Why Essential Smartphone Company Failed to Make a Lasting Impression in the Tech Industry

First impression is the best impression. This statement pretty much sums up Essential’s brief tenure in the tech startup world because, indeed, they did not make a good first impression.

The Essential Smartphone Company: Background and Initial Valuation

Essential, founded by the “Father of Android,” was a beacon of optimism for investors, who were ready to pour in thousands of dollars. The company was valued at $1.2 billion even before it released a single product. This valuation was based on the promise of innovation and the reputation of its founder, Andy Rubin, the creator of Android.

Launch and Reception: The Essential Ph-1

The Essential Ph-1 was the first product to hit the market. Launched in May 2017, it was available for public purchase in August of the same year. Unfortunately, it came and went without a trace, and nobody really missed it. The reception was lukewarm at best.

What Went Wrong: Misalignment with User Needs

Essential did not focus on the things that mattered. The Ph-1 had a lackluster camera and a failed concept of modular design. Instead of addressing the essential features—such as camera quality, price, and timely software updates—Essential focused on gimmicks like modularity, a pure Android experience, and timely software updates. These features would not mean a lot to the average person and catered more to a niche group of enthusiasts. This misalignment with user needs was a significant factor in their failure.

Competing at the Wrong Price Segment

The Ph-1 was priced at $700, competing with established brands like Samsung, Apple, and OnePlus, which offered more value for less money. The Samsung Galaxy S8 and Note 8 series, Apple iPhone 8, and OnePlus OnePlus 5 all had defining features that catered to the general public. Essential’s poor sales initially, coupled with a steep price, did not help their market position. Additionally, the anticipated buyout offers evaporated after the news of Andy Rubin’s scandal, further exacerbating their financial troubles.

The Andy Rubin Scandal and Aftermath

The revelation of Andy Rubin’s involvement in an inappropriate relationship with a minor, as well as the humiliating details of his departure from Google, added salt to the company’s wounds. This scandal not only harmed Essential’s reputation but also deterred potential investors and consumers. The company’s financial health was further jeopardized by the lack of interest from other potential buyers.

Overextension and Proposal Failures

Adding to their woes, Andy Rubin attempted to push a new operating system called Ambient OS alongside the Essential Ph-1. This system was intended to “Activate your home,” but it never saw the light of day. In a final ditch attempt, Essential acquired a failed startup and unveiled a bizarre smartphone prototype. Ultimately, they had to admit defeat when they stated, “Despite our best efforts we’ve now taken Gem as far as we can and regrettably have no clear path to deliver it to customers. Given this we have made the difficult decision to cease operations and shutdown Essential.”

Essential never really had a clear path to success. Their failure is a stark reminder of the importance of focusing on what truly matters—the needs and wants of the consumer—rather than flashy but irrelevant features. The tech industry is highly competitive, and companies must align their products with market demands and consumer expectations. Unfortunately, Essential struggled to find that balance, leading to their shutdown.