Essential’s road to mainstream success is a ten-year play

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Crunch Report | Getting Down to the Essentials

When Andy Rubin returns to smartphones after a few years in the wilderness, the tech press is going to take notice. Sites will speculate endlessly about teasers and report breathlessly about each small nuance ahead of launch. All of that comes with the territory when you’re the driving force that brought Android into the world.

For the phone-buying public, however, Rubin is not yet a household name. For mainstream consumers, his connection to a project isn’t enough to make a device stand out on store shelves alongside countless other Android devices. Following Rubin’s interview at the Code Conference, and a mere month away from the Essential Phone’s ship date, the product and the company’s website like a collection of good – or at the very least, compelling – ideas without a central thesis. Aside from offering something different, what does a phone like this have to offer consumers who are already awash with different smartphone choices?

During the conversation, Rubin touched on some of the motivating factors that drove him to launch both Essential and its investor/incubator Playground, rather than simply embracing a much-deserved retirement. “I’m somewhat responsible for creating this problem,” the Essential CEO told Walt Mossberg on stage. “And this problem is over-complication of technology.”

Essential, then, is an attempt to fight fire with fire – to address the problem of overcomplicated technology (that is due, in part, to the Android monster he helped create) by launching yet another phone and smart home hub. And certainly the company seems to be tempering its own expectations and the expectations of the press in the process.

In an interview that ran earlier today, Jason Keats, the company’s head of product architecture told Wired, “we’ve gone after technologies and methods of manufacturing that aren’t designed to support 50 million devices,” he says. He wants Essential to think like a high-end watchmaker, not a commodity gadget builder.”

And Rubin seems fairly confident that the company has a healthy support structure in place to help it grow at a decent pace. “It’s a typical venture-backed company,” he told Mossberg. “Playground is one of the investors. We’ve raised a substantial hundreds of millions of dollars. The margin structures on these things are confidential, but our investors are confident that we can get to a very interesting business very quickly.”

Of course, “interesting” and truly successful aren’t always the same thing.

In an interview following the big unveil, Essential President and COO Niccolo de Masi told TechCrunch that the company’s immediate goal is building a trusted brand. And that, naturally is a slow burn, particularly when so many consumers have already chosen sides in the smartphone battle.

“This is a long-term play. This is a pro-consumer long-term play,” he explained. “We’re focused on innovation first and solving consumer pay points. We’ll delay maximizing profitability until the company is more mature because we’re building a brand here. My passion is about building a new consumer love brand and the reality is that takes time and you need to show innovation repeatedly.”

The company’s focus, de Masi added, is closer to a ten-year play – an ample period of time to really build up consumer loyalty by consistently releasing quality products. And over that time, the company will begin to build more scale, in order to address a (hopefully) expanding consumer base. And scale, he adds, is a relative thing, pointing to the Google Pixel’s reported 2.5 million sales – a bomb by Apple and Samsung standards, but a success story if you’re some smartphone startup.

Wishful thinking, perhaps, but de Masi likened Essential’s growth potential to the original iPhone, sales that were hampered in part by Apple’s inability to manufacturer enough phones to meet demand. “We will effectively run a similar growth trajectory probably to what you saw with Apple’s approach to the iPhone,” he explained. “They sold a million in the first year. Not because there wasn’t demand for more, but because they could build more than that when it came to capacitive touch-resistant screens.”

For Essential, those roadblocks are things like the titanium shell that encompasses the device, a departure from the standard aluminum that graces most handsets. And when you cut through the abstraction and somewhat scattered messaging of the material issued around launch, that’s precisely what the company sees as its selling point for consumers: premium build at a reasonable pricing.

The future-proofing modularity and the coming ecosystem play that brings the Essential Home hub into the fray are all parts of the long-term play. The company believes that those consumers who pick their maiden device off a store shelf rather than any of the competition will do so because it stands apart from the countless me-too devices that have flooded the market in recent years.

And de Masi admitted that the company hasn’t gone out of its way to offer a succinct unified front on device messaging. “We want our device and brands to speak for themselves,” he told TechCrunch. “We will not be spending a lot of money doing traditional, above-the-line advertising. We’re putting our energy, money and all of our opportunity cost into the product quality. And we think consumers will see and learn about our brand through the products and what they can do.”

It’s a long-term play, and an embrace of patience that really isn’t a part of an industry so devoted to fawning over the next incremental update. But with a healthy dose of funding and tempered expectations with regard to steady, organic success, perhaps Essential can build something meaningful on its own timetable.