4 Tech Crowdfunding Projects and Where They Are Today
Have an idea to change the technology of the world? The advent of digital media (in particular social media) and crowdfunding platforms has given the community easier avenues to turn seemingly impossible technological ideas into reality. Yet for all the benefits this brings, bringing a crowdfunding project to fruition is no mean feat.
From our observations, technological products seem to have a tendency to succeed or fail – spectacularly, in both scenarios. Major crowdfunding site Kickstarter alone records a success rate of just 20.24% for tech projects. This makes tech the least successful category on their site, far below the 36.74% average. These 4 tech ideas in particular we’re about to showcase are therefore something of a statistical anomaly that have overcome the odds – but where are they today?
Pebble Watch – Discontinued
Source: Pebble Watch | Kickstarter
This smartwatch brand was a massive hit when it launched, smashing several crowdfunding records at that time. It provided a platform for access to a large variety of information, expandable through customized software that savvy programmers could build with an official software development kit.
Its crowdfunding campaigns brought in tens of millions in funding. This included a campaign that raised $20.3 million despite finding itself going against the newly announced Apple Watch. The up-and-coming smartwatch company received a further boost to the tune of $15 million in Series A funding from Charles River Ventures.
Yet by 2016, Fitbit had bought over Pebble in December 2016 for just $23 million. By then, it was struggling financially due to the rise of new competitors on the market. Earlier in March 2016, Pebble had laid off 25% of its staff due to a shortage of funds.
However, the final nail in the coffin for Pebble may have been the shifting consumer sentiment of the smartwatch industry itself. Despite the smartwatch industry on an upwards trajectory, CCS Insight reported that enthusiasm for full-touch smartwatches like Apple and Pebble had waned in favour of cheaper and simpler “fitness bands”. Apple Watch was the only smartwatch generating sufficient sales volume, and even then they had been struggling. Android Wear manufacturers LG, Huawei, and Lenovo had all opted not to release a new smartwatch that year.
Fitbit eventually ended all support for the watch after June 2018, encouraging its customers to upgrade to a Fitbit. Yet it may not be the end of the road for Pebble. A dedicated community has set up Rebble, which aims to keep the watch going past its official last day.
Skully AR-01 Helmet – Back from The Dead
Image Source: Skully.com
A pair of founders got together to start a project – a motorcycle helmet, fitted with cameras and a screen. This helmet was marketed as “the first motorcycle helmet with a built-in computer and a rear-view camera”. Through the use of these feature, it claimed to be able to eliminate all of a motorcyclist’s blind spots on the road. Through its Indiegogo campaign, the campaign raised $2.5 million. It soon drew the attention of investors, who pumped an additional 11 million in Series A funding afterwards.
However, this project would soon go down the annals of crowdfunding history as a textbook case study for crowdfunding scams. A former bookkeeper, Isabelle Faithauer, filed a lawsuit against the co-founders, accusing them of using the funds as a “personal piggy-bank”. Among the claimed expenses were vacations to Hawaii, personal rent for their apartments, trips to competitions in Las Vegas, and a visit to a strip club. Faithauer additionally stated in the lawsuit that she was ordered to conceal the illicit usage of the funds. The founders were sacked, but the company soon closed its doors not long after. All that remained of the campaign was a notice on Indiegogo indicating that backers seeking recourse needed to go through bankruptcy courts to recover any money.
Unlike most scams, this one got a happy ending. It was reported that Ivan Contreras, the CEO of boutique motorcycle brand GasGas, bought over the remnants of Skully in 2017. Contreras is promising original backers that it will honour their original pledges that they made over a year prior. The helmet itself also made an appearance at CES 2018 and is now being listed in GasGas’ online catalogue.
Ouya Gaming Console – Discontinued
Image Source: OUYA | Wikipedia
This Android-based gaming console was meant to be a budget, accessible option for the TV. It raised slightly under $8.6m, becoming one of Kickstarter’s gems projects. It later raised another $15 million in Series A funding. However, this console’s lustre faded very quickly.
The console was panned for numerous design flaws, a dearth of titles available to play, and a negative user experience. Owing to its free to play nature, titles attempted to monetise by unleashing “a load of nags, pop-ups, and pleas for upgrades or in-app purchases — some games are $4.99, some are $15.99, others just constantly implore you to donate $.99 so the developer can have a beer.”
Despite a strong start, the console never succeeded in overcoming their obstacles. By April 2015, it was in search for a buyer after tripping a debt covenant and failing to restructure its debt.
Note: A debt covenant is a set of restrictions set by a lender that a borrower agrees to, in order to receive the loan.
Razer eventually bought the software assets of Ouya for an undisclosed sum in June 2015 to further its own expansions into Android TV gaming. The purchase did not include the Ouya hardware itself, which has been discontinued.
Oculus – Going Strong
One of Palmer Luckey’s favourite things to pick up were early attempts at virtual reality headsets. In the 80s and 90s, a slew of companies made their own attempts to turn box office science fiction into reality, all to no avail. They were too expensive to produce and for customers to buy. Additionally, they rarely worked as advertised, and the standard consumer computer was vastly underpowered for the headset. Luckey began to tinker with making his own headset.
He soon found himself in a chance encounter with John Carmack – the lead programmer of leading game titles including Doom, and Quake. Carmack offered to buy the prototype from Luckey. He demoed it at E3 a few months later, setting the Internet abuzz with this new project. Palmer, seeing an opening in the market, formed Oculus VR in June 2012.
He launched a Kickstarter campaign for this project, at that time deemed ambitious. While it had a modest goal of just $250,000, the campaign eventually raised over $2 million. But the campaign wasn’t even for a finalized, consumer product – merely a highly unpolished development kit. Despite its shortcomings, Oculus saw them flying off the shelves. Continued updates and developments were well received, and soon caught the attention of Facebook. In 2014, Facebook announced that it had acquired Oculus for 2 billion dollars. At a hearing for an ongoing lawsuit against Oculus, Facebook CEO Mark Zuckerberg revealed that they had paid an additional 1 billion for employee retention packages.
The acquisition was not well received by their fans, who saw Oculus as “selling out” to Facebook. To them, it was killing off the independence of Oculus that they had come to love. Additionally, Facebook and Oculus still has its work cut out for it to improve the market penetration and perception of VR products in general.
Your Business Idea?
Many more ideas out there are waiting for the right environment. Could the next one be yours?
There’s but one way to find out – prepare the necessary groundwork, find the right platform, and get down to it. Even if it doesn’t work out, we believe it’s a lesson that will get you closer and closer to success each day. As such, failure shouldn’t be feared – it should motivate, and we’re building a marketplace where this is encouraged.
What are your thoughts?
Alternatively, if you’re looking for investors or any good deals, do get in touch!