Roger Fingas
A maker of unreleased 3D-sensing headphones, Ossic, is shutting down and leaving thousands of Kickstarter and Indiegogo backers in the lurch.
The company had managed 22,000 preorders costing between $199 and $299, but announced on its website that it has been unable to find enough funding and is simply out of cash, even with millions in separate seed funding and a team working for free during the last six months.
The company sold 250 "developer" units costing $999 each, but their advanced features are unlikely to be of much use without first- and third-party support.
Ossic promised headphones that would automatically sense the dimensions of a person's ear, generating a custom sound profile. They were also intended to track head positioning, which could've had applications in augmented and virtual reality experiences.
In all the company's crowdfunding efforts raised $2.7 million through Kickstarter with $3.2 million in total accounted for through Indiegogo, according to Business Insider.
Losing money is a real risk of such platforms. While backers can potentially get products before anyone else, and other perks as well, many crowdfunding efforts fail and refunds aren't guaranteed. Nevertheless a Facebook group has organized around Ossic's demise, threatening a class action lawsuit.
Update: Updated to reflect the total amount of the campaign, which is $3.2 million.
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16 Comments
Exact reason why I dislike Kickstarter. You’re funding a company, yet have none of the rights of a shareholder. They should go through the traditional funding rigamarole that goes with creating a startup. This weeds out the deadbeats and those who cannot follow through on plans.
Yeah, it gets pretty iffy with some of the advanced devices people are looking for funding for. With comics, or books, I think it is a legitimate possibility and you are out THAT much hopefully. I'd guess the people at this company had some pretty good times with the amount they raised. And I believe absolutely no legal recourse for the, how to put this politely, 'potential financial backers'.
I abadoned Kickstarter a while ago. Probably 50% of the scams... er, projects I backed went kaput. And almost none have met expectations in a timely fashion. Kickstarter gets a portion of the funds raised, so it's in their interests to not give a flying F about folks getting a proper refund.
You have to be nuts to through money into something like Kickstarter...
There is also a lot of misrepresentation, people claiming they're in the US to gain trust, when they're actually halfway across the planet. The worst offender I've seen was "Ritot" on Indiegogo: they did a great campaign for their projection watch, and people like me who trusted they were based in San Francisco gladly contributed. Turns out they're based in Russia, and collected over $1.5 million under false pretenses. Two years later they still produce "updates" but it's become abundantly clear at this point that they will never ship anything worthwhile. Their explanation for lying about their whereabouts: "nobody would have trusted us" For jus reason, I think.