Case Study: Essential Products

When it comes to major tech startups which are now considered failures (ie companies which are now defunct) by most of the general public, the first such startup which most people would recall would be the American phone manufacturer known as Essential Products. For those who are not aware, Essential Products Inc. was a Palo Alto based company primarily focused on manufacturing and developing consumer technology products (especially mobile devices) for the modern digital world.


This company was formed in late 2015 by Andy Rubin, the co-founder of the Android Operating System. It should be noted that Rubin had served Essential Products' chief executive officer since its early inception to its final days in early 2020. In January 2017, it was reported that Essential Products was planning to unofficially reveal a new smartphone, their flagship product (one which was only available in Canada and the United States).


Essential Products was established in Palo Alto with (seed) funding from Playground Global, a California-based venture fund and design studio that provides resources, mentorship and early-stage funding for startups involved in hardware device manufacturing. By August 2017, the company was valued as a unicorn, with it being reported that they received investment from Amazon, Tencent, and Foxconn among others.


Despite having considerable initial momentum and a lot of investor interest, Essential Products had cancelled its next flagship product and were considering selling their company around late May 2018. However, by
December 2018, Essential Products acquired CloudMagic, owner of the mobile email app Newton.


In October 2019, the Essential Products development team teased an ambitious upcoming
replacement for their existing mobile called the "Gem". This device was supposed to have a much more
slender frame when compared to their predecessor (their initial product), additionally, this mobile
device would rely mostly on voice control, and would utilise advanced AI for processing the voice control input. Little did the company's leadership know, this was what eventually led to their ultimate downfall.


Total Disclosed Funding: $330 Million


List of major stakeholders with investments in PepperTap:
- Access Technology Ventures
- Altimeter Capital
- Amazon Alexa Fund
- Foxconn Technology Company
- Playground Global
- Tencent

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