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
#2I just can't understand how someone can be so irresponsible. They knew exactly what their ad spend was and how many pre-orders they had in the pipeline. Since they only had several hundred pre-orders, they could have easily set that money aside for refunds, but they didn't.
Re: E-scooter company goes bust after spending big on Facebook ads
#3took me a second to realize company's name was unicorn.
Re: E-scooter company goes bust after spending big on Facebook ads
#4I just can't understand how someone can be so irresponsible. They knew exactly what their ad spend was and how many pre-orders they had in the pipeline. Since they only had several hundred pre-orders, they could have easily set that money aside for refunds, but they didn't.
Moreso, they should know their conversion rate and cost per click, and could adjust their spend at any moment. Sounds like they're just trying to pass the blame.
Re: E-scooter company goes bust after spending big on Facebook ads
#5It 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/pages/unicorn-shipping-update
Re: E-scooter company goes bust after spending big on Facebook ads
#6I just can't understand how someone can be so irresponsible. They knew exactly what their ad spend was and how many pre-orders they had in the pipeline. Since they only had several hundred pre-orders, they could have easily set that money aside for refunds, but they didn't.
If they took customers' money knowing that they could neither deliver the product nor refund the money, wouldn't that be fraud?
Re: E-scooter company goes bust after spending big on Facebook ads
#7Hyped industry, sort of hyped name, wasting money on FB ads. It seems like they were “hacking” their way to quick success instead of focusing on delivering a proper product - exactly like Paul Graham described in his recent essay http://www.paulgraham.com/lesson.html
Re: E-scooter company goes bust after spending big on Facebook ads
#8Snarky 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.
Re: E-scooter company goes bust after spending big on Facebook ads
#9I just can't understand how someone can be so irresponsible. They knew exactly what their ad spend was and how many pre-orders they had in the pipeline. Since they only had several hundred pre-orders, they could have easily set that money aside for refunds, but they didn't.
If they took customers' money knowing that they could neither deliver the product nor refund the money, wouldn't that be fraud?
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Re: E-scooter company goes bust after spending big on Facebook ads
#10I just can't understand how someone can be so irresponsible. They knew exactly what their ad spend was and how many pre-orders they had in the pipeline. Since they only had several hundred pre-orders, they could have easily set that money aside for refunds, but they didn't.
As others have pointed out it is obvious at the outset what ads cost, and you can set budgets. None of this should have come as a surprise or a "opps we spend 150K in one day" kinda thing.
I am assuming their line of thought was:
1 - make some sales
2 - spend income from step 1 on more ads to drive traffic to site
3 - go to 1
Kinda like they put themselves into their own recursive ad-pyramid-scheme or something.
Condolences for the customers who go burnt by this.