The Rise, Fall, and Resurrection of Pleo

robotsrule writes "This article contains notes from a 1-hour phone call with Ugobe founder Derek Dotson, now CEO of Innvo Labs Corporation, the company that acquired the rights to Pleo at the recent bankruptcy auction. Dotson reveals the hidden story behind Pleo's rise, fall, and resurrection including intriguing facts about the money trail and what he feels caused Ugobe to fail, including how he had to save Pleo's future on more than one occasion. He also lays out in plain detail Innvo Labs's strategy to help owners of older Pleos and those whose units were swallowed up by Ugobe's bankruptcy." We've been following the Pleo saga for years.

Comments

What is a 'Pleo'?

[MrMista_B]

Yeah yeah, slashdot editors suck, etc. - but expecting your readers to do your work for you is pushing it, and I'm a long-term reader.

Pleo: what is it? why should I care?

Else = Idle

Re:What is a 'Pleo'?

[Trepidity]

Well there's always Wikipedia. =]

The short of it is: it was an animatronic dinosaur briefly sold from 2007 to 2008, which disappeared fairly abruptly at the end of 2008, apparently due to some corporate shenanigans/infighting (which this article, and the previous ones kdawson links to, document some of).

It's interesting from a tech perspective because it was the first widely available, consumer-priced animatronic pet (that I know of, anyway) that seemed to have some semblance of a personality other than "weird robot thing", so was basically the first at least sort-of-success in that area. It was also hackable.

the standard business plan

[murdocj]

When I read

Ugobe was a heavyweight company poised for explosive growth and burdened with all the associated expenses and overhead that implies, so they needed a huge explosion in sales. Derek still believes Ugobe would have survived and done well if they could have raised their last round of funds.

I was reminded of a .com that I worked for during the boom years that had a nice product that would support a small company. But of course, you couldn't get rich creating a small company, so instead they projected a sales curve that started out low and rose exponentially, and thus they could remain "on track" for that "explosion in sales". Ugobe sounds like deja vu all over again...

Re:Why should I care about a stupid toy??

[fuzzyfuzzyfungus]

I'd suspect that, in general, there are two basic reasons:

One is that you think that the other guy failed because he was doing it wrong, not because the idea is fundamentally doomed. You think that the product could have a life.

The second, and potentially more significant, is that the product was in fact doomed; but, because of the bankruptcy process, isn't doomed anymore. In a lot of cases, startup/R&D/tooling/whatever costs too much for the product to ever be economically sensible(nobody will buy at the price needed to pay per-unit costs and recoup your initial costs). However, if you go bankrupt, your creditors eat your startup costs and your assets get sold, typically for a fraction of what you paid to build them. If you don't have to recoup the startup costs, because you bought the infrastructure at a fire sale, you can actually make money.

The story of Iridium is probably the most dramatic example. The Iridium satellite constellation cost a fucking fortune to put into orbit. Even if execution had gone perfectly, prices would have been nutty. When the original outfit folded, the constellation was sold for peanuts, and was suddenly far more viable. Pleo isn't nearly that dramatic, I suspect; but it could easily be the case that, while Pleo would never be able to sell enough units at a high enough price to repay its development and tooling costs, it would be viable to keep pumping out units of the existing model.