Featured case: The SIMM Smartwatch and
the Internet of Things: Designing a Business Model

Share this page:
The case

Who – the protagonist

Diego, founder of SIMM Labs, the company behind the SIMM Smartwatch.

What?

After working as an executive for a wealth of technological companies in Silicon Valley in California, Diego decided to follow his heart and create SIMM Labs.

Mixing his love of wristwatches and technological expertise, Diego came up with the ‘smartwatch’ concept for the Internet of Things market, at a time when none of the major players had yet made their move.

Why?

The wristwatch was dying out – apart from an elite category of luxury watches worth thousands – as its core time-telling function now appeared on all number of household devices.

Rapidly evolving computing technologies led to Diego coming up with the concept of bringing a person’s personal web data to their wrist – what we now know as the smartwatch. Diego believed the device would largely appeal to affluent male technophiles.

When?

The company was founded in 2010 and a prototype of the smartwatch was created by 2012.

At the same time, the Internet of Things, which includes the market for wearable technology, was blossoming. And entrepreneurs were beginning to use new entrepreneurial tools like the Lean Startup Method and the Business Model Canvas.

Where?

Silicon Valley is the technology hub of the US, situated in the South Bay and the Southern Peninsula of the San Francisco Bay Area in California.

The boom of the high-tech industry in the 1960s led to the formation of Silicon Valley. Today, the headquarters of 39 businesses in the Fortune 100 can be found there.

Key quote

“Despite its aspirations, promising sales, and positive PR during the first week after the release of the device, SIMM Labs struggled with closing any contracts with licensees. Its investors, including Foxconn (the world’s largest electronic manufacturer), were becoming impatient. SIMM would run out of cash soon. In short, the business model for SIMM Labs was not working.” – Tedd Ladd, case author.

What next?

Diego and the SIMM Smartwatch were in trouble.

Diego had to quickly discover what was wrong with the business model, whether a new one was needed and, if so, how could it be evaluated before pushing ahead in a new direction? 

 
Interested in finding out more?
Download

Download the case and teaching note

Educators can login to view a free inspection copy of this case and its teaching note.

The SIMM Smartwatch and the Internet of Things: Designing a Business Model
Ref HLT-521-17-1006C
Teaching note
Ref HLT-521-17-1006TN

The author

author

Ted Ladd

Ted reveals how working for SIMM Labs motivated him to write this case.

Inside knowledge

Ted said: “This was more than a research subject. I worked at the company for several years. This was my lived experience. After the company’s demise, I opted to enter academia in order to conduct research on how to help other entrepreneurs avoid, or resolve, many of the questions highlighted in the case.”

keyboard

Sympathy for protagonist

He continued: “Many students recognise the problem of conducting post facto market research. But they also usually agree that such research would have alerted major potential competitors, like Google and Apple, to the company’s product ambitions and progress. In face of this competition, most students also elect to curtail market research.

“Experienced entrepreneurs are even more sympathetic, because they, too, have great “midnight epiphanies” that they believe to be foolproof business successes-in-waiting.”

What could have been…

Ted added: “I wrote the case using the information we had at the time, when making these decisions. I did not use external sources of information that have occurred since.

“This new information makes the case even more poignant and interesting: now that we know that the product category is growing rapidly, students wonder if, by making different decisions, the focal company in the case could have been a dominant player in this expanding market.” 

Bringing real life to the classroom

He concluded: “Personal experience is a powerful motivator. Students like to dissect cases for products that they already know and enjoy. They bring their own biases and suppositions. This mirrors the obstinate passion of founding entrepreneurs, and therefore lends more realism to case discussions in the classroom.”

About the author

Ted Ladd is Professor of Entrepreneurship at Hult International Business School.
 

View a full list of featured cases