Building hardware for the wearables market is only the first challenge companies need to master. For a truly differentiated experience, they must build out a service.

You’d be hard pressed to find a tech company who hasn’t jumped into the wearable tech space. Some make a big splash with game changers like Google Glass, or they come more quietly like Microsoft and Intel. But they are coming – even car manufacturer Nissan introduced a smartwatch. And why shouldn’t they? The potential is huge. ABI Research estimates the global market for wearables in health and fitness alone could reach 170 million devices by 2017.

But while the hardware players have been first on the scene, they are struggling. Building stuff at a price point people will buy is thought to be the easy part, and goal accomplished: fitness trackers like the Nike Fuelband and the FitBit (see disclosure) are flying off the shelves. But building stuff that works well has been tough – to note, I’m on my 4th Fuelband (this one, finally, seems to be lasting). And building stuff people will incorporate into their daily lives and use to improve their lives – that’s a whole other story.

Why the disconnect ?

The majority of products to this point haven’t successfully married the hardware and the software in such a way that there is anything that actually makes life better, easier, smarter for the consumer. We have a lot of products that can add value, but there is a heavy onus on the user to continually plug in, check in, and get the most out of the experience. We’re feeding the big data machine, but we’re not solving any problems. That’s where the opportunity lies.

To move from “my thing” to mainstream, wearable tech device manufacturers need to get out of the hardware first mentality. Devices must have a user experience that hardly involves the user. Collected data has to feed a system that yields analysis, rewarding the user with information – dare I say, advice – that means they’ve done more than just counted their steps. The knowledge of the number of steps they’ve taken informs a decision on living an active life.

How do we get there ?

Brands need to invest in the digital product just as much as the physical product from day one. Build something people will buy, and people will wear, but even more so something people will continue touse. Incorporating user motivation into the design of the product — which involves a heavy emphasis on the digital experience with smartphones — will create wearable technology that keeps customers coming back. You want to know how to retain and grow your user base? Build for the user. Digital partners and hardware suppliers should be at the table with product developers from day one.

There are some companies finding their way. FitBit actually leapt too far too fast when it ditched the user interface on its Flex device. It has since taken into account user feedback and evolved the Flex to include a watch and other visual controls with its newly announced Force– showing we can’t go too far too fast, and we must always take into account what the user wants. FitBit’s evolution of its fitness band showed that people want to interact with their devices right then and there, and not wait to sync.

Other companies, like MapMyFitness, know their users have multiple devices, and thus multiple data points to collect. So the company wisely opened up its APIs to bring together user data from multiple sources into its app, for the convenience of its user.

Beware the "mobile"

Remember how for years mobile meant the cell phone? And now mobile means so much more than that? Yep, same thing here. While the device is important, it’s just a jumping-off point. the form factor is what brings consumers in, but it’s just temporary. In wearables, it’s the knowledge – the ability to change for the better – that will make all the difference and keep users coming back for more.

As Stanford professor BJ Fogg believes, technology serves as a major platform for persuasion, but without an innate understanding of how human behavior works – including the motivation necessary for change – and utilizing that understanding in your product, it just won’t happen.

Today, we’re essentially wearing fancy pedometers. In the future, we’ll see an aggregation of body data from customized, perhaps even implanted, sensors which gather information much meatier than number of steps taken or calories burned. We’ll see devices, apps and data working together, and across platforms, to create entire systems.

We’ll see systems – hardware and software – built for groups, like co-workers, family members, friends, classmates. We might even see systems devised across species – examining questions like do people with dogs live happier lives, and what role does your pet play in your health picture.

It’s all coming. But to get there, we must beware of a fixation on the hardware and start ensuring software, and smart design with the user in mind, is at the table from day one.