Chumby: How to define a new market segment
I finally got my Chumby running. It’s sitting happily between my couches in my living room showing me pictures, telling me the news and occassionaly insulting me in middle english. It’s very cute. Chumby is a really neat idea — a fun hackable platform for small information appliances. It’s embedded linux running a flash viewer. It’s got wifi network access and a really pretty touch-screen for UI.
The designers encourage hacking of both the software and the hardware — I’ve seen chumby-units sown into all sorts of pillows and stuffed animals. The bread and butter of customization is writing custom flash
modules for displaying information. For example, right now there isn’t
one for showing the weather forecast — if I knew flash, I doubt it
would take more than a couple hours to fix this.
As a business I really hope Chumby succeeds. Their challenge will be to make the initial product cool enough that it gets aspirational appeal. At about $150 retail, it’s going to need some solid functionality or solid other appeal to justify a purchase. If they succeed there then the company will stick around long enough to bring the price-point down through economies of scale and lower-end models.
There are a couple of things they could change that I think would make the product more successful. For example, I think the touch-screen is unnecessary for the majority of useful functions in the chumby, and replacing it with a display-only screen would lower the price significantly. My personal opinion is that single-use devices will always have a usability appeal over general-purpose configurable devices. I’d love to see $50 chumby’s that just did one thing. Then you could put a photo chumby in your living room and a news chumby in the kitchen and a weather chumby in your closet. Having a battery-powered model that recharded inductively (or otherwise without needing to be plugged in) would also be a great addition to the product line.
The marketing strategy of starting with a fantastic device that is priced high is a great way to define a new market segment. Sonos is doing this right now to re-define digital living-room audio devices. Their first product was a $1200 stereo that everybody who used absolutely adored. Is $1200 too much for a stereo? That depends. For most people yes. But if it’s really great then some people will pay it. And everybody else will just wish they could afford it. And then Sonos slowly releases lower and lower end models until everybody can afford one. Think ipod->mini->nano->shuffle. It also means that with your first few units your marginal profit is high enough that you know you’ll be able to cover support really well. This was our big mistake with my first startup. It’s a solid strategy — a great way to get people to understand a new kind of product.
The Chumby is a cool idea and I hope they live long enough to pull it off.
[...] control will long be held as the gold standard home audio remote control. As I mentioned earlier, their business team knows how to rebuild the digital home audio market, basically from the ground [...]