Josh Guyot knew he had a hit on his hands. He’d created an
elegant, inexpensive device that turned iPhones into remote-controlled
robotic video machines–and used Kickstarter, the ubiquitous online
crowdfunding platform, to raise startup capital. Within three and a half
days he and partner JoeBen Bevirt had hit their $100,000 goal; by the
time their campaign ended a month later their company, Motrr, had raised
a staggering $702,427.
“That was a great confirmation that people really were interested,” says Guyot. The plans went out to an assembly plant in southern China that Bevirt had engaged for an earlier project to make tripods for iPhones. At that point they had more than $500,000 in back orders from 5,200-plus early funders. Motrr’s deal: If you kicked in $85 or more, you’d get a free Galileo device, which would retail for $130; the company’s unit cost of $35 would still provide hefty gross margins.
With production well under way, Motrr was suddenly ambushed. In late September Apple came out with the new iPhone 5–and turned the developer community upside down. The familiar 30-pin connector powering every iPhone was tossed in favor of a sleeker 19-pin version. Guyot had to rethink, retool–and refund a lot of orders.
The Cloud Economy is great–but when you get hit by a bolt of lightning, all your plans can come tumbling back to Earth.
Guyot’s story begins, as so many entrepreneurs’ do, in college. An industrial design major at Carnegie Mellon University, he graduated in 2000. His first product was designed during the long drive back from a ski trip to Lake Tahoe with his then girlfriend, now wife, Sloan Russell. “She was driving, and I was drinking out of my neoprene bottle, and I splashed all over myself,” he recalls. “Something clicked in my head, and I said, ‘There’s got to be something for this.’?”
That something was a product called SplashGuard, a silicone insert that acts as a seal-cum-opening to make spilling nearly impossible. Over the next decade Guyot Designs went on to make silicone bowls for backpackers and pets and ingenious sets of utensils. But there was a cost. “We’ve borrowed tens of thousands of dollars from friends and family to get products into production,” says Guyot. “Since then we’ve had to fund growth and inventory with hundreds of thousands of dollars of bank loans, using our home as collateral. We’ve always done expensive money.”
That’s why Kickstarter was such an irresistible option. Launched in 2009 as a modest “tip jar” to help artists fund projects, the Cloud-based platform has since grown to raise $351 million for 32,000 projects. The site achieved the financial equivalent of Mach 1 in May, when the Pebble watch, a smartphone timepiece, raised $10.3 million.
After watching Glif, a simple iPhone mount and stand, raise nearly $140,000 on Kickstarter, Guyot and Bevirt decided they had to jump in. He and Bevirt, a Stanford engineering grad who grew up in an electricity-free commune in California’s Santa Cruz mountains, shared a love of design, robotics and automation.
Meeting in 2011, they decided to create a new kind of motion-controlled camera. Activated by a finger-swipe across an iPad or other iOS device, Galileo orients your iPhone or iPod Touch according to how you direct it, with speeds of up to 200 degrees per second. With easy apps for photographers, videographers and social networking sites, you can appreciate how the device could transform Web video connectivity.
Kickstarter wasn’t just a way to raise capital. “We thought it could get us a tremendous amount of marketing and p.r., and it really did,” says Guyot. “Within the first two days we were on Engadget, and that spread like wildfire. Facebook and Twitter all really helped to spread the campaign.”
With money in the bank, Motrr set up a warehouse in the Bay Area to store and ship devices. Inevitably there were technical challenges. The printed circuit boards inside the housings failed muster. Some backers grumbled about delays. “You’re very exposed to everybody’s criticism,” sighs Guyot. “You have to manage their expectations.”
No one, though, expected Apple to redesign its connector. Motrr faced a potentially make-or-break dilemma: continue with the old connector, which satisfies the iPhone 3, 4 and 4s, and meet promised delivery dates, disappointing iPhone 5 users–or return to the drawing board and push back delivery. The company decided to do both, selling the current Galileos to satisfy earlier iPhones and reequipping for the new model.
“It’s taken far more time and resources than we could ever have anticipated,” says Guyot. As for his backers? “Back a few months ago,” before the iPhone 5 hiccup, “we knew some people would want a refund. It was the right thing to do–but it backfired: We had to give tens of thousands [of dollars] in refunds.”
Motrr has given all Kickstarter backers the option of switching to the iPhone 5 version. To date roughly 10% have done so. Guyot promises them they’ll receive the new Galileos sometime in the first quarter of 2013. Where will any new funds come from? Not from Kickstarter. In September it posted new guidelines: In addition to providing background information, hardware creators are now required to submit a manufacturing plan and a prototype.
Despite the setbacks, Guyot remains enthusiastic about his adventure in the Cloud Economy. The experience, says Guyot, “has changed the way I will do business going forward.” He hopes the latest device will require just a few technical tweaks and very little outside money, if any. “Making products that interact with an iPhone is quite challenging,” he says with obvious restraint. Which may be why he is planning to expand Galileo to work with Android, Windows and GoPro devices in the near future.
(published in the 12/10/12 edition of Forbes Magazine)
“That was a great confirmation that people really were interested,” says Guyot. The plans went out to an assembly plant in southern China that Bevirt had engaged for an earlier project to make tripods for iPhones. At that point they had more than $500,000 in back orders from 5,200-plus early funders. Motrr’s deal: If you kicked in $85 or more, you’d get a free Galileo device, which would retail for $130; the company’s unit cost of $35 would still provide hefty gross margins.
With production well under way, Motrr was suddenly ambushed. In late September Apple came out with the new iPhone 5–and turned the developer community upside down. The familiar 30-pin connector powering every iPhone was tossed in favor of a sleeker 19-pin version. Guyot had to rethink, retool–and refund a lot of orders.
The Cloud Economy is great–but when you get hit by a bolt of lightning, all your plans can come tumbling back to Earth.
Guyot’s story begins, as so many entrepreneurs’ do, in college. An industrial design major at Carnegie Mellon University, he graduated in 2000. His first product was designed during the long drive back from a ski trip to Lake Tahoe with his then girlfriend, now wife, Sloan Russell. “She was driving, and I was drinking out of my neoprene bottle, and I splashed all over myself,” he recalls. “Something clicked in my head, and I said, ‘There’s got to be something for this.’?”
That something was a product called SplashGuard, a silicone insert that acts as a seal-cum-opening to make spilling nearly impossible. Over the next decade Guyot Designs went on to make silicone bowls for backpackers and pets and ingenious sets of utensils. But there was a cost. “We’ve borrowed tens of thousands of dollars from friends and family to get products into production,” says Guyot. “Since then we’ve had to fund growth and inventory with hundreds of thousands of dollars of bank loans, using our home as collateral. We’ve always done expensive money.”
That’s why Kickstarter was such an irresistible option. Launched in 2009 as a modest “tip jar” to help artists fund projects, the Cloud-based platform has since grown to raise $351 million for 32,000 projects. The site achieved the financial equivalent of Mach 1 in May, when the Pebble watch, a smartphone timepiece, raised $10.3 million.
After watching Glif, a simple iPhone mount and stand, raise nearly $140,000 on Kickstarter, Guyot and Bevirt decided they had to jump in. He and Bevirt, a Stanford engineering grad who grew up in an electricity-free commune in California’s Santa Cruz mountains, shared a love of design, robotics and automation.
Meeting in 2011, they decided to create a new kind of motion-controlled camera. Activated by a finger-swipe across an iPad or other iOS device, Galileo orients your iPhone or iPod Touch according to how you direct it, with speeds of up to 200 degrees per second. With easy apps for photographers, videographers and social networking sites, you can appreciate how the device could transform Web video connectivity.
Kickstarter wasn’t just a way to raise capital. “We thought it could get us a tremendous amount of marketing and p.r., and it really did,” says Guyot. “Within the first two days we were on Engadget, and that spread like wildfire. Facebook and Twitter all really helped to spread the campaign.”
With money in the bank, Motrr set up a warehouse in the Bay Area to store and ship devices. Inevitably there were technical challenges. The printed circuit boards inside the housings failed muster. Some backers grumbled about delays. “You’re very exposed to everybody’s criticism,” sighs Guyot. “You have to manage their expectations.”
No one, though, expected Apple to redesign its connector. Motrr faced a potentially make-or-break dilemma: continue with the old connector, which satisfies the iPhone 3, 4 and 4s, and meet promised delivery dates, disappointing iPhone 5 users–or return to the drawing board and push back delivery. The company decided to do both, selling the current Galileos to satisfy earlier iPhones and reequipping for the new model.
“It’s taken far more time and resources than we could ever have anticipated,” says Guyot. As for his backers? “Back a few months ago,” before the iPhone 5 hiccup, “we knew some people would want a refund. It was the right thing to do–but it backfired: We had to give tens of thousands [of dollars] in refunds.”
Motrr has given all Kickstarter backers the option of switching to the iPhone 5 version. To date roughly 10% have done so. Guyot promises them they’ll receive the new Galileos sometime in the first quarter of 2013. Where will any new funds come from? Not from Kickstarter. In September it posted new guidelines: In addition to providing background information, hardware creators are now required to submit a manufacturing plan and a prototype.
Despite the setbacks, Guyot remains enthusiastic about his adventure in the Cloud Economy. The experience, says Guyot, “has changed the way I will do business going forward.” He hopes the latest device will require just a few technical tweaks and very little outside money, if any. “Making products that interact with an iPhone is quite challenging,” he says with obvious restraint. Which may be why he is planning to expand Galileo to work with Android, Windows and GoPro devices in the near future.
(published in the 12/10/12 edition of Forbes Magazine)
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