One of the early pioneers in the Quantified Self movement has quietly gone out of business. Zeo, a leading maker of hardware and software used by consumers to track sleep and improve their health, has not been operating since the end of...
One of the early pioneers in the Quantified Self movement has quietly gone out of business. Zeo, a leading maker of hardware and software used by consumers to track sleep and improve their health, has not been operating since the end of last year. A trustee has nearly completed the sale of all company assets. Zeo has been very quiet about the news up until now. In fact, Zeo’s website is still up and doesn’t mention the news.
Zeo was founded by three students at Brown University who had a passion for using the science of sleep and technology to improve people’s lives. The company introduced its first product, the Zeo Personal Sleep Coach in June 2009.
The following week, the first article mentioning the term “Quantified Self” was published in Wired magazine. While the article didn’t mention Zeo, it did claim “a new culture of personal data was taking shape.” And that every facet of life from sleep to mood to pain was becoming trackable. “Even sleep – a challenge to self-track, obviously, since you’re unconscious – is yielding to the skill of the widget maker.”
In 2011, the widget maker Zeo introduced a mobile version to its Sleep Manager product line. By wearing a special headband, with sensors to measure electrical current, the Zeo could track different phases of sleep, such as Light, Deep and REM sleep, in addition to awake time. This data was then sent to an iPhone, iPod, or Android phone, and could be automatically uploaded to a personal and private online sleep database. This data along with some analytical tools could then be used to help improve your sleep and health.
What Went Wrong
Former CEO, Dave Dickinson, who lead the company for the past 5 years, tells TechCrunch the problem was not the brand or the product. In fact, the company was growing before it shut down.
Dickinson says the problem was the business model. “The business model is more important than the brand. Consumer health devices are a very capital intensive business. You have to find enough money to address the consumer, funds to address the physicians, and also the retailers, and that’s up and above the device business having to fund inventory.”
Zeo had two business model options on the revenue side. Become a SAAS-like business with subscriptions and recurring revenue or make enough money from a customer who bought just one unit. But that was very difficult when the company started pricing its mobile product at $99, with ‘sub-optimal’ profit margins.
The Newton, Massachusetts-based company had raised more than $30 million over eight years. Dickinson says raising capital was not the problem either.
Sleep Tracking As A Commodity
Another problem for Zeo was that sleep tracking became a commodity. Devices like the FitBit, lark, and Jawbone Up use an accelerometer to determine sleep and awake cycles, using wrist actigraphy. These products brand their products as sleep trackers just like Zeo.
Dickinson says Zeo had peer reviewed scientific studies, including one published in the Journal of Sleep Research, showing his technology was 7/8th as accurate as data from the a sleep lab, considered to be the gold standard for measuring sleep. The study also says data from wrist actigraphy to measure tiny motions in devices are much less accurate. But that didn’t seem to matter for enough consumers.
Dickinson says he admires what the Fitbit and others like it have done. Those devices are not limited to one health issue like sleep, which was another problem for Zeo. Those other products work for different health and wellness areas, such as the well established desire to lose weight and become physically fit. Consumers already spend billions of dollars to achieve those goals. And they are already educated and motivated to improve their weight and fitness.
Part of Zeo’s business model required it to educate the c