Sorry to see this notice from AirDroids, who had launched the PocketCopter on Kickstarter, but glad to see their list of "lessons learned". Manufacturing is really, really hard, and they were not the first or last Kickstarter project to get in over their head in the process of going from prototype to product.
Dear Drone Lovers,
We are writing to let you know that AirDroids, Inc. is ceasing operations. As of this week, we have sent out units for all the orders that we received addresses for. Our company ran out of money a few months ago, but we have been able to fulfill all orders through a recapitalization of the company funded by the projects creators taking out tens of thousands of dollars in personal loans.
In this message we want to answer two questions. First, how did a project that raised nearly a million dollars run out of money? Second, what does this mean for our Kickstarter® backers and customers?
There are three primary factors that led to significantly greater costs than we originally anticipated. Some of the issues that arose could not have been predicted, others were attempts to make things better for our customers.
First, the unprecedented success of our Kickstarter® campaign meant that we manufactured around 20 times more orders than we originally anticipated. To address this challenge and to make the product more durable for our customers, we decided to do a complete redesign of the system. After seeking advice on how to handle the higher production numbers, we engaged contract engineers who had more experience in designing for higher production runs and who were specialized in designing plastic parts for injection molding. The cost for their services cut significantly into our budget.
Second, since the redesign caused delays in the production schedule, we decided to minimize further delays by making our molds and doing assembly in the United States, rather than outsourcing production to China or Taiwan. This approach was intended to give us the flexibility that we needed to make course corrections and was also a great opportunity to support local businesses. However, this decision significantly increased our mold and tooling costs.
Finally, given the success of our Kickstarter® campaign, we ordered extra parts to be able to build more units for post campaign sales. Much to our disappointment, our Shenzhen suppliers did not consider orders for 2000 units to be sizable enough to give us a large volume discount. We were forced, therefore, to estimate our market demand and our “part failure” rates in order to get the pricing necessary. Further, when the parts arrived, the “dead on arrival” rate was higher than we anticipated.
These key decisions, combined with the already high bill of materials and Kickstarter® and Amazon Payments taking an 8% cut of total funds raised, left us with a minimal financial cushion. In addition to these expenses, the cost of assembly, packaging, shipping, and salaries for our small manufacturing staff caused us to be significantly in the red financially.
The company’s leadership did not receive any profits or distributions off of this project, and took on over $100,000 in personal debt to be able to contribute additional capital to the company in order to assemble and ship all the units that were ordered. Of course, this is all due to our own decisions and we are not soliciting sympathy. Our hope is to provide you, our backers, with some context for what happened and perhaps help other makers with Kickstarter® dreams avoid similar mistakes.
Our small staff has been notified that they are being laid off. Unfortunately, upon the completion of the final orders, the company has ceased operations and will not be able to receive returns or send out additional parts or units, as there is neither staff nor money to do so. We have sent out all orders that we received addresses for. A small group of Kickstarter® backers never provided addresses in response to the backer survey we sent out and we have not been able to ship those orders. Also, some of the packages that were sent out could not be delivered by UPS as the address and contact information provided was incorrect or the recipient did not follow up with customs to meet local import requirements.
We are putting our design files on our website, which you can access at www.airdroids.com/files.html. You may attempt to use these to generate your own spare parts, although please be advised that results created from a 3D printer may differ significantly from what we created using injection molded plastics and we make no guarantees regarding the designs and their functionality. Please use them at your own risk.
With The Pocket Drone®, we wanted to provide our customers with a powerful user-friendly tool to enhance exploration and preserve memories. We are deeply grateful for the support and forbearance of all of our backers and customers. We have also been impressed and humbled by the amazing community of people who came together to improve upon the designs we generated and support other users. We wish you safe flight, and hope you will all continue to enjoy the magic of being able to see the world from a new perspective.