ZEO, Inc.: Is the Market Ready for Wearables?

Abstract

Zeo, Inc. was one of the pioneer companies in the quantified self-industry offering a digital solution for individuals suffering from sleep problems. The company was founded by three undergraduate students who successfully raised capital, make strategic partnerships with major brands like the National Football League (NFL), and introduced their products in stores like Best Buy.The collegiate founders recognized their lack of knowledge and skills from the beginning. To address this gap, they developed an advisory board to guide them on scientific matters. Later, they hired a seasoned executive with industry experience to run and grow the company. Zeo, Inc. also was getting favorable attention among leading sleep experts with publications in scientific journals about the promise of this innovative technology. Zeo, Inc. was positioned to potentially disrupt the technological and business model of the sleep industry at the time.Suddenly, Zeo, Inc. announced it was shutting down the company. Technology pundits, the media and customers were surprised, “Why would a fast-rising company shut down?” Given the lack of board and senior leadership transparency, many speculated as to why Zeo, Inc. closed. The reasons ranged from a lack of a focus on the business model to not keeping up with new entrants into the digital health space such as FitBit. This case highlights for students the growth stages of startups with an emphasis of how a widely acclaimed startup can fail and the lessons to be learned from failure.