#Asia 5 high-profile crowdfunding failures of 2015


Crowdfunding platforms are breeding grounds for innovative devices but not all succeed. Here are five campaigns that went up in flames

Image Credit: YouTube

Image Credit: YouTube

For many, the emergence of crowdfunding platforms like Kickstarter and Indiegogo are a godsend. Their open platforms enable anyone; from the novice inventor, to big companies such as Oculus Rift to crowd source the necessary funding that will fuel their dreams.

Successful campaigns like the Pebble Time smart watch (which received a total funding of US$20,338,986 at 4,067 percent of its goal) paint a beautiful narrative of innovation powered by people.

There is, however, a dark side. Consumers enraptured by seemingly groundbreaking products fail to understand that developing a product still involves a highly complicated technical process. For amateur entrepreneurs with a skeleton crew, this task is even more daunting and many throw in the towel after many delays and failures.

Here are five high-profile crowdfunding campaigns of 2015 that, like the wings of Icarus, became engulfed in the flames of over-ambition.

1. CST-01’s world’s thinnest watch

CST 01 Watch

The CST-01 watch was to become the world’s thinnest watch at 0.80mm, displaying the time using e-ink in a stainless steel shell.

Despite exceeding its funding goal, raising more than US$1 million on Kickstarter in 2013, the CST-01 project encountered many issues with the manufacturing process.

Its numerous delays and missed deadlines were, at first, attributed to the need to fine-tune its parts and a longer-than-expected time to analyse samples from different manufacturers.

Then, there were problems with the quality of the batteries. The CST-01 team also underestimated the speed of production.

To compound the already growing mountain of problems, its manufacturing partner, Flextronics, demanded an additional US$1.2 million in 2015 to continue production (its engineer had to sleep out of a van at Flextronics’s parking lot). At this point, it claimed to have 135 units ready for shipping, although there was no evidence they were ever shipped. Many backers also doubted the claims.

Also Read: Why Chinese crowdfunding sites aren’t really for entrepreneurs

The final nail in the coffin was when Flextronics demanded that CST-01 withhold any comments about its manufacturing challenges or risk having the shipment of its products halted. The numerous updates on CST-01’s campaign page effectively rendered any possibility of an agreement null.

With the project sunk, CST-01 sought to liquidate its assets and make its development blueprints and documentation open source. No further updates were posted beyond that.

2. Pirate3D’s Buccaneer 3D printer

pirate 3d printer Buccaneer

Singapored-based startup Pirate3D didn’t want to just democratise 3D printing, it wanted to develop a 3D printing ecosystem. It had a cloud-based component which would allow the Buccaneer 3D printer to print any 3D object sent from a web-enabled device. But as the saying goes, you have to learn to walk before you run.

Launched in 2013, Pirate3D hit its funding goal of US$100,000 on Kickstarter in just 10 minutes, before bagging a total funding of US$1.4 million. Hopes were high and it promised to include acrylonitrile butadiene styrene (ABS) support once it hit the million-dollar mark.

However, Pirate3D soon backtracked on that promise, claiming that ABS was potentially toxic. Other promised features, including a heated bed, automatic bed calibration, automatic filament feeding and air filtration system, were also left out. There were also numerous delays due to manufacturing issues.

Also Read: Hardware startups in Korea succeed on global crowdfunding sites

Despite this, Pirate3D raised US$2 million from investors in Singapore and Germany earlier this year. In an interview with Tech in Asia, it said it planned to use the funds to fulfil outstanding orders and expand new markets. It also had a larger, commercial 3D printer in the works.

Reality soon hit the startup as irate backers demanded a refund. A supposedly malfunctioning script set the refund date almost two years away, further infuriating the backers.

In October, Pirate3D announced that it was struggling to raise money to fulfil its remaining orders, which stood at 60 percent.

In a Facebook post on October 19, 2015, Pirate3D pleaded with its backers for more understanding and empathy.

“I wish to assure our backers, supporters and the public that we will do all we can to make the necessary amendments to move forward; we have learned much from our growing pains and are pivoting to implement even more productive ways to meet the challenges we encounter. Our production pipeline now includes a more compact and competitively-priced 3D printer,” read the post.

3. TechJet’s Robotic Dragonfly Micro Aerial Vehicle


Like many other failed crowdfunding campaigns, backers of of the US$99 Robotic Dragonfly Micro Aerial Vehicle had to endure a protracted series of delays and excuses before being informed that their wait was in vain.

Despite being funded in 2012, backers had to wait for three years before being told that the project had suffered serious financial problems because of complications in the manufacturing process.

US-based TechJect Inc sought to refund its backers, albeit slowly, and blamed the delay on Paypal and Indiegogo. It is still seeking to complete the project with some additional modifications to the device such as a more ergonomic design.

Also Read: ANTSDAQ, Alibaba’s online equity crowdfunding platform, launches beta version

“We have everyone’s best interest at heart and if nothing comes of it, we will give out all the company’s Dragonfly IP with full license authority to all our campaign backers for use, re-sale and more as they please to instigate recovery against their loss,” read a post on its campaign page.

4. Torquing Group’s ZANO Nano drone


ZANO is another drone crowdfunding project that had its wings clipped. The drone had everything going for it. It was compact enough to fit in your palm; featured an HD video camera and even claimed to be able to operate autonomously via your smartphone. It also raised a whopping £2,335,119 (US$3.52 million) of funding last year.

According to a BBC report, however, the drone was beset by problems. It had trouble staying airborne and the video quality was low. Shipment of the product was also given priority to those who had pre-ordered instead of the initial backers.

The company behind ZANO — UK-based Torquing Group, said that ZANO’s problems occurred mostly in the production phase.

For example, its production models weighed 15 grams more than its prototype, therefore affecting its performance. This led to redesign decisions such as the introduction of lighter plastics and larger propellers.

Also Read: Asia’s developing economies lead world in crowdfunding: Allied Crowds

This, however, failed to halt ZANO’s downward spiral. Last month, former Chief Executive Ivan Reedman announced his resignation from Torquing Group, citing “irreconcilable differences” and “health issues”.

Torquing Group says it is doing its best to fulfil its obligations but, for now, the drone is grounded for the long haul.

5. Bielet Inc’s Goji smart lock


In theory, the Goji smart lock looked really promising. It could purportedly attach to any metal or wooden door and be unlocked or locked using your smartphone. It also had 256-bit encryption and multiple layers of security.

The Goji smart lock received widespread coverage from major publications such as the Rolling Stone, CNN and CNET and raised US$313,000 on its Indiegogo campaign in mid 2013.

So what went wrong?

Reading this far down, you probably would have guessed it — Manufacturing issues, production delays, yadda yadda.

Despite its problems, Bielet Inc managed to raise an additional US$800,000 on equity crowdfunding platform Fundable.

Its last update was in August on its Facebook page. In the post, Bielet posted screenshots of a working model of the Goji smart lock and promised a roll-out by November 2015. Further down in the comments section, it added that the team was “definitely still working on it” and that they “do feel (although can’t promise) the end is near.”

Also Read: Rewards-based vs equity crowdfunding — what works better?

Hardly reassuring statements, coupled with the fact that that November has come and gone and all that Bielet Inc has delivered so far is radio silence.

Honestly, would you entrust the security of your home to a company that has consistently failed to uphold its promises?

One backer summed up his frustrations rather succinctly in a Facebook post today: “WHAT IS HAPPENING? WHERE IS MY GOJI? ITS (sic) BEEN ALMOST 2 YEARS!!!!!!!!”

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