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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

#121

Post by jascii »

braindeath wrote: post #71
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…

> real company This is a bit nebulous. Every consumer, especially where the expense is a lot of money for them would do well to give this idea more thought. A pretty website, a few employees and some prototypes doesn’t hit a meaningful bar, let alone millions of dollars in capital (which this joint didn’t even have), TBH. Too bad fuckedcompany is no longer around, it did a great service.

Prototypes? This company was essentially selling a rebranded Segway ES2.

https://www.bizjournals.com/sanjose/news/2018/06/25/segway-n...

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

#122

Post by com2kid »

TeMPOraL wrote: post #117
com2kid wrote: post #109

Earlier quoted context omitted.

> 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 cam…

True enough, but it has become a much bigger thing now. I've even seen a couple kickstarters showing their funding split on their kickstarter project page between investors and kickstarter funds.

The level of professionality in modern kickstarters is a bit of a turn off really. Seeing massive slick ad campaigns for a kickstarter isn't exactly a sign of authenticity.

But then again if those ads have a positive ROI I totally get it.

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

#123

Post by toomuchtodo »

filmgirlcw wrote: post #78
toomuchtodo wrote: post #52

Earlier quoted context omitted.

> the law isn't on the claimants side here, so they'd lose. That's up to a jury, not an online forum.

But the broader point about lawsuits not being free is valid. Because in addition to filing fees, you need to pay lawyers to do this. And I am not a lawyer, but I don't know many good lawyers would would take on a case to go after a bankrupt company that has no assets. And even then, those good lawyers are going to want a retainer and multi-hundred dollar an hour fees to do the work, so sure. File a lawsuit. Spend te…

Less solid cases have been taken on contingency. No need to have "more money than God", just a strategy and someone willing to take on the risk.

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

#125

Post by TeMPOraL »

com2kid wrote: post #122
TeMPOraL wrote: post #117

Earlier quoted context omitted.

> (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 cam…

True enough, but it has become a much bigger thing now. I've even seen a couple kickstarters showing their funding split on their kickstarter project page between investors and kickstarter funds. The level of professionality in modern kickstarters is a bit of a turn off really. Seeing massive slick ad campaigns for a kickstarter isn't exactly a sign of authenticity. But then again if those ads have a positive ROI I t…

I do feel the same way. I used to casually browse Kickstarter, but don't anymore.

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

#126

Post by arbuge »

I think the cost of Facebook and Google ads blindsides many founders who take them for granted as a distribution channel when planning their startups, particularly founders who have no experience with them, or (even worse) founders who used them several years ago when they far cheaper and are unaware of how the landscape has since changed.

You should assume they will simply not be available to you for planning purposes. Occasionally you might stumble across an untapped niche where it is still possible to run ads at a cost permitting reasonable ROI but in my experience that is now the exception rather than the rule. If you do find such a niche it is more likely to be on Google, since their keyword-based model permits such niches to theoretically exist, whereas Facebook is an all-out competition by all advertisers for the same newsfeed slots.

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

#127

Post by habosa »

They sold 350 scooters at $700 each. So just under $250k in sales. They decided, right before Christmas, that they would tell all those people their $700 has been thrown right in the trash.

The founder of this company is the founder of Tile, a VC-backed company worth $XXX million that has raised $104M+. If this person had any morals he would cash out $250k of his shares in Tile and pay back the people who ordered his scooters. Hell give them half back for $125k. That is chump change to a successful SV founder.

I know that legally he has no obligation, but how can he sleep at night? This wasn't "oh making hardware is way harder than we thought and we couldn't afford it" this was "well I figured if I couldn't sell a million of these I'd rather just give up so I spent all the money on ads".

What a jerk. Merry Christmas from Silicon Valley.

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

#129

Post by MarketingJason »

blunte wrote: post #105
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…

After some research, it looks like they were a part of Y Combinator's Winter 2019 graduating class so I believe that seed round is a part of the package you get when accepted.

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

#130

Post by habosa »

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.

I have heard both sides, I think it depends on your industry. I know people who are blown away with how much ROI they get from Facebook ads. Others have the experience you mentioned.
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