This one is almost too painful to write. As many people know the Kreyos Smartwatch was one of the most successful Indiegogo crowdfunding campaigns of all time. It is also probably one of the most spectacular crowdfunding failures ever. Trust me – this one is pretty hard to top.
We last visited the Kreyos campaign in August as backers started to receive the Kreyos watch. The complaints were widespread as clearly the delivered product had not lived up to the promoted hype. Steve Tan, founder and CEO of Kreyos, composed a personal tell-all last week on Medium. From start to finish, in exacting detail, Steve displayed profound incompetence, naive hubris and perhaps sincere contrition. Of course none of this helps out the over 10,000 backers that paid for a smartwatch that, in the end, wasn’t even able to tell the time.
Kreyos is shutting down the end of this month. No more refunds will be distributed. The collapse is complete.
The story was quite different in August of 2013. A campaign for a Smartwatch, following the incredibly hyped success of the Pebble Watch, seemed like a sure thing. Kreyos set out to raise $100,000 but closed 15 times that amount. Following the crowdfunding success, it was time for the real work began but Kreyos management clearly did not possess the necessary managerial skills to cope – much less a working prototype of a product that we all know now was just vapor.
Steve has taken his medicine and done his mea culpas. What else can he do? He has apologized to all backers and the team at Indiegogo – including the prominent Kate Drane “who were nothing but supportive to us throughout our campaign”. Steve also states he personally invested $370,000 into the Kreyos demise and has borrowed much more. While Steve shoulders complete responsibility for the debacle and states that “this account is in no way intended to shift blame away from me [Steve]”, he spends much time pointing the finger of blame at dishonest partners tasked with the actual creation and coding of the watch and its OS.
Steve starts four years ago on his odyssey, describing Pro Yang Huang Chang as a former friend and then a partner. Pro apparently was responsible for most all of the design and function of the Kreyos Watch. In fact it was Pro’s idea from the beginning after Pebble Watch’s Kickstarter campaign became so well known. Allegedly Pro emailed the Pebble Watch campaign to Steve and communicated to him saying, “this is a very easy product to manufacture and Pebble didn’t know anything about manufacturing..” Ok. Perhaps some excessive bravado here but apparently no red flags for Steve. He states that, “I [Steve] regretfully bought that and thought maybe through working with Viewcooper [the manufacturing company], people like myself who have limited tech and manufacturing experience can launch a viable consumer electronics product. [emphasis added]
So Steve Tan pretty much was handling the brand and the marketing. That was it. He shares some insight into the trip to CES (something Crowdfund Insider covered) saying they showed up with 20 watches, but in the end – only a single one worked. It was not until June of 2014 that “After all these issues, we started to become very suspicious”. Sounds like a delayed reception somewhere.
It was in July of 2014 that Steve in referencing Pro “.. got really annoyed at this and realized that, outside the problems he caused which I have already detailed, he was a horrible partner”. Steve claims that “Our guess is Pro misused the funds for his personal gains or used the funds for his other businesses”. So add fraud to the incompetence to the growing list of the Kreyos implosion.
Steve calls the Ferrari and shopping photos, the ones that were widely shared across the internet last month, part of a “smear campaign”.
To close the monologue, Steve nails the coffin shut:
Refunds: The only reason why we won’t be able to refund any more orders is because we are not financially capable of doing so, we are burned/cheated out of all the funds, we don’t even have money to continue running our office operations nor paying our employees. After we finish shipping to backers we will be wrapping up and shutting down Kreyos as a whole.
To wrap things up, Kreyos is really done, our reputation is already shot beyond redemption and I wish we could provide further remedies, fixes and refunds, but the lack of available funds wouldn’t allow us to do so. We did all we can up to this point.
Now I know that Steve has learned a very painful lesson from this saga. I actually feel sorry for the guy because he really, really f***ed up. The backers – have probably learned a lesson or two as well about backing campaigns that may be too good to be true, or funding a product minus a working prototype. At least making certain the person running the show actually has the tool kit and horsepower to bring it all together in the end. Campaigns like this give crowdfunding a black eye. While this will not be the last rewards based campaign to fail so spectacularly this may be the most transparent. From the very highs to the final lows – hopefully I will never read about Kreyos – ever again.
If you want to read Steve Tan’s trip to the confessional it’s all here.
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