Hardware

The Story Of Lockitron: Crowdfunding Without Kickstarter

Comment

Editor’s note: After a rejection by Kickstarter, the co-founders of Lockitron, Cameron Robertson and Paul Gerhardt, decided to follow in the footsteps of App.net and take pre-orders for their innovative deadbolt add-on directly. This gamble paid off. Big time. The initial goal of $150,000 pre-orders was hit within 24 hours. Now, just five days after launching, the company has $1,500,000 in pre-orders. This is their story told by Cameron.

I’m still having a hard time believing that only a few short days ago, my co-founder Paul and I refreshed our homepage, anxiously waiting to see if anyone would subscribe to our vision for Lockitron and help us climb towards our lofty $150,000 goal. With reservations now exceeding 1,000% of our original target and most of the time left in our campaign, we are immensely thankful to our 10,000+ backers who have made this possible.

Just four months ago we squeezed in with over a hundred other hardware startup devotees to listen to the creators of some of the most popular and impressive Kickstarter projects impart their wisdom. The folks behind Pebble, Skallops and the Brydge answered dozens of questions about their success on Kickstarter; how much effort should you put into the video, did press matter, why did some projects take off and others flop. At one point, our moderator asked the group for a show of hands. “How many of you plan to release your own Kickstarter?” Nearly every hand in the room went up.

Kickstarter meant that for the first time hardware companies could take their ideas straight to the masses, bypassing the gatekeepers of venture capital, and de-risking their business in one fell swoop.

It wasn’t that long ago in Silicon Valley that the very mention of the word “hardware” in the context of fundraising was enough to glaze over the collective eyes of venture capital.

While we are just beginning to witness a renaissance of software wrapped in plastic, the traditionally high costs of making hardware, coupled with the perception of the low margins characteristic of the bygone PC-era, weigh heavily on risk-reward calculation for new investments.

So it was not surprising that Kickstarter gave hardware startups hope.

From its inception, however, Kickstarter was never designed as a store. Kickstarter’s benchmark for success is matching and exceeding the funding provided by the National Endowment for the Arts, not becoming the Apple store for yet-to-be realized products.

Last month, mounting backer frustration over project delays seemed to boil over when a series of articles ran detailing what some had been wondering; how many of these projects failed to deliver to their backers?

The question of who exactly assumed underwriting the risks for projects loomed large despite Kickstarter’s reaffirmation that creators were indeed responsible for delivering what they promised.

Consequently, new guidelines and rules were developed to meet these challenges and to protect backers using their site.

We applied to Kickstarter on a Wednesday, “Kickstarter Is Not a Store” landed on Thursday and by Friday we were rejected. We reached out to a co-founder of Kickstarter through our network. A brief e-mail exchange ensued, culminating with a firm “No” – stating that Lockitron fell into the “home improvement” category of prohibited projects. Kickstarter was simply not the right place for it, he said.

By the following Monday we knew what we had to do. We would launch Lockitron on our own, in an attempt to emulate the success that Dalton Caldwell had with App.net.

In running our own ad-hoc crowdfunding campaign, we knew that we needed to solve the same challenges inherent in Kickstarter’s model for running a hardware campaign.

Our solution was to create a customer-focused system. We decided to collect payment information using Amazon Payments, batch Lockitron shipments for customer transparency regarding delivery dates and only charge customers when their unit is ready to ship. This drives us to make the best product possible rather than overpromise what we can deliver on.

This approach also lets us know how many units to make and qualifies our backers as willing to put money down for the product when delivery time comes due, all while removing risk for them.

Since we only earn our keep once a customer’s Lockitron is ready, we are incentivized to use faster, low-volume/custom-quality production methods that may cost more initially, but will ultimately help us to compress our timelines.

Finally, this past Tuesday (October 2nd), just over a week after Kickstarter declined Lockitron, we took the plunge, fixated on our computer screens after a sleepless night filled with last minute video and website tweaks.

What followed over the next 24-hours was nothing short of stunning – thousands of people saw our vision and voted with their wallets to reserve a Lockitron, blowing past our initial goal in a matter of hours.

It’s debatable whether or not we will see another Pebble or Ouya on Kickstarter. But something I can’t emphasize enough is how much the success of our crowdfunding experiment is predicated on the groundwork that Kickstarter put in place. We are indebted to Kickstarter for validating the incredible potential of crowdfunding in bringing products to market.

Our crowdfunding method isn’t perfect. It requires that you have some resources to be able to kick off production of your product and I believe that there is room for a new model of crowdfunding.

Hardware startups need a platform that would add value for customers and producers by acting as an escrow for funds while validating and assisting fledgling hardware companies with their production plans. Consequently, we are planning to open source a skeletal version of our crowdfunding app to help start this discussion.

The power to ultimately go ahead and purchase a Lockitron rests with our backers. The onus is on us to justify and substantiate any delays along the way. Just as popular hardware Kickstarter projects have proven, it will be our willingness to involve excited Lockitron backers in our progress and turn them into happy customers that will drive our success.

This slideshow requires JavaScript.

More TechCrunch

A new crop of early-stage startups — along with some recent VC investments — illustrates a niche emerging in the autonomous vehicle technology sector. Unlike the companies bringing robotaxis to…

VCs and the military are fueling self-driving startups that don’t need roads

When the founders of Sagetap, Sahil Khanna and Kevin Hughes, started working at early-stage enterprise software startups, they were surprised to find that the companies they worked at were trying…

Deal Dive: Sagetap looks to bring enterprise software sales into the 21st century

Keeping up with an industry as fast-moving as AI is a tall order. So until an AI can do it for you, here’s a handy roundup of recent stories in the world…

This Week in AI: OpenAI moves away from safety

After Apple loosened its App Store guidelines to permit game emulators, the retro game emulator Delta — an app 10 years in the making — hit the top of the…

Adobe comes after indie game emulator Delta for copying its logo

Meta is once again taking on its competitors by developing a feature that borrows concepts from others — in this case, BeReal and Snapchat. The company is developing a feature…

Meta’s latest experiment borrows from BeReal’s and Snapchat’s core ideas

Welcome to Startups Weekly! We’ve been drowning in AI news this week, with Google’s I/O setting the pace. And Elon Musk rages against the machine.

Startups Weekly: It’s the dawning of the age of AI — plus,  Musk is raging against the machine

IndieBio’s Bay Area incubator is about to debut its 15th cohort of biotech startups. We took special note of a few, which were making some major, bordering on ludicrous, claims…

IndieBio’s SF incubator lineup is making some wild biotech promises

YouTube TV has announced that its multiview feature for watching four streams at once is now available on Android phones and tablets. The Android launch comes two months after YouTube…

YouTube TV’s ‘multiview’ feature is now available on Android phones and tablets

Featured Article

Two Santa Cruz students uncover security bug that could let millions do their laundry for free

CSC ServiceWorks provides laundry machines to thousands of residential homes and universities, but the company ignored requests to fix a security bug.

1 day ago
Two Santa Cruz students uncover security bug that could let millions do their laundry for free

OpenAI’s Superalignment team, responsible for developing ways to govern and steer “superintelligent” AI systems, was promised 20% of the company’s compute resources, according to a person from that team. But…

OpenAI created a team to control ‘superintelligent’ AI — then let it wither, source says

TechCrunch Disrupt 2024 is just around the corner, and the buzz is palpable. But what if we told you there’s a chance for you to not just attend, but also…

Harness the TechCrunch Effect: Host a Side Event at Disrupt 2024

Decks are all about telling a compelling story and Goodcarbon does a good job on that front. But there’s important information missing too.

Pitch Deck Teardown: Goodcarbon’s $5.5M seed deck

Slack is making it difficult for its customers if they want the company to stop using its data for model training.

Slack under attack over sneaky AI training policy

A Texas-based company that provides health insurance and benefit plans disclosed a data breach affecting almost 2.5 million people, some of whom had their Social Security number stolen. WebTPA said…

Healthcare company WebTPA discloses breach affecting 2.5 million people

Featured Article

Microsoft dodges UK antitrust scrutiny over its Mistral AI stake

Microsoft won’t be facing antitrust scrutiny in the U.K. over its recent investment into French AI startup Mistral AI.

1 day ago
Microsoft dodges UK antitrust scrutiny over its Mistral AI stake

Ember has partnered with HSBC in the U.K. so that the bank’s business customers can access Ember’s services from their online accounts.

Embedded finance is still trendy as accounting automation startup Ember partners with HSBC UK

Kudos uses AI to figure out consumer spending habits so it can then provide more personalized financial advice, like maximizing rewards and utilizing credit effectively.

Kudos lands $10M for an AI smart wallet that picks the best credit card for purchases

The EU’s warning comes after Microsoft failed to respond to a legally binding request for information that focused on its generative AI tools.

EU warns Microsoft it could be fined billions over missing GenAI risk info

The prospects for troubled banking-as-a-service startup Synapse have gone from bad to worse this week after a United States Trustee filed an emergency motion on Wednesday.  The trustee is asking…

A US Trustee wants troubled fintech Synapse to be liquidated via Chapter 7 bankruptcy, cites ‘gross mismanagement’

U.K.-based Seraphim Space is spinning up its 13th accelerator program, with nine participating companies working on a range of tech from propulsion to in-space manufacturing and space situational awareness. The…

Seraphim’s latest space accelerator welcomes nine companies

OpenAI has reached a deal with Reddit to use the social news site’s data for training AI models. In a blog post on OpenAI’s press relations site, the company said…

OpenAI inks deal to train AI on Reddit data

X users will now be able to discover posts from new Communities that are trending directly from an Explore tab within the section.

X pushes more users to Communities

For Mark Zuckerberg’s 40th birthday, his wife got him a photoshoot. Zuckerberg gives the camera a sly smile as he sits amid a carefully crafted re-creation of his childhood bedroom.…

Mark Zuckerberg’s makeover: Midlife crisis or carefully crafted rebrand?

Strava announced a slew of features, including AI to weed out leaderboard cheats, a new ‘family’ subscription plan, dark mode and more.

Strava taps AI to weed out leaderboard cheats, unveils ‘family’ plan, dark mode and more

We all fall down sometimes. Astronauts are no exception. You need to be in peak physical condition for space travel, but bulky space suits and lower gravity levels can be…

Astronauts fall over. Robotic limbs can help them back up.

Microsoft will launch its custom Cobalt 100 chips to customers as a public preview at its Build conference next week, TechCrunch has learned. In an analyst briefing ahead of Build,…

Microsoft’s custom Cobalt chips will come to Azure next week

What a wild week for transportation news! It was a smorgasbord of news that seemed to touch every sector and theme in transportation.

Tesla keeps cutting jobs and the feds probe Waymo

Sony Music Group has sent letters to more than 700 tech companies and music streaming services to warn them not to use its music to train AI without explicit permission.…

Sony Music warns tech companies over ‘unauthorized’ use of its content to train AI

Winston Chi, Butter’s founder and CEO, told TechCrunch that “most parties, including our investors and us, are making money” from the exit.

GrubMarket buys Butter to give its food distribution tech an AI boost

The investor lawsuit is related to Bolt securing a $30 million personal loan to Ryan Breslow, which was later defaulted on.

Bolt founder Ryan Breslow wants to settle an investor lawsuit by returning $37 million worth of shares