The Quantified Self: The Arms Wars Has Begun

The Quantified Self

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Oh my gosh, is it windy today.  It is 32 degrees, but feels like 19 degrees.  Brings to mind March, and running along the Charles into those wind tunnels by the BU Bridge.  Or Manhattan and its concrete canyons that also serve said function.

Source:  Basis website
Source: Basis website

 I have been perplexed, to date, why no large company has jumped into the quantified self/wearables market, purchasing one of those small companies with little revenues, some technology, and a lot of PR and a toehold on the space.  It is obvious why all these large companies should be lumbering in, creating joint ventures, adding product extensions, apps and going all-in.  It’s a huge potential market that has the potential to dramatically improve Americans’ health.

Today, Intel announced that it was purchasing Basis Science Inc. for $100m to $150m, or $2m to $3m per employee.  We expect many more acquisitions to be announced in the coming months.  What typically occurs in a market with this type of huge potential, is that when one acquisition is made, it kicks off a wave of acquisitions in the space.  Unfortunately, none of these companies are public, so there’s no way for the average person to play this space.

basis back
Source: Basis website

For example, it would be a natural for Apple to acquire Misfit Wearables, which designs and manufactures the Shine.  The founders have an Apple pedigree, and the device is more than elegant.  Why wouldn’t Nike acquire RunKeeper? And why are Fitbit and Jawbone (manufacturer of the UP Fitness Band) still independent?

The Basis B1 looks like a watch, and costs $200.  It tracks heart rate, movement, ambient temperature, skin temperature and sweat.  The heart rate, temperature and sweat are measures of exertion, and better quantifies the calories burned.  Sensors, sensors and more sensors.  You heard that investment theme here, first.

The BASIS B1 device, using “BodyIQ,” can detect running, walking and bicycling.  Most of the current activity monitors, including the Nike FuelBand and Fitbit are glorified pedometers.[1]  Basis has gone a couple of steps further and provides the software/apps that help you analyze all that data.  The most useful Basis provided tool is called Habits, and makes an effort to gamify fitness.  We can see the watch connected to other apps, such as RunKeeper, or collaborating with other devices, such as Withings blood pressure monitor and Smart Body Analyzer.

As the United States strives to improve the health of its citizens, and commensurately lower its health care costs, measurement is crucial.  The two items that are most effective at changing habits, and it’s habits that we’re talking about, are measurement and support.  So think Monitors and Social.

Most people know that I’m a gadget hound.  I purchased the much maligned Newton (by the way, I believe the Newton was astonishing, and a huge productivity enhancer for sales teams), the first cell phone and Blackberry, have started in the health gadget space with RunKeeper and then iHealth’s blood pressure monitor, and own a NikeConnect as well as a Shine.  I was an early adopter in the health tracker space—so much so that a tiny plastic battery cover on my Withings’ blood pressure battery compartment cracked from age.  Something the folks at Withings hadn’t seen before.

As such, I’ve seen the sophistication of these devices increase over time.  And it is all about the added software and analysis, rather than the actual devices.  All these manufacturers have central software databases where you register, and the data is “shipped.”  You can have blood pressure, weight charts, and activity charts (think running with RunKeeper or swimming with the GarminSwim) that go back years—literally.

When it’s time to visit my doctor, I download the blood pressure data, and email him a six month chart.  The data is presented graphically and in an Excel spreadsheet.  And it’s just too easy.  I asked my physician why he doesn’t have all his patients use these devices.  Believe it or not, he had no clue that these things exist, and I was the first to introduce him to these devices.  And he’s a BMOC with a major Boston medical center.  It seems most of his patients are much older. and don’t even carry smart phones.  There is a huge demand, just waiting to be filled.  Those cranky human habits will present challenges every time.

Why wouldn’t CIGNA—or any other health insurance company— form partnerships with these companies, and negotiate discounts to their members.  The insurance companies already provide “coaches.”  Why not go the next step and deliver a means of working with meaningful data?  All of this has huge data privacy and security requirements, but the results have the potential to be truly astonishing.

Please send me your additions/modifications to these lists.

Margaret Johns

Founder, BlueLake Partners, LLC 

Affiliates:

 

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Jan Robertson, Managing Director

 

Susan Woods and Vlad Harris , Managing Directors

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Margaret Johns is the Founder and Chairman of BlueLake Partners, a boutique M&A investment bank based in the Greater Boston Area.  Prior to founding BlueLake she was an employee founder and Managing Director at Needham & Company where she worked in Corporate Finance in New York City and headed up its Boston office.  She now lives in Londonderry, New Hampshire with her husband, 16 year old step-daughter and three pugs.  When she’s not working with clients, FINRA or writing blogs she competes on the Granite State Penguins Masters Swim Team, skis, rides her bike or is out walking her pugs.

Content researched, edited and reviewed on a best efforts basis.

We make no claim to being comprehensive in our review, as the contents are companies and topics we, ourselves, find of interest.

This newsletter is currently being proofed by Dave Henshaw, which is much appreciated. Dave is my USMS swimming lane mate, and Granite State Penguin team-mate.  He is retired from MIT, where he used to produce and proof their annual financial report.  Exactly what we need.


[1] arstechnica, Dec 22, 2013