Wow. It’s such a balancing act, getting through that phase where you need the growth to support the demand, but there isn’t enough actual income yet to support the growth because you need the growth to support the demand and earn the income.
I’m kinda there right now with my year-old startup (non-GF related), so this kind of terrifies me.
i think this is one of the things that happens in crowdfunding that people just don’t talk about / think about enough. when you create a crowdfunded project with a projection of, say, 500 units, but take orders enough for, say, 5,000, scaling up to 10X or more units for production just isn’t as easy as people might think. and a lot of startups have failed and/or folded trying to make that happen.
I am taking a naive view through lack of experience, though it may be a lesson I need to learn before next year, but how is it that the orders are accepted for such rapid expansion ?
Is it just an overwhelming optimism born out of the surprise at the initial success that leads to this sort of situation ?
Or am I unaware of the pressure that that success produces, in reality ?
Engineers and entrepreneurs are the most optimistic people on the planet - they are profoundly certain that they can do whatever they sell.
The promises of contract manufacturing. I won’t comment on this case in particular, but in a generic Kickstarter you probably plan on contracting out the making. So how hard could it be? Ask a bankruptcy lawyer.
While I have worked for a company that understood its capacity and understood the danger of accepting large, one-time orders without a plan, generally speaking very few people in business consider too many orders a problem that cannot be overcome.
A large expansion is always dangerous for a business of any size. The smaller the business the less expertise there is in managing an expansion and the less room for financial miscalculation. In this particular case it sounds like they sold a product before they figured out how to properly make it and then spent a lot of money trying to figure out that part. I don’t think it is the pressure of success as much as it is the pressure of so much to do.
If I recall, The founders here were looking for something like 100,000 or so to decide weather or not the idea was viable. 27,000,000!!?
Being savvy enough to manage to scale up and navigate that road, well I’ll wager Dan could write another book on what was learned on this journey.
Made me think of a chapter title in his book - “The Benefits of an early Bankruptcy”
It takes a special breed of maniac. I’m still a little bit in awe.