Ouch...RIP Skully Helmets

[TB151]

I've met the founders before, and got to check out the helmets at CES this year. Such a great concept, such poor business practice...I hope no one here pre-ordered.

Skully Closes Its Doors and Ceases Operations
AR helmet startup Skully goes down in flames

[Tekime]

So they burned through $12M without delivering a single helmet?

Really too bad. Great concept. Would be surprised if there wasn't a last minute acquisition at this point.

[Speed serpent]

I loved the concept just not the price. Hopefully someone else comes along and sees this through. You can build something similar for less but having it ready out of the box and warranty is worth a bit of a premium

[WokDisWey]

For about the same price, I'd much rather have one of these.
Home - Intelligent Cranium Helmets

[Trevor K]

I have a friend who ordered one, I will have to see what happens. "What a shame." Also, what a scam. The ability for a company to take hard earned money from working people only to claim bankruptcy and walk away unscathed absolutely disgusts me. I understand the investors have a risk they accept when they invest. But when a customer orders a product from a company, that's not an investment assuming a certain risk, that's the purchase of a product. In this case, the purchase of a non-existent product. This company was apparently running a ponzi scheme.

[capt1014]

Good tech but couldn't get in the market at a suitable and affordable price point....too bad though

[aldend123]

I have a friend who ordered one, I will have to see what happens. "What a shame." Also, what a scam. The ability for a company to take hard earned money from working people only to claim bankruptcy and walk away unscathed absolutely disgusts me. I understand the investors have a risk they accept when they invest. But when a customer orders a product from a company, that's not an investment assuming a certain risk, that's the purchase of a product. In this case, the purchase of a non-existent product. This company was apparently running a ponzi scheme.

In a lot of these micro-investment start-ups, people aren't 'customers ordering a product'. They are essentially investors as well, who's payout is the product. It should be recognized that there is always the possibility for the investment to become a big zero.

But that becomes a little less clear since they also have an ordering page on their site and seem to make no indication that it is crowd-funding, or use the phrase 'pre-order'. I'm guessing they changed things around once they started shipping product. But they don't just get to 'claim bankruptcy and walk away'. They either file for protection, which is intended to prevent major lenders from strangling the company, and get them back in action. Or they liquidate, and a third party oversees the distribution of the liquidated money to repay their debts. I believe those who 'ordered' product they had not received would be first in line.

[aldend123]

Good tech but couldn't get in the market at a suitable and affordable price point....too bad though

They raised their goal amount in the first 24hrs. 'Getting in the market', and the price weren't the problem. Doesn't seem like there was a shortage of willing buyers. The article above also says there were 3000 pre-orders. The picture being painted is severe mismanagement, and potentially some genuine difficulties experienced by a start-up company trying to produce new technology.

[PhilB]

I have a friend who ordered one, I will have to see what happens. "What a shame." Also, what a scam. The ability for a company to take hard earned money from working people only to claim bankruptcy and walk away unscathed absolutely disgusts me. I understand the investors have a risk they accept when they invest. But when a customer orders a product from a company, that's not an investment assuming a certain risk, that's the purchase of a product. In this case, the purchase of a non-existent product. This company was apparently running a ponzi scheme.

An honest but unsuccessful attempt to build a business is not a scam. It costs money to start a business, and that money gets spent doing that. Investors are, and should be, at risk -- they put their money in, and know that they might profit if the company succeeds, or lose if the company fails.

I do agree that buying the product is different, and that your friend should get his money back. Selling vaporware is a type of scam, but in that scam, actual production is never intended and just enough of the investment/sales deposit money is spent to look like it is. I do not believe that to be the case with this company.

And definitely not a Ponzi Scheme. A Ponzi Scheme is a specific type of scam, in which the money from later investors is used to pay early investors, to make the setup look profitable for a while and therefore sucker more new investors. This didn't do that, either.

PhilB

[cdovego]

They had a big mountain to climb and didn't make it. People love to throw hate at these situations but until you try, you'll never know just how hard it is. Few make it.

[Not Sure]

So they burned through $12M without delivering a single helmet?

That's actually not a lot based on what I've seen start ups burn through and never make it to the other side. Pretty common to burn through multiples of that.

[breakdirt916]

I love failing businesses....let's lowball them to buy them out!!!

[SteveM]

No customer who ordered expected to become a risk sharing partner in this enterprise.

That's where the hat comes from. Their VC's are in the risk business, most miss and some hit.

Customers are not investors and their payments or deposits should be protected funds in trust to be refunded if the company fails. Otherwise owners and investors are lowering their investment level on the backs of unfilled orders.

[Not Sure]

Yeah, agreed.

No customer who ordered expected to become a risk sharing partner in this enterprise.

That's where the hat comes from. Their VC's are in the risk business, most miss and some hit.

Customers are not investors and their payments or deposits should be protected funds in trust to be refunded if the company fails. Otherwise owners and investors are lowering their investment level on the backs of unfilled orders.

[SVRACER01]

They raised their goal amount in the first 24hrs. 'Getting in the market', and the price weren't the problem. Doesn't seem like there was a shortage of willing buyers. The article above also says there were 3000 pre-orders. The picture being painted is severe mismanagement, and potentially some genuine difficulties experienced by a start-up company trying to produce new technology.

they wouldve had to outsource a lot of the tech needed. those companies may have raised costs, or they couldnt fulfill the orders and they had to go to someone else that was charging more. hard telling not knowing.
ever seen the movie "Joy"?

[xrocket21]

Skully Founders Allegedly Used Funding As "Personal Piggy Banks" - BuzzFeed News

Skully founders may have used Kickstarter cash for strip clubs

[tsorfas]

That's actually not a lot based on what I've seen start ups burn through and never make it to the other side. Pretty common to burn through multiples of that.

Idk man. Depends the type of start up. For what they were doing I'm gonna guess that 12M (I heard 15 in some other convos) was wayyyy more than enough to get started.

- - - Updated - - -

Skully Founders Allegedly Used Funding As "Personal Piggy Banks" - BuzzFeed News

Skully founders may have used Kickstarter cash for strip clubs

And there you have some examples. Lol

- - - Updated - - -

They had a big mountain to climb and didn't make it. People love to throw hate at these situations but until you try, you'll never know just how hard it is. Few make it.

I don't think good and ethical business decisions and values were part of this personally and I know exactly what you mean.

[SteveM]

Skully Founders Allegedly Used Funding As "Personal Piggy Banks" - BuzzFeed News

Skully founders may have used Kickstarter cash for strip clubs

If this is true then shame on their investors for failing to know what was going on with their money. A good VC not only brings capital, but also strategy, financial discipline and oversight.

[TheIglu]

Don't throw hate at Skully while they throw your money at strippers.

[xrocket21]

Don't throw hate at Skully while they throw your money at strippers.

stripper lives matter

[Not Sure]

Idk man. Depends the type of start up. For what they were doing I'm gonna guess that 12M (I heard 15 in some other convos) was wayyyy more than enough to get started.

It isn't. It burns fast and unless you've been around startups..... tech in particular, it's hard to understand. That's not a lot of money in this case.

[Trajiks9]

12M = A shit ton of lap dances

[Speed serpent]

Not all is lost though. FUSAR will give those who invested the ~$1500 in Skully $1500 in FUSAR credits. It's not the same, but it is something.

[scottieducati]

An honest but unsuccessful attempt to build a business is not a scam. It costs money to start a business, and that money gets spent doing that. Investors are, and should be, at risk -- they put their money in, and know that they might profit if the company succeeds, or lose if the company fails.

And definitely not a Ponzi Scheme. A Ponzi Scheme is a specific type of scam, in which the money from later investors is used to pay early investors, to make the setup look profitable for a while and therefore sucker more new investors. This didn't do that, either.

PhilB

They had a big mountain to climb and didn't make it. People love to throw hate at these situations but until you try, you'll never know just how hard it is. Few make it.

If this is true then shame on their investors for failing to know what was going on with their money. A good VC not only brings capital, but also strategy, financial discipline and oversight.

Sorry folks, this is looking more and more like some douche-bags using the crowd sourced funds as their personal gravy train. This is NOT a failed business attempt for business means, this is as unethical as it gets. These guys should be sued, hard... if not arrested for money laundering and outright defrauding of customers. I hope the lawsuits are successful, and that there are more to come.

[PhilB]

Sorry folks, this is looking more and more like some douche-bags using the crowd sourced funds as their personal gravy train. This is NOT a failed business attempt for business means, this is as unethical as it gets. These guys should be sued, hard... if not arrested for money laundering and outright defrauding of customers. I hope the lawsuits are successful, and that there are more to come.

That may turn out to be the case, and if so, those people should face consequences for that. My point, though, was that a lot of y'all were jumping to ASSUME that the failure of the company was a scam, a ponzi, without having any evidence of that -- just random baseless accusations, coming only from your prejudices against business people. Some individuals *are* slimy, in business as in elsewhere. But a person should have some evidence of that before accusing any particular individuals -- more than just that they didn't succeed, and he thinks all business people are slimy.

PhilB