Need a dedicated AI device?

Editor’s note: Happy Thanksgiving to all our readers in the United States…

Our office is closed today due to a public holiday. We’re taking this opportunity to feature Jeff’s insights into some of the personal AI devices that received a lot of attention earlier this year.

However, despite the initial buzz, the response after the device was in the hands of consumers was overwhelmingly negative. So what happened?

Now, as Jeff explains below, these companies need more than just purely interesting technology if they want to strike the right chord with consumers and investors…

These were two of the most interesting new technology products announced this year.

And those also happened to be two of the biggest flops.

This may seem contradictory, but it’s not.

In a rapidly emerging technology market where business opportunities seem endless, it’s a race to gain a foothold as quickly as possible.

The lure of gaining a large market share in a huge, well-known market is what drives venture capital to invest billions of dollars in startups with uncertain outcomes.

Innovation and iteration are certainly interesting. Regardless of whether you have access to these early-stage investments, you can benefit as an investor by observing what works and what doesn’t.

To that end, two great examples come to mind this year. Humane with AI pins and Rabbit with Rabbit R1.

Imagine new AI interfaces

Both the AI ​​Pin and R1 products are interesting in that they imagine a new physical user interface for artificial intelligence.

The companies have developed new consumer electronics products that use several new types of hardware and envision new ways to communicate with generative AI technology.

Would consumers prefer to use a completely different type of device other than a smartphone or laptop to connect with a personal AI assistant? That’s the real question these companies were trying to answer.

In the case of Humane, we developed the AI ​​Pin device. This is meant to be worn over your top layer of clothing so you can “see” into the outside world.

Source: Humanitarian

The product itself is impressive in terms of hardware. It has a similar configuration to the Apple Watch, with a Qualcomm 2.1 GHz processor, 4 GB of RAM, 32 GB of storage, Wi-Fi, Bluetooth, and cellular connectivity.

It sells for $699 or $799 depending on the model and comes with a $24 monthly subscription. This subscription includes unlimited talk, text, and data over T-Mobile’s wireless network in the United States. In that sense, the device has a phone number and is positioned as a potential replacement for smartphones.

I couldn’t help but be reminded of the modern Star Trek combadges, or communicators, which function as both communication devices and universal translators. The Humane AI Pin is designed to be worn in the same location and activated by the same type of tap on the device.

However, despite the AI ​​Pin’s vintage being 2024 compared to Starfleet Combadge circa 2350, the AI ​​Pin was designed with more functionality in mind.

In addition to being able to take calls and work with an AI assistant, the front of the device has an external camera for vision and a projection device for viewing and interaction.

Source: Humanitarian

The interface projected on our hands can be used to control the device by tapping the buttons projected on the hand. It is also a display of information. Control is also possible through certain hand gestures.

You can also use the camera to determine your surroundings and location. AI Pins can be asked questions such as “What is it that I have in my hand?” Or “What building is this?” You can also use your camera to take a photo or video by simply tapping your device.

While it’s easy to see the practicality of such a sophisticated product, the feedback on real-world devices is less than encouraging.

Wearable technology with uncomfortably quiet noise

AI pins are not actually pins. It has a magnet on the back and can also function as a battery pack that attaches to the inside of your clothes. Because of their weight, they tend to pull your clothes down.

Hand-projected user interfaces can be difficult to use, and there are many complaints about the sensitivity of the system, which often leads to errors and frustration.

Battery life was less than 4 hours, and many reviews indicated that the device had issues with overheating and having to pause to cool down. The heat is so noticeable that it can be felt on the wearer’s skin under the AI ​​pin.

There was also a delay in responses from the AI ​​pins when interacting with the device, often lasting several seconds, leaving users wondering what was going on in the awkward silence. And without screens, the uncertainty was even greater.

This all points to too much friction in the AI ​​pin user experience. Advanced technology should ultimately reduce friction and make tasks easier, not harder, to perform. That’s why Humane’s product launch was such a failure.

Humane was founded by two senior Apple executives who had great success developing products for the consumer electronics giant. Humane’s marketing certainly had an Apple-like feel to it. Last November, the device was unveiled as a fashion accessory at a Paris fashion show.

This executive pedigree helped him raise about $240 million between 2019 and 2023 from Tiger Global Management, Sam Altman, Marc Benioff, Microsoft, Salesforce, Qualcomm, SoftBank and more. That was enough.

And just like that, the company is now looking for a buyer.

Humane believes it is worth between $750 million and $1 billion. However, we need to keep in mind that it is a “question”.

I’m sure Humane’s investors want to exit at this level, as it would mean a profit for some and a return of capital to others.

Assuming there is a buyer, I doubt Humane will be able to come close to that valuation.

Funky handheld device with limited practicality

Another recent flop is the Rabbit R1, a funky, retro-looking device.

It’s hard not to like the design, and at $199 and no subscription required, it’s certainly an easy sell.

Source: Rabbit

The product was listed as a blockbuster at CES 2024 in January and attracted a lot of attention. (CES is the annual Consumer Electronics Show and one of the world’s most popular technology trade shows, where companies introduce and display their best products. Cutting-edge new technologies.)

The Rabbit R1 contrasts with the Humane AI Pin because it is a handheld device with a push-to-talk button (the gray button on the side), an embedded camera that can be rotated to face the user or the outside world, and an analog. It has a scroll wheel (orange cylinder), and a screen on the front.

Source: Rabbit

The R1’s technical specs aren’t all that similar to the Humane device, except for a larger battery, more memory, and bigger speakers. The R1’s larger handheld size compared to the AI ​​Ping makes these features easier to use.

That being said, the overall purpose of the product (to be a user interface to an AI assistant) is very similar to the Humane AI Pin. The idea of ​​the ready-to-use product is to provide users with access to generative AI (search, vision, translation) and music.

And the product vision for Rabbit R1 is to enable an action-oriented AI assistant that can make reservations, buy tickets, provide navigation, and provide contextual research related to a user’s interests.

However, like Humane AI Pin, this software is strange and slow. And the rotating camera added friction rather than function. After all, smartphones are better and easier to use because they have front and rear cameras. This would have been easy to do on the R1 and wouldn’t have cost the device that much.

What makes R1 (and AI Ping) such an appealing and novel idea is the use of simple voice interactions. For the first time, viewers of this technology can imagine being able to interact with their devices without having to type prompts on a computer keyboard or smartphone screen. But ultimately, it becomes clear that its functionality is no different than a more developed, AI-powered Siri or Alexa.

Rabbit is at an even earlier stage than Humane, having raised just $36 million between 2021 and 2023 with backing from Khosla Ventures and a handful of lesser-known venture capital firms. Despite the poor reception so far, I suspect Rabbit is now looking for more funding to complete its product vision.

These comments are not meant to be critical. In fact, we’ve found that these developments provide great insight into user experience and raise some obvious questions.

Reduced friction and increased practicality

While some of the issues and bugs in both devices may be remedied, the real question is whether consumers will adopt yet another device to use artificial intelligence (AI).

The reality is that all the features that are or will be on AI Pin and R1 are already available on smartphones.

A new device must do more than what existing computer interfaces (such as smartphones) can do to take the market by storm. The friction, learning curve, and cost of change are too high.

Wearing a communicator on your chest or carrying around a new household appliance means that it has features you’ve never seen before, thereby making your life easier and eliminating the need to carry around another device (such as a smartphone). It only makes sense if it disappears. ).

The most likely and obvious path towards consumer adoption of AI is through the devices we already use throughout the day. Smartphones, glasses, AirPods (earbuds), and for some people, smartwatches.

Smart glasses or augmented reality glasses in the form of glasses or sunglasses provide AI systems with a lens into the real world and allow them to communicate with AI assistants hands-free. AirPods have a similar voice interface, and the usefulness of smartphones continues to increase with each generation released.

I had the opportunity to make early investments in both Humane and Rabbit. I gave them both. It’s not because I don’t think technology is cool or interesting. that’s right. However, both increased friction and were less practical than what we use today. Those features are already available on smartphones.

And what we want as both users and investors is to reduce friction and increase utility.

thank you.

jeff