Google Glass

Strategic Entrepreneurship

Spring 2015

Google Glass

1. Evaluate this potential (corporate) venture: How does Google intend to create and capture value with Google Glass? How big of an opportunity is this? (50%)

After it was first publicly unveiled in April 2012, Google explored several opportunities to capture or create value. The motivation was whether people should be walking around looking down at a smartphone. There were questions about its social acceptance.

Opportunities came in different forms and stages. In November 2013, Google opened access to a broader range of developers with the launch of its Glass Development Kit. The range of apps speculated were giving firefighter’s information about navigating through buildings to allowing field repair technicians to consult manuals.

When they hired outside consultants to look at their industry, Deloitte Consulting predicted “smart glasses” would sell four million units in 2014 at an average price of $500. With demand surpassing 100 million units by 2020. In evaluating the $112 billion global eyewear industry, there are plenty of opportunities for Google Glass to capture value especially with a growth projection of 4%, and even higher in emerging markets. The $98 billion glasses industry is split between prescription lenses at 53%, prescription eyeglass frames at 29%, and nonprescription sunglasses at 18%.

Growth drivers for the eyewear industry included increasing per capita income and urbanization, an aging population, rising rates of myopia combined with a declining age of diagnosis, and an increasing use of eyewear as a fashion accessory since glasses were made in a wide variety styles, colors, and materials.

In the US, 64% of adults wore prescription eyeglasses of which 60% had vision insurance which covered the cost of the annual examination along with partial or full reimbursement of the cost of new glasses.

Google can capitalize on this opportunity especially since 98% of total sales in 2013 came from retail stores versus online channels. Consumers picked a store based on price, vision insurance coverage, and convenience and paid on average $255 for a complete pair of glasses, frame and prescription lenses.

2. Today’s class will focus on how entrepreneurial opportunities and challenges differs across industries. Taking a big picture view, what are some key (for potential entrepreneurs) dimensions along which we could compare industries? Focusing on these dimensions, what is different between the industry Zipcar is entering/building and between the industry Google Glass is in? (50%)

Very big picture: attractiveness of the industry. The attractiveness is analyzed by looking at the relative strength of forces pushing and pulling on industries and the potential companies within.

Rivalry - Low - Other than a few tiny startups, the only real real-world-HUD manufacturing company is much smaller and only makes a very niche snow goggle display. This, so far, would have zero use in the rest of life and would have a very difficult time garnering App support (as is seen by the slow expansion of tech powerhouse Microsoft’s own App market). Zipcar had one direct competitor in rental car companies. This is the exact opposite situation, as rental car companies are huge, numerous, and very well known for exactly what they do. Glass does not have to directly compete with anyone.