What Can be Learned from the Downfall of Doppler Labs?
By most accounts, Doppler Labs had the vision on where hearing aids are headed (over-the-counter and a LOT cheaper), and they had a great team and a solid jump on the tech needed to achieve it. But today, November 10th, will be their final day of business. David Pierce of Wired took an inside look at what went wrong for Doppler. Here are a few highlights:
ON OCTOBER 23, [2015, co-founder Noah] Kraft…appeared on CNBC to make the case for his company. “We want to put a computer, speaker, and mic in everyone’s ear,” Kraft said during the interview. “We have very lofty visions of the future, everything from real-time translation to personal assistants.”
That Doppler Labs is closing its doors now seems surprising for many reasons. Internally, executives say the company’s never been more stable. Kraft and [recently added CEO Brian] Hall spent most of 2017 re-orienting the team’s efforts around the hearing-health market, helping pass a bill allowing hearing aids to be sold over the counter and building a new app for those with mild to moderate hearing loss. Progress is underway for the second version of Doppler’s main product, a pair of wireless earbuds called Here Two.
Meanwhile, Doppler’s core idea—that in-ear computers are the next frontier—has permeated the industry. Apple’s promoting AirPods, Google’s touting Pixel Buds, and every headphone maker from Bose to Jaybird is experimenting with wireless earbuds you can wear all the time. Voice assistants like Siri and Alexa continue to improve rapidly, and users are beginning to look for ways to stay connected to tech without having to bury their face in a smartphone all day. These are the things Doppler’s been waiting for. It just ran out of time.
Is there more to it than the (not so) old Silicon Valley cliché that “hardware is hard”? That was certainly the main issue, according to Kraft.
…[A]n early build of Here One came back from Doppler’s China manufacturers in far better shape than anyone expected. (I got a demo of this build around the same time, and it was impressive.) The earbuds looked good, the software worked almost perfectly, and even the real-time translation feature seemed to be coming together. Suddenly, Here One was on pace to beat Apple’s AirPods to market. “Not only did we have an inbound offer, but we were ahead of the curve,” Kraft says.
But with all the focus on size and aesthetics, battery life slipped through the cracks, along with production challenges.
They’d switched manufacturers, and a longer-than-expected wait for a component pushed mass production back from fall of 2016 to February of 2017. That meant Here One wouldn’t beat AirPods to market, or capitalize on the all-important holiday sales rush. And Doppler had to raise another $10 million just to get the product out the door.
To make matters worse, in January, a team came back from China with troubling news. They’d hoped the earbuds would to get 4.5 hours of battery life with augmented hearing, or three hours of music streaming. But because of a Bluetooth chip drawing more power than expected, Here One was lasting barely three hours of AR, and less than two for music. Apple was promising five hours on a charge for AirPods, which made Doppler look even worse. “We focused so much on size and compactness with Here One that we kind of compromised battery life,” Lanman says.
WHEN YOU GET right down to it, Kraft says he made one mistake that sticks out above the rest. “We [*$Q#(@*$] started a hardware business! There’s nothing else to talk about. We shouldn’t have done that.
There’s much more to the story, including some lessons on not getting “irrationally confident” when one thing goes well, and it’s worth reading the full Wired piece. But in the midst of a wave of stories of sexist and immature founders, there is another element of Kraft and Lahmann’s approach to the impending closure of Doppler Labs’ doors: taking care of their employees.
[When options were running out this summer], Kraft and Lanman explored shaving their equity stakes by more than 75 percent, hoping to find a way to at least pay back investors and make a little money for employees. Mostly they wanted a landing place for the tech and the team. That’s the thing the Doppler leadership comes back to over and over in the weeks leading up to the end of Doppler: doing right by the employees. They eventually received two offers from hardware giants, but neither was meaningful money. “They said, ‘Let’s see if we can do a deal that’s definitely shitty for you, but not too shitty, and definitely better than going out of business,'” Kraft says. Doppler would have saved face, but it wouldn’t have made anybody any money. So Doppler said no.
As Pierce points out, “the hardware world is full of cautionary tales”.
A study by analytics firm CB Insights found that while it’s still relatively easy to get early funding for a hardware company, only 24 percent of those companies will raise any more money at all, and 97 percent will essentially turn into nothing. “As hard as it is for all tech startups, it’s even more difficult for consumer hardware companies,” the survey concludes.
Doppler’s website has already changed to reflect the new reality.
It contains a download link to the new app, pages about Here One and Doppler, and a note from the leadership explaining what happened and why Doppler is no longer.
On the final day for the Doppler team, we are giving a shoutout to a team that almost certainly has correctly seen the future of hearing assistance, and to the founders who have striven to do right by their employees.
Every employee I spoke with at Doppler echoed the same thing: that this was a difficult, demanding, chaotic job, and they wish they didn’t have to leave it yet. Even so, they seem to take some solace in the company’s legacy. “Down the road, let’s say the hearing aid market is completely disrupted three to five years from now, it’s so important that Doppler is remembered as the company that opened that door,” says KR Liu, Doppler’s VP of advocacy and accessibility and the driving force behind the company’s hearing-health work. “That’s really important not only to me, but the employees of the company. That’s what we want to be known for, remembered for.”
At the end of it all, the people who worked at Doppler at least feel like they tried. And they’re all excited, in some way, to live in the future they predicted. “It’s not as good as doing it yourself, but it’s something,” Lanman says. “At least we left a mark.”