I'm quite angry. This sucks so bad. I "ordered" a Time 2 via Kickstarter.
I'm glad they are refunding me, but that makes me think... WTF, did they not produce any Time 2's? Or are they all going to the landfill? How long have they been knowing that they are going to be insolvent? This doesn't happen overnight! Was the last Kickstarter a gamble?
Why does everybody have to aim for total market dominance to be successful? They overreached and now the customers suffer. There should be a place for "small" manufacturer selling a niche product ("small" with a certain understatement like German "Mittelstand" enterprizes - I mean Pebble sold millions of units). If they had to increase the price by 10% to be sustainable, they still would have smashed the Kickstarter.
Sometimes I think there is a secret cabal conspiring so we can't have nice things ;-). The same one that decided that cell phone batteries have to be non-removable, touchscreens glossy, and wearables either mini-smartphones or bluetooth-step-counters.
_All_ Kickstarters are gambles. Their messaging[1] is pretty clear in the fact that you aren't buying a product, you're contributing money with the hope that the maker will deliver on their promises.
Right, but I meant a gamble on their side, not the buyers'. Like when MtGox lost their bitcoins and ran as a fractional reserve trying to cover what happened. Or an actual addicted gambler trying to cut their losses by playing more. I wonder when they learned they were going out of business, and if the last Kickstarter was just a Hail Mary...
"What they should have done is cut costs and develop 10x fewer features, let the community grow slowly but organically and wait out the bad times."
It's easy to say that, but when you are up against the Apple/Samsung type companies who have much deeper pockets, don't have to wait out bad times, have the ability to lean on vendors, have contracts in place with manufacturing and the supply chain to efficiently deliver the product, it might not be realistic to do that. On top that, as others here have said, once you take VC money, there isn't really an option to go slowly and let the community grow.
> there isn't really an option to go slowly and let the community grow.
Sure there is. Just not while also being the dominant, or one of the dominant players in the industry when there is competition form a bit name. Pebble didn't have to be a dominant player, they could have positioned themselves differently if they wanted. Both paths are a gamble, but if it comes to a small company I own trying to compete with Apple/Samsung/Google and it's obvious their resources give them an edge (which they almost always do), then I think I would try to position myself to net necessarily compete with them directly (e.g. be the more hacker friendly device, don't shoot for the luxury market, find some cool thing they aren't offering, etc).
> It's easy to say that, but when you are up against the Apple/Samsung type companies who have much deeper pockets
They did not really have to go against Apple/Samsung, their product was unique enough that Apple and Samsung don't have anything that's similar to it, and people like me would prefer pebble over their products. I mean now that pebble is gone, I'll most likely go back to regular watches.
There are Kickstarter projects that a year or two after the fact, haven't shipped. (for example, the Hydradock, which was to have shipped in June 2015)
I think this is an example of an issue that some companies that do kickstarter/preorder campaigns have.
They try to do a Hardware project that pushes boundaries and try to collect money to early during the development process at a time when it is really impossible to set a ship date. (Also a factor is company inexperience with manufacturing) This is why so many projects have to delay shipments and sometimes eventually run out of money without getting to a shippable product.
Companies that are successful typically do their preorders at a point where they have already completed multiple production runs at a cm in china and are ready to ramp for mass production. the order count helps justify the costs of ordering mass production parts. The issue of course is that it means investors had to be willing to fund seed/series A without seeing any traction.
This is not really an issue with what some companies are doing. This is the main point of kickstarter.
It's for people to support funding projects still in development and helping them get from that stage to get into production. In exchange for a "reward". It's not meant to be for products already having done multiple production runs ready to ramp up and customers are just pre-paying a long delivery time.
I would agree it appears there needs to be better communication about the risks and uncertainties. But they have said quite clearly kickstarter is not a store:
I think the point is that Kickstarter is not a sustainable way to build a hardware business. Despite kickstarter's own statement that it isn't a store, it really is. Would the majority of people on the site really back projects if they didn't expect the rewards?
I hear what you're saying but I have this perspective that includes Kickstarter in these issues. Why doesn't Kickstarter take a more active role in supporting it's campaigners after they raise funds?
Kickstarter for hardware products is very much its own insane, dysfunctional, extraordinarily risky world.
Most money spent on Kickstarter goes to projects which are far far more likely to be completed in some form: videogames, books, board games. I'd say that hardware projects should be banned entirely except for companies that have already shipped similar products but, well, that would've included Pebble.
I don't mind the risk. I think it's great there's a way to support cool product ideas that still need time and money to figure out if it will work.
It's not for everyone, but I'd be happy to back a hardware project knowing there's a solid chance it might not succeed, especially on the more niche products. Someone has to.
But I do think risky product creators can compensate their backers better for the risks and for taking a chance on them. For example I think it would be great to see something like a behind the scenes component with more sharing of the process as they go. Maybe like a weekly vlog about them building this new product from scratch, with successes and failures and what they are learning. The company doesn't have to show anything proprietary. It's like behind the scene DVD but for a product not a movie. I'd watch it. Plus all the backers would know that the creators tried and if they are failing, the reasons why. It could be interesting and entertaining. And if doesn't work they would at least have shared what they learned which others can learn from too. Anywho I don't see this happening.
A while back GPG announced their Kickstarter campaign for a game to be named Human Resources. It was later announced that they actually didn't have enough funds to survive if the Kickstarter didn't go through[1]. The campaign stalled and the entire company went under.
People were understandably angry. And it wasn't so much the risk (because none of the backers lost their money), it's that the company wasn't upfront about risks. GPG's leadership knew going in that the company would go under if the campaign didn't become a miraculous success, but backers didn't find that out until after the campaign had stalled.
Presumably, backers wouldn't have been informed at all if the campaign had succeeded.
This situation with Pebble is even more strange because apparently their campaign succeeded (in raising money beyond their target goal)....
Even though Kickstarter explicitly says it's not a store, it doesn't mean people don't think it is. Perception = reality. This news will most likely have the largest effect on Kickstarter, specifically in the tech category, more than anything else. There have been many failures of promises on Kickstarter, but when your top 4 most funded projects are all now dead, people are going to start thinking twice about backing companies.
I don't want to hit a person while they're down (in the dumps about their "purchase"), but going to Kickstarter for version 3 was my sign to give it a rest on buying Pebbles. Maybe it was just marketing, but it caused me to wonder "have you not made enough profit to support rolling out your third version without outside backing?" If it finally hit retail, great, I might get one then. But in the meantime I bought a Garmin Fenix instead of financing someone else's manufacturing interest-free.
Pebble wasn't aiming for market dominance, they were aiming for market traction. How many Pebbles do you see in the wild? Now, how many Apple Watches do you see? How many Garmins? FitBits? "Notifications" is the baseline these days. It's just a given if I buy a fancy electronic watch. So where does that put Pebble? Having the same notification functionality as other devices, only not as slick and more cheap looking. Oh, Pebble has fitness stuff now? Have fun going up against Garmin and FitBit. As more and more devices gain the functionality that defined Pebble, Pebble went from the leader in this segment to playing catch-up.
Sometimes I think there is a secret cabal conspiring so we can't have nice things ;-).
Of course you know better. :-) Pebble sold you a device, everyone else sells you an ecosystem. All the fitness add-ons in the world won't make a difference if there isn't some form of analysis and data storage behind it. I can go back to stuff my Garmins have recorded over a decade ago. FitBit's got something similar, Nike (back when they made hardware), and others I've missed. Apple and Android watches tie into their respective systems for more functionality than just notifications on your wrist. Nope, no cabal, the market just moved on and Pebble got left behind. We do have nice things, they just don't have "Pebble" silkscreened on them now.
>How many Pebbles do you see in the wild? Now, how many Apple Watches do you see?
Almost the same number for me. That said I barely see any Apple watches and most people I know who bought them have left them in the bedside drawer long ago
Because sometimes an up vote isn't enough: I have nothing more to add other than complimenting you on a very insightful comment that said in one sentence what has taken me paragraphs.
Totally this. Kickstarter is for, well, kick-starting things. It's not meant to be a business model. If you're already a million-dollar company, and you can't bring a new revision of your product to market without crowdsourced funding, maybe you're not doing it right.
> Pebble sold you a device, everyone else sells you an ecosystem.
Pebble actually had the full ecosystem going, app store, online integration, accessories, the whole hog. So much so that (for me at least) it was actually a /bad/ thing. I don't want my smartwatch to be a portal into web services and a means of datamining my life. I don't want a subscription to a watch service. I just want it to be a watch that I can program and that can talk to my phone.
> have you not made enough profit to support rolling out your third version without outside backing
I interpreted it more as a way to build hype around pre-orders for something that wouldn't come out for a while. In light of them going under, your explanation seems to gain some support, but I still wonder if they were also using Kickstarter as a hype builder and pre-order managment system.
They genuinely believed they were going to change the world, drank too much of their own kool-aid and eventually ran out of money.
Pretty sure they feel terrible right now and I don't think they slept well for the past 6 months.
Could someone reasonable see this coming before KS? Most likely yes. Would they get this far without taking big risks? Most likely no.
You feel angry you didn't get your pebbles, I feel angry I didn't get my two pebbles and a core.
Imagine how they feel - reportedly turned down $750 mil and less than a year later had to apply for a job at another struggling wearables manufacturer.
You can take the "going to change the world" too far. They are bankrupt and still believe they're "Making Awesome Happen". Investors lost their money. Suppliers will not get paid. Employees are losing their jobs just before Christmas. Customers will not get their orders. Current customers are left without support and - in the near future - a limited functioning device. How is that "Making Awesome Happen"? A more humble attitude would be more appropriate.
I have to totally agree. Kickstarters fail, but this[1] is a gold standard of how not to write your "sorry, we failed" post. Ditch the marketing speak and the PR photos and just be honest with your customers.
VC/exponential growth increase risk of exploding the whole company.
In alternative reality:
1. They could hire way less aggressive and stay lean. Product development will be much slower, but they can operate cash flow positive.
2. With Kickstarter/pre-orders they could avoid taking any serious VC funding.
3. They probably need to move less expensive region than SF Bay Area. SF is great for go big or go home, but not an ideal place for long-term sustainable business.
4. Probably the price of watches would be higher and they will be niche, but still there are tons of watch manufactures that survived decades.
I agree, and it's such a shame to see this company/product's demise due to overreach.
Per their site, Pebble's current product line has three different case designs, each available in at least three different finishes, and one with an additional heart rate monitor. That seems like an awful lot of SKUs for a small hardware startup to develop, manufacture, stock, fulfill and support. Their latest kickstarter added even more models.
From my armchair, it looks like they tried to expand and segment their market too quickly, for the sake of both growth and the optics of their product line in comparison to Apple.
I'm in the early stages of creating the world's tiniest "hardware startup" (the product consists of a single piece of metal), and it's a constant discipline to not get caught up in offering variations on the base design. Every product design choice ripples through the supply chain, increasing complexity and overhead at your peril.
Good luck to all the folks at Pebble in their new endeavors.
Totally this. I'd gladly pay double for Time 2 if it meant the platform will grow sustainably.
> Sometimes I think there is a secret cabal conspiring so we can't have nice things ;-). The same one that decided that cell phone batteries have to be non-removable, touchscreens glossy, and wearables either mini-smartphones or bluetooth-step-counters.
I feel that all the time. Of course it's not a secret cabal, just the free market promoting get-rich-quick schemes and making it harder for sustainable businesses and actually useful products to survive.
Unfortunately companies can't make a sustainable business around people like you. If they were to double the price, then they are going toe to toe with the features and infrastructure behind the Apple Watch, and that's an area they just can't compete in at their size.
Yep, everything in the past year has indicated that they were underpricing their offerings. I'm not even talking about turning a large margin, but that they were offering more services than they could sustain, regardless of market penetration.
This last kickstarter raised $12million while only requiring $1million to fund. I'm really unsure how they managed to get 12x the "required" funding but still fail to deliver.
It's pretty common for Kickstarter projects to ask for a lot less than they actually need. Hence the reason for all the stretch goals and such. Companies like the story to be that they blew their goal out of the water, not just barely creeped over the funded line.
Which is super shady in my opinion. I've seen video game Kickstarters cancel their KS when they have a bit over 100% funding and a few days left. Clearly they are short of their real goal. Another common warning sign is when it fails to fund the first time and relaunches a few months later with a lower goal.
> I'm glad they are refunding me, but that makes me think... WTF, did they not produce any Time 2's? Or are they all going to the landfill?
The probably made some, but it takes money to turn any component inventory they may have into shippable products. They probably burned all of the money on mechanical tooling and part procurement already, and maybe hit a major issue in doing so (critical component is suddenly a very different price, etc). All of that inventory either is returned (if possible) or ends up liquidated on the secondary electronics component market for pennies on the dollar, to pay back the creditors. Custom parts, tools, etc have less of a resale market, but I'm sure a company in China will be happy to pick them up cheap to make smartwatches for the local market.
> and maybe hit a major issue in doing so (critical component is suddenly a very different price, etc)
There were some stories circulating that their provider of screens for Time 2 is in financial troubles, so presumably may have not been able to fulfill the order.
Having done a hardware Kickstarter, I can tell you it's not as easy as just "increase the price". Hardware is hard. We did two crowdfunding campaigns: almost broke even on the first one, and are still in massive debt from the second one. Although I'm glad we came through for our backers, I wish we had just refunded everyone. The aftermath has been incredibly stressful both mentally and fiscally.
Hardware isn't really profitable or even sustainable until you are shipping millions of units. That's why you don't see many hardware startups succeeding without either massive amounts of VC funding, or a really cheap-to-make product that you can sell for much more than it's worth (e.g. Fitbit). That's why any investor will tell you that the subscription model is basically the only way to go if you're making hardware.
According to one of the developers, they produced a very tiny number of Time 2's for testing. She has said those ones all worked perfectly but even she didn't even get one.
It's clear to me that Fitbit bought Pebble to kill it. It was the only smart watch that had good functionality, good battery life, good pricing, and easy user programmability. So of course it had to die. The founders no doubt got a nice payout and the customers, as usual, got forcibly sodomized.
Kickstarter is like the blind men talking about the elephant, its just too big. Cutting edge hardware? Gonna be risky, it almost always fails. On the other hand the board game and RPG scene on KS is reliable as the worlds slowest amazon-like fulfillment store, it always arrives in ten short months (after having been promised six). I swear board game developers are as bad as software devs at estimating delivery dates.
Of course that's kind of a mis-use of the kickstarter site... you've been in the euro/war/rpg board gaming business for over 25 years and you've had 8 completely successful kickstarters and now you're starting your 9th... I'm not naming names, but come on, you're not "kickstarting" anything, this is just your online store.
Kickstarter, the company and the 'creators', depend on this expectation mismatch. If everyone who kickstarter 'wasn't for' didn't use it, there'd be no kickstarter.
You'll get a refund. What's the problem? I've lost money backing stuff where the money just disappeared. Not even that has angered me. Kickstarter is not a store.
Did they aim for total market dominance? I haven't followed it to closely, but to me it didn't seem like they did any totally crazy expansions. Seems like they should have developed further models in smaller steps, but would people have bought enough of those then?
If they have 20 millions in debt, just increasing the price on their kickstarters slightly wouldn't have done it, so they obviously overdid something.
No. Chinese manufacturers are building whatever you pay them for. It's literally a human-powered API converting designs to hardware. It's the western companies that don't want to build nice things.
I'm glad they are refunding me, but that makes me think... WTF, did they not produce any Time 2's? Or are they all going to the landfill? How long have they been knowing that they are going to be insolvent? This doesn't happen overnight! Was the last Kickstarter a gamble?
Why does everybody have to aim for total market dominance to be successful? They overreached and now the customers suffer. There should be a place for "small" manufacturer selling a niche product ("small" with a certain understatement like German "Mittelstand" enterprizes - I mean Pebble sold millions of units). If they had to increase the price by 10% to be sustainable, they still would have smashed the Kickstarter.
Sometimes I think there is a secret cabal conspiring so we can't have nice things ;-). The same one that decided that cell phone batteries have to be non-removable, touchscreens glossy, and wearables either mini-smartphones or bluetooth-step-counters.