Oura's glossy smart ring is everywhere these days: in high-profile TV ad campaigns and on the fingers of plenty of people.

Yet when Oura tried to go public late last month, it couldn't find enough buyers at its proposed price and shelved the listing. The company blamed jittery markets, despite major stock indexes being near record highs, and said it could afford to pick its moment.

Surging Treasury yields were certainly part of the problem. The bigger challenge, though, was a mismatch between how Oura sees itself and how prospective investors saw it.

It pitched itself as a technology and data platform worth as much as $15 billion. Many investors saw a fancy wellness product instead.

That's more than semantics. Technology platforms can scale exponentially and cheaply, while gadget makers have to keep convincing people to buy the next one. Investors are right to be skeptical of one-hit wonders, at least until they prove they can become something more.

That's because they have learned the hard way. Peloton, Fitbit, Casper Sleep and GoPro all built buzzy brands quickly, then hit the same wall: They had to keep selling the product to keep revenue growing.

"The consumer wallet," says Stephanie Davis, a health-tech analyst and adviser, "is a very quick adopter of solutions and a very quick abandoner of solutions."

Jay Ritter, a University of Florida professor who studies IPOs, tracked 13 single-product consumer companies that went public between 2005 and 2024. Five years after listing, their shares had lost about 32% on average from the IPO price, while the market rose 49%. More than 1,200 other IPOs in his sample gained 68% on average over their first five years.

The exception is revealing. Roku, the only single-product maker on the list to beat the market, turned its streaming device into an advertising platform.

In June, Fox Corp. agreed to acquire it in a $25 billion deal. The lesson is that a consumer product usually needs to become something more, whether a platform, a recurring subscription or a product that someone other than the consumer pays for.

Oura isn't primarily any of those yet, but it has potential.

Its prospectus calls the company a "health intelligence platform" built on more than 40 billion hours of biometric data tracked over time. Layer software and AI on top, and there's a credible case that Oura could turn that data into services that drugmakers, employers or insurers will pay for.

But calling a product a platform doesn't make it one economically, at least not yet.

About 80% of Oura's revenue still comes from selling rings, and just 20% from memberships. Its overall gross margin is about 55%, well below what digital-health software companies typically earn.

Yet Oura was asking for about 10 times trailing revenue. Fitbit was sold to Google for less than two times revenue.

"Hardware-centric businesses naturally demand a lower sales multiple," says Robin Boldt, chief investment officer at Rock2 Capital, a healthcare-focused hedge fund. "The ability to sustain and even accelerate subscription growth would make public investors more comfortable."

Oura does have a recurring business: More than five million members pay about $6 a month, and the company says 85% stick around after a year. But successful platforms are built on dependence.

Developers make a living on Apple's App Store; drivers and restaurants rely on Uber. Leave Oura, and you lose little more than your sleep history. So Oura has to keep spending heavily on marketing -- about a fifth of revenue -- to sell new rings every year.

So how does a single-product company thrive over the long haul? One route is to stop being a single product.

Garmin was best known for car GPS units, a business that smartphones gutted. It now makes most of its money from fitness watches, outdoor gear and aviation and marine electronics.

Another is to turn the product into a platform, as Roku did. It sells its streaming players at thin margins and makes money from advertising and a cut of subscriptions.

The most promising route for Oura, and for other wellness startups such as Whoop, is to get someone else to pay. Patients get ResMed's CPAP machines and Dexcom's glucose monitors largely because insurers cover them. Hinge Health, which offers app-based physical therapy for back and joint pain, is paid mostly by employers and health plans.

Oura already has several healthcare partnerships. For instance, its temperature data feeds Natural Cycles, a fertility app, and employers spend heavily on fertility care. But it still has to show payers that wearing the ring actually improves people's health, not just that it measures it accurately.

The easiest route, at least for shareholders, might be to get bought. A tech company could theoretically buy Oura, but a healthcare giant might be the more natural owner. Eli Lilly invested in Oura pre-IPO and had indicated interest in buying more. Lilly could decide there is real value in knowing whether patients on Zepbound and Mounjaro are sleeping better, moving more and improving other measures of health.

Oura doesn't need to become the next Apple or even the next Garmin. It needs to prove that the data it collects is valuable to someone other than the consumer -- and that it does more than just sell pricey rings.