feWatch Company Collects $1 Million On Kickstarter, Spends It All, Then Hides

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Kickstarter is not, and never has been, a store. Yet companies that use the platform to fund the production of a new product are eventually supposed to, um, make that product. Backers who contributed more than a million dollars to produce thin e-ink watches want answers from the company that promised these watches, and they aren’t satisfied with “we’re broke” as an answer.

Producing a completely new product is hard, especially when you’re a new company. We’ve shared other Kickstarter disasters here, including Linkwallet, a company that eventually promised its backers refunds sometime in 2015, after collecting pledges back in 2013.

Here’s what we know about Central Standard Timing. Their watch, the CST-01, looks like a slap bracelet with an e-ink display. It’s not a smartwatch, but it’s really cool-looking. The two cofounders asked Kickstarter for $200,000, and the backers contributed more than $1 million to make the watches happen. The project was funded in February 2013, and CST promised to deliver watches to backers in September of that year. They raised even more money accepting direct pre-orders on their own site after the Kickstarter campaign ended. Yet very few backers and pre-orderers report having watches in their hands now. What happened?

“We overestimated the capability of a manufacturing partner to transition a product we were able to make in our workshop to something that could be mass manufactured,” CST explained in a Kickstarter update. After years’ worth of problems with production, the founders say that the money has run out, and they were only able to make a few watches. You can read a very, very detailed summary of the company’s updates here, but it seems the final design was not as “final” as backers were promised, and drastic changes to the watch and band happened before real production could start. They managed to ship one small batch in February, and then…no more shipments. There’s a big difference between a prototype made in your workshop and making the same item in a factory.

Their local Better Business Bureau has received fifteen complaints about the company, and it has responded to none of them. Cooperating with the BBB is voluntary, of course, but what about an actual law enforcement agency? For another Kickstarter projects where backers were left empty-handed, the Washington state Attorney General stepped in and sued the company. That hasn’t happened yet here, though backers on the original Kickstarter page say that they have tried to contact the AG in Illinois. CST hasn’t responded to the agency’s queries.

In their last Kickstarter update, the company suggested that they could sell what they’ve already finished to an outside company, perhaps one that has the million and a half dollars or so needed to produce the watches that have already been paid for. Promising an item for $99 when it will cost $300 to produce is not a good business plan. That’s what one of the founders claimed to the New York Observer.

Does anyone even want an open-source CST-01? Probably not. Would anyone even pay the current pre-order price of $300 when you can get an actual smartwatch for less than that? Nope. Will the Illinois state attorney general sue and save the day? Will an investor swoop in, buy up the company, and create a happy ending?

We don’t know. All we know is that Kickstarter isn’t a store, and that you should keep that in mind when backing cool projects. Even if the people behind a really exciting product say that it’s ready to roll out of the factory as soon as they get some capital together, that does not mean that it’s true. Adjust your expectations and your budget accordingly.

Did the Creators of a $1M Kickstarter Botch Production or Blow the Cash on Mojitos? [Observer]
CST-01 – It’s just not gonna happen [Forum]
CST-01: The World’s Thinnest Watch [Kickstarter]

SEE ALSO:
The Instacube: Kickstarter Success, Real-World Disaster
Kickstarter Isn’t A Store, But These People Still Want Their iPods
Do A Bit Of Research On Kickstarter Projects Before You Hand Over $100 For A $15 Watch
If A Project Funded By Online Backers Never Takes Off, Should Everyone Get A Refund?

by Laura Northrup via Consumerist