The Rise and Fall of KREYOS

Update 26 Sept 2014:

Kreyos opensource can be found at: https://github.com/kreyosopensource


Hi backers, friends, colleagues, this is Steve Tan, founder of Kreyos.

First things first: I want to offer my sincerest apologies to all the backers and customers who pledged for or pre-ordered the Kreyos Meteor. I am fully aware that the final product didn’t end up being the product we envisioned and ultimately detailed on our Indiegogo campaign. I would also like to apologize for the series of shipping delays all of you had to endure — — the disparity between the concept product you backed and the final product you received along with all the delays are things that never should have materialized. These are things I take full responsibility for.

I, along with the helpdesk team have a queue of thousands of unread emails which increases steadily each day. I am cognizant of the fact that we have not been responding to support tickets as quickly as we want to but I want everyone to know that we are putting measures in place to improve our response times. We are not ignoring your emails, it’s just that we most likely haven’t gotten to them yet.

I also want to apologize to the team at Indiegogo (Kate, Ben) who were nothing but supportive to us throughout our campaign. They have been taking misplaced blame and heat for our own failures. There are ongoing debates as to how Indiegogo’s policies are not as consumer-friendly as they should be, but I think that’s an entirely different topic altogether. The Indiegogo team was instrumental not only in helping Kreyos raise the funds it needed to make the Kreyos Meteor a reality, but they were also there every step of the way offering strategic advice even when things took a turn for the worse for us.

I also would like to express my deepest apologies to the team of 16 people who are part of Kreyos a lot of whom gave up stable jobs to help me and the company build our dream. All of them have been troopers throughout this entire thing and I cannot thank them enough for their loyalty and dedication and failing while working with some of the most amazing people makes things a little more painful for me.

At this point of time and in the interest of transparency, I want to post a detailed account of Kreyos from conceptualization, setting up our operations, moving to mass production and up to the mess we’re in right now. This account is in no way intended to shift the blame away from me, I am the CEO of Kreyos and this is my company and, as mentioned, I take full responsibility for the state the company and its products are in right now. I, however, think that there’s value in posting this for the benefit of the people who backed Kreyos but, more importantly, I am hoping that people who are planning to use crowdfunding to see their ideas to fruition to see this as a cautionary tale to keep in mind when selecting Asian CM (contract manufacturer)or ODM (original design manufacturer) solution partners.

Finding a reputable ODM solutions partner is difficult and costly, especially in terms of time and complexity. I made some bad decisions along the way but there is no worse decisions for us than going with and falling victim to a certain solutions company — VIEWCOOPER CORP and its CEO Pro Yang who, ultimately perpetrate an intricate conspiracy against Kreyos.

I wish I learned earlier about all the troubling things about Viewcooper. Perhaps the Kreyos story would’ve played differently than it did. Instead, Kreyos itself along with our backers and customers all fell victim to an elaborate white collar crime perpetrated by Viewcooper.

The wheels were set in motion back in Early 2010…

While I was in China for a business trip sometime in 2009, I was introduced by a mutual friend to Pro Yang Huang Chang. Aside from Viewcooper Corp, he also runs a chain of 40–50 Food and Beverage stores in China and claims ownership of electronics manufacturing plants in the region. I’ve constantly stayed in touch with Pro for the next 5 years and occasionally met him when I traveled to Shanghai for business.

This is how Pro Yang describes himself:

Pro is an experienced and passionate technologist who loves to create innovative consumer electronic products. He is also a serial entrepreneur with over 10 years of experience specializing in OEM/ODM electronic products. Has a solid understanding of where technology trends are moving towards and has a knack for designing products that solve specific problems even before the market hits maturity. His broad experience encompasses not only design and delivery of complex hardware but also includes product management. Previously, Pro was CEO at a Shanghai based hardware solutions company VIEWCOOPER, where he led, R&D and product management. Prior to that, Pro founded Innmax which created 3C storage products. Major clients includes HP, NEC, Lenovo , Acer, Fujitsu, Lacie,Transcend.


QUICK SUMMARY OF HOW DID PRO YANG/ VIEWCOOPER DESTROYED KREYOS?

  1. Our agreement we entered with Viewcooper/Pro Yang, is for us to buy a complete ODM solution smartwatches from him. Towards the end, it Pro Yang and Viewcooper were unable to deliver on this and ended up with Kreyos having to oversee firmware, software and mobile app development, manufacturing and logistics on his company’s behalf.
  2. Paid Viewcooper premium pricing but got in return mass production products with quality and countless issues. We will be more than willing to turn a blind eye if they delivered the products according to the specifications.
  3. Viewcooper took a deposit of $16K USD to begin working on our iOS, Android and Windows Apps, but they weren’t able to deliver these either at the very last moment. No refunds were issued to Kreyos for these unfulfilled part of the agreement.
  4. Kreyos paid his solutions company Viewcooper, a big fortune — $$1,692,575.95 USD, but, as we later learned, he never spent it on the product, nor did he allocate the budget to hiring the competent resources/talents for the project. Almost $900,000 USD are pocketed from just from the 20k Units and also the LCDs that we bought from Viewcooper. Now after finishing the first 20,000 units we ordered, we are still left with 44K units of overpriced LCDs ($660,000) and 6,000 units of Meteors ($312,000). What we are extremely outraged about is he has taken so much money from Kreyos, but didn’t deliver a product that was up to the agreed upon specifications. He cut a lot of corners on quality as you may realize from the hardware you received.
  5. Misled Kreyos into buying and stocking unnecessary and overpriced components namely units of Sharp LCDs — $962,250 USD. Viewcooper sold us the LCDs at $15 USD each when the actual cost was only $5USD, Kreyos bought a total of 64,150 pieces of Sharp LCDs.
  6. Quoted premium prices for tooling, but ended up using cheap materials for it resulting in countless issues in injection.
  7. Convinced Kreyos to give him 30% equity in the company in return for selling us at cost price (zero markup). The price we were buying the finished product from Viewcooper was $52USD/pc,which he claims is the “at cost” price. We later learned that the total cost per unit was $30 and he was pocketing $22 USD in profits per unit he sold us.


Here are some other details about VIEWCOOPER

Viewcooper Corp./訊聯光學股份有限公

Room 1061 Building A Block 7, No 128 Hua Yuan Rd, 200083 Shanghai, China 上海市虹口區花園路128號運動Loft7街區A棟1061室 200083 http://www.viewcooper.com

Contact Details:

PRO YANG HUANG CANG/ 楊煥昌

pro.yang@viewcooper.com


HIS PARTNERS IN CRIME:

ALEX HU/胡建雄

Pro’s right hand man and partner in crime, who is equally as useless if not worst, can’t even handle simple instructions when our designer sent specific files and instructions for printing our master cartons.

Viewcooper Corp.

Mobile: + 86 135 6435 1785

Tel: +86 21 6076 8117

Fax: +86 21 6173 1990

Skype: jianxiong.hu

Email: alex.hu@viewcooper.com


Here’s a quick breakdown of the ill-gotten profits PRO and VIEWCOOPER made from Kreyos

20K units X $22 = $440,000 in PURE PROFIT

64,150 units of OVERPRICED LCDs (this is exclusive of the LCDs used for the units described above)

44,150units*$10= $441,500

Total profits: $440,000+$441,500= $881,500 USD

$881,500 USD of PURE PROFIT, which I am more than willing to turn a blind eye to and chalk up to experience had they delivered the products as originally specced out. This figure doesn’t include the profits he made from Kreyos from all the toolings and samples he charged Kreyos premiums on.


Financial Evidence:

We have uploaded all our invoices of transactions between Kreyos and Viewcooper. You can find an archive of all our invoices in the Dropbox link below:

https://www.dropbox.com/sh/fgxh1xj5ioc4pdq/AAD_SIoyBFHQKZhSr4b91TCSa?dl=0

We paid Viewcooper a total of $1,692,575.95 USD from the start of the project until the delivery of the products you currently have. Here is our trial balance used for 2013 tax filings.

The publicized amount of money we raised through our crowd-funding campaign on Indiegogo, as you know, is in the neighborhood of $1,500,000. In reality, after the IGG fees, credit card processing fees, Paypal fees, and the amount we spent on PR and Marketing, we were only left with around $1.2M USD.

With every painful delay we announce, we saw a spike in the number of refund requests from backers who understandably grew impatient. The total number of refunds we processed from the start of the projects up to this day amounts to around $500,000++. If you’re following, the cash left from the Indiegogo campaign is now down to around $800,000. This amount excludes pre-orders from our own ecommerce store.

I’ve personally invested a total of $370,000 in Kreyos as well. Also in order to keep Kreyos’ operations running until we ship, I’ve borrowed loans from angel investors, friends and family who forked out a total of $750,000 USD. Unfortunately most of that money is in the pockets of Viewcooper.

There’s also monthly operational overhead, employee salaries, marketing costs, ongoing refunds etc. The more we pushed back our launch date, the worse it got for us. If Viewcooper ends up delaying production and shipment by 8 months, it means we have to go 8 months without substantial income and revenue, and still have to pay all our monthly operational expenses and honoring refunds at the same time.

A total of $750,000 USD of loans from angel investors, friends and family:

1) $100, 000 USD on the 20th Dec 2012

2) $100, 000 USD on the 11th Jun 2013

3) $150, 000 USD on the 13th Aug 2013

4) $200, 000 USD on the 24th Feb 2014

5) $100, 000 USD on the 18th Mar 2014

6) $100, 000 USD on the 19th Jun 2014

EARLY 2012: HOW IT ALL BEGAN

During one of my trips to China in 2012, Pro invited me for dinner and showed me a hardware prototype geared towards competing against popular big-name action cameras. I was quite impressed by the product and the price he says he’s able to manufacture and ultimately sell them but Pro made it clear that he will only be focused on doing ODM and not branding or marketing. For us, we are able to buy it OEM, slap on our own brand and market it as our own, which a friend and I were extremely interested in doing. Fortuitously, before he was able to get it out to the market, GoPro came up with its celebrated Black version which completely made his product uncompetitive specs-wise and resulted in him shelving the product and go back to the drawing board.

Click here for the action cam specs: https://www.dropbox.com/s/8urjrsiugnfifc1/2012.08.24.Action%20Cam.C001.Introduction.MW.pdf?dl=0

One day, Pro emailed me and sent me the link to Pebble’s widely successful Kickstarter page. He told me that Pebble is having manufacturing issues and bragged about how they are seeking his ODM company (VIEWCOOPER) in helping resolve the manufacturing issues. He said this is a very easy product to manufacture and Pebble didn’t know anything about manufacturing. I regretfully bought that and thought maybe through working with Viewcooper, people like myself who have limited tech and manufacturing experience can launch a viable consumer electronics product.

So fast forward a few weeks, he emailed me and proposed he will do a ODM project for us, for a much better smart watch and we can use our own brand. In short we buy a complete ODM product from from Pro’s solutions company — Viewcooper. All we needed to do was provide them with our brand, watch industrial design, packaging design, App UI design, and they will take care of all the rest. So I thought it shouldn’t be too hard, as I won’t have to work on the software, hardware, firmware and focus on building a good brand instead. He said he would charge a fixed ODM profit of $15 USD per unit for the (at the time unnamed) smart watch, and assured us he won’t take on any other smartwatch projects

DEC 2012 -> JUN 2013

So Viewcooper invited me to visit his solutions company’s office, and also sent us a PDF, with the suggested specs and price which I have described below. Before everything started, Viewcooper promised to sell the Kreyos Meteor at BOM +$15 USD, of which $50 is the BOM (bill of materials) cost from the factory. After the success of the IGG campaign we were initially supposed to pay him 20,000 * $65 USD for 20k units of the Meteor.

Since I very limited technical knowledge as far as consumer electronics would go , we relied on his company to define the specs. After all, Pro made himself to be an expert in this industry. He suggested that we add a Microphone, Speaker and ANT+ connectivity in order for us to differentiate ourselves from the 1st Gen of smart watches that were out in the market at that time. I thought it made perfect sense. Click on the below to download the PDFs. I’m keeping the original file names that was sent to us.

i) Kreyos Specs.pdf

ii) 2012.11.05.SmartWatch.Customer Development Guildline.pdf

iii) 2012–1.12.25.Smart Watch APP and Gadgets.pdf

iv) 2013.05.31.Smart Watch SDK.Proposal.pdf

My marketing team and I brainstormed a few brand names and settled on KREYOS. We started with the ID design with a designer, and also booked a small amount of Sharp LCDS for the Kreyos campaign. We initially ordered only 3150 pcs of Sharp LCDs at $15 USD each . Prior to the campaign we already paid almost $200K USD to Pro’s company for the moldings, LCDs and samples. I have been working in online marketing and branding for almost 10 years, so we know which resources to use and how to launch and package a new product (SEO, PPC, Media buy, FB campaigns, Retargeting etc). This is our initial design of the Meteor which originally was very thin but Viewcooper was not capable enough to execute on this design. Click on the below to download the PDF.

i) KREYOS_SMART_WATCH.pdf

JULY 2013:

The fact of the matter is when Kreyos launched the product on Indiegogo, All we had was a small marketing team of 4 people including myself and some outsourced providers. We also hired 3 part-time customer support personnel from oDesk and that’s it. In the beginning we did a wonderful job handling the campaign launch, emails, social media and pretty much everything else. After the campaign period we considered our part done. At that juncture, the ball was on Viewcooper’s court and to manufacture the product based on the agreed upon specifications. We’ve already provided everything they required on our end: App UI designs, watch’s UI, packaging, etc.

Our original goal was $100K, we did 15X more. When our small team and I launched the Kreyos project, and hit a $1.5MM project, we were all so happy, and we thought it was the beginning of a successful startup. We had no way of knowing that the person that would cause all of this misery, delays and issues would be the person who brought me into this industry.

AUGUST 2013:

Since we were able to launch an extremely successful campaign, and pushed for more competitive pricing ($149), we negotiated with Viewcooper on dropping their price by $15. Pro countered that offer and suggested that we give VIEWCOOPER equity in return for them dropping the price. It sounded like a good deal to join forces with them and merge our companies , become co-founders and work with his team in order to augment our weakness: hardware and FW, software R&D. If they are able to sell to us at cost price, we should be able to drop our price from $169 to $149.

In exchange for selling the Meteors at cost to us, Pro was given a 30% stake in Kreyos. 30% is given to him to distribute to key members of his company/team. He claimed that he will spread the equity around in his own discretion. We later found out that he never shared any of these details with his team, whom we learned, wanted to join Kreyos too.

So far so good. We buy at actual cost price, our solutions company Viewcooper becomes our partner, so we can be more competitive price-wise and we get his whole team to join. What’s strange and something that should’ve raised a red flag at that time was we were never given access to his team, but only communicated with Alex and Pro himself. As things slowly progressed, they finally gave in to allowing us to contact their FW and Hardware engineers.

Take note that they only allowed us to do this towards the latter part of the manufacturing run, whereby his staff started resigning/stopped working as few claimed they didn’t see any hope in Viewcooper and the project as there were only few people working on a project this big. We started digging and found out that the at-cost price which we were supposedly getting the Meteors for from Pro and view cooper was not $50.

The at-cost price is only $30 and Pro was already earning around $22 USD from selling us at $52. His total PURE PROFIT per unit is around $37 USD(if including the $15). And to make things worse, the LCDs cost which he misled us into buying huge batches of, was not $15, but only around $5 USD each.

All R&D, firmware, hardware, software App personnel are from Pro’s solutions company Viewcooper Corp. As you guys know, we only had a goal of $100K USD when we launched the campaign, we had no way of knowing that we would sell $1.5MM USD in such a short period. So after the campaign ended, we had to immediately pay 50% ($52*20000)/2=$520,000 USD, part of which was $150,000 worth of LCDs that been already been paid for) of the invoice to Pro’s company VIEWCOOPER to begin manufacturing.

During this period of time, Pro and Alex constantly made us believe that the SHARP’s LCD of the watch is always out of stock, as Pebble and Nike is booking up the entire Sharp’s manufacturing line. They claim that there is only 1 line that manufactures the small Sharp LCDs, and the other lines manufacture LCD TVs. They also told us that the LCD’s booking time is usually 4–6 months just for the 2nd batch of LCDs to arrive unless we order and stock now. So we became worried because this will be a major problem if we start scaling. Judging from how well we did on Indiegogo, we expected our marketing team to be selling it very well on our own eCommerce channels as well. So we placed our 2nd order of LCDs for 20k Units and followed by 44,000 units of LCDs, for a total of 64150 pieces of LCDs, of which we paid a total of $966250. Now with all we were are sitting on 44,000 pcs of LCDs — $660,000 of worthless LCD inventory. )

MID AUGUST 2013

We spent a good amount of money to hire a design firm to design the Kreyos homepage to make sure we properly communicate our key features to the public. We outsourced all our ecommerce development work to a Philippine software company to build our magento eCommerce platform.

They kinda screwed up as it wasn’t ready when the Indiegogo campaign ended, so I rushed over to the Philippines to see what the hell is going on. We were losing so much potential sales after we completed our IGG campaign and the eCommerce site is still not ready. I had no idea that the time I flew was the worst time of the year to fly to Philippines. The moment I arrived, one of the worst typhoons hit the Philippines. I got stranded in Manila for a few days as we were not able to travel due to the mass flooding all over the city.

We had to risk our lives to drive 3 hours all the way to Subic (a province in the Philippines) where we encountered heavy floods and broken bridges along the way. We reached our destination to find the developers cramped in a small, almost inhumane working space still working on the eCommerce site.

Upon returning to Manila, I got to meet another Singaporean friend who has a small team of programmers and customer support personnel to manage his eCommerce business in a shared office. After figuring out the costs in Philippines is WAY cheaper compared to the US, I decided to share a new office space with my friend and setup a small team of Customer support reps in Philippines -Manila. This is how we came to setup our Philippine office.


SEPTEMBER 2013

Seeing that our eCommerce store still had a lot of issues with the software provider I mentioned above, we’ve decided to end our relationship with them and hire our own web developers to work on our eCommerce store in-house. Things started to get better at that point.


OCTOBER 2013

We finally finished with our simple renovation of the office. We hired our first customer support employee — Katrine, whom many of you have exchanged emails with in the past. We have since expanded our customer support team from there to around 5 full time customer support personnel.


NOV 2013:

Remember when we announced our first delay? When we couldn’t ship in time for Christmas , our marketing team was the first to come under fire from the public. I couldn’t say it then, but in reality, Viewcooper was all to blame for this and should be the ones answering to the public.

Every time we encountered delays, we were the ones who unfortunately had to come up with excuses for Viewcooper not delivering. For every delay, we process around $100K USD of refunds, which is a HUGE loss for a small startup like us. In total we refunded around $500,000 USD of what we received from Indiegogo & preorders due to DELAYS. And when we complained numerous times to Viewcooper about it, Pro simply said, how it is not a loss and how we’re just refunding what they prepaid upfront.

During this time we are still pushing everyday for prototypes/samples and also the iOS and Android Apps, because we haven’t seen any developments from them at this point.

DEC 2013:

Finally we received prototypes from Pro good enough to bring with us to CES. We tested it and the speaker sucked big time. He placed the blame on his partner ALEX HU who tested the speakers. And what’s even more ironic was that the echo problem was found out by my friend when he was playing around with it. And Viewcooper has no clue at all when they provided the prototype.


JAN 2014:

In all honesty, I didn’t feel like we had to attend CES, as its a unnecessary expense for us in the meantime. Most of the distributors/retailers have already reached out to us one way or another before the show. But the show itself was a success as we practically didn’t have time to take a break as the booth we setup was always swarmed by people.

BUT the experience was a nightmare tech-wise. I was given 20 prototype units, of which by the end of the show, only 1 was left functioning.

During the whole show, Pro was NEVER at the booth, he was always with his uncle going around the floor. And when I called him to tell him how crazy it was that so many units were broken, he shouted at me over the phone saying, JUST TELL ME THE PROBLEMS AND I WILL FIX IT! At this point, it kind of felt like Kreyos was working for Viewcooper and reporting to Pro as the boss. After the show, he mentioned we will need to delay shipping again due to the fact that they need to make openings to the mold to fix the speaker and sound issue we uncovered.

Also remember we had to do the retooling of the molds? This was done because the initial molds were useless and Pro even charged us a premium for them. As I learned later, Pro marked this process up by 200–250% on top of what the supplier charged him. We paid a premium expecting to get a premium product done but that was not the case. His employees advised to redo the tooling very early on(during October, but he is so stubborn and didn’t want to fork out extra money from his own pocket. Only in XXXXX/2014 did he agree to redo the tooling, but by that time, we were already so close to the shipping dates we announced. Every change in molding, PCB requires extensive testing.


FEBRUARY 2014:

We designed the mobile UI and paid him $16K USD deposit back in 2013 to build our iOS and Android app. They never delivered those. Pro finally told me that his team was not able work on our iOS, Android and Windows Apps this late when in the past, he lied and said they were almost done. We scrambled to start hiring mobile developers in the Philippines to work on the mobile app for Kreyos.

Many would ask why didn’t hire developers in the US to get this done on time. The simple answer is cost and budget. An experienced iOS/Android dev would easily cost us anywhere from 80k–150K annually in the US, while it would only cost us around 10–20K USD in Philippines. We simply cannot afford 4–5 full time mobile developers in Silicon Valley this late in the game. If you’ve been following, we’ve also have paid out a large portion of our funds to Viewcooper. Part of the reason why many US/EU corporations have development/support teams in here. And to make things worse, Viewcooper provided almost none if not incomprehensible and very incomplete at best documentation on Firmware resulting in the mobile team having a VERY hard time working on the integration, since then 2 mobile developers have left because they felt it was impossible to work with Vewcooper. Not even one working product was given to our team to work on the app. The worst thing is, the batteries on the units they did provide were not even soldered to the board. We had to go to the mall, buy some keyboards, cut out their USB cables and look for someone to solder them for us.


MARCH 2014:

We had a potential angel investor who wanted to invest 300K USD, and wanted to meet with Pro. Pro’s response?

Pro: How much is he investing?

Steve: $200–300K depending on valuation

Pro: Not worth my time meeting with an investor only planning to invest such an insignificant amount. I can easily provide and lend you this amount myself.

There were numerous times when Kreyos needed Pro to put his money where his mouth is and never once did he come through and even offer a single cent to help Kreyos. Even with the last delay, Viewcooper “promised” to AIR FREIGHT all the inventory to the US for us, but never did.

A lot of you are probably asking why we continued using Viewcooper at this point in time after we have encountered so many delays and issues with them(Note that at this stage, we weren’t aware of the ridiculous markups and the money Pro pocketed from our entire deal)

i) We do not have working relationships with any other solutions company

ii) We do not know any other EMS factories in China

iii) Most importantly we already paid him more then 50% of our money (50% of the 20k Units and also the 64150 units of LCDs), so we are held hostage with virtually no way out. We are not going to be able to raise enough money in time to push through with the project if we dropped Viewcooper at this point.

iv) We are a marketing team with very limited hardware experience.

So what can we do? Tell our backers that we are having issues with our solutions company whom we have PAID 50% to start production and, under whose advise, we stocked overpriced LCDs. We were put in a very bad spot where the only viable thing to do was wait and wait until they deliver what was promised to us and our backers. If we ditch them, we are not going to be able to find a solutions partner in such a short window and needless to say the delivery date will be further delayed.


16th of May 2014:

The update we posted on 16th of May is another thing I want to come clean on., Remember the time when we posted that we were ready to ship, and posted images of the Kreyos loaded in the boxes? Those were not 5000 units. In fact, the picture is of a single pallet as most components didn’t arrive. Pro asked us to give them another 30 days to start shipping. I agreed but on the condition that that he uses air freight to ship everything so we can get our stocks into our US distribution facilities at the same time. He agrees to this with his team and other manufacturers as witness. But when the day came for him to supposedly ship the units, he said it was too expensive and not willing to do so.


JUNE 2014:

So when we were “close” to fixing all these issues, we encountered another problem: Viewcooper forgot to place an order with the accessory supplier, and the supplier did not have enough manpower to rush the orders. So we flew in again to China, and traveled all the way to Wujiang, which is about 2–3 hours from the Shanghai Airport to visit this Silicon supplier. We spent a premium on the mouldings, but it is only capable of churning out 500 pcs per day. And they didn’t have enough manpower and some machines weren’t even working. To make things worse, the beltclip molding broke down, so much for quality.

After all these issues, we started to become very suspicious. We also found out that he only paid the EMS factory 30% to get the order working, but he claims that the EMS factory requires 50% to begin with and another 50% before we ship out ( this affects our cashflow as well. If they only require 30% to start the project, it is much easier for Kreyos). But due to the long delay, he told us to pay the remaining 50% or else the EMS factory won’t continue to work on it (guess Pro exhausted the funds and therefore pressured us to pay him, this is my WORST mistake, we shouldn’t have paid him, but being pressured to deliver I didn’t see any recourse).

After I started traveling so frequent to the EMS factory, we learned that Viewcooper has only paid 50% (30% followed by 20%) since, and still owed the factory 50% of the funds even though we have already shipped out 14K Units to our warehouses. He has had difficulty in paying the suppliers and the EMS factory, The EMS factory was not willing to release the remaining 6K Units of Meteor units that we were supposed to have. Our guess is Pro misused the funds for his personal gains or used the funds for his other businesses.


JULY 2014:

We finally started to ship to our Hong Kong warehouse. Pro didn’t even bother to come to the factory and he practically is just 20mins away from it. I persuaded him to come twice as it is a huge for Kreyos and the team to see our products finally going out, but he wouldn’t hear any of it. I got really annoyed at this and realized that, outside the problems he caused which I have already detailed, he was a horrible partner.

I started to get familiar with the manufacturer, his employees and started to put the pieces together. Something was definitely very wrong about this entire situation. (Note that at the earlier stages, we weren’t given access to his employees nor are we able to travel to the manufacturer without him bringing us there.)

Disgruntled Viewcooper employees are leaving because they weren’t getting paid (they only get paid when we ship, Pro pays them $1–2USD per unit), and also because these people are working crazy hours.

We also realize that Kreyos, suppliers, are mere pawns in his chess game. In fact, his real intention was to make use of Kreyos to develop an ODM solution for smart watches whereby he can resell it instantly as a turnkey solution to other companies looking for this kind of product.

Basd on statements by his former employees and friends, we learned that Viewcooper had around 15 projects on hand, of which several are Smartwatch projects — something he promised not to do for other companies.

We received the original invoices from the molding suppliers with the same prices, but we learned that local China suppliers will gladly issue a “fake” invoice based on what Viewcooper told us. They will then pay Viewcooper a commission based on the actual cost. A quick example:

Supplier quotes Viewcooper $10,000 USD. But Viewcooper tells supplier to send Kreyos an invoice of $20,000 USD. Kreyos pays directly to the supplier, and supplier will then pay Viewcooper $10,000 in commission for the deal. Moldings, protoypes, samples, accessories all fell victim to this.


AUGUST 2014 -> Current

All hell breaks loose. I was accused of being a scammer and trying to run away with all the money we raised on Indiegogo.

Images of my holiday trip to Italy back in 2010 Italy where I went with some close friends to visit the Ferrari factory (one of my friends bought a Ferrari) were even pulled out from my Facebook page as part of a smear campaign.

The picture of me with the outlet shopping bags were actually taken using the bags of my friends’ wives. I was goofing around when I took that picture. That was used for the smear campaign. I already posted a clarification on our official Facebook page but, after doing so, BetaBeat still went on to say “that doesn’t explain where he got his haul of stuffed Ferregamo bags.” Seriously if one of my friends can afford to buy a Ferrari , they can afford to buy some bags for their wives. Out of all the shopping bags in that picture, the ONLY thing I bought is a pair of shoes from Hugo Boss. Is this good enough for you @BetaBeat?

This undoubtedly has been one of the most stressful and toughest periods of my life. I can afford to fail, lose money or start again from scratch, but I cannot afford my reputation being ruined with something that I didn’t do or plan to do.

One of the major reasons why we delayed posting these facts is because, even though we have paid so much money to Viewcooper. The remaining inventory belongs to Viewcooper, and not Kreyos. Therefore we have been working on getting him to sign documentations that would allow us to transfer the the toolings (useless as of now) and most importantly the remaining 44K LCDs which most probably is useless now as well, which we can at least try to dispose off at a huge loss.


WHAT WE DON’T UNDERSTAND:

What I don’t understand till now is, with the success of Kreyos, and the amount of money we paid him, why didn’t Pro invest in talent or hiring the right people. The total amount of people working on Kreyos from his end was only around 4 people, some of whom we realized are just working part time. We wouldn’t have minded him pocketing so much money if he at least delivered something that we can fix for our backers and customers and continue selling for a few more months until we conceptualize a new and improved version.

He constantly bragged that we will impress our backers by shipping earlier then the promised date. But things started to look bad after numerous delays

We wanted to hire our own firmware guys, but he wouldn’t send us the firmware’s source code, and insisted we won’t be able to manage it. He said he will hire more people in his Taiwan office to help speed things up, but apparently those people are working on his other projects and not Kreyos.


ISSUES:

Waterproofing: The Meteor has waterproofing issues. At this point, we DO NOT recommend you using it on activities that may involve it getting wet.

Waterlogged Watches: Viewcooper will provide replacement units for this. Replacement units are not waterproofed as well.

Speaker: Due to the design of the Meteor itself, unless the whole design is changed, the output of the speaker will not be maximized. And also the codec component is also one of the issues that caused the poor sound quality. We were assured again and again by Viewcooper that they will fix the sound issues, but it didn’t happen. The firmware can further optimize the quality of the sound decreasing the pitch. They are still in the process of improving this part.

Battery Life: We were promised 7 days of battery life by Viewcooper as you can read up in the Kreyos Specs.pdf. Reasons that the current battery life doesn’t last as long as advertised is (A) the firmware is not optimized, (B) the battery component was kept idle too long in the warehouse because of the repeated delays resulting in them losing charge capacity. In the battery specs sheet, it specially mentioned that if it is not being used, it needs to be charged every 3 months, to avoid losing charge capacity.

Firmware: We are still pushing for the Viewcooper’s FW developers to fix known issues. Updates will be posted to the server from which you can download and update your watch. We are also going to allow users to update the watch from the computer using the charger.

Windows APP: Our developers are still working on this, but have hit a roadblock as we have issues with the protocols that Viewcooper provided to our team, as per Nikka has mentioned on Facebook.

Kreyos Custom: It has come to our attention that one of our backers has been working on a new firmware. We will be working closely with him to see if we can help out in anyway.

Refunds: The only reason why we won’t be able to refund any more orders is because we are not financially capable of doing so, we are burned/cheated out of all the funds, we don’t even have money to continue running our office operations nor paying our employees. After we finish shipping to backers we will be wrapping up and shutting down Kreyos as a whole.


CONCLUSION:

If we were ever planning to run away with the money in the first place, why even bother continue running the company till now, or even borrow money from investors, friends and family just so Kreyos can continue running, or spending money to go exhibit on CES, flying back and forth to China endlessly just to make sure things are moving. We didn’t work so hard just to make it a failed/scam campaign, we want it to be a success from the first day we launch our campaign. I took a ALL IN mindset if not I wouldn’t have invested so much time and money on this.

After our IGG launch, we were constantly reached out to by huge companies who wanted to sign us up on retail distribution, partnerships, distributors who fly in from all over the world just to discuss exclusive distribution in their country.

To wrap things up, Kreyos is really done, our reputation is already shot beyond redemption and I wish we could provide further remedies, fixes and refunds, but the lack of available funds wouldn’t allow us to do so. We did all we can up to this point.

It has been a extremely tough journey during these 2 years. We thank you all for your support, and we are very upset that we weren’t able to hit our expectations of this product and also not able to continue working on Kreyos. My team and I really did our very best salvaging whatever we can but ultimately it didn’t work out well due to Viewcooper, if they are willing to even use the actual amount of money for what we paid for, things might have turned out really different for Kreyos.


WHAT WE WILL BE DOING:

  1. Releasing all source codes, documentations available until now for the Firmware, iOS, Android and Windows Phone 8 apps as open source either in Github or BitBucket. Will post updates when ready.
  2. Kreyos will shut down all operations worldwide by end of September 2014.

WHAT VIEWCOOPER WILL BE DOING:

  1. Viewcooper will continue to provide updates and fix known firmware issues.
  2. Viewcooper will provide exchanges for waterlogged watches and quality issues. Please contact exchanges@viewcooper.com for exchanges.

Thanks for your time in reading this!

- Steve