Google Glass is a brand of smart glasses with an optical, head-mounted display. Just two years after they were launched, Google announced they would no longer be producing a consumer version of the glasses.
Google Glass failed primarily because of a poor product-market fit. The developers believed the glasses would sell on hype and not on how they would solve user problems.
Google Glass competed against more successful smart devices such as watches, speakers, and televisions. They also attracted criticism for their ability to film others covertly and didn’t perform any function especially well.
Google Glass is a brand of smart glasses with an optical, head-mounted display.
Google developed the glasses with the intent to produce a ubiquitous computer allowing the wearer to communicate with the internet via voice commands.
Prototype Google Glass smart glasses were launched in April 2013 for the princely sum of $1,500. Almost immediately, they attracted criticism from consumers concerned about their privacy, safety, and cost.
Just two years later, Google announced it would be ceasing production of the consumer version of the glasses.
The company then pivoted to the business sector and launched Glass Enterprise Edition for certain workplaces such as factories and surgeries.
Why did the consumer version fail so spectacularly? Read on to find out.
Product-market fit
Marc Andreessen defined Product/market fit as “being in a good market with a product that can satisfy that market.” According to Andreessen, that is a moment when a product or service has its place in the market, thus enabling traction for the company offering that product or service.
Google Glass failed as a product because its inventors did not conduct proper research on its potential users and the market.
Instead of developing a product that would solve user problems, they believed the glasses would sell on hype and revolutionary technology alone.
The early adopters were exposed to poor product development and could not identify any meaningful benefits to wearing the glasses.
Moreover, the glasses were not technologically advanced enough to warrant regular use, and Google had not determined whether they were comfortable to wear for long periods.
Competition
Google had lofty ambitions to augment reality with a touchpad, camera, and LCD or LED display.
In truth, however, all the company did was supplement reality.
Ultimately, the sunglasses had a limited battery life of between three to five hours.
They were also competing with smart televisions, watches, and speakers with faster processors, larger capacities, and better cameras.
Stigma and negative publicity
Google Glass attracted significant criticism after discovering wearers could film others covertly.
Some bars and restaurants banned wearers from entry, with the term “Glasshole” coined around the same time.
Google then released a statement instructing users to respect the privacy of others and not be creepy or rude, but the damage had been done.
The timing of the negative publicity was also unfortunate since there was also rising distrust around the power of big tech companies at the time.
The high cost of the glasses was exacerbated by the fact that they didn’t perform any function, especially well.
As a result, those who could afford them were content purchasing a more affordable smartphone without the associated stigma of owning it.
Timing
While as a company, you can innovate and create new markets.
Often, technologies proceed with the development of complementary innovations.
AR might have been too early to be accepted at the time, given the strong transition from desktop to mobile.
In that phase, though, mobile won.
Setting the stage for the AR revolution
Augmented reality and virtual reality are taking center stage in what has been defined as the “Metaverse.”
Just like Virtual Reality (VR) develops an entirely new environment for the user using the technology and replaces the existing real environment, AR uses the current and real environment. Still, the objects inside are enhanced to stimulate user perception. It alters one or multiple aspects of the environment for interaction and enriches the experience. Whereas VR would have replaced the entire room and shown you an entirely manipulated environment, AR enables users to use the same environment and observe different objects.
Today these technologies and products might become the next frontier. As companies like Apple dominated the mobile industry.
Who’ll be able to tame the next wave will also ride a very large market.
Google (now Alphabet) primarily makes money through advertising. The Google search engine, while free, is monetized with paid advertising. In 2021 Google’s advertising generated over $209 billion (beyond Google Search, which comprises YouTube Ads and the Network Members Sites) compared to $257 billion in net sales. Advertising represented over 81% of net sales, followed by Google Cloud ($19 billion) and Google’s other revenue streams (Google Play, Pixel phones, and YouTube Premium).
A hidden revenuebusiness model is a pattern for revenue generation that keeps users out of the equation, so they don’t pay for the service or product offered. For instance, Google’s users don’t pay for the search engine. Instead, the revenue streams come from advertising money spent by businesses bidding on keywords.
Of Google’s (Alphabet) over $257 billion revenues for 2021, Google also generated $753 million from a group of startup bets, which Google considers potential moonshots (companies that might open up new industries). Those Google’s bets also generated a loss for the company of over $5.2 billion. In short, Google is using the money generated by search and betting it on other innovative industries.
Google (Alphabet) has a cross-functional (team-based) organizational structure known as a matrix structure with some degree of flatness. Over the years, as the company scaled and it became a tech giant, its organizational structure is morphing more into a centralized organization.
Google is an attention merchant that – in 2021 – generated $209 billion (over 81% of revenue) from ads (Google Search, YouTube Ads, and Network sites), followed by Google Play, Pixel phones, YouTube Premium (a $28 billion segment), and Google Cloud ($19 billion). Over $31.5 billion went toward R&D (12.3% of its revenues).
YouTube was acquired for almost $1.7 billion in 2006 by Google. It makes money through advertising and subscription revenues. YouTube advertising network is part of Google Ads, generating more than $28B in revenue by 2021. YouTube also makes money with its paid memberships and premium content.
The traffic acquisition cost represents the expenses incurred by an internet company, like Google, to gain qualified traffic – on its pages – for monetization. Over the years, Google has been able to reduce its traffic acquisition costs and, in any case, keep it stable. In 2021 Google spent 21.75% of its total advertising revenues (over $45.56 billion) to guarantee its traffic on several desktop and mobile devices across the web.
Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
