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E-scooter company goes bust after spending big on Facebook ads

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Re: E-scooter company goes bust after spending big on Facebook ads

#101

Post by koolba »

bransonf wrote: post #13

If you give $700 to a company that promises to deliver a scooter, and they spend that money on advertising, that’s fraud. They have no plausible argument that they didn’t know they couldn’t deliver or refund customers after they started spending pre-order funds. I hope customers get successful chargebacks and there’s a class action lawsuit. This wasn’t a crowdfunding campaign. Consumers were lied to, and the law shou…

Why would anyone do this when you can get what seems like the same scooter for $300? Isn’t this the same as those Xaiomi (spelling?) scooters I keep seeing for sale?

Re: E-scooter company goes bust after spending big on Facebook ads

#102

Post by koonsolo »

mherdeg wrote: post #12

I have read people say that a key difference in entrepreneurship in the US versus European countries is that European company founders are much more likely to be held responsible for their companies' debts and are therefore much less likely to experiment with new businesses at the rapid pace we see in the US. Would that have been true here? If a German startup had raised $150k in venture capital and taken $250k in or…

At least in Belgium, you could still be charged by neglectance when your company goes bankrupt. I have no idea what that means in practice and how many are actually convicted.

This is to prevent doing irresponsible things without it being real fraud.

Re: E-scooter company goes bust after spending big on Facebook ads

#104

Post by taude »

mikestew wrote: post #81
davidweatherall wrote: post #5

It seems they "only" had $150,000 in funding, but as they were basically white labelling the Segway ES2[1] I'm surprised they didn't just hold onto their sales revenue to purchase the product... Interestingly enough, about 2 clicks around their site and you realise they didn't even put the effort into setting up their Shopify site correctly... - https://unicornrides.com/collections/all [1] - https://unicornrides.com/…

I’d rather they white-label the Segway than build the monstrosity in the video. Though the Ninebot won’t let you tote your three year old on it like in the video. (WTF? I know people do it, but advertise it as a feature? I ride a Boosted Rev to work every day, and my advice is: no one under 13 admitted, at all.) Others in this thread are saying it was $700? Why not buy the Ninebot for $100 less? Or were the shipping…

EDIT: Sorry, mis read your comment the first time. I was excited that you had a hookup for $100 scooters.

~where do you get a Ninebot for less than $100? [1]

[1] https://store.segway.com/segway-ninebot-kickscooter-es2~

Re: E-scooter company goes bust after spending big on Facebook ads

#105

Post by blunte »

MarketingJason wrote: post #53

Ouch - 150K in a seed funding round from Y Combinator

This makes me wonder about Y Combinator. What this scooter company so new and innovative that it warranted investment? Isn't it one of dozens?

Or is it that there's must too much VC money without enough places to put it...?

More pessimistically, it's plausible that a lot of VC money gets spent on expenses that directly or indirectly benefit those VCs, so it's less about the viability of the startup and more about the money flow.

Re: E-scooter company goes bust after spending big on Facebook ads

#107

Post by alistairSH »

ghshephard wrote: post #69
johnfactorial wrote: post #42

Earlier quoted context omitted.

> If you gave $700 to a company who promised to deliver you a scooter a few years down the line if all of the dominoes fell exactly as planned... I would argue that you got what you paid for even if it amounts to nothing tangible in the long run. Is that what happened with this company? That's the model of kickstarters and the like, but this story sounds like it was a real company offering a product for sale. If a co…

You don't really "sell" products on kickstarter, you try and convince people that you'll actually follow through on your vision. I've backed a dozen or so, and I've got about a 50% hit rate of anything coming through. The failures are always interesting. Trying to guess, ahead of time, which ones are failures (or scams) - is an education into itself. They always seem so earnest in the beginning. But, yeah - go into k…

You don't really "sell" products on kickstarter,

The link doesn't mention Kickstarter at all - I assumed Unicorn was selling through their own website?

Re: E-scooter company goes bust after spending big on Facebook ads

#108

Post by cletus »

Here's my take: the company needed to raise $X to deliver their $700 scooters. They had raised $Y where $Y Since the only way for Unicorn to raise money is by preselling scooters They had to sell more scooters. Word of mouth wasn't doing it so they tried advertising for customer acquisition. Nothing unusual here.

So when they say the as we expensive what they realty mean is customer acquisition was really expensive. To put it another way conversions were really low.

So they likely completely understood these costs. They may have been unrealistic. They may have been sold a bill of goods (as agencies are notorious for unrealistically optimistic CPA costs). They may have simply not budgeted enough or expected more organic sales.

So they may want to blame this on expensive ads butt what they realty mean is they screwed up and underestimated customer acquisition costs.

Re: E-scooter company goes bust after spending big on Facebook ads

#109

Post by com2kid »

ansible wrote: post #56
flyGuyOnTheSly wrote: post #28

Earlier quoted context omitted.

You're not wrong, you're an idealist, which typically are very closely intertwined when it comes to reality. If you gave $700 to a company who promised to deliver you a scooter a few years down the line if all of the dominoes fell exactly as planned... I would argue that you got what you paid for even if it amounts to nothing tangible in the long run. Which is to say, you paid for a pricey digital lottery ticket with…

Yeah, I don't understand the craze with all the kickstarters. I've backed a few here and there. Two of them I knew the principals for a while before the kickstarter began. And I supported them at a level I considered a donation, so that if I never received anything, that's OK. Another I backed (ReSpeaker from Seeed Studios) I did because we were interested in it for a project at work, and it was convenient for me per…

> Yeah, I don't understand the craze with all the kickstarters.

It used to be they were a cool way to get access to products that were otherwise unavailable.

1. I got some amazing desserts from around the world that no way would have been able to try otherwise 2. Limited production run clothing using experimental materials 3. Stick on Cell phone microscope lens! The ones I got were before they became a common thing, and they were a small batch production run 4. Board games that are only ever sold through kickstarter.

Now days kickstarter is a lot less fun, it used to be I could go browse local projects and find a ton of local creators to support, lots of kids out of school trying to make their first video game, local board game designer wanting to release his/her dream, that sort of thing. Now days I find a lot less of those quirky fun projects, which is sad.

I never expected anything to arrive on time (software!) and it is pretty easy to spot a hardware project that is going to fail, e.g. if the amount of $ a team wants to raise to make a smartwatch is less than a single run of tooling to make a smartwatch, it is obvious the team doesn't know much about manufacturing! (Though now days outside investors are pulled in after a successful Kickstarter demonstrates interest).

I also got one of those cool track-belts before they became easily available in the US, and I got this obscenely overpowered LED light bulb that I can't actually use anywhere because it is too bright!

Still sad I never got my glow in the dark plants though, that project is what first got signed up for Kickstarter.

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