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3D Headphone Startup 'Ossic' Closes Abruptly, Leaving Crowdfunders Hanging (npr.org)
An anonymous reader quotes a report from NPR: Ossic raised more than $3.2 million in crowdfunding for its Ossic X, which it touted as the "first 3D audio headphones calibrated to you." But after delivering devices to only about 80 investors who'd paid at least $999 to for the "Developer/Innovator" rewards level on Kickstarter, Ossic announced Saturday it had run out of money -- leaving the more than 10,000 other backers with nothing but lighter wallets.
Ossic, which The San Diego Union-Tribune notes was founded by former Logitech engineers Jason Riggs and Joy Lyons, had excited gamers, audiophiles and other sound consumers by creating headphones that used advanced 3D audio algorithms, head-tracking technology and individual anatomy calibration to "deliver incredibly accurate 3D sound to your ears," according to its funding campaign on Kickstarter. In less than two months in 2016, it was able to raise $2.7 million from more than 10,000 backers on Kickstarter. It raised another $515,970 on Indiegogo. "This was obviously not our desired outcome," the company said in a statement. "To fail at the five-yard line is a tragedy. We are extremely sorry that we cannot deliver your product and want you to know that the team has done everything possible including investing our own savings and working without salary to exhaust all possibilities."
Ossic, which The San Diego Union-Tribune notes was founded by former Logitech engineers Jason Riggs and Joy Lyons, had excited gamers, audiophiles and other sound consumers by creating headphones that used advanced 3D audio algorithms, head-tracking technology and individual anatomy calibration to "deliver incredibly accurate 3D sound to your ears," according to its funding campaign on Kickstarter. In less than two months in 2016, it was able to raise $2.7 million from more than 10,000 backers on Kickstarter. It raised another $515,970 on Indiegogo. "This was obviously not our desired outcome," the company said in a statement. "To fail at the five-yard line is a tragedy. We are extremely sorry that we cannot deliver your product and want you to know that the team has done everything possible including investing our own savings and working without salary to exhaust all possibilities."
I presume they'll be releasing into the public domain all their research notes, designs, prototypes, etc?
They can't license this tech to some bigger company? If the product had that much attention being producd why wouldn't some larger audio company want in on it? Unless of course it didn't deliver what the company promised and that is the real reason it's gone.
Sent from my TARDIS
They can have an ICO to raise more money.
Sucker born every minute!
Or may it be Ocheck. I like to whatch the bitcoin.
I thought we are in the 3D printed post-scarcity anti-Luddite game-changed future? We have 3D printed houses, 3D printed cars, 3D printed organs. Surely we have 3D printed 3D headphones?
Yea! Lets laugh at people who lost money! It doesn't do anything to make our lives better. We are short of a new product that a lot of people may had wanted, some people are out money, who probably could had invested it into an other product that could had come to be.
The issue I have with Crowdfunding is that it is a High Risk Low Reward investment, But it is relatively cheap to get into. So often the money people put into crowd funding is the old equivalent of smoking money. Money people can afford to loose.
However the idea of the product and the credentials of the people, made it seem plausible. However 90% of all businesses fail within the first year. We should know this. That is why there is Bankruptcy protection laws. Because it is to allow people to fail, without having to lose everything.
However, I would much rather see success in such ventures. As I would have a new gizmo that I may want to have, and if the product goes, the company will expand and hire more people to work for it. An overall net benefit.
But screw all this Nerd Economics stuff. Lets laugh at someone misfortune, because they didn't make the best business decision.
If something is so important that you feel the need to post it on the internet... It probably isn't that important.
My dad had a quadraphonic stereo back in the 1970's. Didn't really catch on back then.
Yea! Lets laugh at people who lost money! It doesn't do anything to make our lives better. .
Okay.
HAHAHAHAHAHAHA
Sig Follows: "Suppose you were an idiot. And suppose you were a member of Congress. But I repeat myself." -- Mark Twain
Yea! Lets laugh at people who lost money!
Looks like we found one of the suckers who backed this campaign. Hahahahahahahaha!
So much butthurt. Do I need to call the waaaahmbulance for you?
Crowdfunding is like an ICO. It's a way to avoid the critical eye of sane financial investors, and instead attempts to get funding from the least qualified people.
Imagine if Sennheiser started selling claims to future headphones they haven't yet developed. Consumers would rightly laugh at them. A company is expected to figure the financials to deliver a product. If they can't do that without crowdfunding, it's a strong sign the idea is shit, and they can't get traditional funding.
People are dumb and deserve to be laughed at.
Deal with it. You invest a certain amount of money, there may be a pay-off in the form of a product that would otherwise not have existed, but there may also not be a pay-off. Stop complaining.
Most ACs are not even worth the keystrokes to insult them. Be generically insulted by this and ignored otherwise.
Two idiots that do not get it in a row. Special, even for /.
Most ACs are not even worth the keystrokes to insult them. Be generically insulted by this and ignored otherwise.
Exactly. If you can’t score VC money then your idea and tech is likely beyond crap.
Finding out that a crowdfund collected a lot of money and then disappeared without fulfilling their obligations is like a news alert that Trump tweeted something controversial today. You know it's coming, just a matter of when.
There's been a thousand of these on Kickstarter and GoFundMe. American startups are crazy likely to pull these, and then it's always attempted to be excused without accounting in any way how the funds have been spent.
Weirdly enough, I know these founders. They were great people, hard workers, and smart. I got to mess with the prototype a bit and it was pretty incredible; as acoustic engineers they were amazing people.
But I never shook the feeling that it wasn't going to work. Where did it go wrong?
1) Ossic got the tech working, but that's not enough to build a successful business. It needs the right product-market fit. The problem I had with their business was it was predicated on the hypothesis that VR would take off creating a market for them to fill. It has not, and their business floundered. Even if it did take off, a game developer would have to build their audio portion of the game around what their system offered for it to provide the full experience, so it was also predicated on developers designing for their headset. THEN people would buy it. That's a tough sell. When VR floundered, they tried to re-position the tech, but it didn't have a good application outside of VR gaming.
2) Design costs - product engineering always costs more than you think. Always, and if you're not experienced developing hardware it's often 5X what you expect it to be. THis is the hard part with crowd funding: people budget assuming the gross margin on the hardware at scale, but it's the ramp to gross margin (engineering, prototypes, re-engineering, test lots, first batches, then the working capital cost to develop inventory to deliver at scale) that hardware projects die. Ossic's folk are actually quite experienced at product design, but it's in the operational and budgetary side that can be difficult.
I like these guys, they did the best job they could and did make an interesting tech. It's sad to see folks with such passion and heart go down.
Your sig says "ACs are not even worth the keystrokes to insult them.". Interesting considering you responded to an AC.
At least the guys didn't just leave an almost blank webpage with the word "penis" on it or something.
And that his post isn't even worthy to insult.
Audeze just closed an Indiegogo campaign for their 3D Headphone attempt. This could be an option. They're an established company with some great sounding headphones so I have no doubt these will actually ship to customers. How good they are remains to be seen but they have fooled people in demos with the sound positioning. People searched for the phantom speaker in the empty space.
https://www.audeze.com/products/mobius-series/mobius-headphone
True, but to be fair, if there's one group that's ripe for being parted from their cash to little benefit, it's audiophiles. Arguably this deal is only slightly worse than many of the pointlessly overpriced snake oil like oxygen-free cables that they happily throw money at.
I remember 3D audio being used on in music and theater sound effects back in the 90's. This is not new tech at all, except for the addition of making the audio source track with the image. I can see how this could be a real problem, especially when a SFX of any duration is triggered then has to follow an image's location in the game.
Republican leadership = Idiocracy
I think last I read many of these crowdfunded startups fail its typical a product with limited appeal that wouldn't be eligible for traditional funding paths. Its a risk for people investing and shouldn't expect a guaranteed return. Your taking a chance on something you think is a good ideal. Maybe it has wide appeal and maybe you'll find out it doesn't.
Spectral cues How 3D sound works, (links in the description)
Never loan money without a contract.
People are dumb and deserve to be laughed at.
reanjr once wrote, "People are dumb and deserve to be laughed at." I agree with the second part.
It's a micro-investment but since they are not allowed to reward you with ownership due to government rules (like a regular investor would be), they reward you with a product
Then it's not an investment at all. It's simply a sale. No ownership, no investment.
Another Clinton affiliated company that ripped off hard working americans. Most of us want to end the partisan which hunt aganst the president and lock her up already.
I didn't back this, but I have to say I couldn't be too mad about this folding, as it was a reach to begin with - you don't back moon shots expecting every one to fly. You just back the ones you want to see try and enjoy whatever success you find.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
This. It's high risk very low reward.
One of the child comments mentions "if you can't get VC money then your idea is likely beyond crap" which is silly. Most VCs aren't interested in one-off hardware ideas. They don't have the explosive growth that's attractive to VCs. Hardware is hard, and I think someone needs to push for crowdfunding to involve more than maybe getting the product at a slightly-below retail price, or nothing. Laws need to be changed, but give these people stock in the resulting company. They're literally funding it...
Also, VCs and other investors are one step removed in the wants prediction game. They try to predict what other people will want, where crowdfunding backers only need to figure out what they themselves want. Keynesian beauty contests can take you strange places, so this advantage is not small.
The other thing you need to figure out though, is the entrepreneur's ability and willingness to deliver. The crowd does not have an advantage here. Professional investors should ideally be better at it, but they do their share of investing in frauds and failures too. We pay the price for their failures too, in the form of higher prices on the stuff that succeeds.
I see the flaw! They didn't include "AI" or "Crypto-Blockchain" in their marketing to get even more money from more idiots. Then they could convert some of the BC investments (cause you'd want that!) into real money and disappear.
The problem is those that pledged money by crowdfunding are the ones holding their dicks, not the company. The assets, the technologies, etc., this small startup created in the short time they were around *will* be sold off. Creditors will get their cut of *that* revenue, but the peons on Kickstarter and Indiegogo are left with less than nothing.
Without debts? Without responsibility? By working on what they wanted for as long as they were able to do so? By having probably learned a lot thanks to having enjoyed the most appealing version of the best possible learning proceeding (= momentarily tough conditions without relevant long-term consequences, a bit of fear and stress but nothing too serious)? I have no words!
Custom Solvers 2.0 = Alvaro Carballo Garcia = varocarbas.
I mean, the same thing is true for VCs who invest in new/start up businesses. They are also the ones holding their dicks as they have no return on their investment.
Again...think of crowd funding like doing a VC investment, in terms of risk...It has a high-likelihood of failure.
However, unlike doing a VC investment...the rewards are often pretty low...you simply get the product you paid for. Not the large pay outs or ownership interest of a company that could be worth a lot of money.
With AMD's Ryzen, 8 (and next year 12) cores are 'cheap' high-end VR and gaming CPU solutions, and offer all the aural DSP processing power needed for anything. Indeed, AMD replaced its licensed 'Trueaudio' DSP hardware solution with Trueaudio 2, a CPU software solution.
VR already knows where the head is 'facing' so a software solution can take account of ear position in the virtual world. Hardware headphone solutions for 3D sound are all lying conning gimmicks. The 'problem' is getting software standards so well known positional algorithms can be common place in games, VR etc.
Today you can download a little free code patch to make mega popular open world games Skyrim and Fallout 4 true 3D audio on any headphones- and the method works really well. Better DSP algorithms allow more perfect up-n-down, and front/back positional identification (the Skyrim solution is really just 180 and distance). No solution needs special headphone hardware.
The problem is that classic HiFi fanboys are suckers for every con going. Their hobby is a religion, and they really need to believe in the insane rantings of their high priests. They have money to burn, and the belief that spending stupid amounts of it will buy their way into HiFi heaven.
PS it is like 3D TV. Had TV adopted the side-by-side broadcast standard, 3D channels would have been backward compatible with digital 2D TV sets (which would have simply zoomed into one side or the other of the transmission). Then sitcoms and soaps would have been shot in 3D, and the format might have taken off.
New sound standards need that backward compatibility- the days of new hardware for new sound formats are long gone. 3D sound will explode in next gen VR games on the coming new consoles from Sony and Microsoft next year- and the 3D sound will be solely a result of code running on the AMD Ryzen cores each of these new consoles will use.
Not really. Most VCs are looking for unicorns - companies that can reach a valuation beyond $1 billion. If you cannot reasonably build a market case to achieve that (and being a niche 3D headphone would not come anywhere close to that, given the ENTIRE headphone market is only worth $17 bilion), then 99% of all VCs will ignore you. No matter how good your idea or how well-developed the technology.
Browsing at +1 - no ACs, I ignore their posts. So refreshing!
How does this happen?
Let's assume for a moment that this was NOT just a way to hype a vaporware product, get a lot of VC funding after crowdfunding seed money, looting the treasury and disappearing.
Let's also assume that a "former Logitech engineer" knows how much it will cost to manufacture the product if it had been a Logitech product. Of course it'll cost more because the new company won't have Logitech's scale/logistics/infrstructure. But let's assume for the sake of argument he has a ballpark idea.He also must have known how much it would cost to develop the software (or he already has the software) and any other development time/costs. Noone begrudges him (the hardware dev) and a couple of software devs a living wage while they do this.
So, he knows the product will cost $30 to make (an arbitrary number for the sake of argument), so the product needs to sell for at least $90, maybe $100 to account for overhead and give some profit. Of course, he's already priced out how much it'll cost to make it, package it, and ship it before he even starts his crowdcsourcing. So, when he sets his goal of 1000 (arbitrary) units sold through the crowdsource, he knows pretty well what the costs will be. Right? A normal, sensible person would have done that, right?
How does a company then lose $4 million a year when they know exactly what it'll cost to develop the product, make it, package it, and ship it to the customers? Is it because no work was done ahead of time and all that was being crowdsourced was an idea? Was it that the creator dumped development on for-hire teams in India or China? Was it that someone was vacationing somewhere on an island, telling themselves that after they clear their head they'll jump in full-time and get the priject done? Was it money thrown down the drain wining and dining VC investors? Or was it just another case of taking people's money without giving them what they paid for?
Wait, you're telling me that people start companies without having any idea of what they're doing or how much it'll cost to do what they clam they'll be able to do quickly, easily, and better than everyone else in their industry? That "distrupting the marketplace" is just bullshit marketing-speak?
Crowdfunding is like an ICO. It's a way to avoid the critical eye of sane financial investors, and instead attempts to get funding from the least qualified people.
No it isn't. That's perhaps true for some but for others it's so far away it would hard to be further away and still be about money. For some, it's basically a form of patronage. For others it's for a product that would never get invstment because there isn't a big enough market to make it worth investing. For others it's jut wild eyed dreamers.
People are dumb and deserve to be laughed at.
Like you've never made a mistake or misjudged a person before. It makes you happy because you think it reflects well on you. It doesn't make you any smarter.
SJW n. One who posts facts.
The good thing about crowdfunding is that there's no real collateral damage if the venture fails.
Sure the people who buy in because they like the idea, and want the finished product are on the hook what amounts to disposable income. The folks developing the product don't need to go into hock to fund their vision. There's no bank holding the bag in the event of default.
Seems like a pretty good setup to me.
An investor is someone who provides capital in return for a share of the company.
On Kickstarter you are NOT an investor, unless they are offering shares of the 'company' in return.
You are just an unsecured pre-order client, or donator, depending on what you choose to do.
The most obvious difference is profit share, why on EARTH someone would give captial investment without any form
of profit share agreement in such a case is... special?
The issue I have with Crowdfunding is that it is a High Risk Low Reward investment,
That is kind of the point of Crownfunding model. A lot of people risk a little money, and when it pans out, they get their bits, and if it doesn't, no big deal, because it is a RISK.
This is a poor mans version of venture capital. If you want the rewards of success for venture capital, then you'll have to be willing to risk the kinds of money those people invest. Most people don't have the money or the skills to walk a high risk investment to the reward stage, but want to participate "early" in a good idea. Crowdfunding is exactly that.
Money people can afford to loose.
Exactly. If you can't afford to lose the money, save it for when product is actually shipping, or ... find a similar product that works well enough. Personally, I won't invest in concept dreams, but will if they have working prototypes but need capital to fund low cost manufacturing, I will.
Agent K: A *person* is smart. People are dumb, stupid, panicky animals, and you know it.
ROTFL.
So, its an investment is it?
Great! Where is the documentation showing that these 'investors' now own part of the company? If enough of them get together they can control it!
Pity it was not a success, then they could all claim a share of profits!
Oh, wait, there is none, as it is an unsecured pre-order. At best. Oops.
Yep, I'm trying to keep the bitching on articles down to minimum, but how does this even pass for news? And I'm saying that because major news sources broke the story long before SlashDot, so apparently it IS news. Out of seven reasonable, reachable-goals Kickstarters (Which is supposed to be the verified, trustable projects) I've participated in, ONE delivered what they promised, after one delivered my "Beta Tester Ultimate Package" in a broken state after the product was already being delivered at lower price through their own web-store. Really, it should be big news if a crowdfunded project delivers as promised. But this is also largely by design.
What I have more problems is that all of the crowdfunding projects basically grab your money & disappear going totally incommunicado with no feedback either direction, whether they will or don't deliver the project at the end, if there's any backer-updates at all they will be late and clearly showing their contempt for providing any feedback at all. I can't find the statement now (Was it actually removed?) but I remember Kickstarter stressing this was supposed to be a common journey to create something new. Now they're working exactly like (and, in most cases, worse than) traditional closed up development projects with free funding.
Only one laughing is kickstarter, because they walk away with the money whether investors get the product or not. I don't understand why credit card companies still allow payments to go to kickstarter because they're not buying products, they're buying the hope of a product. Kickstarter really sells mystery bags. Users are told a bag might contain a product they want, they just have to pay full price and they can have whatever is in the bag. If a guy on the street did that you'd laugh, but because it's on the internet you trust it?
my karma will be here long after I'm gone
Found one of their investors.
No, VCs usually do own parts of the companies they invest in, so if that company goes bankrupt, they get at least something back if something of the company can be sold.
Most businesses fail promptly, but most businesses are also largely funded with the owners’ own capital. How-to handbooks for startups generally suggest that 60% of the initial capital should be your own savings.
This is not the case for Kickstarter projects. Some have the founders own capital as a portion of the project, but even then it is very small compared to the amount raised. As a result, the founders get a paid job where they have a lot of flexibility regarding how they want to work, and not only do they have no risk to their own savings, they can increase their savings based on the salaries they pay themselves from the money raised.
If the project succeeds, great, they have a great new business, the equity of which they own in its entirety. If it fails, they were still occupied for two or more years doing whatever it was the money was pledged for. Its a win-win situation and has no drawbacks whatsoever aside from slightly lowering your credibility when it comes to future Kickstarters.
I am very sorry, but the people pledging here are suckers. This cavalier attitude with your own money is really rather stupid in the long wrong and only suggests to me that the said individuals probably arent very frugal in other aspects of their lives. So instead of being smart, putting the money into the stock market and getting it back manyfold in several decades, they essentially decide to give it as an interest-free loan to companies with junk credit ratings and founders that arent themselves ready to put their savings into their belief.
I will just buy it if it succeeds and turns out to be a valuable product later on. If it doesnt, no big deal, there are sufficient other cool things to buy that suckers that back kickstarters are ready to finance for me at no cost. Its literally a free ride.
No, you’re right, it’s nothing like an ICO. An ICO is most likely to be a scam whose operators will exit with the money, but in the rare case it is not a scam, you can actually get a return on your investment relative to the riskiness of your investment. In the case of Kickstarters, all you get is a 50% discount on a good of unspecified quality that has a considerable likelihood of never seeing the light of day. As bad as ICOs are, Kickstarters are a whole new level of being really -really- dumb with your money.
There's a distinction to be drawn between "crowdfunding" (seeking capital to develop a product) and "patronage" supporting the ongoing expenses of an artist. There are niches where crowdfunding can be effective (boardgames, for example), but anyone who crowdfunds an electronic device is a moron.