AmpStrip decides not to do fitness, refunds everyone

AmStrip

In probably the weirdest move of the year, Indiegogo project AmpStrip has decided that it doesn’t like being popular – and has exited the fitness business.  Instead, it’ll pursue bringing the device to market within the medical industry.

You’ll remember AmpStrip from back in January at CES.  It was a small multi-day adhesive patch that could track your heart rate and broadcast it to devices, just like a regular HR strap.  The difference being, it was just a small sticker.  Further, it could actually save all that data for later uploading (24×7 HR too!) – including metrics beyond just simple heart rate – such as steps and body temperature.

I was able to actually give the unit a test run (and shower) and found it did fairly well, despite being a prototype.  Their subsequent Indiegogo project managed to raise some $537,000USD – an impressive mount.  Further, I’d have rated it one of the most interesting things in the health/fitness realm to come out of CES this year – and many other media outlets and CES themselves agreed.  Here’s a snippet of one of my runs (seems I never actually ended up posting all the full data, ran out of time).

Unfortunately, the company won’t be bringing the product to market, and will be refunding all backers of the project.  They made the announcement today to backers via an e-mailed update, a small snippet of which I’ve included here:

“After much discussion and debate, we have decided to suspend development of AmpStrip as
a fitness product. Going forward, we are going to first focus on the device’s potential uses as a
medical device rather than a fitness device.

Many of you have commented on AmpStrip’s potential medical benefits ­ the potential ability for
patients and doctors to monitor irregular heart rate, respiratory function and activity levels to
name just a few. We believe that in that capacity, this device can truly make a difference in
people’s lives.

Unfortunately, we do not currently have the resources to simultaneously support our previous
athletic performance objectives and our current medical focus. For that reason, we will be
unable to ship the AmpStrip at this time. We will be refunding everyone’s money.” (October 14th, 2015)

I’ve gotta say – this is definitely super odd on so many fronts (and of course, disappointing).

First off, remember that AmpStrip was made by FitLinxx – that’s a company that’s been split between fitness products and a couple of minor health focused products (scales and a blood pressure sensor).  They’ve also got a corporate wellness program.

It’s peculiar to me that they’d ditch the fitness realm to go towards the medical realm.  I say this because the medical device realm is fraught with multi-year roadblocks and regulatory approval processes.  It’s not something that happens overnight.  To say that they couldn’t do both is weird – because the costs associated with the fitness side are frankly trivial compared to the validation for medical devices.  Like dropping a penny down the storm drain type trivial.

Further, if I was in their shoes and wanted to go down the medical route I would have leveraged the fitness side of the house to drive product innovation in the medical side.  Meaning, they effectively could have taken lessons learned from the fitness side (broad consumer base) and used that to speed their development on the medical side.  This would have likely shortened some of the non-formal testing aspects – such as typical new product teething pains that are more easily found in vast numbers.

Next, the company is refunding all backers.  That’s not a cheap move.  Undoubtedly they’ve long since burned through that money, so the refund has to come from somewhere.  So while this is much appreciated, it’s not the typical crowd-funded exit strategy of a failed product.

IMG_3149_thumb

So…what’s at play?

Well, I’m going to guess one of two things:

A) Some large company has acquired the technology and simply doesn’t want to deal with the consumer application – and this (the payout) is the most tidy way of disposing of the end consumers.
B) Some large company wants to bring the product (licensing or similar) to market purely in the medical space and is otherwise funding the effort, and again, doesn’t want to deal with the end consumers.

The differences are subtle (acquisition of the technology vs licensing), but ultimately I’ve gotta believe something far bigger is at play here.  After all, if you look at the major business models of FitLinxx, much of it is targeted at non-medical devices.  Pieces that would have actually really benefited from this being more consumer than medical.  Add that to the fact that their booth at CES quickly became a hub for people looking to invest in the company.  Thus the only logical explanation is a really big check (deservedly so).

Which – don’t get me wrong – I think the medical applications here are indeed massive.  Being able to do 24×7 body monitoring of patients in at least those known categories (HR, Steps, Body Temperature) is immensely useful – especially when paired to a simple smartphone.  As you can see in my embedded tweet, they demonstrated the ability to actually livestream that data via my phone while I was running out in the middle of the desert – straight to their backend servers.  The potential for this is huge.  But, to me the weird quirk is to say that they don’t have the money to do both consumer and medical.  I just don’t buy that portion of the argument.

Still…interesting times.  I suspect 6-12 months from now we’ll find out who really bought it, or what really happened when we see the product pop up somewhere else.  Unfortunately, it’s a bit of a loss for the sports technology side (at least in the meantime).

With that – thanks for reading!

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57 Comments

  1. Scott E

    The potential for the product sure seemed to have a bright outlook. One could imagine an internal debate around sports market penetration given the magnitude of wearables already on the shelf. Sure, completely different niche having a strip versus a watch, as well as what is measured, yet each product launched reduces some portion of the overall market. Certainly hope them success in the healthcare arena as the concept is sure to be a winner.

  2. Frank E

    Medical devices command a much higher price plus a barrier to entry. Most likely they don’t want an identical but cheaper device out there to compete with their high margin product. Approval is a hurdle but a 510K is not that difficult to obtain. There are other pharma examples where companies have withdrawn products only to reintroduce them at much higher prices to a different audience.

    • Josh Parks

      I’m not a medical device pricing guy per se but…I agree with Ray on the not making sense side. If they are thinking about the hospital or home healthcare market in these scenarios reimbursement is tied to the DRG and as such the price per patient day is actually pretty low. Combining a number of the comments below they either are building some crazy dot.com esq growth model OR they’ve figure out a way to apply this as a better mousetrap (think EMTs using these and an APP instead of some $100k apparatus)….only problem is they’ve not demonstrated what that thing is and they got a lot of press at CES. So they better have good broad ip and a great idea. I have some suspicions on who might be behind the buy but everybody can name their fav med device cos at this point.

    • John

      I agree, they probably realized they could sell more for $500 per unit in a hospital environment than the could at $5 per unit to athletes, and they needed to ensure the medical community is the only distributor.

      And I’m guessing the reason they decided to refun all the investments (instead of just cancelling development and going home with a big apology like most failed crowdfunded projects) is because a another investor stepped in and offered to pay the tab. Probably a medical field venture capital firm.

  3. Donnie Barnes

    Another option…what if they couldn’t pull it off at near enough to the pricing they were shooting for? Just because a prototype worked doesn’t mean they didn’t just miss the mark on how much they could get the thing down in price thanks to volume, right?

    I was in for $119, so I’m obviously disappointed it isn’t happening, but glad I’m at least getting my money back. Oh well.

    –Donnie

  4. Philip L

    Wouldn’t be of any use medically unless it could have multiple heart leads (views). Turn it into a 5 lead device with oxygen sensor and temprrature and it would be spectacular!

  5. Jimbo

    I agree that it has to be some kind of big takeover or similar. Giving out the refunds alone are near proof of that.
    I would think that having a consumer version would be great testing before going down the difficult road of a medical device. By the time they got to version 2 or 3 they would probably be more ready for the medical market.
    Apparently, this is not what the Sugar Daddy wants.

  6. John David Lauren Blake Branum

    I’m still hoping the Kenzen Echo smart patch eventually makes it to consumers. It actually has more potential capabilities than the ampstrip but for some reason it’s crowd funding attempt didn’t work as well. It has all the same capabilities with the addition of monitoring your hydration status and lactic acid levels. Ray, did you ever test their monitor out? link to kenzenwear.com

  7. Gavin

    what annoys me is that fitlinx took the money from backers and effectively used it to fund their vc/pharma/healthcare backers who are writing the cheque to fitlinx. We the backers have been seed funders and should be rewarded with equity or the finished product. Money back is very poor substitute.

  8. Peter

    What alternatives for comfortable 24/7 heart rate monitoring do you guys know beside the kickstarter project Zoom by Lifetrack? The Tomtom Spark may get 24/7 monitoring too in the future. Sadly it is a little too big in my opinion and you can’t wear it on the upper arm under your clothes. The Charge HR isn’t an option either, because the heart rate isn’t reliable enough when exercising, moreover it isn’t designed for swimming.

  9. Adam

    The there is a ton of venture funding for products like this in the medical field. It doesn’t surprise me that they decided to change focus, they will probably make much more money going the healthcare direction first then going to consumers next.

  10. Mike B

    I work in the the medical device, pharmaceutical, and biotech industries supporting companies from clinical trials through approval and into commercial production. The compliance required to manufacture then get such a medical device approved by the FDA (at least in the US) is a significant hurdle and will yes, bring more profit, but also raise costs significantly. To keep two product lines (fitness and medical) running, would necessitate two completely separate sourcing, production, and QC operations and potentially facilities. So this decision does make sense to me. Maybe someday once this is well established in the medical field we might see the technology trickle down to the fitness industry, but that’s probably not going to happen for 5-10 years I’d say.

  11. Chris G

    Apple? Google? Samsung?

  12. Vic

    Going into pharma with a reputation to drop products and customer segments within a few months of introduction??? Good luck!

  13. Etienne

    This product has many potential uses, consumer wearables being one. Pharma is another, “cheap” in the field monitoring of a soldier’s health stats during operations is another.

  14. I was a backer, and hugely disappointed.
    Another idea that popped into my mind is that the product was too “complicate” for the fitness users that are used to fitbit or similar “plug and play” devices.
    Spending 2USD every week just to replace the adhesive of the sensor is not cheap. Also putting it on/taking it off was not a straightforward exercise.
    Those are annoyances that someone can live with if they have to diagnose some heart disease, but maybe too much of a burden for the fitness market.

    Of course refunding half a million USD is not cheap, so definitely that money that was long gone had to be collected somewhere

  15. Tomas G

    Somehow I think they might have failed at keeping the device on the body for extended period (up to 7days). Problem being not the point between adhesive and skin, but between adhesive and silicon device itself. With medical approach it’s easier: same model might work when there are less body movement involved, or ditching that reusable model for single use patch.

  16. Casey

    Very disappointing to hear. I was waiting to give them my money for this reason exactly, but they seemed to be making lots of progress and were consistent about sending out video updates on their development until recently. Sorry to everyone who took part in the free financing period. Hopefully Ray’s correct and it pops up with a Garmin/Apple/Google/TomTom badge in a few months…

  17. Ray Reynolds

    Sounds like it was a Ponzi scheme all along.

    • Turn The Damn Cranks

      The first Ponzi scheme in history in which the scammer voluntarily refunded all the money?

    • kw

      That’s actually precisely how Ponzi schemes work: you use the second generation of “investors” to pay off the first generation, and so on.

    • Kinda a stretch. In this case, some big-ass company came along and likely did their due diligence (probably the same time Fitlinxx stopped providing updates) and they went quiet. Very standard M&A practice. Their press notes for the update yesterday read exactly like a M&A boiler-plate, as did their ‘no comments’ to me on whether they or the technology was acquired.

      (I used to work in M&A’s).

  18. Hack Kampbjørn

    When they close down last month and changed delivery date from OCT15 to JAN16 without any updates that had all the markings of a takeover. Specially the radio silence but still refunding anybody who requested it.

    I see an option C: Some large company wants to bring the product (licensing or similar) to market purely in the fitness/consumer space and is otherwise funding the effort, and again, doesn’t want to compete against Ampstrip. This leaves Fitlinxx with the medical option. Think Garmin buying Varia.

    With a few software updates to work with their watches this could be a really cool swim HRM for Garmin, Polar or Suunto.

    • kw

      This seems the most logical scenario. There’s no reason to squash a consumer application altogether. They were probably simply bought out by another entity that will bring the technology to the consumer market. Meanwhile, FitLinxx can continue to develop the medical device.

      But this does raise important questions about crowdfunding and whether it’s used as stealth VC money. Would the funders have a claim to equity in the company or the buyout/licensing deal (assuming that’s what’s behind it)? Will they be asked to extinguish such a claim to get a refund? It seems like crowd funders supply much of the seed money but receive none of the upside.

    • Your second point is the most interesting one, and I’m going to guess at some point a project will reach a tipping point and someone will file suite and probably win. I don’t think there’s basis here for that, but eventually a project will screw up just enough and leave that door open…

      I also think that Indiegogo will eventually get sued for not doing enough to protect the consumer (unrelated to this). Kickstarter has done some in that area to put gates around whereas Indiegogo is just playing dumb.

  19. Chris Cooper

    Please do keep us informed as much as possible! I was shocked, too, because it seemed like such an innovative product that was actually working. Glad to get my $ back as a backer via Indiegogo, but really wanted to try this! I hope the tech eventually makes it to the fitness market.

  20. Maddy

    Oh, was waiting for this one 🙁 Thanks for your thought why did it happen, would like to hear new info.

  21. Oscar P

    Maybe some secret agency will acquire the technology and will improve it to the point that each of us will be constantly tracked! I’m sure that’s already a movie.

  22. Scott Ashmead

    What a shame… back when you first reported on this, I think this product was the most exciting for me to see at that time. I have been really looking forward to its release. oh well 🙁

  23. Dave Mcbastard

    Sounds like the sort of thing Wiithings would go for….

  24. HA

    I am not really sure what the initial buy in for the consumers was (I did not invest), but I find it interesting that the company is washing away their hands by just providing a refund of the same amount. For a crowdfunded project the consumer is essentially the angel investor. In a regular angel investor scenario, if the product and hence the company is truly big 6 months to a year past the initial investment, the angel investor will deserve and get a huge payout for their stake. Now I understand that an investment as small as 100 – 200 bucks may not mean a lot but the principles remain the same. And in the complete scheme of things, it would be hard to believe that the current worth of the product is $537,000 (as mentioned above). This raises a big question regarding the right of a consumer (in other words angel investor) in crowd funded projects.

  25. tom rutter

    Perhaps the technology didn’t work very well for sports use? There were multiple complaints from beta testers about ampstrips coming off and losing data when the user was very active. It may just be that the technology is inherently more appropriate for medical (i.e. normal activity) uses.

  26. tom

    I was also a backer and I’m really disappointed. Granted, this company has been plagued by really poor decisions. They were originally supposed to ship the product to early backers in June, and then in that month announced it would be delayed until November or something. It turns out they essentially had an alpha product at the time and they should have known since the beginning of the year that June is unrealistic. Instead of communicating to the backers they just kept quiet. At the very end they didn’t provide any updates for 2 months and then come out with this.

    I’m more annoyed by how the company handled this and that it gives a bad rep to crowdfunding as a whole. I hope another company comes in the shows these people how it does. Although, I don’t really think this will be a viable product until there is some sort of wireless charging that allows you to keep the device on 24/7. The bandaid thing looked like a really annoying and expensive process.

  27. TL

    This product is valuable not only for fitness and medical applications, I think the real deal behind all that is access to people’s private information as a monitoring/ tracking device.
    If your data is tracked and livestreamed straight to their servers while running in the middle of nowhere, imagine its potential application as a surveillance device for not so innocuous purposes as fitness and medicine.

  28. chris kelly

    Has anyone ever heard of the Vital Connect Health Patch?

    It seems to be a similar product but not quite as polished – no dedicated app and non-rechargeable batteries.

    Looks to be a reasonable alternative but maybe battery cost will render it uneconomic.

    I’ve read one article where the author mentions he used it with the sweetbeat app for hrv tracking

  29. Pete

    I thought this all along that it it would be ready for elder care.

    Call it grampstrip.

  30. widjit

    I was a backer as well, and am very disappointed, I’m very skinny so it is very hard to get a good fit with a HR monitor without it sucking the air out of me. What disappoints me the most is at the same time as this was going on another company had a similar product on indiegogo, but added some sweat based metrics as well, for about the same price, sadly it didn’t get funded, and I can no longer find any info on it. Anyone else remember seeing this around that time on indiegogo?

    • widjit

      ok answered my own question after some searching, maybe this company would be up for trying to relist now that the ampstrip is gone. here is the link to the indiegogo campaign link to indiegogo.com seems pretty cool to me.

    • Remco Raaphorst

      Unfortunately this campaign already ended february 🙁

      I too was really looking forward to using the Ampstrip. Now it’s just waiting for a major company to produce a similar device, hopefully without proprietary transmission etc.

  31. Gavin

    So still annoyed at being used a seed fund by Fitlinxx for the ampstrip. I am surprised that there are not alternatives being marketed or crowd funded. Has anyone heard of anything current?

  32. Well… at least they refunded me yesterday… not a total scam like the LIMITS powermeter (which luckly didn’t fund thanks to your first comments this spring)

  33. I think the issues related to the AmpStrip related to the functioning and the lack of resources have made the company to discontinue it. I am happy that they are clear about the refunding thing as a substantial amount of money is blocked up there!

  34. Stacy Hall

    After reading about this product I was so excited. I’ve been looking for a 24/7 heart rate monitor. In December 2015 I had a heart attack from a Spontaneous Coronary Artery Dissection. I have to keep my heart rate within a specific range during rest and light excercise. This seemed like a great product.

  35. Julian Evans

    Hi Ray,

    Did you see this: link to kickstarter.com ?

    Seems to be the same concept as the AmpStrip. Maybe this one will make it to the market.

  36. I heard that the reason they bailed is that their algorithms just couldn’t cut it which seems weird considering how deep they were into their beta program. I did run into another company at CES that appears to be working on an ampstrip-like product. Pretty stoked that someone is picking up the torch since the AmpStrip was one of the projects I was looking forward to. The company I ran into is FitPal (link to fitpal.com). They have a background in measuring heart rate in the medical field, so I have high hopes we’ll see this product come to fruition.

    • David

      Thanks for the heads-up re: FitPal (Brian & Julian). I too was a backer of AmpStrip and was very disappointed when they pulled the plug. Hopefully FitPal or Kenzen will make it to market.

      I the meantime, what is the current best way to continuously monitor heart rate, with an emphasis on during sleep? I don’t wearing a chest belt when exercising, but would prefer sometime less intrusive at night.

    • Brian Van Peski

      To track heart rate during sleep and get a good idea of resting heart rate, a basis peak might be your best bet.

    • David

      Thanks Brian, I’ll give the Basis a look. Being a Windows Phone user, the MS Band 2 is also on my shortlist.

  37. J

    Are there any potential patent implications for future similar products?

  38. Selica

    I was an AmpStrip supporter and have just found out about a product that is awfully similar. It had a Kickstarter campaign that already ended but it can be preordered. It’s called Fitpal. I doubt they’ll deliver by Nov. 2016 but at least its existence gives me hope.

  39. AQ

    It doesn’t appear that the compnay issued refunds to all. Just by looking at the Indiegogo campaign comments.

  40. msdrpepper

    Interesting… because just this month, SparkPeople.com has announced that their Spark Activity Tracker will no longer be supported by…. ta da! you guessed it… Fitlinxx .

    Soooo “This Perfect Day” by Ira Levin – do you think their wrist “communicator” government monitoring evolves out of “medical monitoring/fitness monitoring” wearables??