01 Dec 2011
Clocky’s quest for market shareRe: Jill Avery (DBA 2007)by Carmen NobelTopics:
In the spring of 2005, media outlets from Gizmodo to Good Morning America were buzzing about Clocky, a clock that jumped off the nightstand and rolled away chirping and beeping when its alarm went off. At that point, the device was just a project that Gauri Nanda, a graduate student at MIT’s Media Lab, had developed for an industrial design course. She hadn’t planned to publicize Clocky beyond some photos on the course website, but a few gadget aficionado blogs linked to the images, and the buzz went viral.
Around the same time, HBS professor Elie Ofek was seeking case studies for his second-year Marketing and Innovation course. In “Clocky: The Runaway Alarm Clock” (with former research associate Eliot Sherman) and the follow-up case, “Nanda Home: Preparing for Life after Clocky” (with Jill Avery, DBA ’07), Ofek explores the challenges of designing, positioning, marketing, and selling Clocky, as well as the issue of expanding the company’s product line.
The cases deal with universal entrepreneurial consumer product questions:
Should the product be sold at big-box stores or through upscale specialty boutiques? (In the beginning, Nanda stuck with small museum shops and specialty catalogs, in spite of all the advance publicity.)
Is it better to partner with an American product design firm and risk prohibitive expense, or to team up with a less-expensive overseas firm and risk the inherent quality control and communications issues? (Nanda, who was able to launch the product with seed money from family members, retained full design control but subcontracted production to an Asian firm.)
More pointedly, the cases address the reasons for Clocky’s startling, unsolicited publicity, along with an issue that faces any entrepreneur looking to build a business around an unconventional product that elicits multiple reactions: How do you balance fun and function in order to avoid the danger of your product becoming a flash-in-the-pan fad?
In the “Clocky” case, Nanda cites the Roomba, iRobot’s robotic vacuum cleaner, as an example of a product that manages to steer clear of that fate.
“I’ve heard a lot of people say that the first-generation Roomba turned out to be a gadget, a fad item, because after a while it was a hassle to use and provided little results, even if it was always fun to have it running around the house,” Nanda states. “After seeing its product in the field for some time, iRobot has since improved the original Roomba and is introducing other new products like the Scooba a robot mop that are targeted to solve more difficult household chores.”
Clocky’s sales have begun to flatten by 2010, when the follow-up case, “Nanda Home,” takes place. Revenues in 2009 were $990,000, down from $1.5 million in 2008 and $2.2 million in 2007, the year Clocky came on the market. Nanda, who cut the original price of the clock from $50 to $39 to spur sales, knew she needed to extend the existing product line or venture into new product categories to grow the company successfully.
“This is another lesson for entrepreneurial students,” Ofek says. “How do you manage this growth phase?”
The case describes the prototypes that Nanda developed as potential complements to Clocky: Ticky, which sported digital minute and hour hands as opposed to a standard digital interface; and Tocky, which had the ability to upload MP3s so that owners could wake up to their favorite songs rather than beeps (Tocky made it to market).
Ofek remains in touch with Nanda, reporting that she is now mulling the idea of a children’s alarm clock that will not only wake kids in the morning but also tell them bedtime stories and sing songs at night. Might this be the subject of a third case? “Time will tell,” Ofek quips. In the meantime, he invites Nanda to attend his class when the Clocky cases are taught.
“I think she likes it because it gives her a chance to have people poke at her ideas and propose new ones,” he remarks. That’s feedback any good entrepreneur would value.
—Carmen Nobel is senior editor of HBS Working Knowledge.