Every week, a hopeful team launches a new gadget on crowdfunding sites such as Kickstarter and Indiegogo. After bolstering their campaigns with professional videos, public relations teams and social media outreach, the fortunate emerge from the 30-to-60-day gauntlet with a mandate to take their prototype to the next level, which is usually mass production and delivery of the rewards promised in the campaign.
This often requires extended trips to China negotiating an unfamiliar landscape, making countless iterative design adjustments to combat unforeseen issues while keeping anxious backers at bay with communications that often include unwelcome news about delays answered by refund demands or lawsuit threats. Finally, if all goes well, a device that gets it right arrives from the factory and into the hands of those early supporters.
And then the hard part starts.
Making it on Kickstarter is one thing, but there is a big difference between attracting the dollars of its risk-embracing community and thriving in a demanding retail environment. At stores like Target and Best Buy, scrappy startups compete for attention and shelf space with giant competitors armed with well-tuned retail experience. As a result, many of those who have found success on crowdfunding networks struggle to get beyond selling products on their own sites.
B8ta seeks to give the kick-started another push along the journey. The company, a startup itself, was created by former employees of Nest. That company, which debuted a stylish connected thermostat, was one of the few hardware startups that broke through the field and was ultimately acquired by Google for $3.2 billion. The consumer-facing part of b8ta is not on an app, its own device, a subscription service or even a Web site, but a small space in tech-friendly Palo Alto outfitted with informative displays and non-commissioned staff. Their purpose: to entice the curious to experience and ultimately acquire products from the store's unique if limited collection of innovative devices.
Silicon Valley's technology retail lore extends at least as far back to Paul Terrell's Byte Shop, which offered the first Apple II computers for sale, As brick-and-mortar retailers prove every day, being able to see and feel products drives customer engagement. For b8ta, this effect should be even more pronounced given that many of the products have little brand awareness or have done minimal advertising.
The company has insulated itself from some of the risk of selling unproven products. While it makes some money from selling the products, it derives subscription revenue from the companies that produce the products it offers and carries almost no inventory; products are sold on consignment.
B8ta has also eschewed e-commerce on the assumption that its vendors are already selling online. An earlier company, Grand St., which sold crowdfunded devices online on consignment,, was recently shuttered after being acquired last year by Etsy. Nonetheess, forsaking e-commerce removes a chance to drive more exposure by a company that is acting largely in a marketing role.
B8ta positions as an alternative for small device makers that are not prepared to engage with national retailers. For these companies, working with b8ta may be simpler, but its single location -- with no immediate plans for expansion -- also can't hope to offer the kind of exposure or drive the kind of volume as those retailers, either.
True to its name, b8ta may represent a testing phase before these products are ready for the mainstream. In that case, though, it also risks losing the attention of its most successful products. For hardware startups eager to expose their products to consumers in the real world (or at least as much of it as Palo Alto represents), b8ta today provides more of an opportunity to hone and refine rather than drive make-or-break revenue.