Continuing where the first part left off (a general overview), we’re now going to tackle two examples of crowd funding coffee projects that have turned bitter. Those two projects are the all-in-one coffee roaster, grinder, and brewer from Bonaverde, and the PID-Controlled (ensures consistent temperature during shot pulling) Espresso machine from ZPM Espresso. Both of these projects share four similarities: they presented an idea that hasn’t been commercialized previously; they both exceeded their fund raising targets by substantial margins; the campaign creators have no experience in the coffee business or manufacturing; and both have failed to deliver as promised on their fund-raising pages.
During the writing of this article, the campaign by ZPM Espresso had a dramatic development: it officially ground to a halt. After raising over $350k USD (with a $20k funding target), and almost exactly two years after promising to ship six months after funding, ZPM Espresso notified all backers that they’ve officially shut down. With claims that all parts had been ordered late in 2014, and the majority of issues resolved from Beta testers early in 2014, everyone expected to receive their units. What they got in January was notice that all the money had been spent on the development of the machine and parts, and that the majority of the team had quit the company. In one single email, $369k raised from backers went poof! In response, some of the beta testers who received beta machines posted their results of the machines’ performance (speculated that less than 25 units were sent to beta testers), and stated that it failed to perform as advertised across the board. Granted, it was a beta unit. However, it appears they received their units nearly one year after backing the project. We’ll keep everyone posted as the story develops further.
On the other end of the spectrum, you have Bonaverde, who promised backers “let’s change coffee together” with its all-in-one coffee maker. As of today, Bonaverde has a growing backlash from people who feel they’ve been misled, lied to, or even downright conned out of money for a non-existent product. Bonaverde has done nothing to stem the tide of growing backlash, and in many cases, provided more fuel for the growing fire. How? Why? Quite simply, through a number of miscalculated posts and two additional crowd-funding campaigns after completion of the initial Kickstarter campaign.
Immediately after the success of the Kickstarter campaign, Bonaverde started up a new campaign on Indiegogo (which was successful in raising $124k USD with a goal of only $50k). With over $800k in funding raised, over four times more than their target, Bonaverde had more than asked to go into production and fulfill their quest of changing the way people drink coffee. After all, they were using a complete unit, Korean manufacturer Happy Time & Java Coffee’s Java Pro machine, in all of their press demonstrations. The Java Pro machine has been available in Korea for quite some time, retailing for approximately $630 USD. The price discrepancy between the retail price of the Java Pro and the initial offering of $250 for a machine from Bonaverde defies logic. Was Bonaverde truly going to take a loss, or did they honestly negotiate a discount to account for the $250 offering? Many appliances have between a 25-40% markup over wholesale cost from the manufacturer, which would have put the wholesale cost at over $300 USD. This doesn’t account for shipping the machines from Korea to Germany (or multiple drop-ship locations around the world), so how in the world would they ever cover this discrepancy?
Over the coming months supporters would realize they were in for a rude awakening. Every update that Bonaverde published would be filled with more claims that continued to push the delivery of the machine back, and that further improvements were required. Backers became frustrated, because this was supposed to be a machine nearly ready for production sans some final engineering work.
Ultimately, it was disclosed that an all-new machine built from the ground up would be required. But the updates for the next 6 months were similar: we’ve hired someone new, we have tooling and starting manufacturing, we’ve hired someone new, we have tooling and are starting manufacturing. How had a machine that apparently had tooling multiple times not completed manufacturing?
To add insult to injury, another campaign – this time on the European crowd funding site Seedmatch – raised over $1.6million USD. The same promises of an all in one machine, and changing the way we drink coffee were stated. But after the $800k USD raised nearly a year ago, it begs the question: were the Europeans more foolish to invest twice as much as the U.S. supporters based on all the false updates provided by Bonaverde thus far? There’s a phrase that rings true: Google is your friend. Type in Bonaverde into Google and the Kickstarter campaign page comes in as the second link, followed by a story of backers rebelling over the broken promises of Bonaverde. Why would the Europeans not be suspect, especially when the amount being raised was almost 10x the original amount sought with the first two campaigns?
Just as abrasive to supporters was the (Google Translated) response on the Seedmatch website where Patrick Bales, COO of Bonaverde distances the company from the Kickstarter campaign by stating “As our society (Bonaverde Coffee AG) legally not associated with the Kickstarter campaign is our view that actions against the Company and can not be enforced.”
It’s hard to read something that claims that they aren’t associated with the Kickstarter campaign, yet on both pages the backers are the same, the goal is the same, but Bonaverde acknowledges and implies Kickstarter backers won’t be getting a single coffee maker by suggesting the two companies aren’t connected, when all facts point to they are one and the same. Will Bonaverde deliver to its supporters in the end?