Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

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

bbc.com

Post reply on HN
Print view View original

111–120 of 184 posts

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

#111

Post by justaguyhere »

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…

It might be better to have higher/stricter standards than suing them after the collapse. For example, some rules around how much of the raised money they are allowed to spend on advertising, forcing them to post monthly financial statements (so any money mismanagement is caught early) etc - something like that. This might improve the quality of companies attempting such projects.

Litigation is expensive - plus, 150K isn't that big of an amount in the larger scheme of things. This isn't Theranos level fraud, assuming it was a fraud and not just incompetence/inexperience

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

#113

Post by TeMPOraL »

jberm123 wrote: post #47
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…

>what's to stop the same employees and founders from following that method ad infinitum? Informed consumers

Part of the task of marketing is to disinform customers. Companies existing to scam people are necessarily marketing-heavy.

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

#114

Post by lanewinfield »

What's more insane about this is that they went broke after whitelabeling an off-the-shelf Ninebot/Segway ES2, that retails on Amazon for $480, $220 less than what Unicorn was offering. All I can see that they offer on top of the scooter is "UnicornCare," basically insurance for $1/day on top of the $700 price.

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

#115

Post by alistairSH »

dcolkitt wrote: post #33
rpmcmurdo wrote: post #30

Just wait until the scooter companies and operators get nailed with an injury class action lawsuit. A good friend was seriously injured on a rental scooter, going 2-3 mph, catapulted onto her face, ended up with brain damage and multiple facial fractures requiring reconstructive surgery. A high school physics student could work out that tiny wheels combined with a high center of gravity is a bad combination.

The problem is lack of helmet. If the injured party wasn't wearing a helmet, and the scooter clearly stated that a helmet should be warn, the case will get thrown out. Everybody knows that nobody wears a helmet while riding scooter company. The manufacturers know, the ride-sharing services know, and the riders know. But if a helmet warning is clearly displayed, that gives the scooter company virtual legal immunity fr…

No, the problem is scooters with small wheels that are easy to crash.

The Dutch do fine riding bicycles without helmets.

If scooters are in fact more dangerous than bicycles, we should probably just reevaluate their use in the first place.

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

#116

Post by manigandham »

mtgx wrote: post #48
vkou wrote: post #11

Earlier quoted context omitted.

> It seems like they were “hacking” their way to quick success instead of focusing on delivering a proper product Generally - not specifically - speaking, in a world where your competitors can throw away millions of VC dollars into hacking their way to quick success and market share, this is a valid strategy. It may, in fact be the optimal strategy. Of course, if you don't have said millions of VC dollars to throw in…

It might be better using other advertising channels if your competitors are pissing away VC money drastically raising bids and making it virtually impossible for any "proper" business to do well in digital advertising utilizing the same channels. You can notice this even within sub-segments of Google Ads and Facebook Ads where there is a propensity for advertisers to just throw millions at the channel without expecti…

That's assuming those other channels aren't also saturated by the same companies.

Organizations spending millions aren't going to leave a big opening in another medium that's able to reach the same consumers.

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

#117

Post by TeMPOraL »

com2kid wrote: post #109
ansible wrote: post #56

Earlier quoted context omitted.

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,…

> (Though now days outside investors are pulled in after a successful Kickstarter demonstrates interest).

This was happening probably since the very beginning. Around 2013, I did independent technical evaluation of a certain hardware startup on behalf of a local accelerator, and one of the things I've learned is that the startup in question had some funding that was conditioned on the success of their Kickstarter campaign, which was meant to feel out the market.

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

#118

Post by aeternum »

qeternity wrote: post #31
llamataboot wrote: post #8

Snarky comment about LLCs being able to shirk responsibility by just going bankrupt... But really this seems like a basic class-action fraud suit on what they hoped would be a bootstrapped ponzi-scheme. (Spend enough, fast enough to get enough customers to be able to actually deliver your product) but not keeping at least enough money in reserve to make minimum refunds is a major liability.

An LLC does not protect anyone from fraud...

Would be very difficult to get this to qualify as fraud. Maybe if they used the funds for their uncle's advertising company.

There have been many startups that have wasted money on things that make less sense than advertising before going under.

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

#119

Post by noonespecial »

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…

I consider kickstarter an entertainment product. You pay to watch and participate a bit. The physical product/non-product at the end is part of the "story".

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

#120

Post by Kiro »

paulpauper wrote: post #46

Facebook ads are way too expensive and tend to not convert that well. There are stories of fake likes and fake clicks. If your growth strategy involves buying click ads, find another strategy or business idea. Groupon is another company that overpaid on Facebook ads to build its email list. Disney and other multinationals are the only companies that should buying such ad.

Facebook ads work amazing for me but maybe it's just my product (haven't tried any other channels).
Post reply on HN