Originally launched on Kickstarter in 2013, the Coolest cooler looked set to be a crowd pleaser from the off. The product promised to be a ‘portable party disguised as a cooler’ and featured gadgets galore including a USB charger, blender, Bluetooth speaker and a cutting board.
The initial crowdfunding attempt for the Coolest cooler did not go well but a follow up campaign in 2014 went on to break records on Kickstarter, raising over $13 million from more than 62,000 backers. The campaign was the most successfully backed project of the crowdfunding sites history and won several awards. The entrepreneur behind the product, Portland based Ryan Grepper, was thrown into the limelight as the poster boy for Kickstarter.
And, they didn’t even give away any equity!! This was a rewards based fundraising, not an equity crowdfunding campaign.
With a buy-in price averaging at $175 the opportunity to be part of Grepper’s vision was too good to miss and the number of investors grew in record time but once the campaign doors closed things began to turn sour.
Despite raising such a phenomenal amount of money, Coolest was still just a prototype; backers had shown their support for an idea without realising the very nature of crowdfunding.
At the time of writing this post and almost 24 months since Coolest began to receive backing on Kickstarter, only a third of investors have taken delivery of their coolers; why?
In August 2015 (a year after the campaign originally launched), backers received correspondence from Coolest promising delivery of their product by November 2015. They cited postal issues as cause for delay but when November came and went the reasons continued to mount as to the non-appearance of the coolers including a factory strike.
The latest update on April 12th explained to backers that they would need to spend an additional $97 in order to receiver their Coolest cooler by the summer….it appeared that the original asking price was not enough to cover production and shipping costs.
“…keep(ing) the lights on” with Amazon
In order to keep the project alive, Grepper uploaded a (now deleted) video to YouTube explaining that the Coolest cooler was being sold on Amazon for around $400. He went on to add that those backers who would not pay the additional $97 would need to wait until the company had recovered enough profit from the Amazon sales to cover the shipping to original backers. No deadline was given for when this might be.
There may be trouble ahead….
Rightly so, most backers were not too pleased to hear this information and one disgruntled user published private information about employees of the company potentially opening them up to threat and harassment.
The crowdfunders appealed to Kickstarter to get their money back and began publicly shaming Grepper and the company via social media platforms and Kickstarter’s own forum.
Some backers have even expressed an interest in filing a lawsuit against the company, calling Grepper a loser, a fraud and a snake oil salesman.
From being Kickstarter’s Golden Boy to being at the centre of a drop in faith at crowdfunding in general, Grepper’s failings in money management and planning seems to have seriously dented the confidence of potential backers to other projects.
Projects pitched for crowdfunding are far more appealing than standard investments opportunities. It’s easier to feel more excited about backing young designers, talented entrepreneurs and passionate inventors than sinking a few hundred into a savings fund but, as with any investment, there are risks; and any number of ways that, even with the best of intentions, things don’t go according to plan.
In fact, independent research suggests that almost one in ten projects on Kickstarter that achieve their full funding fail to deliver on their goals.
The Coolest cooler was a great idea but money alone can’t always see a project through to fruition. Backers should also look for potential projects that pay attention to the reality of the deliverable and with the expectation that a project’s creator may be overoptimistic with timescales and costs.
As with any investment, you take a gamble and sometimes this will pay off and sometimes there will be delays but the benefits can also be very rewarding.
So, whilst Grepper’s project wasn’t the success it first appeared to be, do also remember that far more projects that receive their funding goals go on to be successful, albeit in a far less headline grabbing way….but perhaps that’s for the right reasons.