In a hip fashion boutique in San Francisco’s Hayes Valley neighborhood, a clutch of guests milled around the small store, chatting and laughing as they sipped wine and beer. The occasion: An indie smartphone named Robin, now available for purchase at the boutique.
The neighborly event was a far cry from the spectacle of a product launch by Apple or Samsung. But it’s one part of San Francisco-based Nextbit’s plan to make its little-known smartphone a success.
Mike Chan and Tom Moss, who previously worked together at Google, founded Nextbit because they believe that people shouldn’t run out of storage space on their smartphones. The pair originally set out to create software for Android-based phones that would let users store their personal information in the cloud—that is, on a server in a remote datacenter, rather than on the device itself. Eventually Chan and Moss decided to make the hardware, too. After testing the waters with a crowdfunding campaign on Kickstarter, the Robin—”the first Android phone that makes running out of space history,” the company proclaims—officially hit the market earlier this year.
You have to admire Nextbit’s audacity—its competitors are huge Global 500 companies. Titans like Apple and Samsung have billions of dollars in the bank, burnished brands, and enormous market share. (Just last quarter, Apple sold more than 40 million iPhones.)
But the startup isn’t worried. “We are building a smartphone,” Chan told me at the party on Wednesday, “but our target audience is different.” Translation: Price-sensitive, appreciative of design, and willing to look beyond the big vendors for something distinctive.
Nextbit has broader ambitions to reach mainstream consumers, but it’s in no hurry to do so. Indeed, its $299 Robin smartphone is only available through the company’s website, on Amazon, and now in three San Francisco boutiques.
But the company is an example of how there can be innovation in an industry that seems all but locked up by the largest competitors.
The market has proven receptive to new entrants, Chan told me, citing two Chinese smartphone makers. Xiaomi, of Beijing, debuted its first smartphone five years ago and is now a top-five vendor worldwide; OnePlus, in Shenzhen, is just three years old but sold more than a million units of its first model. Both companies have built fast-growing businesses by selling high-end smartphones at mid-range prices.
That’s what Nextbit wants to do, too, Chan said.
Small companies can be mighty—even in one of the biggest markets around. Says Chan: “We don’t have to sell that many phones to be a successful business.”
Kia Kokalitcheva
This is the Startup Sunday edition of Data Sheet,Fortune’s daily tech newsletter, edited by reporter Kia Kokalitcheva. You may reach me via Twitter, email, or an entirely new platform that your startup developed. Feedback welcome.
Everyone's Talking About
Jet. After a week of rumors, Jet officially announced on Monday that it was selling to Wal-Mart for $3.3 billion, less than two years after it opened its doors to its first customers. Whether Jet's sale is a success or a failure, however, is still debated. (Reuters) (Fortune)
Unicorn Watch
Ashton Kutcher comes to the defense of Airbnb. The actor (and Airbnb investor), along with other prominent names, sent a letter to New York Gov. Andrew Cuomo to oppose a new bill that will impose harsh fines on hosts violating New York City's short-term rental laws. (Fortune)
Lyft rebuffs GM's acquisition advances. GM has reportedly expressed interest in buying the ride-hailing company, but Lyft is instead opting to raise more funding. (The Information) (Fortune)
Zenefits settles compliance issues in two more states. The HR software company said this week it has cleared up its regulatory issues in South Carolina and Delaware. (Fortune)
The Week In Startups
Carvana Raises $160 Million for 'Car Vending Machines' (Fortune)
How Memebox, a Korean Beauty Startup, Uses Data to Keep Up With Trends (Fortune)
Power Grid Startup Varentec Raises Money From Bill Gates (Fortune)
Marketo's Co-Founder Tries His Hand at Another Marketing Startup (Fortune)
Xperiel, Led by Ex-Googlers, Gets Millions From Major League Baseball and the LA Dodgers (Fortune)
CIA-Backed Palantir Buys Data Visualization Startup Silk (Fortune)
It's About to Get a Lot Easier for Apps to Talk to Each Other (Wired)
Blendle Clocks Up 1M Signups for Its Pay-Per-Article Journalism Platform (TechCrunch)
Microsoft Acquires Beam Interactive Game Live Streaming Service (TechCrunch)
Ambitious Ed Tech Company AltSchool Prepares for Phase Two (TechCrunch)
Words of Wisdom
"Historically, the results of bubbles have usually been more empowerment for more people. Historically, bubbles have provided an explosion of funds which blasted away the entrenchments of an old oligarchy not only to the benefit of entrepreneurs but also to the benefit of consumers in general." —Tom Evslin, entrepreneur and author. (Evslin's blog)
