Poor communication may cripple failed start-up's efforts to get back on its feet
What is missing in failed Singapore start-up Pirate3D's communication to customers? An apology, obviously.
Pirate3D, famous for its low-cost Buccaneer 3D printer, ceased operations two months ago and left some 60 per cent of its financial supporters, or 2,000 of them, in the lurch.
These backers had invested some US$1.44 million (S$2 million) via US crowdfunding platform Kickstarter. But there was not a single apology from the start-up anywhere online or in media reports. Instead, at noon yesterday, Pirate3D posted a cavalier remark on its Facebook page: "We love all the news and hype about us. It's strange how in 2014 we 'sink' and in 2015 we 'sink'. Hopefully sooner than later these folks realise the only thing that can keep sinking and sailing is a submarine.
"Still here and still building 3D printers. (Oh, maybe the name of our next-generation printer should be The Submarine.)"
SINKING OR STILL SWIMMING?
We love all the news and hype about us. It's strange how in 2014 we 'sink' and in 2015 we 'sink'. Hopefully sooner than later these folks realise the only thing that can keep sinking and sailing is a submarine.
PIRATE3D, in a post on Facebook yesterday
Serial angel investor and technopreneur Eddie Chau said he would invest in founders of failed ventures only if they are humble. "Arrogance is blinding, but being humble will build a better relationship in the market in the long run," he said.
Pirate3D, which was co-founded in 2012 by Mr Brendan Goh, Mr Tsang You Jun, Mr Roger Chang and Professor Neo Kok Beng, was celebrated as a pioneer on the cutting edge of an exciting new technology when it first came onto the scene.
After raising $600,000 in 2012 from Singapore angel investor Leslie Loh, Pirate3D went on to attract the $2 million via Kickstarter the following year.
Another $2 million came in last year from unnamed investors in Singapore and Germany.
Pirate3D had planned to ship the first 500 units of Buccaneer by December 2013, but it managed to ship only 200 units as of August last year.
The company continued to face delays. It began offering backers the options of either waiting for their printers or requesting a refund.
But these refunds have since stopped, with Pirate3D now trying to raise another $2 million to $3 million to fund the production of a new machine using the latest 3D technologies.
The start-up also hopes to use proceeds from the new product - which will cost less than the original US$799 Buccaneer - to meet back orders.
Some of its previous financial backers are now staying away. "I would not back them again," said freelance writer Ken Wong, 43, despite having received a US$500 refund from Pirate3D last year.
Pirate3D's angel investor, Mr Loh, who is still advising the start-up, said the next step is for it to find strategic investors who have manufacturing or marketing abilities.
"Manufacturing is very expensive. For a young team, this is too much to handle," said Mr Loh, managing director of home-grown tech incubator firm Red Dot Ventures.
But more communication is needed.
Venture capital lawyer Bryan Tan of Pinsent Masons MPillay said Pirate3D should give a better account of how it spent its funds before asking for more money.
"Using fresh money to try and generate fresh profits to cover past shortfalls is extremely risky, given that one round of failure had already occurred," said Mr Tan.
"Savvy investors will view this sceptically."
A version of this article appeared in the print edition of The Straits Times on October 17, 2015, with the headline 'Where's the apology, Pirate3D?'. Print Edition | Subscribe
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