3D Robotics

AIrDroids (PocketCopter) ceasing operations

3689651910?profile=originalSorry 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.

Team AirDroids

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Comments

  • In the description of the 'post mortem' text in the post, they have provided a link (www.airdroids.com/files.html), where we can find and re-use their design files. Clicking on the link shows a 404 ERROR.

    Does anyone have access to their design files?

    Thanks!

  • Caveat emptor applies to investors as well.

  • Sorry to see this stop but it had a rough beginning starting with the rock solid in flight promo videos which it was found out were taken with a completely different, larger multicopter that had a large gimbal camera and such. I have found that kickstarter is a great way to loose less money than if you funded the complete project out of pocket and should only be used if your product is actually ready to be mass produced. The projects that reach their funding goals are usually priced at cost or slightly below, along with stretch goals that add features not initially accounted for in the price. Along with other "rewards" such as T shirts and what not that add more shipping headaches than it's worth. Bad parts from the manufacturer and other cost over runs are rarely considered. Kickstarter and Amazon payments take a chunk and the city you live in may take a chunk for doing business there so the $ is not tax free. All of which takes up time and leaves no $ left over for patents and R&D which is what most of these projects seem to spend most of the money on. It's easy to get excited about a project that reaches its funding goal until you really look at the prices and promised features that show the funding goal to be far below what it should have been.

    Case in point I watched the "Coolest" cooler make over 13 million$. With over 60,000 backers, if each cooler is just one dollar below cost, he'll be 60,000 dollars in the hole right there. Add in the usual amount of returns, people complaining of defects, money spent on the R&D upgrades they have announced and that 60,000 loss can grow much larger real quick. Facebook doesn't always show up and buy your coolers for a couple billion like they did for some glasses. I hope it succeeds though as there is no reward without some risk.

  • Moderator

    @Quadzimodo,

    true, I didn't go through Kickstarter comments, and I see some negative comments. I relied totally on the post. After backing few Kickstarter projects, I have my own experience in "no show" products. so I felt this is better than that, but seems I was wrong. Atleast, they shared their experience.

     I remember the full episode, what happened during their campaign and comments by you and many others here at DIYD. I also agreed with you on how they claimed those videos done by pocket drone. 

  • Bill I do not actually disagree with anything you say. I clearly have far too much time on my hands today. I just thought it odd that the founder was an IP Attorney by trade and one of the people close to the project made reference to a patent pending (presumably a design patent) and a potential infringement by Hobbyking (on DIYD). And the end result was so, so terrible. I mean it does-not-fly terrible. Maybe  I should have looked a little closer when I got a hit on the trademark when I thought that I was searching on patents. So, enough from me today.

  • Whatever else is true, this is a valid cautionary tale.

    As this discussion points out there are a lot of reasons to be very careful about investing in this sort of project.

    If it's something you really believe in and you can afford the loss then fine, toss the dice, but be clear, it is a toss of the dice.

    I still like the concept, there are just a lot of ways it can go wrong, intentional, careless, lack of foresight or just bad luck.

    As for the patent thing, mostly our technology moves so fast that very few patents are going to have any long term effect, they are mostly obsolete by the time they are implemented.

    The reason this stuff has moved (and is moving) so fast is because the open source, open hardware fanatics (us) keep leapfrogging the system.

    So, damn the torpedoes, full speed ahead and up the institution.

    A lot to be said for the benefits of Anarchy.

    Best Regards,

    Gary

  • Developer

    @Marc. The patent application is just part of the process in creating a company with IP. Filed in April 2014. It's a mechanism to attract investors. The other options are 'Trade Secrets', Trademarks and "Trade dress".

    IMHO I believe they did not act fraudulently. Some mistakes that have been identified in the write-up of lessons learned (though I think the Amazon Pay and Kickstarter being blamed for their cut is lame as those are declared upfront costs by those entities)

    What would have been interesting is to know when the key decision to go / no go was made? Was that made when investors where on-board to help launch the company, or made with the hope of investors coming on-board later. Persumably they didn't get the kind of angel investment they needed.

    What is clear, a $500 RTF package drone needs more than sale-price to develop. Which isn't that surprising as 3DR Kit prices where about that at the same time. 

    As for Kickstarter, it a 'market validation' tool when it comes to manufacturing. It does not take into account the capital costs need to start manufacturing a product. A successful Kickstarter Campaign needs to lead to a successful funding campaign before 'Go" can be decided.

    [On a side note, I think Pebble di their new watch on Kickstarter for the benefit of kickstarter and marketing, more than need, and I bet they are not paying 9c on every dollar to do so!]

  • Well I may be way off base an howling at the moon. I do not know how to search for patents. I just know that one of the former founders made reference to a pending patent.......so I did a quick search.

  • 3D Robotics

    Marc, that's a Trademark, not a Patent. All companies file trademarks. 

  • I am not outraged on behalf of consumer that spent $500 on kickstarter. I seriously doubt anyone was in the poor house because of this. But it is an interesting post mortem. This was potentially not just a technology fail that I thought may have been a bit unlikely from the get-go. Nothing wrong with failing and blowing people's money in the process. Some of us have honestly done this.

    But when I saw that the founder is an IP Attorney that was clearly doing IP work for Airdroids in a time frame when it must have been clear this device was not actually even going to fly, literally, then you have to start questioning integrity. Why should be we believe the PR piece put out. Why should we believe work was being done pro bono. It is not a leap at all to think that a substantial amount of money was cynically spent on this and something rather token was actually delivered.

    Could this be The Producers meets Drone Kickstarter? I am not saying it started out like this but it could have ended up that way...

    I think it is valid the ask these questions and have these discussions about patents and Kickstarter. 

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