TappLock, a startup promising the "world's first smart fingerprint padlock" has claimed that issues with manufacturing in China were behind the months of silence which provoked aggrieved backers to contact The Register, fearing fraud.
The padlock business had managed to raise over $320,000 on the crowd-funding site Indiegogo by March 2016, with a promise to start shipping to its backers by September. However, when September rolled around, its backers received neither their padlocks nor an explanation of why they were yet to ship.
One backer, fearing the company had taken the money and done a runner, complained to The Register that all social media feeds for the company had dried up without comment or update, while comments on the Indiegogo page itself received no replies. Emails sent to the address that Indiegogo forwarded to aggrieved backers who attempted to report the campaign, were bouncing.
After The Register managed to chase down a former employee at TappLock and query the lack of shipments and communication, Winnie Chen, executive assistant at Tapplock, offered a "sincere apology on behalf of our company for our lack of communication" in an email to The Register, which was subsequently posted to Facebook.
Tapplock claims that its "manufacturing experience has been rocky" and more expensive than it anticipated. It said it has shed staff and sent its entire engineering team to Shenzhen to watch over the manufacturing process, which the company's CMO, Michael Wang, explained to The Register has been fraught with difficulties.
"Yes, we're receiving a lot of complaints," said Wang. He justified the silence by explaining that when the team moved back to China, they realised that their handmade prototype was not compatible with the manufacturing procedures in Shenzhen, and the mechanical and industrial design of the padlocks had to be recreated.
"Our financials didn't support making so many locks," Wang added, noting that the company made eight dies for their larger product, which cost far more than the $320,000 raised.
"Suppliers can be very sly," said Wang, who complained that they had also received a lot of excuses regarding currency fluctuations when it came to the supply of the proper parts, although Wang told The Register he wouldn't identify the supplier as he didn't want to strain the relationship and risk further delays.
Tapplock says it now plans to start shipping the padlocks in early March 2017, though Wang acknowledged with the Chinese new year approaching, it could not be certain that target would be met, and cited two specific risks.
The first was manufacturing, he said, as the company had found sub-standard chips were slowing down the promised 0.8-second unlock time, as well as other quality issues leading to delays. Tapplock has brought in an experienced project management company to help it navigate the manufacturing business environment in Shenzhen.
Wang also admitted that the company would not be able to ship backers' padlocks all at once, as that would deplete both its stock and capital, and so it would be sending out batches of 500-1,000 units over the course of a few months, while also selling to new customers to generate cash flow.
This meant there is also market risk, said Wang. "If we don't sell additional units, then we won't be able to bring Tapplock Lite to market," he explained. This is vital for the company to keep capital flow, he said.
Wang added that with four of Tapplock's six-strong team in Shenzen, China's great firewall had been an impediment to contacting backers, although the two other staffers, himself and Winnie Chen, remain in Vancouver, Canada. The lack of communication was "a huge failure", Wang told us.
"It's a PR disaster," Wang acknowledged. "The worst thing you can do is not say anything."
The firm has promised "bi-weekly updates from now on informing [backers] about our situations, challenges and progress".
One anonymous backer told The Register: "All we can hope as backers is that these problems are overcome and lessons learned about completely cutting off backers. The product looks great, but I still question whether we'll ever see it shipped." ®