Kickstarter Campaign for 3D Printer Collapses After Raising Nearly $3 Million
This is a cautionary tale of rewards-based crowdfunding. As we reported earlier this week, Tiko 3D printer has been in limbo for some time. Most backers (16,538) had not received their printers and many who had complained about the quality. In January, reports percolated up that Tiko 3D had fired much of their staff. An ominous sign for any company.
This past Wednesday, the campaign creators posted an update that effectively limited any hope of backers ever receiving a 3D printer. The explanation reproduced below, is a saga of the struggle of entrepreneurs with “blind optimism” matched with poor decision making in the cut-throat world of hardware manufacturing. The creator said that Tiko was not dead – yet – and they intend on fulfilling outstanding rewards. I would not hold my breath. Tiko is in a difficult position of finding new capital from investors to fund a two-year-old project.
A quick review of backer comments includes a good deal of venting. Someone has created a petition: Backers United Against Corrupt Kickstarter Tiko 3D. Misery loves company, and there is plenty of it on the Kickstarter page.
In rewards based or presales crowdfunding – having a prototype is not enough. You have to have the intrinsic skillset to manage a supply chain and manufacturing along with shipping and delivery. If you don’t have these skills in your toolkit, you need to pay someone else that does.
Another tough lesson is that technology moves fast. The hot product today is soon antiquated and forgotten. If a presale product is not scheduled to ship soon after the close of a crowdfunding campaign, you should probably skip it. Better to wait and purchase it on Amazon if, and when, it is ready for retail.
Crowdfunding platforms need to play a more prominent role in the process too. Failure to deliver on tech/hardware projects has been a nagging issue for both Kickstarter and Indiegogo. While there have been plenty of cool products that have delivered, too many have failed making backers leery of supporting anything in the future. Burn a backer once, and many will not return.
Tiko 3D Update is below
If you have followed us these past couple of years, then you have witnessed the struggles of entrepreneurship. The ups and downs. The highs and lows. The exciting victories, and the painful losses. You have seen that starting a company is a perilous journey, where success is the exception, not the rule.
Today we have some regretful news to share. Just when it seemed we had finally made it, we have once again found ourselves in a difficult situation.
It’s a long story, but it’s all out there in the updates.
We started as a trio of starry-eyed first-time entrepreneurs. With your support, we set out to change the world. Our mission was grand: to build the ultimate prototyping tool and empower everyday innovators around the world. We set off with a bang, and with blind optimism, we jumped head-first into manufacturing. It felt like we had it all figured out…
Except, we didn’t. We had no idea how difficult it would be to go from a prototype to mass production.We learned along the way, but most mistakes were costly and irreversible. Our greatest mistake was committing to inventory too soon. We didn’t realize it at first, but by ordering components in bulk, we had backed ourselves into a corner. Design flaws appeared, and we were trapped. By the time we understood our predicament, it was already too late. We were in too deep, and there was no turning back. Our cheerful mission to empower innovators had become a struggle to survive.
Despite the year and a half of hardware and software setbacks, manufacturing challenges, repeated delays, regulatory hurdles, unending certification requirements, unplanned operating expenses, logistical nightmares, sleepless nights, strained relationships, frustrated suppliers, a disgruntled community, new competitors, and a jaded industry, we simply refused to give up. Day after day, we kept fighting with all our hearts. Evenings. Weekends. More engineers. More developers. More prototypes. More testing. Nothing was ever enough. We did everything we could to turn this around, but by November 2016, we were at a breaking point. With resources running thin, and options running out, we prepared for one final push. We believed software improvements could solve the remaining technical issues, and that pre-orders could solve our financial ones. It was our big chance to get back on our feet.
We gave it everything we had, and we made great progress, but in the end it wasn’t enough. Software had improved, but not enough. Same with hardware and quality control. Pre-orders streamed in, but they too were just not enough. We were right at the finish line, and yet, we were miles away.
How Far Did You Get?
We developed the software, finalized the hardware, and manufactured 16,000+ sets of (almost) every component. We managed to ship a little over 4100 finished printers. The first hundred went to early-bird backers, and the rest were spread across three large batches. One to Canada, two to the United States. Europe was next, but feedback suggested the software was not ready, the hardware still needed work, and we no longer had the resources to assemble/ship further batches.
There’s also a myth that we bought/built an entire factory. It’s based on the ambiguous wording of a previous update. The fact is, we simply rented a space for assembly. We later backed out because of registration issues, but were allowed to stay in the free space we had before.
What Is the Status Now?
By early January, we had no choice but to lay off our team and wind down operations. It was the hardest thing we had ever done. Despite the team’s incredible effort and dedication, their sacrifice and their faith, we simply could not afford their salaries. We had to let them go. We asked everyone to organize and document their work, and with heavy hearts, we wished them farewell. Everything is now in “hibernation mode”. Frozen, but well documented and ready to resume at a moment’s notice.
Meanwhile, in China, operations have slowed to a crawl. We continue to run small-scale tests to show that hardware can be improved, and we do our best to fulfill warranty requests, however we are no longer in production. Most of the components are sitting there in boxes, but we lack the resources to purchase the remaining few, or to assemble/ship full batches of finished printers.
We have also cancelled all pre-orders. We deeply appreciate their patronage, but the risk is now too high. We must return our focus to fulfilling Kickstarter rewards before making promises to anyone else.
Basically, the company is now on standby while we pursue ways to get back on track.
So, Is Tiko Dead?
No, at least, not yet. We made countless mistakes, and we are now in a tough place, but it doesn’t mean that everything we built is suddenly worthless.
The cost of 3D printers has dropped significantly since our campaign launched. Now that this price war (aka race to the bottom) is nearing its end, we have asked ourselves: What is the next frontier? Where will this industry go next?
Well, we have our theories, and we believe that Tiko as a platform is exceptionally well positioned for this future. Granted, these technologies need some re-engineering, more testing, and much better execution, but the potential is still there. It turns out there are people who feel the same way…
What Are You Doing To Fix This?
We are doing something we should have done a long time ago. We are speaking with investors.
Up until now, we have been on our own. We believed investors would get in the way, but that was immature. It’s time to put that thinking behind us, and start working with people who have the resources and experience to manufacture a product at this scale, and build a sustainable business.
We are already well into discussions with a number of interested investors. They are fully aware of our situation, but see our vision for the industry, and the roadmap for our technologies. They understand the challenges, but also recognize the potential for a bright future.
Of course, these discussions cannot be rushed. It’s a lengthy process, and it could take months for us to reach something conclusive. We’ll update you on this once we have something definitive.
Why Didn’t You Tell Us Sooner?
Keeping technologies private is one thing, but this is entirely different. It’s an incredibly heavy burden to bear, and holding back was not easy. Unfortunately, many investors value discretion, especially in the early stages of discussion. The headlines of our failure would hurt the odds of reaching a deal, so we did what was best for the project and kept quiet. It’s all out in the open now, but we’ve already made good progress, so it might not be a dealbreaker.
What If Investment Falls Through?
There are other roadmaps for how we could proceed. Some position us for a slow recovery, while others involve a gradual wind down. Either way, we feel that you should have a say in all this. Over the coming weeks, we will be in the comments section to collaborate on a variety of ideas. Everyone is welcome to participate, and we hope you will join us as we work together to define the next chapter of the Tiko story.
Can I Get a Refund?
Starting a company is a fight against the odds, and a journey into the unknown. Just when you think you have it all figured out, reality comes in and hits you in the gut. We climbed to the top, then fell off and hit every branch on the way down. We’re sorry we disappointed you. You believed in us, and we let you down. It hurts like hell… but this isn’t over yet.
We know you’re tired. We are too. The thing is, we still love what we do. We still have our vision, our passion, and perhaps even our future. These are tough times, but we haven’t given up yet, and we hope you won’t either.
Thank you for supporting us at our highest heights, and our lowest lows. We may be down, but as long as you believe in us, we will never be out.
We’ll be in touch,
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