If you follow the startup industry, you likely know the story of smartwatch maker Pebble, including that famous Kickstarter campaign in 2012 that sought $100,000 but wound up raising more than $10 million instead.
You might also remember thinking that Pebble’s fate was sealed once Apple launched its own now-ubiquitous smartwatch in 2014. You were right if so. By late 2016, Pebble was forced to sell its software and intellectual property to another wearable giant, Fitbit, for less than $40 million — an amount that reportedly barely covered Pebble’s debt.
What you probably don’t know was that behind the scenes, Pebble founder Eric Migicovsky was frequently seeking advice from Y Combinator. Pebble had passed through the accelerator’s program in the winter of 2011 and like many alums, Migicovsky had formed strong bonds with both his fellow founders and with YC execs, including its president, Sam Altman. “Seven years later . . . I was still phoning Sam at 11 p.m. to get help in that deal” to Fitbit, says Migicovsky with a laugh.
Now, Migicovsky will be sharing lessons learned with future YC startups, having quietly joined YC last month as one of its now 18 full-time partners. His role: to work with incoming teams, including those whose companies have a hardware component.
We talked with Migicovsky late last week about his wild ride to date and what he hopes to accomplish in his new role. Our chat has been edited for length.
TC: Your relationship with YC dates back some time.
EM: I was in Waterloo, Ontario [studying engineering and starting up Pebble] and [YC founders] Paul [Graham] and Jessica [Livingston] wound up investing and I ended up moving the company the California. YC was really the first [outfit] to believe in us. We did the winter 2011 batch and did our Kickstarter a year later — before it was even a thing — because we couldn’t raise money. It was hard days for hardware back then.
YC played an amazing role through the sale to Fitbit, and after I sold the company, I took some time off, but because I’d been part of YC, I began working last summer as part-time partner. It was a great chance to start mentoring companies and to spend one-on-one time with the founders, and [YC CEO] Michael [Seibel] and Sam said I should jump on board.
TC: You’ve now joined full-time. What is your role exactly?
EM: I’m definitely covering the hardware desk. About 15 percent of companies going through YC have some connection to hardware, be it enterprise hardware, software with an enterprise component . . . So I’ll be a main point of contact for many of those companies.
TC: Have you done any investing in the past?
EM: I’ve done some but I didn’t have much time outside of Pebble, so the opportunity to take some of the anecdotes and experiences I’ve gathered and help apply them at other companies is really exciting to me.
TC: What are some of the lessons learned that you’re likely to share with these startups?
EM: In the early days of a startup, it’s pedal to the metal; you’re doing what it takes to get going. But after it starts taking off, it’s important to keep in mind a vision of where the company is going in the long run. At Pebble, we had a great first shot with Kickstarter. We were able to capture people’s attention and imagination. We had this “activation” energy. But it didn’t carry us into the next stage. I didn’t have that longer term vision in mind necessarily when times got hard. I wasn’t thinking about the company’s world-changing mission, and that’s something I talk about with startups.
TC: So you think you could have prevented Pebble’s eventual outcome, despite the technical and marketing muscle of a competitor like Apple. Where do you think Pebble went wrong more specifically?
EM: We sold a quarter billion dollars worth of watches. We were in a good position. What we lost was that seed. We were a hacker product from the get-go. We were building a watch that anyone could program for, but under pressure from competitors that came in, we didn’t find the one thing to stake our claim on. We vacillated between fitness and productivity in trying to find our groove and scale to a larger audience, and we couldn’t find it in time. Meanwhile, others like Fitbit had done this really well. Fitbit was like, “We’re a health and wellness product.”
TC: YC has changed a lot since 2011. Do you find the scale at all daunting?
EM: It has changed a ton. When I went through in 2011, there were 40 companies in the batch and people wondered how YC could be [managing so many startups]. Now, it’s more than 150 companies in each batch. What’s amazing to me are the processes and software that Michael and Sam have built out to help the companies and to help the partners. For example, we have evaluation process software that helps us to manage office hours and mentoring at scale. It’s pretty awesome.
TC: Is it too soon to say whether it’s more awesome than running your own company? Would you want to launch another startup?
EM: I just started full time four weeks ago, but one of the things I’m loving, working at YC, is [interfacing] with hundreds of companies. I ran Pebble for nine years, and running a company is a very laser-focused operation. You need to be thinking every single minute about how you can help your employees and product. YC is a very different experience. I can dive deep into a particular company’s problem, provide a relevant story or connection, then jump back out and move on to the next company. It’s kind of like ADD for startups.
YC is announcing 11 other appointments today, including the appointment of two visiting partners. You can learn more here.
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