In October of 2013, Finland's most promising and successful crowdfunding round reached an end when Espoo-based Beddit closed their IndieGoGo campaign with an unseen national achievement of $500,000 in received funds. We covered them, twice, closely following the steps of their success. It's time to check where they're at now.
Their product, a sleep monitoring hardware solution and app, promised customers deep analytics of their sleep schedule through a ribbon that picks up heartbeats and breathing rates from the user. The price wasn't bad for this high tech solution either - it just clocked in at $114.
Unfortunately the company seems to have tripped over the Finnish line, and customers are complaining the company didn't live up to its challenges listed in their IndieGoGo page as the product began shipping.
Under their 'Challenges' section they wrote:
“The risks with the hardware, Beddit sensor, are well mitigated and we have experience in successfully bringing products to the market, as well as managing the supply chain, production, and logistics. The iOS and the Android apps are scheduled to be launched simultaneously. The app development is progressing as planned. First application prototypes with limited features are already being used by the first test users. The hardware works seamlessly with both platforms. We promise timely and transparent communication throughout the process!”
Though the above statement is listed under "challenges", it can easily be interpreted as direct promises, which is probably why some of the feedback has an aggressive tone.
We at ArcticStartup saw a demo of some similar hardware the Beddit guys were using in hospital beds, and it was fairly breathtaking to see hearbeats and breaths pull up on the computer in real time, just by leaning a chair on top of a sensor. The technology works, but Beddit hasn't seemed to deliver for their consumer product.
Below are a few recent of the many unhappy and aggressive comments posted in Beddit’s IndieGoGo page, accompanied with a few selected replies from Beddit’s CEO Lasse Leppäkorpi.
It’s clear that there is an obvious general discontent with the delivery of Beddit's products, both the application (of which the Android version hasn’t been released yet) and the hardware. Thats pretty much the exact opposite of what should have happened at launch.
Leppäkorpi does seem to communicate to some extent but I really need to point out the promise written by the company, which I quoted in the beginning of the article, clearly states that none of the problems above were to be expected. Yet here they are.
What’s interesting about the case, is that it makes myself question the viability and trustworthiness of crowdfunding as a whole. What are the criteria for a good launching crowdfunding campaign? There’s a huge difference between a great concept and a great, possible and viable concept.
The problem is that by hyping a great invention and making huge promises, its easy to forget it's tough to deliver a complete, working product to the hands of the consumer. Inventors might not be in their comfort zone when it comes to solving logistical problems.
Crowdfunding is a marvelous thing that really gives corporate newcomers an alternative entrance to an successful business, but with bigger hype comes bigger risks for consumer disappointment. Unlike VCs and Angels, common backers rarely have the interest or the resources to really analyze how likely the product will be delivered as stated. Naturally, the amounts invested individually are far less than the amounts put in by professional investors, but this shouldn't mean the service provider should treat their promises with any less respect.
Who protects crowdfund funders?
For more insight into the regulations of non-equity crowdfunding in Finland I strongly suggest you re-read our article from a few years back.
All is not lost though. If Beddit works up a working app and device, delivers these to their customers as quickly as possible, we might start seeing an inflow of positive feedback, which would eventually give this fumble a better ending. Whether the damage done can be completely repaired, well that’s another story.