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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.
Slashdot social media options: AIM, ICQ, Yahoo, Jabber and Mobile Text. Why no MySpace?
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.
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.