Kickstarter Update on Funding Challenges
Hi Kickstarter Backers,
I hope you have seen my video explaining where we are with this campaign. I know you may be anxiously awaiting your Rite Press, but as you saw in the video, Rite has run out of funding. I mentioned in the video that I will be sending everyone an email with options. I wanted to send this update before that to explain in detail what I was talking about in the video and to share some numbers. We will still send the emails to each of you in groups (1 liter backers, ½ liter backers, etc). That will be early next week at the latest. There is a lot of info below, I would really appreciate it if you could take a few minutes to look at it.
In 2016 we embarked on a mission to create the best coffee press in the world. After years of work, I can say with confidence that our product is better than ever. I want to get every backer the Press, and am not giving up on that goal!
As I also mentioned in the video, I’ve put most of my savings, over $280,000, and years of time into launching the Rite Press because I believe this product is going to change the coffee world. The Rite Press is one of the best Presses on the market, and that is what you pledged for us to create. As much as I am proud of the Rite Press, I do owe you an apology for not building a bigger budget into the campaign from the start. Looking back our pledge tier levels were way too low and free shipping in the USA was also aggressive. I wish I had better accounted for contingency costs and delays when we were building the campaign.
Currently the Kickstarter platform only has 2 options for us. Fulfill backers with reward or “similar reward” or tell them how funds were spent if we cannot fulfill. I feel there are a few other options that the platform doesn’t address, like an optional increase of a pledge. As mentioned in the video, I bounced these options off KS legal as an alternate path forward, but KS didn’t feel additional options fit the platform. I will continue to work on fulfilling backer rewards but it is going to take much longer than anyone would like without additional funding via backer support.
Let me share what happened in 2018 with respect to pledges and spending. I feel that if you understand the numbers going backward it will be easier to evaluate how to move forward. Here is a table showing the total raised and a breakdown of how backer funds were spent.
Here are the 1 Liter and ½ liter model breakdowns:
As an engineer and designer, I feel that I succeeded in bringing a great product to life. At the same time, I learned a powerful lesson in the crowdfunding space and wish I would have done certain things differently, especially building in contingencies for cost increases and timing delays. I hope all of you backers understand how much I appreciate your support. I’m sorry for not meeting your expectations of me with this campaign. I have learned from this process and it has made me better. I will keep working toward making it up to all of you.
Thank you again for reaching this and being part of this vision.
Onward, (a shout out to one of my coffee heroes)
I understand that you might have questions, I would be asking questions if I just got this update. I have tried to anticipate some of those questions and provide answers in this next section.
QUESTIONS & ANSWERS
1) If I lend additional support, how do I know you won’t ask me again in the future for more money, and how do I know I will get a Rite Press?
The costs that caused the shortfall are related to the first factory flaking, product development, and increased cost at the new factory. These were not build into the first tiers of pledges but I have built them in now. The funds you put in will be used to make a remaining payment to the factory and pay the shipping and duties, these are the only costs preventing backers from getting a unit.
2) If I don’t lend Rite Press further support, will I get a reward?
We will do our best and we think we will be successful, but it will take time. As we said above, we are still working to ship the remaining backers' units. We will continue to ship Rite Presses to Kickstarter backers as funds become available. Right now our best source of funding toward this effort is the sale of products on our website and Amazon. The stronger the sales are in these channels, the faster we will be able to get all backers’ units. I understand this is not an ideal situation, but it is a path forward. THIS DOES MEAN THAT WE WILL START SELLING RITE PRESS ON OUR SITE IN A FEW MONTHS AT FULL RETAIL, and will use a portion of these sales to help ship backers units.
3) Did you use backers funds to develop the plastic Essential+?
No. I see this question a lot in the comments section. When we decided to partner with Amazon for the plastic press, the first thing I did was raise separate funds for development and inventory of Essential + from outside investors. We used these outside funds to develop, tool and build it. The Essential + however is a backers biggest help. The funds that we can generate from sales of it on Amazon will help us ship backer rewards faster. We will deploy part of the profits from Essential + to ship Kickstarter backer funds.
4) What did you do when the first factory quit, why did they?
The first factory built tools in 2017 for both the 1 liter and ½ liter. The factor started production on the ½ liter because they felt it was easier to produce than the 1 liter. The parts they were making had repeated problems that should have been an easy solve. At the same time the factory was not chasing 1 liter production schedule effectively. I feel the factory felt producing products to our quality standard was not going to be profitable for them so they told us they would not be producing product going forward. At this point we asked for our money back for the material deposits and tooling. They responded by saying they had already spent over hundred thousand dollars on development would not return the tools or deposits back. We spoke with an attorney in South China about this. His feedback was that we would spend far more than the cost of the tools and deposits in legal fees and it could take years to find a resolution. In my years of working with China, I have never had a factory do this.
5) What is the progress of the filter and other issues that you mentioned in the past?
The second round of filter tools came back better than the first round but we rejected them. They are going to make another round of tooling mods that will be ready March 8th. The Rite Press itself has no production issues.
6) What features in detail did you add to the Rite Press make it better than when I pledged, and why did you add feature after the campaign?
We added the extra features because the new factory could execute on these upgrades without too much additional cost. They already had a great powder coating set-up as well as tools to do vacuum insulation. These upgrades make the Rite Press much better and did not cost us additional time because we had to redesign regardless when we switched factories. We did a past update on the upgrades, here is a link to it.
7) Why can I not have a refund?
The costs of the project (as we highlighted above) so far are far more than the total amount we raised. All of the backer funds have already been deployed toward bringing this product to life and fulfilling rewards. There is simply no funding available to give refunds. Again we are sorry for the delay with the project. We have taken great care to use the funds we have responsibly and are continuing to ship presses.
8) Why is the ½ liter shortfall larger than the 1 liter?
The backer community pledged for many more 1 liter models than ½ liter version. As a result the ½ liter group each carry more cost associated with engineering, and ½ liter backers pledged an average of $10 less per unit than the 1 liter backers did.