Getting emotional – the Holy Grail for hardware startups

During my past trip to Taipei, I stayed at the apartment of my best friend, Eric. After I finally put all luggages into place, took a refreshing shower and sat at the dinner table for a nice warm cup of tea, Eric said "I have something to show you", with a smirk on his face as if he just discovered the answer to the ultimate question of human beings.

He then took something out of his pocket and sure enough it's a Narrative Clip.

21yiARePQbL.jpg

Originally called Memoto Lifelogging Camera when it rolled out its Kickstarter campaign toward the end of 2012, Narrative Clip is an utterly simple device that does only one thing: taking a photo every 30 seconds. This small little white plastic box does not have an LCD for framing or any controls, except a few sensors for detecting the situations where it should stop taking photos.

The originally designated use case was just as simple: pain-free recording of your life. The idea is that you clip the device to your clothes during important stretches such as parties and family trips and record the entire precious time as a time-lapsed video clip.

The idea turned out to be a big hit. At a whopping $149/$199 price tag for a plastic box, its KS campaign closed at around $550k with close to three thousand backers. The company has since rolled out a new version Narrative Clip 2, selling it directly on their website to worldwide customers.

In my words, Narrative Clip has clinched the Holy Grail for modern hardware startups by creating an emotional product.

We could envision a spectrum of consumption as depicted above. On the left end is RATIONAL consumption. On the right end is EMOTIONAL consumption.

For RATIONAL consumption, consumers make the buying decision by comparing benefits to costs, or in the engineering term "performance/cost ratio". PCs and laptops fall notoriously to this category. Today there's almost no way you could differentiate in PCs and laptops so buyers will only buy PCs/laptops that offer the highest benefits (performances) with the lowest costs (prices). To a certain degree we're seeing smartphones moving toward this end (and hence the trouble for Samsung).

On the RATIONAL end, vendors have very little pricing power. The prices are dictated by the competitive landscape. As soon as competitors catch up in technologies or offerings, prices will align more or less together.

For EMOTIONAL consumption, consumers go after the perceived values. It's hard to quantify or even describe the benefits one gets from this kind of consumption, but the perceived satisfaction could overwhelm entirely the satisfaction on the RATIONAL end by a couple of orders. Luxury and fashion apparently falls into this end despite its relatively limited reach. On the other hand baby and pet products conquer a much larger percentage of consumers emotionally.

On the EMOTIONAL end, vendors have much higher pricing power. The marketing focuses on creating different perceptions in order to differentiate, instead of describing the benefits and costs. You will never see Louis Vuitton brag about its leather being 127.99% better than that of Hermès. Johnny Walker's TV commercials go for group identity instead of detailing the quality of the malt and the water it uses.

On the EMOTIONAL end, consumers could not easily compare the benefits of one product to those of another. That opens up the door for vendors to create much higher perceived values (and therefore satisfaction) for customers and avoid transparent competition.

As a hardware startup, obviously you want to be on the emotional end as there's no way you could compete with electronic giants such as Sony, Samsung and Apple on benefits and costs. If you could successfully create an emotional binding between your products and your customers, you have reached the Holy Grail of hardware startups.

A perfect example would be GoPro cameras. It's not the first, not the only, not the best and surely not the cheapest HD video camera that could record extreme sports. However, by (stumbling into) the extremely powerful marketing strategy of viral campaigns in allowing the users to share their extreme-sport or fun videos with each other, GoPro has successfully created a brand that copycats cannot replace.

People who buy GoPro cameras are not going after the benefit/cost ratio. They could have easily gotten water-proof HD cameras with higher specs and better looks than GoPro. They buy GoPro cameras because they associate making fun videos or extreme-sport videos almost exclusively with the brand GoPro. This is not a necessity purchase but a perception purchase. They don't need to buy but if they decide to buy, it's gonna be GoPro by default.

This is why even though any camera OEM/ODM company in Shenzhen could create a better (at least in specs) and cheaper HD sport camera, they wouldn't have a chance to compete with GoPro, since the later has successfully captured the Holy Grail, the EMOTIONAL end of the spectrum of consumption.

The same thing goes with Narrative Clip. The consumers could have done time-lapsed videos using their smartphones, digicams or DSLRs. They choose instead to pay $199 for a little plastic box even though they could find loads of digicams on the market that take better photos/videos with more powerful functions. The combination of ease of use and a compelling emotional idea of recording your life unconsciously makes Narrative Clip such a grand success, despite the fact that most if not all of its customers probably already own some devices that could achieve the same life logging purpose.

It also means that copycats will have a hard time competing with Narrative Clip since people don't buy Narrative Clips because it can record time-lapsed videos, but because they associate it genuinely with life-logging.

And my friend Eric didn't even use Narrative Clip to record his own life! A peace maker and an avid gardener, Eric used it to record the life of the plants on his balcony. See below for the video he extracted for me which recorded 4 hours worth of plant growth with a total of 472 photos. He used the Narrative app to directly create this video and couldn't be more proud of the growth of his children.

That's a father getting really emotional and that's one Narrative Clip customer that would never defect.

Geek article — USB Type C descends on us

Meeting Prof. Joseph E. Stiglitz