Did Leap Motion Just Blow a Billion-Dollar Opportunity?
Well, it looks like I’ll have to put my dream of being Tom Cruise in Minority Report on hold.
That’s because, on Thursday evening, I received bad news in an email from Leap Motion CEO, Michael Buckwald. The note said that the shipment date for pre-orders of the company’s cutting-edge motion-sensing device will be pushed back from May 13 to July 22.
Lest you think I’m someone special, I’m not.
Everyone who pre-ordered the device (“hundreds of thousands,” according to the company) received the same email. So they’re sharing my disappointment, too.
But hold your sympathy. As investors, here’s why the news matters to you…
In January, I pegged motion sensors as one of the top investable technology trends for 2013.
And I singled out Leap Motion as the player to watch in the space.
I promised to keep you posted on any major developments leading up to the launch of the device and the company’s eventual IPO. This certainly qualifies as major.
I was originally attracted to Leap Motion because it possessed the most compelling technology. By detecting finger movements as small as the head of a pin, it’s capable of turning the average desktop or laptop into a gesture-controlled computer. For only $80.
However, just because a company has the most compelling technology doesn’t guarantee that it’ll become the most compelling investment.
As I’ve noted before, technologies take time (and money) to develop. And they’re prone to delays, too.
In this respect, Leap Motion had a significant leg up on the competition.
Whereas many competitors have cropped up in the last year, Leap Motion started developing its technology back in 2010 when it was known as OcuSpec.
And while other competitors are still raising the essential capital needed to bring a product to market, Leap Motion has already raised over $44 million. That means it has enough financial breathing room to focus on commercializing its product, instead of fretting about keeping the lights on.
But this week’s news could change everything.
The delay starts to eat into Leap Motion’s first-mover and first-to-market advantages.
More plainly, it busts the door wide open for competitors.
But could a 69-day delay really undermine the company’s prospects that much? Especially since it’s still on track to incorporate the technology into upcoming Hewlett-Packard (HPQ) and ASUS products as planned?
No. Not if it’s just 69 days. But I have no confidence that the delay will be that short…
As Leap Motion Dithers, its Competitive Advantage Could Vanish
While Buckwald claims, “There is nothing catastrophically wrong,” and this is “the first and only delay there will be,” even Pinocchio would admit he’s stretching the truth.
Back in March, Singularity Hub reported that Leap Motion had originally hoped for a February or March launch. Yet Buckwald decided to push it back to May because the company wanted to make sure the product was as impressive as possible.
Or, as he put it, “The goal is for all those things to coalesce in May such that the user experience is amazing.”
So this really isn’t the first delay.
What’s more troubling, though, is that Buckwald’s reason for the first delay sounds eerily similar to the one he offered up in his email on Thursday.
His email reads: “Ultimately, the only way we felt 100% confident we could deliver a truly magical product that would do justice to this new form of interaction, was to push the date, so we’d have more time for a larger, more diverse beta test.”
Okay… it’s true that technology companies only get one shot at making a knockout first impression. So taking the extra time to perfect the product makes sense.
But what’s to stop Buckwald from saying the same thing come late June or early July? Absolutely nothing.
Fear not, though. If Leap Motion’s launch keeps getting aborted – delaying its IPO in the process – there’s another promising motion sensor startup, based in Canada, that’s destined for an IPO, too.
Given time, it could easily end up being the most investable gesture-control company.
So stay tuned for my next article, when I’ll reveal the company’s identity, compare its technology to Leap Motion’s, and officially add it to our list of the Top 10 Startups to Watch in 2013.
Ahead of the tape,