The ultra thin CST-01 watch that shows the time using an E-ink display had raised over $1 million on Kickstarter, but just 3 years following the campaign backers have received a notice that they will not get the product or their money back.
Crowdfunding campaigns have flooded the internet in recent years, however in some cases even products that have raised several times more than their initial goal did not find their way to its backers. The latest product to go down that road is the CST-01, dubbed the “world’s thinnest watch” from Central Standard Timing which shows the time using an E-ink display and weighs 12 grams.
The project, which ended in February of 2013, has raised over $1 million from 7,658 backers. Central Standard Timing planned to answer the demand by producing about 2,000 units on a weekly basis, but actual numbers were about 100 to 200 units produced weekly.
After several updates, excuses, delays and explanations, the company has published a private message on the campaign’s home page declaring that the company has officially declared bankruptcy.
An outright gamble
On June 2015, CST had updated that it has parted ways with Flextronics, a leader in the wearable technology industry. Coupled with a brief apology, the company closed the update on a brighter note with a promise to get back on track as soon as possible. However, the latest news coming out of CST has left its backers, who invested at least $99 in order to secure a unit to themselves, without a product or a refund.
According to Slash Gear, the update did not contain any text, only a few legal documents declaring CST’s bankruptcy and clarifying that none of the backers will receive their money back. Slasher found one document that said that the company’s assets totaled just $30,000 while having liabilities of $891,563. The whereabouts of the capital raised by the company during the campaign are unknown.
This update is very unfortunate news for the backers, but it must be noted that investing in future projects that are still in the prototype stage is ultimately a gamble that will not necessarily yield positive results. It is not the first case of a crowdfunding project going viral and raising several times its initial goals just to end in a disappointment. In November of 2015, two different projects managed to raise $17 million combined, only to declare bankruptcy soon after.
The first project is Coolest Cooler, which has a built-in Bluetooth speaker, blender, smartphone charger and internal lighting. The project achieved massive success and managed to raise $13 million, a figure that made the campaign the second most popular crowdfunding project on Kickstarter behind the Pebble watch.
The second product is Zano, a nano drone that garnered major support from news outlets and backers alike. Torquing’s nano drone raised more than $3.5 million against the production of 12 thousand units.
Kickstarter does not provide any guarantee or protection for backers. Once the campaign has reached its goal, it is closed and the backers are charged with no way of getting their money back. When we back a product it is important to remember what the company’s spokesperson emphasize whenever a bankruptcy case arises: that Kickstarter is not a store, and backers help make an idea to become reality, and in return they enjoy an attractive price of the finished product, and in no way are they purchasing a product that currently exists on the market.