Global fintech and funding innovation ecosystem

A crowdfunded startup explains why crowdfunding can be a complete disaster

share save 171 16 - A crowdfunded startup explains why crowdfunding can be a complete disaster

The Verge | By Ben Popper | Jan 27, 2015

Lockitron 300x250 - A crowdfunded startup explains why crowdfunding can be a complete disaster


Like so many ambitious young hardware startups these days, Lockitron used crowdfunding to sell people a product before they built it. The company promised users a keyless door lock that paired with Bluetooth, Wi-Fi, and NFC, allowing customers to unlock it remotely or with a simple proximity sensor. Lockitron ran its own crowdfunding campaign and managed to collect more than $2.2 million in pre-orders for around 14,000 units; it aimed to start shipping in March of 2013. The success of that campaign and press attention on the company drove another 70,000 pre-orders through its website.

Fast forward to today and Lockitron has shipped just over 11,000 units, less than 14 percent of the orders it had taken over the past two-odd years. And while this early version of the device does work, it can be a struggle to set up, has fallen short on battery life, and is missing prominent features. More than a few customers found themselves locked out after the product malfunctioned. "Our crowdfunded backers became the unfortunate guinea pigs," says co-founder Cameron Robertson. In a survey sent out to customers, a question asked them to describe Lockitron in three words. "Beta, potential, unreliable," read one response.


"Our crowdfunded backers became the unfortunate guinea pigs."

In August of last year the company realized it needed to start from scratch, and today Lockitron is announcing the results. It has a new manufacturing partner and a completely redesigned product, called Bolt. "We made mistakes, we learned a lot, and now we are ready to deliver something that fulfills our ambition," says Robertson. The new unit is set to start shipping this March for $99, roughly one-third the cost of the original Lockitron.

Lockitron's struggles are symptomatic of challenges many young DIY hardware companies face. Crowdfunding, which seemed like the new face of innovation a couple years ago, has been humbled by the complex realities of mass production. The first big hurdle for the company, after the rush of receiving so many orders, was figuring out how to get them all built. "We didn't know the first thing about China, about how to find a good partner — someone with domain expertise building something like a lock with 41 discreet mechanical components, most of which were custom-made," says Robertson.

"We didn't know the first thing about China."

The factory they settled on delivered working units, but couldn't keep pace with the promises the company had made around shipping. "We got caught in a low-volume production trap," says Robertson. "We had over 70,000 units on backorder, and they were producing a few hundred each week."

Lockitron had come out of the prestigious Y-Combinator startup program, but that certainly didn’t guarantee success — they were able to build something that worked well for a demo and could endure testing in their lab, but they didn't have the capital to really field test something with the mechanical complexity of a lock. The complexities of testing were magnified by the fact that the product was expected to work in partnership with whatever lock customers already had on their door.

Continue to the full article --> here

share save 171 16 - A crowdfunded startup explains why crowdfunding can be a complete disaster

Leave a Reply

Your email address will not be published. Required fields are marked *

fifteen − 14 =