The title of the final email from FlowMotion was a bit shocking, and it made my heart sink despite being in the midst of celebrating the Canada Day holiday weekend on July 1, 2019:
“FlowMotion is closed down”
It left very little to the imagination, and its contents reflected the brutal reality of this little company who had a fantastic product that people were lining up to purchase, was unable to deliver and had folded like a deck of cards. It has become a cautionary tale about how Kickstarter does not ensure success, the struggles of entrepreneurs, and above all, the risks and dangers of Internet pre-order sales. That did not stop me from ultimately trying to step in and save the company.
My story begins one late night on the couch watching TV and fiddling with my laptop. I was visiting the in-laws, and when I saw the FlowMotion device, I was captured by it.
Once upon a time, I had been a film major in University and decades later with so much video being shot on smartphones instead of traditional video equipment, I had become frustrated with the quality of my videos to the point where I avoided doing any video entirely.
Even though (admittedly) I had had a few drinks that night, the potential excited me. I had landed on the website through some ad I clicked on Facebook (or somewhere) and watched the videos of the auto-stabilization and ability to follow a subject as it moves through the frame. After checking out reviews, testimonials, and even looking into products from competitors, I was hooked and dropped $313 on my pre-order (including the extension pole and extra battery for an additional $64). I had big plans, and my marketing company was going to put this bad-ass toy to work.
Let’s rewind to January 10, 2017. That’s the day FlowMotion was funded by Kickstarter for over $1,325,241 by 5,508 backers, and their first significant step towards “the end of shaky videos” was realized. The raise was so successful that the FlowMotion ONE was funded in less than 1 hour. It was not just me who saw the enormous potential in the product — thousands wanted it. The market was proven, and with a million bucks in their pocket — they were on their way.
I love Kickstarter. I would never suggest not backing a project that you believe in via the platform, and I have backed many projects, including the Cyanide and Happiness card game “Joking Hazard” as well as the Oatmeal’s “Exploding Kittens” card game through the platform. I received those purchases, but the investment amounts were pretty small. Spoiler alert — Joking Hazard is the better card game (and wildly inappropriate!
But, there are inherent risks to giving your money to anyone on a pre-order where a product does not yet exist (or limited past their prototype) or where a company has no proven track record.
The FlowMotion Kickstarter channel is proof of this. To date, it shows over 5,382 comments and they aren’t flattering. Complaints about units that never arrived, others that were broken or did not work on delivery. To their credit, FlowMotion attempted to reply to almost every comment to explain, but there’s only so much water you can bail on a sinking ship.
The project started with so much promise and at its core, I don’t believe there was any intention by the company to “steal” anyone’s money, but that’s what happened to me and thousands more.
With my pre-order billed to my credit card (and blissfully unaware at the time that they had begun on Kickstarter at all), I started telling marketing clients about our intention to start shooting new videos, building up YouTube channels, and they were interested. We tentatively started planning shooting dates based on the delivery date for my shiny new camera gimbal. There was little doubt in my mind that it would arrive — their website had a “100% Money-Back Guarantee” on it, and I could cancel my pre-order at any time. The 93% recommendation rating and 4.7 out of 5 ratings on their website supported that my decision was sound.
However, the company was in trouble. What was (most likely) occurring behind the scenes was that they were accepting additional pre-orders to fund previous orders, hoping that they would make it up in their margin and one day become profitable.
It was soon after my pre-order that the delay emails began arriving in my Inbox. Pretty much all the correspondence I received from the company was about the chronic delays and problems with production. Every time I would open their emails, I hoped “maybe this time,” but every time it was another delay and reason why I would not receive my device.
“July Update — Shipping Schedule for Pre-Orders
We want to start off by saying thanks for being patient with us. We know you’ve been eagerly awaiting your FlowMotion ONE. The shipping of your pre-order has been delayed for some time, and we really appreciate your support throughout this journey.” — FlowMotion Email from July 5, 2018.
My order was pushed to Late September, and it was the first time I was made aware that there were outstanding Kickstarter orders:
“The Kickstarter shipments took longer than expected. During the last months, we’ve smoothed out kinks in production, adding more rigorous quality control and working with our logistics partner to increase fulfillment speed.”
After that, they started to get specific with the dates. The emails were always designed to impress with fresh photos of the auto-stabilizer, showing above all that their marketing and damage control departments were still functional. My delivery date was pushed to November 28th and then December 5th. It felt like delivery was truly getting close.
“December Update: FlowMotion ONE Shipping Schedule —
In short — production hasn’t hit our expected 3,000 per week mark. We’re rigorous in our quality control and making sure your long wait is worth it (…) The good news is that we’re picking up the pace and are back on a stable trajectory.” — FlowMotion Email from December 20, 2018.
Christmas and Santa Claus came and went, and (surprise!) there was no advanced stabilizer in my stocking that year. Most people would look at this and see a company in trouble, and dive into keyboard warrior mode to lambaste the Internet with complaints. However, I saw an opportunity and had something else in mind.
At the time, I was aggressively expanding my investment portfolio. I was already invested in live streaming platforms, video gaming, and the tech scene. I loved this product so much, it would make a good vertical integration, and I thought what they needed was a good strategic investor to get the financials shored up, right the ship, and save the company.
As the first anniversary approached since my order had been placed, I reached out via email on April 9th, offering capital to save the fledgling company. Despite the best intentions, no reply came. Unbeknown to customers, the end was swiftly approaching, and the bad news went out on May 7, 2019 from Lars Flesland, the Co-Founder and CEO:
“FlowMotion: Update on your order —
I personally want to follow up your FlowMotion ONE order, and the lack of updates you have received. We are truly disappointed over the continuous delays, and I apologize for not sending this email earlier (…) Although we have resolved all production issues, the delays and extra costs have caused temporary financial challenges. To accommodate the financial situation, we are raising funds from new and existing investors.”
Then, he dropped a bold-typeface bomb on customers:
“Due to this, we are unable to ship your product, nor pay out refunds, before August.”
From the outside looking in, the co-founder’s assessment appeared to be correct. They were sitting on a loyal following and massive amounts of unfilled orders. It seemed clear that hardware had been faulty, and it was likely that it cost more to produce a working product than they had expected.
From a marketing perspective, if the company could rally and meet the expectations of its customers, it could turn those terrible delay experiences into vocal brand ambassadors. It could become a tremendous part of the company story about how it was saved from the clutches of death. It was a moment of confirmation that my assessment had been correct — the company was being choked to death by cash flow. It was now or never, so I wrote the CEO that same day:
“I reached out to your support team some time ago asking if investment dollars would help and we got zero reply from your company.
I don’t think you’re running a very tight ship over there and I doubt you’ve been honest with buyers along the way. We needed this item when it was promised and its been an enormously long time and now it sounds like the company is broke.
What is the ask for new investors?”
Surely, after breaking down and writing an email to their customers and publicly admitting they were on the brink of failure (and likely to much embarrassment) that they were seeking new investment, it seemed inevitable that an email reply was forthcoming.
A reply never came.
The scenario felt very similar to the way Elon Musk had promised and promised to deliver the Tesla to buyers, waiting with money in hand. At one point, Tesla had to go to customers and ask for more money to fulfill orders. Not surprisingly, many clients bailed in disgust. However, many ponied up the extra bucks in anticipation of seeing the future of transportation realized with their electric vehicles leading the way.
The dream of “the end of shaky videos” died on July 1, 2019. It did not matter how many millions of dollars the company had raised. It did not count that thousands of people had purchased the product, that there was a strong demand for the product, or that it had been thoroughly validated. This time, there would be no promises, delayed delivery dates, or flashy marketing photos:
FlowMotion is closed down — “Today, with a heavy heart, we must announce that FlowMotion is shutting down and we are not able to pay out refunds or deliver the remaining FlowMotion ONE’s.
Since the beginning, our mission has been to build the world’s best stabilizers, and enable people to create professional videos with their smartphones. The team has worked tirelessly, and successfully developed, produced, and shipped thousands of products all over the world.
However, due to the complexity of the product, we had to overcome countless production problems that caused delays and extra costs. This put the company in a tough financial situation, despite always keeping salaries and administrative costs at an absolute minimum.
In order to accomodate the extra costs, we have explored every possible fundraising option. Even with the future potential of FlowMotion, we could not secure the necessary investment. Without funding, and no money left in the company, it is impossible to move forward.
Even though we are proud of the team and everything we accomplished, we are also disappointed and emotionall exhausted. We know this is extremely disappointing for you, and we want yo to know that we did everything we could to save the company. We sincerely apologize that we were not able to deliver your order.
Regards, The FlowMotion Team”
The email went on to state that all employees had been let and that a “standard bankruptcy procedure” had been initiated.
Questions came to mind as the company was crashing to the ground. Had they been trying to save the company? Or, had FlowMotion and its CEO been only trying to convey the illusion of trying to save the company?
After all, multiple emails offering investment capital had gone entirely unanswered. There had been no attempt to go the Tesla route and ask paying customers for more money, lest they lose their purchase entirely. Had the chronic outreach about delays and reassurance been a smoke and mirrors tactic to merely bide time to make it to bankruptcy and liquidation without a class action lawsuit?
For whatever reasons (we may never really know) it seems to have come down to the failure to execute sustainable manufacturing, lack of good leadership, failure to listen to customers — or all of the above.
Even with a great kickstart, building a successful and sustainable business is much more than sexy marketing materials, and it goes well beyond raising millions in venture capital. In the end, nothing matters if you cannot deliver a working product or service.
Perhaps the moral of the story is to not buy anything off the Internet late at night after a few drinks.