When Crowdfunding Goes Wrong

Makovsky

Last year, I was extremely excited when a new product called Coin was announced. Coin is a device that digitally stores your all of your credit card info and can be used for transactions. Essentially it digitally combines all of your cards into one card.

Coin executed an extremely successful crowdfunding campaign using referrals and social ads. People could pre-order Coin at a discount, and many did. After all its a pretty sexy device and very innovative so why wouldn’t you? Then, the waiting game began.

Finally, a few weeks ago Coin broke their silence and sent an update that was extremely confusing. They announced their app would be ready the next week and you could “claim your Coin” through the app. The also announced “Operation Beta” in the email’s subject line but didn’t explain what it was. Here’s where the problems began.

As it turns out, Coin was only releasing a set of prototypes to select backers. Then they were trying to charge these beta testers an additional $30 for the finished device. Immediately, there was a huge backlash, and the company reversed it’s decision shortly after.

It didn’t end there. Soon after, the company sent an email to backers apologizing for the lack of transparency and confusion. The first paragraph said “we want to earn your trust again.” They went on about how they ran into some technical problems and offered some explanation, but failed to let backers know when they could expect their device. Adding to the frenzy, they announced that they were releasing extra beta spots. CNET did a great job explaining the situation in this article.

On August 23rd they sent another email letting us know that the app was ready for iOS and we could “Claim Our Coin!” After going through an extremely frustrating process finding the app in the Appstore (the link did not work) I learned that my Coin would ship in Spring 2015. Not cool.

Again, there was a huge backlash. Over Labor Day weekend, there were 17,000 mentions on Twitter of @Coin. The overwhelming majority was extremely negative. The consensus was that Coin was not transparent about their progress, the beta program and some people already began asking for their money back. A parody account was created called @Coin_Beta_Help to poke fun at the situation.