Coin, the smart credit card that met its $50,000 crowdfunding goal just 40 minutes after pre-orders for the device were announced last Thursday, is poised to become one of the most well-funded hardware projects since the Pebble smartwatch and Ouya game console. It’s received enthusiastic coverage from the press, attracted thousands of pre-orders in less than a week, and raised more than enough to fund its continued development.
Now it just needs to make sure that it lives up to the hype, which might be harder than many would think.
People who back things like Coin, Pebble, or Ouya tend to be passionate about the project; why else would they give money to unproven companies making their first product? “Kickstarter is fascinating because it allows you to find your audience,” Ouya CEO Julie Uhrman said during the F.ounders conference in March. “It says, I have this idea. And if you believe in it too, then we’ll make it.” But that belief can quickly transform into indignant wrath when things go wrong, as evidenced by the swift and seemingly-incessant backlash these companies faced when their products were delayed or didn’t perform as expected.
That change in opinion can occur no matter how funds are raised, whether it’s through crowdfunding platforms like Kickstarter and Indiegogo or through pre-order systems like the ones used by companies like Coin and August. These tools all focus on different aspects of the shift towards crowdfunding, but they all involve money changing hands — with one exception, discussed below — and all open these companies to the fury often associated with popular hardware projects.
“As great as some of these funding platforms like Kickstarter and Indiegogo are — and I’m a big fan of them — the downside for hardware startups is that they do create this fury to deliver quickly,” says August CEO and Internet of Things Consortium head Jason Johnson.
I think this business of taking people’s money — especially if you’re charging their credit cards, which we are not; we won’t charge a credit card until we ship a product to somebody — you have to be careful what your expectations are. That is one of the challenges of going on Indiegogo or Kickstarter, and is part of the reason why we didn’t.
Coin could avoid all those problems. It might deliver its product without experiencing the manufacturing or shipping delays that plagued other projects. Its smart credit card might perform exactly as expected, without any malfunctions or half-baked features. It could enjoy the benefits of being a crowdfunding diva without having to deal with the bumps and blemishes that its counterparts have. That’s the best-case scenario, and that’s what the company is working towards.
We want to be extremely clear to everybody who does support us, and what we’re going to do is keep an open channel with all our partners and suppliers and make sure that we don’t surpass a demand that they can supply. If at any point we realize that the time it would take to get the parts to get a Coin would take longer than we promised, we would rather put in a wait list than not deliver what we promised.