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This Experimental Retail Startup Wants to Be the Apple Store for Futuristic Gizmos

Ex-Nesters launch a physical home for newfangled things.

Vjeran Pavic for Re/code

This may be the breakout holiday for newfangled toys. Among the wrapped presents will almost certainly be someone’s first drone, smart gadget or virtual reality plaything.

But unless they’re fashionable novelty buys — say, hoverboards or that cute Star Wars droid — many futuristic tech products will find reaching shoppers difficult. They must push expensive promotions online or pay heavy end-cap fees to retailers. If they’re the lucky ones to make it into an Apple Store, they are boxed in the back with the accessories.

Enter b8ta. The retail startup, which launches with a tiny store in Palo Alto, Calif., on Friday, is built to showcase just these sorts of devices. Founded by four early members of Nest, the connected device company acquired by Google, b8ta wants to be a space where consumer electronic upstarts can receive unparalleled exposure — and pay regularly for the privilege. It’s a unique approach to retail, one that’s pushing uphill against e-commerce trends and big-box incumbents itching to cash in on emerging tech.

For b8ta, however, both e-commerce outlets and brick-and-mortar shops get this wrong. “Nobody is doing retail like this,” said co-founder Vibhu Norby.

The impetus came from frustrations at Nest, which mirror many problems hardware startups have. If you sell your wares elsewhere, you relinquish control. It’s particularly taxing for new devices, like smart-home gadgets, that sell better with a physical presence — where consumers can see and touch the product — but must rely on external sales associates.

 A smart kitchen scale, from Drop, on display at b8ta
A smart kitchen scale, from Drop, on display at b8ta
Vjeran Pavic for Re/code

Phillip Raub, another b8ta co-founder and former head of channel marketing for Nest, explained the manufacturer’s dilemma. “Are you going to be comfortable playing in someone’s sandbox? You still are in somebody else’s home,” he said. “We wanted to make sure that the product was truly the hero.”

At the onset, b8ta’s sandbox has 60 products, ranging from niche smart-home devices sold at Best Buy to some out-there gadgets, like the Thync, a “mood-altering” headset. Around a third of those on display are sold only there and online. They’re out of the box, so shoppers can toy around with them. Companies behind the devices get software from b8ta that instantaneously tracks sales performance, down to the foot traffic inside the store, measured by smart cameras.

B8ta has some venture capital backing, but they won’t say from whom. It’s a risky endeavor, investing in physical retail solely around unproven products. Despite techy buzz, drones, smart-home gadgets and virtual reality things have not hit enough sales to be a full-on category, let alone a holiday fad.

But b8ta claims they have considerable interest from device makers eager to get their products out there. That gives the new retailer a steady revenue stream: Manufacturers pay b8ta a monthly subscription fee, rather than sales commission, to be in the store.

“This is not designed to be a loss leader,” said Norby. “It’s a real business.”

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