If you want to hear a tale of woe, you don't need to dust off some Dostoyevsky – just head to Kickstarter, which has no shortage of stiffed punters and failed projects. The latest example in a long line of crowdfunding cockups is the Coolest Cooler, which raised over $13m in 2014 and collapsed earlier this week with 20,000 orders unfulfilled.
The Coolest Cooler was pitched as a high-tech drinks cooler, paired with a built-in blender, phone charger, wheels, speakers and more. It's the type of stuff QVC nightmares are made of, and improbably, it sold like hotcakes. Coolest, the firm behind the campaign, spruiked over 60,000 units costing $185 apiece, making it the one of most financially successful Kickstarter campaigns ever.
It didn't take long for cracks to emerge, however, with shipments repeatedly delayed. Coolest also burned public goodwill when it started selling the Coolest Cooler on Amazon for the marked-up price of $500, long before it had finished distributing devices to backers.
To add insult to injury, two years after the campaign concluded, Coolest asked backers for a further $97 in order for them to receive their product before the July 4 holidays of 2016.
Compounding the company's woes, the Oregon Department of Justice probed Cooler that same year, with the latter agreeing to fulfil all orders from Oregon customers, as well as those who complained to the state. It was also provided a 2020 deadline to fulfil the remaining orders, otherwise it would be obligated to pay each customer $20.
Crucially, per the terms of the 2017 settlement, this obligation cannot be discharged in bankruptcy. However, with the company winding up, it's not clear how it'll be able to pay this compensation.
Ryan Grepper, CEO of Coolest, blames the company's ultimate collapse on the trade war currently raging between the US and China, which slapped a 25 per cent tariff on his products.
"It was devastating to our business, and I know it was felt by many of you in one way or another as consumers and thousands of small businesses everywhere," Grepper wrote in an update to backers.
Five years is an inordinately long time for a product to be delivered, even by low standards set by many crowdfunding campaigns. And while it's undoubtedly fathomable that the tariffs introduced as part of Trump's trade war had something to do with Cooler's end, the real answer probably has something to do systemic issues that dogged this firm's short life. ®