UP bracelet. Customers complained of syncing issues and faulty hardware that rendered the device unusable. Many users reported bracelets that simply stopped working after a few months of use.
These widespread technical issues pointed to deeper manufacturing and quality control problems within Jawbone. Their reputation quickly tanked as users lost confidence in the reliability of their products. Reviews mentioned the “Jawbone death grip,” referring to the bracelet’s tendency to become unresponsive when squeezed at certain points.
While Jawbone pushed out iterative versions like the UP2, UP3, and UP4 throughout 2014-2015, the core issues remained unresolved. Subpar manufacturing processes led to defective units slipping through quality control checks. Ultimately, Jawbone could not deliver a reliable product or rectify the perception among consumers that their devices were prone to breaking.
Internal Culture Clashes
Behind the scenes, Jawbone was hampered by internal divisions that hindered their ability to course-correct. Employees described an environment plagued by departmental silos and clashing personalities amongst the executive team.
Co-founder and longtime CEO Hosain Rahman was known for a management style that bred animosity between teams. A lack of collaboration meant sales teams were disconnected from engineering, and individual departments often had misaligned goals. Rahman also frequently overruled or disputed recommendations from his staff.
This toxic culture severely restricted Jawbone’s agility, wasting resources as teams pulled in different directions. When the UP bracelet began faltering, managers pointed fingers rather than working together toward solutions. A more unified leadership team may have been able to turn the ship around. But at Jawbone, ongoing conflicts only exacerbated their floundering product strategy and slipping market share.
Financial Challenges and Failed Pivots
As problems compounded, Jawbone’s financial situation went from troubling to dire. They faced dwindling cash reserves after manufacturing costs ate away at their capital. Investors also began losing confidence as Jawbone hemorrhaged market share to Fitbit and Apple.
In a last-ditch effort, Jawbone tried pivoting to software and services focused on health data insights. But their pivot attempts were hobbled by half-hearted execution and lack of resources. Jawbone simply could not transition from a flailing hardware company to a software service quickly enough.
After multiple rounds of layoffs, Jawbone stopped production on their UP line in 2016. They soon liquidated their remaining assets and patents to cover debts and liabilities. A company that once led the wearables space had dissolved just a few years later.
Key Takeaways from Jawbone’s Collapse
Jawbone’s precipitous downfall offers some sobering lessons for companies trying to avoid a similar fate:
- Have a long-term product strategy: Jawbone failed to look past its initial UP bracelet success. Once competitors entered, they had no additional products to challenge Fitbit’s lineup.
- Invest in reliability: Quality control issues killed Jawbone’s reputation. Their products seemed untested and prone to breaking.
- Fix a toxic culture: Internal conflicts divided Jawbone’s workforce. Leadership needs to foster collaboration for teams to work together.
- Support bold pivots: Jawbone’s half-hearted software pivot was too little, too late. Major strategic changes require commitment.
- Mind the financials: Sloppy cash flow management left Jawbone unable to fund pivots once their hardware sales declined.
Jawbone serves as a sobering reminder that early leads can easily evaporate. Success requires long-term planning along with flawless execution. A company can quickly go from first to worst without the strategic vision and operational discipline needed to stay in power.
While Jawbone has joined the likes of Palm and Blackberry in the graveyard of once-leading consumer tech brands, their rise and fall provide valuable lessons for companies looking to avoid a similar fate. By learning from Jawbone’s missteps and misfortunes, future startups can hopefully strategize to avoid rising so high only to crash and burn.
