Crowdfunding has become a practical and acceptable way for small companies and startups to raise the capital they need to get their business off the ground. But a successful crowdfunding campaign doesn’t necessarily translate to a successful business, as there is still a myriad of challenges that must be overcome when bringing a new product to market. Just ask the team behind the “Heacket”, a product we first covered when it launched on Indiegogo back in December of 2016.
The high-tech jacket promised to keep wearers warm in cold temperatures by using a small USB battery pack to power heating elements woven into its textile. The idea was that skiers, snowboarders, mountaineers, and other outdoor enthusiasts could stay outside longer –– and remain more comfortable –– thanks to the extra warmth generated by the jacket itself.
After the Heacket’s campaign wrapped up in February of 2017, the team behind the project went radio silent until early April.
The pitch was obviously an effective one and the Heacket went on to become a major success story, raising more than $289,000 over the course of just a few weeks. With the necessary funding secured, the team behind the crowdfunding campaign promised to begin production as soon as possible with the intention of shipping the jacket by April of 2017.
But when that month came and went without a single garment delivered, red flags started to go up with backers. Before long, it became clear that there was something amiss with the project, which eventually devolved into yet another cautionary tale for those considering backing any crowdfunding effort.
Delays, delays, delays
After the Indiegogo campaign wrapped up in February of 2017, the Chinese team that launched the project went radio silent until early April. At that point, they reemerged to post an update indicating that they had faced some unforeseen manufacturing delays, but that they had managed to overcome those hurdles and the first shipment of jackets were being prepped for delivery. An accompanying photo showed what appeared to be stacks of Heackets that were ready to be shipped out to eager backers.
A photo posted by the production team showing what appeared to be stacks of Heackets ready to ship.
The next update came just a few weeks later in late April and brought bad news. A fire had reportedly broken out at a DHL shipping center in Hong Kong, causing a delay in sending out the jackets.
Once again, the post was accompanied by a photo, this time showing a small fire inside a nondescript warehouse environment that may or may not have belonged to DHL.
The good news was that all the Heackets had escaped damage from the blaze and the team was in the process of hiring a new shipping agency with the promise that all of the jackets would be shipped out in May.
After issues getting Heacket certified to ship via air, they decided to send the jackets by sea.
A month later, things seemed to be improving when the team posted its next status report. Once again, they had faced some unexpected challenges with the shipping process, this time due to the large number of battery packs the company was sending out to customers.
That situation seemed to be resolved however and backers were told that the new shipping agency was preparing to send all of the jackets. At that point, delivery had only been delayed by about a month and customers were told:, “This time there will not be further delays.” That ended up being far from the truth, however.
Another photo posted by Heacket accompanying an update on how a fire had reportedly broken out at a DHL shipping center in Hong Kong, causing a delay in sending out the jackets.
Three months passed before the next update, and in August of 2017, the Heacket team revealed that they were having difficulty getting the certifications they needed to ship battery packs via air.
In order to get around this challenge, they made the decision to send the jackets by sea instead. This would reportedly make the process much easier, although it would once again bring additional delays.
By this time, supporters of the project had started to become nervous about whether or not they would ever get the perks they were promised for backing the crowdfunding campaign. Hundreds of emails were pouring into Heacket customer support requesting updates, while others began posting comments on the Indiegogo page sharing their frustrations and growing concerns. Some called the project a scam, while others continued to hold out hope that they would be rewarded for their patience eventually.
In October of 2017, the Heacket team announced that the jackets had begun shipping at long last. The first batch had been loaded onto ships and they were now en route to the customers. The company posted several messages to its Indiegogo page apologizing to its backers and reassuring them that their new heated jackets would arrive before winter.
Over the subsequent two months, regular updates followed, indicating more shipments had been sent out. It seemed that despite the long delays –– something that isn’t all that uncommon amongst crowdfunding projects –– customers were finally going to get their hands on the Heacket.
But once again, supporters were met with disappointment. A few customers took shipment of the Heacket only to find that it was considerably smaller in size than what had been advertised. The jackets were often too tight in the shoulders, too short in the sleeves, or were simply too small to be worn at all.
Later, it was revealed that when the jacket went into production, the sizes ended up being based on those that are common within China, which aren’t nearly as large as garments that are made to be sold in the U.S. or Europe.
By now, things had turned into a complete disaster for the Heacket team. They had missed their promised shipping date by six months and customers were growing angrier by the day.
Just a few of the 1,600+ comments on Heacket’s official Indiegogo campaign page.
Dozens of comments were being added to the Indiegogo page with numerous backers indicating that they had yet to receive their jackets, while others demanded refunds or exchanges. Some indicated that they were disappointed in the build quality and hinted that inferior materials were used to make the jacket. There were even those who said the heating elements stopped working after wearing the coat a time or two.
Double down? Really?
As if all of that wasn’t enough, the Heacket team made the inexplicable decision to conduct a second Indiegogo campaign to collect funding for yet another heated jacket. This time they called their product the Outwarmer, and promised that it would be a significant upgrade over the Heacket in every way.
Efforts to reach anyone on the Heacket team for comment on this story proved fruitless.
Naturally, supporters of the original campaign were none too happy with the news, pointing out that many of them still hadn’t received their original orders. To appease those customers, the team offered supporters of the original model a $99 upgrade to the Outwarmer. Some took the deal, while others continued to remain patient.
Many continued to reiterate their dissatisfaction with the entire process, regularly posting comments to the Heacket Indiegogo page.
The Outwarmer crowdfunding campaign managed to reach its modest goal but pulled in just a tenth of the cash that Heacket had a year earlier. Worse yet, it seems to have been plagued with similar issues, shipping delays, customers not receiving their jackets, and the coats ending up being completely undersized. To be fair, more customers seem to have received their Outwarmer jackets, but the campaign was far from a rousing success story.
Efforts to reach anyone on the Heacket team for comment on this story proved fruitless, but when the jacket was first announced the company was working with a Chinese marketing firm called Meltpartners Outdoors. We were able to connect with someone from that organization who confirmed that Heacket was a former client of theirs, but that the contract between the two companies ended earlier this year.
Speaking on condition of anonymity, the Meltpartners rep told us that the first 200 jackets were manufactured at the proper size, but everything after that was made to Chinese sizing specifications instead. This is why so many customers received coats that were way too small, with most now left high and dry without an opportunity to exchange them or collect a refund.
Lots of money was raised and many disgruntled customers have been left with very little to show for their investment.
We were also told that the founder of Heacket was forced to sell his house in order to launch the Outwarmer Indiegogo campaign, a move that ultimately proved futile. The company reportedly has now closed up shop and is attempting to sue the factory that manufactured the jackets in an effort to recoup some of the money.
That legal process could take a long time to play out however and time is a commodity the team doesn’t seem to have. Apparently, Heacket is headed toward bankruptcy, closing the book on what was once a very promising startup.
Digital Trends also reached out to Indiegogo to see if the crowdfunding platform could offer any insights into what exactly happened with the Heacket campaign. A spokesperson for the company told us that it was investigating the situation, but as of this writing, there was no further information to share. In other words, they know about as much as we do –– lots of money was raised and many disgruntled customers have been left with very little to show for their investment.
When asked if customers had any recourse against the organizers of the crowdfunding campaign, we were told that Indiegogo can issue refunds to supporters provided that they are requested prior to the end of the campaign deadline. After that, the funds are released to the organizer and Indiegogo essentially has no more control over the money. Such was the case with the Heacket, which ended up being highly successful in terms of the amount of cash raised. It wasn’t until the company actually tried to manufacture and ship the jacket that things started to go off the rails.
It’s unlikely that Heacket customers will ever receive the jackets or get even a partial refund.
Indiegogo’s terms of service prominently point out that supporters accept the risks that come along with backing a crowdfunding campaign when they contribute money to the cause. There is no guarantee that any product or service will be delivered on time or at all for that matter.
All agreements made are between the backer and the creator of the campaign, with the website merely serving as a platform for connecting the two parties. Once the campaign has come to a close, Indiegogo may assist in helping a project reach the marketplace, but it has no direct control or influence over the campaign creator. In other words, contributors are left to the mercy of the campaign owner, who may or may not deliver.
For the most part, the crowdfunding process is a good one, allowing startups to get some much-needed funding while providing backers with enticing perks. But occasionally there are campaigns that end up like the Heacket, with a trail of broken promises left in its wake. Unfortunately, if the campaign owner doesn’t have the wherewithal –– or the desire –– to refund backers, there is very little that can be done and contributors can find themselves out a lot of cash. That certainly seems to be the case with the Heacket, as it seems very unlikely that they’ll ever receive the jackets they pledged their hard earned money towards or get even a partial refund.
The moral of the story is to be careful which crowdfunding campaigns you ultimately back, as even the highly successful ones can end in disaster.
- Don’t get burned! How to back crowdfunding projects the smart way
- The Mate X folding ebike carries a 55-mile range with an affordable price tag
- Portable microphone system transcribes multi-person conversations in real time
- Awesome Tech You Can’t Buy Yet: UV-sensitive tattoos and ultrasonic washing machines
- You can put your name down for the Atari VCS, but it won’t arrive until 2019
The LA Times has reported that Verizon has announced that it will no longer impose data restrictions on first responders on the West Coast and in Hawaii. The news comes in the wake of a massive backlash generated by the announcement that Verizon had been throttling the data of firefighters from the Santa Clara County Fire Department.
In addition to this announcement, the mobile carrier has also said that it will be rolling out a new plan for first responders which aims to address these issues. The plan cost $38 a month and will offer first responders unlimited data and priority access on congested networks. A company representative also said that the company will disable throttling for all future responders during emergencies.
Verizon’s vice-president of business and government sales, Dave Hickey, made the announcement on Friday, August 24, while attending a meeting with California lawmakers. During the meeting, lawmakers expressed surprise that Verizon would throttle the speed of first responders, but were relieved to hear that the company was changing its policies.
Verizon said that the Santa Clara County Fire Department’s plan featured unlimited data, but that they were subject to slowdowns due to reaching their monthly cap. Officials who were trying to coordinate relief efforts said that Verizon’s throttling caused their operations to nearly grind to a halt. One person said that the speeds were akin to using a dial-up modem from 1995.
Verizon’s senior VP of the public sector, Mike Maiorana, has issued an apology for the issue and has called it a customer service error.
“In supporting first responders in the Mendocino fire, we didn’t live up to our own promise of service and performance excellence when our process failed some first responders on the line, battling a massive California wildfire,” said Maiorana. “For that, we are truly sorry. And we’re making every effort to ensure that it never happens again.”
Despite this apology, Verizon has rebuffed claims that this is a net neutrality issue and maintains it was a customer service error. However, representatives from the Santa Clara Fire Department have disagreed with this statement. Anthony Bowden, chief of the Santa Clara Fire Department, has gone so far as to join in a lawsuit filed by 21 states seeking to overturn the FCC’s decision regarding net neutrality.
- California’s pro-net neutrality bill passes the Senate
- Congress has until Monday to save net neutrality and keep the internet open
- Switching to the ‘Un-carrier?’ Here’s a breakdown of T-Mobile’s plans
- We tried Visible’s $40 unlimited data plan for two weeks to see how it fares
- AT&T WatchTV is free streaming TV for wireless customers, fueled by Time Warner purchase