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Another Crowdfunded Startup Takes Customers' Money, Then Shuts Downs (mercurynews.com)
An anonymous reader quotes the Bay Area Newsgroup:
A Bay Area startup that promised to give music lovers state-of-the-art wireless earphones is instead closing its doors, becoming the latest in a string of crowd-funded companies to take customers' money and shut down without shipping a product. San Francisco-based Kanoa ran out of capital and shut down this week, leaving in the lurch scores of customers who paid $150 or more to pre-order high-tech earphones they never received. The company emailed customers on Wednesday to break the bad news, directing them to a letter posted on the Kanoa website...
Kanoa is just the latest local crowdfunded company to disappoint customers. Last summer San Francisco-based startup Skully imploded, to the dismay of 3,000 customers who paid $1,500 each for high-tech motorcycle helmets they never received. In February, Lily Robotics, another San Francisco-based startup, filed for bankruptcy. Unlike Skully and Kanoa, Lily promised to reimburse the more than 60,000 customers who paid for but never received its camera drones.
In a letter online the company claimed they are "in negotiations" with potential investors, "and also large tech companies on an acquisition" -- but unless and until funding materializes, "we do not have enough capital to stay operational..."
"We know you are disappointed, and can only ask that you understand that we genuinely tried."
Kanoa is just the latest local crowdfunded company to disappoint customers. Last summer San Francisco-based startup Skully imploded, to the dismay of 3,000 customers who paid $1,500 each for high-tech motorcycle helmets they never received. In February, Lily Robotics, another San Francisco-based startup, filed for bankruptcy. Unlike Skully and Kanoa, Lily promised to reimburse the more than 60,000 customers who paid for but never received its camera drones.
In a letter online the company claimed they are "in negotiations" with potential investors, "and also large tech companies on an acquisition" -- but unless and until funding materializes, "we do not have enough capital to stay operational..."
"We know you are disappointed, and can only ask that you understand that we genuinely tried."
It's a well-known risk of crowdfunding and backers are warned about this risk a gazillion times.
This shouldn't be shocking to anybody even remotely sane.
If you're outraged by this, you should instead be outraged by the psychiatrics wards' inability to keep you locked up inside.
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People confuse crowdfunding with pre-ordering. In crowdfunding you sponsor someone's attempt to achieve something, because you want it to happen. Perks are just an additional incentive. Sometimes a perk happens to be a product, but it's still a perk for your sponsorship, not something you bought or pre-ordered.
Some actual numbers, old and incomplete:
https://www.crowdfundinsider.c...
That's the best I could find.
"So long and thanks for all the fish."
KANOA send headphones for review, this guy THOROUGHLY reviewed them and SLAUGHTER the product, shortly after they closed their web page
https://videosift.com/video/Re...
No, companies and startups need to start to learn how large companies develop products.
We don't come up with an idea and then make 100,000 of them.
We make 1. Work it until it breaks.
Figure out what went wrong.
Then we make 100. And we break all of them again.
Along the way we figure out our certifications, tooling, suppliers, quality control, end pricing, and all the other issues Kickstarters run into.
I want a crowdsourcing/funding site that stages the release of money to follow the proper way to release a product.
Round 1 buyers will want it enough they'll pay the premium. Take pre-orders for the final conceptualized product from the beginning. Don't release those funds until it's ready for an actual pre-order.
Hell put them in a mutual fund and turn it into a 'savings' account for people that can't seem to save money. A majority of Americans don't have $500 in savings but I would bet more would if you add in failed crowd funding campaigns. If the campaign fails you just have money in a mutual fund or savings account; surprise you have something more than nothing.
Of the 100+ projects I supported on Kickstarter, way more than 50% have delivered. Usually later than promised, sometimes not quite the way it was originally envisioned. But they delivered.
The trick is to choose the projects you support not based on 'oh, that sounds cool' but to check if the project starter seems to know what they are doing, if they considered potential problems and if they have a reasonable time table.
I think the reason that high tech crowdfunded products are so popular isn't due to the inherent foolishness of the people who back them, but because of the failure of established technology companies to actually meet market demand.
Too many products are crippled by their parent company or VC financing MBAs who look at the product and figure out how it can be manipulated into 5 years of new models and revisions, which features can be withheld or turned into vendor exclusive options or upgrades, and so on.
The high tech landscape at all levels from consumer to enterprise is littered with good technology corrupted by relentless marketing and financial scheming to extract the maximum amount of money from the buyer, and quite often with the side effect of not fixing bugs or making basic functionality or features completely reliable.
It seems like so many kickstarter projects are attempts to fix broken products with accessories that ought to be built in features or produce a variant of a product that wasn't crippled at birth by its maker for whatever marketing or long-term pricing games they have.
Okay, please explain.
You want a product. You want a product so bad that you finance the company to make it before it even exists. Your reward for doing this is to receive the product.
Is this not just pre-ordering something that doesn't exist? If it works and is successful, you'll be able to pick one up not long after they make them anyway, whether you invested or not. If it doesn't work, you're going to lose money or receive a substandard product.
What's in it for you to crowd-fund that kind of thing?
Now, I have crowdfunded things. Literally, they were all limited run, support-for-the-creators projects, where the product wouldn't exist afterwards and/or the product wouldn't get made otherwise where the creators had a proven history of success.
For example, Defense Grid 2. It couldn't have happened without the kickstarter. The people behind it had proven themselves already. There was in fact already a substantial amount of the game complete. They weren't reliant on just the kickstarter. And actually I profited quite heavily as AMD gave them some graphics cards to give away to backers, I got the game, and all kinds of other stuff. Even then, that kickstarter really worried me, as it's not how I normally do things. I've only ever backed four or five small projects with a tiny percentage of my disposable income. Four succeeded, delivered the product, after having proven they could deliver a product before they even started. One stopped the kickstarter and never took the money because they found investment, and the game came out anyway (and backers got a free copy).
But... at no point did I put money, into an unknown company, with no track history, promising to make something that didn't exist, that you'd just be able to buy normally later even if you hadn't funded it.
I'm afraid I have to apply my normal rule here. If it doesn't exist, in a shop, to buy, today, then it's all hype and hyperbole. For anything from fancy battery technologies and electric cars, to Half-Life 3, to the latest iPhone, or even a movie.
All the pre-hyping stuff just flies over my head, because it's all irrelevant if you can't actually buy that product yet.
You can "invest", but what you're really doing is "donating" - to be honest I'm quite happy donating to a project where I'm enjoying the fruits of their previous labours so much that I think they deserve more. If I get something else out of that too, cool. If not, I've paid them back for something they gave me (yes... even if I have paid more than I needed to, I'm fine with that if - say - a computer game cost me almost nothing but ended up giving me hundreds of hours of entertainment.
I've been known to buy second copies for friends, even if those friends likely won't play that game, etc. It's the only reason I'll buy DLC too... to support the original game).
If you can't buy it today, but you could buy it tomorrow no matter what, then why would you lay down money today instead of just waiting?