Dog Fitness Tracker Raises $25 Million: Blame Google - InformationWeek

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1/30/2015
03:50 PM
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Dog Fitness Tracker Raises $25 Million: Blame Google

As the tech market scrambles for the Next Big Thing, VCs are betting on nervous executives with deep pockets.

Drones, Phones & More: What Tech Will Last A Century?
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Forbes reported recently that Whistle, a startup which makes activity trackers for dogs (think FitBit for Fido), raised $15 million in a series B round of venture investment. That $15 million comes on top of a $10 million A round, for a total of $25 million.

How, I thought, could sharp-eyed investors expect to get any kind of return on a product that is patently useless? Do these investors really think there are hundreds of thousands of people stupid enough to drop $100 on a dog fitness tracker?

And then I got it. The investors aren’t betting on the stupidity of large numbers of Americans. They’re betting on the fear and anxiety of a small number of CEOs and corporate board members.

(Image: Krista Sanders for Whistle)

(Image: Krista Sanders for Whistle)

Big tech companies watch as Apple rakes in obscene amounts of money every quarter from its phone and tablet sales. Given that these two markets are essentially locked up, companies that aren’t Apple are desperately scanning the horizon for the Next Big Thing — a new gadget that captures hearts and wallets by the billions.

What is the Next Big Thing? We don’t know. No one knows. It could be pet wearables. Or exploding kittens.

[ Whistle isn't the only company making a play for pet wearables. Read 7 Cool Wearables For Pets. ]

What we do know is that it’s out there—somewhere. We also know that when it appears, it’s going to seem like a perfectly obvious idea, and it’s going to make someone an obscene amount of money.

So companies are making bets, and one area where they’re betting big is the Internet of Things, or IoT. I blame Google for this.

When the search giant spent $3.2 billion on Nest, a thermostat and smoke detector company, it was a signal to the venture community. The signal said, “We don’t want to miss the next Golden Ticket, so we’ll throw gobs of money at things that have sensors and an app.”

Thus, VCs, can risk floating a few tens of millions to startups hawking ridiculous IoT products. The startups don’t need a sensible business plan. They don’t need to capture a large market share. They don’t need to create a viable business.

That’s because VCs aren’t worried about selling this stuff to consumers. That’s not who the VCs are targeting. They’re targeting anxious CEOs and sweaty board members at big tech companies who are panicked about getting disrupted or missing the next boat.

That’s a much easier sell. And the VCs don’t need a billion-dollar exit to make a tidy profit. A few hundred million from a tech company hedging its bets will do just nicely. Woof.

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Drew is formerly editor of Network Computing and currently director of content and community for Interop. View Full Bio
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Joe Stanganelli
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Joe Stanganelli,
User Rank: Author
2/7/2015 | 12:30:04 AM
Re: Pre dot-com bust
Of course, in our current bubble (yes, I am convinced that it is a bubble), the economic impact is much less because so relatively few of these companies have gone public (although that is rapidly changing) and they are much slower to go public, compared to the dot-com bursting bubble.

So maybe this bubble won't burst; it will just deflate a little bit.
Li Tan
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Li Tan,
User Rank: Ninja
2/5/2015 | 12:39:25 AM
Re: Pre dot-com bust
This is similar to the .com bubble happened many years ago. Now venture invests a lot on these startups. The question is how is the ROI on average. Most of the startups went to bankrupt finally. I am willing to see how big market dog fitness tracker will get. It depends on whether there is strong demand and the inforation it can provide.
Drew Conry-Murray
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Drew Conry-Murray,
User Rank: Ninja
2/4/2015 | 10:21:38 AM
Re: I love my dog
@shamika I just make sure I take my dog for a walk every day. I guess I don't really track it, but we generally walk a similar route for a similar time, with occasional variations, so I have an overall sense of how much exercise he gets. The notion of buying a gadget to track his steps seems silly to me, because that level of precision doesn't seem necessary. But maybe there are lots of people out there who love data and want the information.
Joe Stanganelli
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Joe Stanganelli,
User Rank: Author
2/4/2015 | 2:21:57 AM
Pre dot-com bust
Reminds me of the days when Microsoft was notorious for throwing gobs of money at startups to keep them from growing to be threats -- this in the time preceding the dot-com bust.

Makes you go hmmm...
Susan Fourtané
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Susan Fourtané,
User Rank: Author
2/2/2015 | 10:14:49 PM
Re: now a cat wearable would be different...
SusanN, What I would like to know is if those people who will get a fitness tracker for their dog have a fitness tracker for themselves and a healthy weight. I would love to see some kind of study about that. -Susan
Kelly22
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Kelly22,
User Rank: Strategist
2/2/2015 | 6:10:25 PM
Re: now a cat wearable would be different...
If Americans spent $58.5 billion on their pets last year, I have no doubt there are a few who would shell out for a Fido fitness tracker. As far as I'm concerned, if the dog gets walked every day then he's fine.. Mine probably racks up a few miles each week chasing animals around the yard, ha.
danielcawrey
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danielcawrey,
User Rank: Ninja
2/1/2015 | 2:21:36 PM
Re: the best of the times and the worst of the times!
I think that many of these companies, including Whistle, do sell investors with a solid business plan. The typical pitch for VC money comes from a problem, and a startup's solution to that problem.

Whistle may seem to outsiders a stupid idea, but perhaps fitness tracking isn't the only thing it plans on doing. If it is going to track the overall health of a pet, I think a lot of people will pay for that. 
tzubair
IW Pick
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tzubair,
User Rank: Ninja
1/31/2015 | 11:09:45 PM
Re: now a cat wearable would be different...
"That said, I won't be buying any fitness devices for my pets--they're already more fit than I am, if I tracked their fiteness I would just end up feeling bad about myself. heh heh."

@Susan: I'm glad you're not into it and some sanity prevails at least. It does sound a bit harsh on the pets if they're made to maintain their fitness just because the pet owners feel the need to do so. There has to be some regulation on this.
Susan_Nunziata
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Susan_Nunziata,
User Rank: Strategist
1/31/2015 | 10:14:06 PM
Re: now a cat wearable would be different...
@Pedro: hahahaaa, Hambit. I love it. You need to patent that idea right now! Actually, a fitness device for dogs isn't the strangest thing I've seen get VC money in recent years. A recent article in The Consumerist said Americans will spend $703 million on Valentine's Day gifts for their pets this year. The American Pet Products Manufacturers Association estimates that Americans spent $58.5 billion -- yes BILLION -- on their pets in 2014.

IMHO things like the "Yo" app being able to raise $1m is far more dumb.

That said, I won't be buying any fitness devices for my pets--they're already more fit than I am, if I tracked their fiteness I would just end up feeling bad about myself. heh heh.
Susan_Nunziata
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50%
Susan_Nunziata,
User Rank: Strategist
1/31/2015 | 10:04:34 PM
Re: now a cat wearable would be different...
@shamika: Oh, the cat would understand the signal. But, being a cat, he would simply choose to ignore it until such time as he felt like coming home. LOL.
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