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The Rise and Fall of KREYOS
Hi backers, friends, colleagues, this is Steve Tan, founder
ofKreyos.
First things first: I want to offer my sincerest apologies to
allthe backers and customers who pledged for or pre-ordered
theKreyos Meteor. I am fully aware that the final product didntend
up being the product we envisioned and ultimately detailedon our
Indiegogo campaign. I would also like to apologize forthe series of
shipping delays all of you had to endure thedisparity between the
concept product you backed and the finalproduct you received along
with all the delays are things thatnever should have materialized.
These are things I take fullresponsibility for.
I, along with the helpdesk team have a queue of thousands
ofunread emails which increases steadily each day. I am cognizantof
the fact that we have not been responding to support ticketsas
quickly as we want to but I want everyone to know that weare
putting measures in place to improve our response times.We are not
ignoring your emails, its just that we most likelyhavent gotten to
them yet.
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I also want to apologize to the team at Indiegogo (Kate, Ben)who
were nothing but supportive to us throughout ourcampaign. They have
been taking misplaced blame and heat forour own failures. There are
ongoing debates as to howIndiegogos policies are not as
consumer-friendly as they shouldbe, but I think thats an entirely
different topic altogether. TheIndiegogo team was instrumental not
only in helping Kreyosraise the funds it needed to make the Kreyos
Meteor a reality,but they were also there every step of the way
offering strategicadvice even when things took a turn for the worse
for us.
I also would like to express my deepest apologies to the team
of16 people who are part of Kreyos a lot of whom gave up stablejobs
to help me and the company build our dream. All of themhave been
troopers throughout this entire thing and I cannotthank them enough
for their loyalty and dedication and failingwhile working with some
of the most amazing people makesthings a little more painful for
me.
At this point of time and in the interest of transparency, I
wantto post a detailed account of Kreyos from
conceptualization,setting up our operations, moving to mass
production and up tothe mess were in right now. This account is in
no way intendedto shift the blame away from me, I am the CEO of
Kreyos andthis is my company and, as mentioned, I take full
responsibilityfor the state the company and its products are in
right now. I,however, think that theres value in posting this for
the benefit
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of the people who backed Kreyos but, more importantly, I
amhoping that people who are planning to use crowdfunding tosee
their ideas to fruition to see this as a cautionary tale to keepin
mind when selecting Asian CM (contract manufacturer)orODM (original
design manufacturer) solution partners.
Finding a reputable ODM solutions partner is difficult
andcostly, especially in terms of time and complexity. I made
somebad decisions along the way but there is no worse decisions
forus than going with and falling victim to a certain
solutionscompanyVIEWCOOPER CORP and its CEO Pro Yang who,ultimately
perpetrate an intricate conspiracy against Kreyos.
I wish I learned earlier about all the troubling things
aboutViewcooper. Perhaps the Kreyos story wouldve playeddifferently
than it did. Instead, Kreyos itself along with ourbackers and
customers all fell victim to an elaborate whitecollar crime
perpetrated by Viewcooper.
The wheels were set in motion back in Early 2010
While I was in China for a business trip sometime in 2009, Iwas
introduced by a mutual friend to Pro Yang Huang Chang.Aside from
Viewcooper Corp, he also runs a chain of 4050Food and Beverage
stores in China and claims ownership ofelectronics manufacturing
plants in the region. Ive constantlystayed in touch with Pro for
the next 5 years and occasionallymet him when I traveled to
Shanghai for business.
http://en.wikipedia.org/wiki/Original_design_manufacturer
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This is how Pro Yang describes himself:
Pro is an experienced and passionate technologist who loves
tocreate innovative consumer electronic products. He is also
aserial entrepreneur with over 10 years of experiencespecializing
in OEM/ODM electronic products. Has a solidunderstanding of where
technology trends are moving towardsand has a knack for designing
products that solve specificproblems even before the market hits
maturity. His broadexperience encompasses not only design and
delivery ofcomplex hardware but also includes product
management.Previously, Pro was CEO at a Shanghai based
hardwaresolutions company VIEWCOOPER, where he led, R&D
andproduct management. Prior to that, Paul founded Innmaxwhich
created 3C storage products. Major clients includes HP,NEC, Lenovo
, Acer, Fujitsu, Lacie,Transcend.
QUICK SUMMARY OF HOW DID PRO YANG/VIEWCOOPER DESTROYED
KREYOS?
Our agreement we entered with Viewcooper/Pro Yang, is forus to
buy a complete ODM solution smartwatches from him.Towards the end,
it Pro Yang and Viewcooper were unableto deliver on this and ended
up with Kreyos having tooversee firmware, software and mobile app
development,manufacturing and logistics on his companys behalf.
1.
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Paid Viewcooper premium pricing but got in return massproduction
products with quality and countless issues. Wewill be more than
willing to turn a blind eye if they deliveredthe products according
to the specifications.
Viewcooper took a deposit of $16K USD to begin working onour
iOS, Android and Windows Apps, but they werent ableto deliver these
either at the very last moment. No refundswere issued to Kreyos for
these unfulfilled part of theagreement.
Kreyos paid his solutions company Viewcooper, a
bigfortune$$1,692,575.95 USD, but, as we later learned, henever
spent it on the product, nor did he allocate the budgetto hiring
the competent resources/talents for the project.Almost $900,000 USD
are pocketed from just from the 20kUnits and also the LCDs that we
bought from Viewcooper.Now after finishing the first 20,000 units
we ordered, we arestill left with 44K units of overpriced LCDs
($660,000) and6,000 units of Meteors ($312,000). What we are
extremelyoutraged about is he has taken so much money from
Kreyos,but didnt deliver a product that was up to the agreed
uponspecifications. He cut a lot of corners on quality as you
mayrealize from the hardware you received.
Misled Kreyos into buying and stocking unnecessary andoverpriced
components namely units of Sharp LCDs$962,250 USD. Viewcooper sold
us the LCDs at $15 USDeach when the actual cost was only $5USD,
Kreyos bought a
2.
3.
4.
5.
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total of 64,150 pieces of Sharp LCDs.
Quoted premium prices for tooling, but ended up usingcheap
materials for it resulting in countless issues ininjection.
Convinced Kreyos to give him 30% equity in the company inreturn
for selling us at cost price (zero markup). The pricewe were buying
the finished product from Viewcooper was$52USD/pc,which he claims
is the at cost price. We laterlearned that the total cost per unit
was $30 and he waspocketing $22 USD in profits per unit he sold
us.
6.
7.
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Here are some other details about VIEWCOOPER
Viewcooper Corp./
Room 1061 Building A Block 7, No 128 Hua Yuan Rd,
200083Shanghai, China 128 Loft7 A1061 200083
http://www.viewcooper.com
Contact Details:
PRO YANG HUANG CANG/
http://www.viewcooper.com/
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[email protected]
HIS PARTNERS IN CRIME:
ALEX HU/
Pros right hand man and partner in crime, who is equally
asuseless if not worst, cant even handle simple instructions
whenour designer sent specific files and instructions for printing
ourmaster cartons.
Viewcooper Corp.
Mobile: + 86 135 6435 1785
Tel: +86 21 6076 8117
Fax: +86 21 6173 1990
Skype: jianxiong.hu
Email: [email protected]
mailto:%[email protected]://jianxiong.hu/mailto:[email protected]
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Heres a quick breakdown of the ill-gotten profits PRO
andVIEWCOOPER made from Kreyos
20K units X $22 = $440,000 in PURE PROFIT
64,150 units of OVERPRICED LCDs (this is exclusive of theLCDs
used for the units described above)
44,150units*$10= $441,500
Total profits: $440,000+$441,500= $881,500 USD
$881,500 USD of PURE PROFIT, which I am more than willingto turn
a blind eye to and chalk up to experience had theydelivered the
products as originally specced out. This figuredoesnt include the
profits he made from Kreyos from all thetoolings and samples he
charged Kreyos premiums on.
Financial Evidence:
We have uploaded all our invoices of transactions betweenKreyos
and Viewcooper. You can find an archive of all ourinvoices in the
Dropbox link below:
https://www.dropbox.com/sh/fgxh1xj5ioc4pdq/AAD_SIoyBFHQKZhSr4b91TCSa?dl=0
https://www.dropbox.com/sh/fgxh1xj5ioc4pdq/AAD_SIoyBFHQKZhSr4b91TCSa?dl=0
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We paid Viewcooper a total of $1,692,575.95 USD from the startof
the project until the delivery of the products you currentlyhave.
Here is our trial balance used for 2013 tax filings.
The publicized amount ofmoney we raised throughour
crowd-fundingcampaign on Indiegogo, asyou know, is in
theneighborhood of$1,500,000. In reality, afterthe IGG fees, credit
cardprocessing fees, Paypal fees,and the amount we spent onPR and
Marketing, we wereonly left with around $1.2MUSD.
With every painful delay we announce, we saw a spike in
thenumber of refund requests from backers who understandablygrew
impatient. The total number of refunds we processedfrom the start
of the projects up to this day amounts to around$500,000++. If
youre following, the cash left from theIndiegogo campaign is now
down to around $800,000. Thisamount excludes pre-orders from our
own ecommerce store.
Ive personally invested a total of $370,000 in Kreyos as
well.Also in order to keep Kreyos operations running until we
ship,
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Ive borrowed loans from angel investors, friends and familywho
forked out a total of $750,000 USD. Unfortunately most ofthat money
is in the pockets of Viewcooper.
Theres also monthly operational overhead, employee
salaries,marketing costs, ongoing refunds etc. The more we
pushedback our launch date, the worse it got for us. If
Viewcooperends up delaying production and shipment by 8 months,
itmeans we have to go 8 months without substantial income
andrevenue, and still have to pay all our monthly
operationalexpenses and honoring refunds at the same time.
A total of $750,000 USD of loans from angel investors,friends
and family:
1) $100, 000 USD on the 20th Dec 2012
2) $100, 000 USD on the 11th Jun 2013
3) $150, 000 USD on the 13th Aug 2013
4) $200, 000 USD on the 24th Feb 2014
5) $100, 000 USD on the 18th Mar 2014
6) $100, 000 USD on the 19th Jun 2014
EARLY 2012: HOW IT ALL BEGAN
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During one of my trips to China in 2012, Pro invited me
fordinner and showed me a hardware prototype geared
towardscompeting against popular big-name action cameras. I
wasquite impressed by the product and the price he says hes ableto
manufacture and ultimately sell them but Pro made it clearthat he
will only be focused on doing ODM and not branding ormarketing. For
us, we are able to buy it OEM, slap on our ownbrand and market it
as our own, which a friend and I wereextremely interested in doing.
Fortuitously, before he was ableto get it out to the market, GoPro
came up with its celebratedBlack version which completely made his
productuncompetitive specs-wise and resulted in him shelving
theproduct and go back to the drawing board.
Click here for the action cam
specs:https://www.dropbox.com/s/8urjrsiugnfifc1/2012.08.24.Action%20Cam.C001.Introduction.MW.pdf?dl=0
https://www.dropbox.com/s/8urjrsiugnfifc1/2012.08.24.Action%20Cam.C001.Introduction.MW.pdf?dl=0https://www.dropbox.com/s/8urjrsiugnfifc1/2012.08.24.Action%20Cam.C001.Introduction.MW.pdf?dl=0
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One day, Pro emailed me and sent me the link to Pebbleswidely
successful Kickstarter page. He told me that Pebble ishaving
manufacturing issues and bragged about how they areseeking his ODM
company (VIEWCOOPER) in helping resolvethe manufacturing issues. He
said this is a very easy product tomanufacture and Pebble didnt
know anything aboutmanufacturing. I regretfully bought that and
thought maybethrough working with Viewcooper, people like myself
who havelimited tech and manufacturing experience can launch a
viableconsumer electronics product.
So fast forward a few weeks, he emailed me and proposed hewill
do a ODM project for us, for a much better smart watchand we can
use our own brand. In short we buy a completeODM product from from
Pros solutions companyViewcooper. All we needed to do was provide
them with ourbrand, watch industrial design, packaging design, App
UIdesign, and they will take care of all the rest. So I thought
itshouldnt be too hard, as I wont have to work on the
software,hardware, firmware and focus on building a good brand
instead.He said he would charge a fixed ODM profit of $15 USD per
unitfor the (at the time unnamed) smart watch, and assured us
hewont take on any other smartwatch projects
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DEC 2012 -> JUN 2013
So Viewcooper invited me to visit his solutions companysoffice,
and also sent us a PDF, with the suggested specs andprice which I
have described below. Before everything started,Viewcooper promised
to sell the Kreyos Meteor at BOM +$15USD, of which $50 is the BOM
(bill of materials) cost from thefactory. After the success of the
IGG campaign we were initiallysupposed to pay him 20,000 * $65 USD
for 20k units of theMeteor.
Since I very limited technical knowledge as far as
consumerelectronics would go , we relied on his company to define
thespecs. After all, Pro made himself to be an expert in
thisindustry. He suggested that we add a Microphone, Speaker
andANT+ connectivity in order for us to differentiate ourselvesfrom
the 1st Gen of smart watches that were out in the marketat that
time. I thought it made perfect sense. Click on the belowto
download the PDFs. Im keeping the original file names thatwas sent
to us.
i) Kreyos Specs.pdf
ii) 2012.11.05.SmartWatch.Customer DevelopmentGuildline.pdf
iii) 20121.12.25.Smart Watch APP and Gadgets.pdf
https://www.dropbox.com/s/mxsnk6djhsybuk5/Kreyos%20Specs.pdf?dl=0https://www.dropbox.com/s/5143uhcco73s1j5/2012.11.05.SmartWatch.Customer%20Development%20Guildline.pdf?dl=0https://www.dropbox.com/s/4c9m89oz3rwdv8n/2012-1.12.25.Smart%20Watch%20APP%20and%20Gadgets.pdf?dl=0
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iv) 2013.05.31.Smart Watch SDK.Proposal.pdf
My marketing team and I brainstormed a few brand names
andsettled on KREYOS. We started with the ID design with adesigner,
and also booked a small amount of Sharp LCDS forthe Kreyos
campaign. We initially ordered only 3150 pcs ofSharp LCDs at $15
USD each . Prior to the campaign we alreadypaid almost $200K USD to
Pros company for the moldings,LCDs and samples. I have been working
in online marketingand branding for almost 10 years, so we know
which resourcesto use and how to launch and package a new product
(SEO,PPC, Media buy, FB campaigns, Retargeting etc). This is
ourinitial design of the Meteor which originally was very thin
butViewcooper was not capable enough to execute on this
design.Click on the below to download the PDF.
i) KREYOS_SMART_WATCH.pdf
JULY 2013:
The fact of the matter is when Kreyos launched the product
onIndiegogo, All we had was a small marketing team of 4
peopleincluding myself and some outsourced providers. We also
hired3 part-time customer support personnel from oDesk and thatsit.
In the beginning we did a wonderful job handling thecampaign
launch, emails, social media and pretty mucheverything else. After
the campaign period we considered ourpart done. At that juncture,
the ball was on Viewcoopers court
https://www.dropbox.com/s/zrlohxesy9bc9i7/2013.05.31.Smart%20Watch%20SDK.Proposal.pdf?dl=0https://www.dropbox.com/s/j6n7hp4ftkq3x6a/KREYOS_SMART_WATCH.pdf?dl=0
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and to manufacture the product based on the agreed
uponspecifications. Weve already provided everything they
requiredon our end: App UI designs, watchs UI, packaging, etc.
Our original goal was $100K, we did 15X more. When our smallteam
and I launched the Kreyos project, and hit a $1.5MMproject, we were
all so happy, and we thought it was thebeginning of a successful
startup. We had no way of knowingthat the person that would cause
all of this misery, delays andissues would be the person who
brought me into this industry.
AUGUST 2013:
Since we were able to launch an extremely successful
campaign,and pushed for more competitive pricing ($149), we
negotiatedwith Viewcooper on dropping their price by $15. Pro
counteredthat offer and suggested that we give VIEWCOOPER equity
inreturn for them dropping the price. It sounded like a good dealto
join forces with them and merge our companies , become co-founders
and work with his team in order to augment ourweakness: hardware
and FW, software R&D. If they are able tosell to us at cost
price, we should be able to drop our price from$169 to $149.
In exchange for selling the Meteors at cost to us, Pro was
givena 30% stake in Kreyos. 30% is given to him to distribute to
keymembers of his company/team. He claimed that he will spreadthe
equity around in his own discretion. We later found out that
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he never shared any of these details with his team, whom
welearned, wanted to join Kreyos too.
So far so good. We buy at actual cost price, our
solutionscompany Viewcooper becomes our partner, so we can be
morecompetitive price-wise and we get his whole team to join.Whats
strange and something that shouldve raised a red flag atthat time
was we were never given access to his team, but onlycommunicated
with Alex and Pro himself. As things slowlyprogressed, they finally
gave in to allowing us to contact theirFW and Hardware
engineers.
Take note that they only allowed us to do this towards the
latterpart of the manufacturing run, whereby his staff
startedresigning/stopped working as few claimed they didnt see
anyhope in Viewcooper and the project as there were only fewpeople
working on a project this big. We started digging andfound out that
the at-cost price which we were supposedlygetting the Meteors for
from Pro and view cooper was not $50.
The at-cost price is only $30 and Pro was already earningaround
$22 USD from selling us at $52. His total PURE PROFITper unit is
around $37 USD(if including the $15). And to makethings worse, the
LCDs cost which he misled us into buyinghuge batches of, was not
$15, but only around $5 USD each.
All R&D, firmware, hardware, software App personnel are
fromPros solutions company Viewcooper Corp. As you guys know,
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we only had a goal of $100K USD when we launched thecampaign, we
had no way of knowing that we would sell$1.5MM USD in such a short
period. So after the campaignended, we had to immediately pay
50%($52*20000)/2=$520,000 USD, part of which was $150,000worth of
LCDs that been already been paid for) of the invoiceto Pros company
VIEWCOOPER to begin manufacturing.
During this period of time, Pro and Alex constantly made
usbelieve that the SHARPs LCD of the watch is always out ofstock,
as Pebble and Nike is booking up the entire Sharpsmanufacturing
line. They claim that there is only 1 line thatmanufactures the
small Sharp LCDs, and the other linesmanufacture LCD TVs. They also
told us that the LCDsbooking time is usually 46 months just for the
2nd batch ofLCDs to arrive unless we order and stock now. So we
becameworried because this will be a major problem if we start
scaling.Judging from how well we did on Indiegogo, we expected
ourmarketing team to be selling it very well on our owneCommerce
channels as well. So we placed our 2nd order ofLCDs for 20k Units
and followed by 44,000 units of LCDs, for atotal of 64150 pieces of
LCDs, of which we paid a total of$966250. Now with all we were are
sitting on 44,000 pcs ofLCDs$660,000 of worthless LCD inventory.
)
MID AUGUST 2013
We spent a good amount of money to hire a design firm to
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design the Kreyos homepage to make sure we properlycommunicate
our key features to the public. We outsourced allour ecommerce
development work to a Philippine softwarecompany to build our
magento eCommerce platform.
They kinda screwed up as it wasnt ready when the
Indiegogocampaign ended, so I rushed over to the Philippines to see
whatthe hell is going on. We were losing so much potential
salesafter we completed our IGG campaign and the eCommerce siteis
still not ready. I had no idea that the time I flew was theworst
time of the year to fly to Philippines. The moment Iarrived, one of
the worst typhoons hit the Philippines. I gotstranded in Manila for
a few days as we were not able to traveldue to the mass flooding
all over the city.
We had to risk our lives todrive 3 hours all the way toSubic (a
province in thePhilippines) where weencountered heavy floodsand
broken bridges alongthe way. We reached ourdestination to find
thedevelopers cramped in asmall, almost inhumaneworking space still
workingon the eCommerce site.
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Upon returning to Manila, Igot to meet anotherSingaporean friend
who hasa small team ofprogrammers and customersupport personnel
tomanage his eCommercebusiness in a shared office.
After figuring out the costs in Philippines is WAY
cheapercompared to the US, I decided to share a new office space
withmy friend and setup a small team of Customer support reps
inPhilippines -Manila. This is how we came to setup ourPhilippine
office.
SEPTEMBER 2013
Seeing that our eCommerce store still had a lot of issues
withthe software provider I mentioned above, weve decided to endour
relationship with them and hire our own web developers towork on
our eCommerce store in-house. Things started to getbetter at that
point.
OCTOBER 2013
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We finally finished with our simple renovation of the office.
Wehired our first customer support employeeKatrine, whommany of you
have exchanged emails with in the past. We havesince expanded our
customer support team from there toaround 5 full time customer
support personnel.
NOV 2013:
Remember when we announced our first delay? When wecouldnt ship
in time for Christmas , our marketing team wasthe first to come
under fire from the public. I couldnt say itthen, but in reality,
Viewcooper was all to blame for this and
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should be the ones answering to the public.
Every time we encountered delays, we were the ones
whounfortunately had to come up with excuses for Viewcooper
notdelivering. For every delay, we process around $100K USD
ofrefunds, which is a HUGE loss for a small startup like us.
Intotal we refunded around $500,000 USD of what we receivedfrom
Indiegogo & preorders due to DELAYS. And when wecomplained
numerous times to Viewcooper about it, Pro simplysaid, how it is
not a loss and how were just refunding what theyprepaid
upfront.
During this time we are still pushing everyday
forprototypes/samples and also the iOS and Android Apps,because we
havent seen any developments from them at thispoint.
DEC 2013:
Finally we received prototypes from Pro good enough to bringwith
us to CES. We tested it and the speaker sucked big time.He placed
the blame on his partner ALEX HU who tested thespeakers. And whats
even more ironic was that the echoproblem was found out by my
friend when he was playingaround with it. And Viewcooper has no
clue at all when theyprovided the prototype.
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JAN 2014:
In all honesty, I didnt feel like we had to attend CES, as its
aunnecessary expense for us in the meantime. Most of
thedistributors/retailers have already reached out to us one way
oranother before the show. But the show itself was a success aswe
practically didnt have time to take a break as the booth wesetup
was always swarmed by people.
BUT the experience was a nightmare tech-wise. I was given
20prototype units, of which by the end of the show, only 1 was
leftfunctioning.
During the whole show, Pro was NEVER at the booth, he wasalways
with his uncle going around the floor. And when I calledhim to tell
him how crazy it was that so many units werebroken, he shouted at
me over the phone saying, JUST TELLME THE PROBLEMS AND I WILL FIX
IT! At this point, it kindof felt like Kreyos was working for
Viewcooper and reporting toPro as the boss. After the show, he
mentioned we will need todelay shipping again due to the fact that
they need to makeopenings to the mold to fix the speaker and sound
issue weuncovered.
Also remember we had to do the retooling of the molds? Thiswas
done because the initial molds were useless and Pro evencharged us
a premium for them. As I learned later, Pro markedthis process up
by 200250% on top of what the supplier
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charged him. We paid a premium expecting to get a premiumproduct
done but that was not the case. His employees advisedto redo the
tooling very early on(during October, but he is sostubborn and
didnt want to fork out extra money from his ownpocket. Only in
XXXXX/2014 did he agree to redo the tooling,but by that time, we
were already so close to the shipping dateswe announced. Every
change in molding, PCB requiresextensive testing.
FEBRUARY 2014:
We designed the mobile UI and paid him $16K USD depositback in
2013 to build our iOS and Android app. They neverdelivered those.
Pro finally told me that his team was not ablework on our iOS,
Android and Windows Apps this late when inthe past, he lied and
said they were almost done. We scrambledto start hiring mobile
developers in the Philippines to work onthe mobile app for
Kreyos.
Many would ask why didnt hire developers in the US to get
thisdone on time. The simple answer is cost and budget.
Anexperienced iOS/Android dev would easily cost us anywherefrom
80k150K annually in the US, while it would only cost usaround 1020K
USD in Philippines. We simply cannot afford 45 full time mobile
developers in Silicon Valley this late in thegame. If youve been
following, weve also have paid out a large
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portion of our funds to Viewcooper. Part of the reason whymany
US/EU corporations have development/support teams inhere. And to
make things worse, Viewcooper provided almostnone if not
incomprehensible and very incomplete at bestdocumentation on
Firmware resulting in the mobile teamhaving a VERY hard time
working on the integration, since then2 mobile developers have left
because they felt it wasimpossible to work with Vewcooper. Not even
one workingproduct was given to our team to work on the app. The
worstthing is, the batteries on the units they did provide were
noteven soldered to the board. We had to go to the mall, buy
somekeyboards, cut out their USB cables and look for someone
tosolder them for us.
MARCH 2014:
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We had a potential angel investor who wanted to invest 300KUSD,
and wanted to meet with Pro. Pros response?
Pro: How much is he investing?
Steve: $200300K depending on valuation
Pro: Not worth my time meeting with an investor only planningto
invest such an insignificant amount. I can easily provide andlend
you this amount myself.
There were numerous times when Kreyos needed Pro to put hismoney
where his mouth is and never once did he come throughand even offer
a single cent to help Kreyos. Even with the lastdelay, Viewcooper
promised to AIR FREIGHT all theinventory to the US for us, but
never did.
A lot of you are probably asking why we continued
usingViewcooper at this point in time after we have encountered
somany delays and issues with them(Note that at this stage,
wewerent aware of the ridiculous markups and the money Propocketed
from our entire deal)
i) We do not have working relationships with any othersolutions
company
ii) We do not know any other EMS factories in China
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iii) Most importantly we already paid him more then 50% of
ourmoney (50% of the 20k Units and also the 64150 units ofLCDs), so
we are held hostage with virtually no way out. We arenot going to
be able to raise enough money in time to pushthrough with the
project if we dropped Viewcooper at thispoint.
iv) We are a marketing team with very limited
hardwareexperience.
So what can we do? Tell our backers that we are having
issueswith our solutions company whom we have PAID 50% to
startproduction and, under whose advise, we stocked overpricedLCDs.
We were put in a very bad spot where the only viablething to do was
wait and wait until they deliver what waspromised to us and our
backers. If we ditch them, we are notgoing to be able to find a
solutions partner in such a shortwindow and needless to say the
delivery date will be furtherdelayed.
16th of May 2014:
The update we posted on 16th of May is another thing I want
tocome clean on., Remember the time when we posted that wewere
ready to ship, and posted images of the Kreyos loaded inthe boxes?
Those were not 5000 units. In fact, the picture is of a
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single pallet as most components didnt arrive. Pro asked us
togive them another 30 days to start shipping. I agreed but on
thecondition that that he uses air freight to ship everything so
wecan get our stocks into our US distribution facilities at the
sametime. He agrees to this with his team and other manufacturersas
witness. But when the day came for him to supposedly shipthe units,
he said it was too expensive and not willing to do so.
JUNE 2014:
So when we were close to fixing all these issues, weencountered
another problem: Viewcooper forgot to place anorder with the
accessory supplier, and the supplier did not haveenough manpower to
rush the orders. So we flew in again toChina, and traveled all the
way to Wujiang, which is about 23hours from the Shanghai Airport to
visit this Silicon supplier.We spent a premium on the mouldings,
but it is only capable ofchurning out 500 pcs per day. And they
didnt have enoughmanpower and some machines werent even working. To
makethings worse, the beltclip molding broke down, so much
forquality.
After all these issues, we started to become very suspicious.
Wealso found out that he only paid the EMS factory 30% to get
theorder working, but he claims that the EMS factory requires 50%to
begin with and another 50% before we ship out ( this affects
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our cashflow as well. If they only require 30% to start
theproject, it is much easier for Kreyos). But due to the long
delay,he told us to pay the remaining 50% or else the EMS
factorywont continue to work on it (guess Pro exhausted the
fundsand therefore pressured us to pay him, this is my
WORSTmistake, we shouldnt have paid him, but being pressured
todeliver I didnt see any recourse).
After I started traveling so frequent to the EMS factory,
welearned that Viewcooper has only paid 50% (30% followed by20%)
since, and still owed the factory 50% of the funds eventhough we
have already shipped out 14K Units to ourwarehouses. He has had
difficulty in paying the suppliers andthe EMS factory, The EMS
factory was not willing to release theremaining 6K Units of Meteor
units that we were supposed tohave. Our guess is Pro misused the
funds for his personal gainsor used the funds for his other
businesses.
JULY 2014:
We finally started to ship to our Hong Kong warehouse. Prodidnt
even bother to come to the factory and he practically isjust 20mins
away from it. I persuaded him to come twice as it isa huge for
Kreyos and the team to see our products finally goingout, but he
wouldnt hear any of it. I got really annoyed at thisand realized
that, outside the problems he caused which I have
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already detailed, he was a horrible partner.
I started to get familiar with the manufacturer, his
employeesand started to put the pieces together. Something was
definitelyvery wrong about this entire situation. (Note that at the
earlierstages, we werent given access to his employees nor are
weable to travel to the manufacturer without him bringing
usthere.)
Disgruntled Viewcooper employees are leaving because theywerent
getting paid (they only get paid when we ship, Pro paysthem $12USD
per unit), and also because these people areworking crazy
hours.
We also realize that Kreyos, suppliers, are mere pawns in
hischess game. In fact, his real intention was to make use ofKreyos
to develop an ODM solution for smart watches wherebyhe can resell
it instantly as a turnkey solution to othercompanies looking for
this kind of product.
Basd on statements by his former employees and friends,
welearned that Viewcooper had around 15 projects on hand, ofwhich
several are Smartwatch projectssomething hepromised not to do for
other companies.
We received the original invoices from the molding supplierswith
the same prices, but we learned that local China supplierswill
gladly issue a fake invoice based on what Viewcooper told
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us. They will then pay Viewcooper a commission based on
theactual cost. A quick example:
Supplier quotes Viewcooper $10,000 USD. But Viewcooper
tellssupplier to send Kreyos an invoice of $20,000 USD. Kreyospays
directly to the supplier, and supplier will then payViewcooper
$10,000 in commission for the deal. Moldings,protoypes, samples,
accessories all fell victim to this.
AUGUST 2014 -> Current
All hell breaks loose. I wasaccused of being a scammerand trying
to run away withall the money we raised onIndiegogo.
Images of my holiday trip toItaly back in 2010 Italywhere I went
with someclose friends to visit theFerrari factory (one of my
friends bought a Ferrari) were even pulled out from myFacebook
page as part of a smear campaign.
The picture of me with the outlet shopping bags were
actually
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taken using the bags of my friends wives. I was goofing
aroundwhen I took that picture. That was used for the
smearcampaign. I already posted a clarification on our
officialFacebook page but, after doing so, BetaBeat still went on
to saythat doesnt explain where he got his haul of stuffedFerregamo
bags. Seriously if one of my friends can afford tobuy a Ferrari ,
they can afford to buy some bags for their wives.Out of all the
shopping bags in that picture, the ONLY thing Ibought is a pair of
shoes from Hugo Boss. Is this good enoughfor you @BetaBeat?
This undoubtedly has been one of the most stressful andtoughest
periods of my life. I can afford to fail, lose money orstart again
from scratch, but I cannot afford my reputationbeing ruined with
something that I didnt do or plan to do.
One of the major reasons why we delayed posting these facts
isbecause, even though we have paid so much money toViewcooper. The
remaining inventory belongs to Viewcooper,and not Kreyos. Therefore
we have been working on gettinghim to sign documentations that
would allow us to transfer thethe toolings (useless as of now) and
most importantly theremaining 44K LCDs which most probably is
useless now aswell, which we can at least try to dispose off at a
huge loss.
WHAT WE DONT UNDERSTAND:
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What I dont understand till now is, with the success of
Kreyos,and the amount of money we paid him, why didnt Pro invest
intalent or hiring the right people. The total amount of
peopleworking on Kreyos from his end was only around 4 people,some
of whom we realized are just working part time. Wewouldnt have
minded him pocketing so much money if he atleast delivered
something that we can fix for our backers andcustomers and continue
selling for a few more months until weconceptualize a new and
improved version.
He constantly bragged that we will impress our backers
byshipping earlier then the promised date. But things started
tolook bad after numerous delays
We wanted to hire our own firmware guys, but he wouldntsend us
the firmwares source code, and insisted we wont beable to manage
it. He said he will hire more people in hisTaiwan office to help
speed things up, but apparently thosepeople are working on his
other projects and not Kreyos.
ISSUES:
Waterproofing: The Meteor has waterproofing issues. At
thispoint, we DO NOT recommend you using it on activities thatmay
involve it getting wet.
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Waterlogged Watches: Viewcooper will provide replacementunits
for this. Replacement units are not waterproofed as well.
Speaker: Due to the design of the Meteor itself, unless thewhole
design is changed, the output of the speaker will not bemaximized.
And also the codec component is also one of theissues that caused
the poor sound quality. We were assuredagain and again by
Viewcooper that they will fix the soundissues, but it didnt happen.
The firmware can further optimizethe quality of the sound
decreasing the pitch. They are still inthe process of improving
this part.
Battery Life: We were promised 7 days of battery life
byViewcooper as you can read up in the Kreyos Specs.pdf.Reasons
that the current battery life doesnt last as long asadvertised is
(A) the firmware is not optimized, (B) the batterycomponent was
kept idle too long in the warehouse because ofthe repeated delays
resulting in them losing charge capacity. Inthe battery specs
sheet, it specially mentioned that if it is notbeing used, it needs
to be charged every 3 months, to avoidlosing charge capacity.
Firmware: We are still pushing for the Viewcoopers FWdevelopers
to fix known issues. Updates will be posted to theserver from which
you can download and update your watch.We are also going to allow
users to update the watch from thecomputer using the charger.
https://www.dropbox.com/s/mxsnk6djhsybuk5/Kreyos%20Specs.pdf?dl=0
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Windows APP: Our developers are still working on this, buthave
hit a roadblock as we have issues with the protocols thatViewcooper
provided to our team, as per Nikka has mentionedon Facebook.
Kreyos Custom: It has come to our attention that one of
ourbackers has been working on a new firmware. We will beworking
closely with him to see if we can help out in anyway.
Refunds: The only reason why we wont be able to refund anymore
orders is because we are not financially capable of doingso, we are
burned/cheated out of all the funds, we dont evenhave money to
continue running our office operations norpaying our employees.
After we finish shipping to backers wewill be wrapping up and
shutting down Kreyos as a whole.
CONCLUSION:
If we were ever planning to run away with the money in the
firstplace, why even bother continue running the company till
now,or even borrow money from investors, friends and family justso
Kreyos can continue running, or spending money to goexhibit on CES,
flying back and forth to China endlessly just tomake sure things
are moving. We didnt work so hard just tomake it a failed/scam
campaign, we want it to be a success fromthe first day we launch
our campaign. I took a ALL IN mindset
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if not I wouldnt have invested so much time and money
onthis.
After our IGG launch, we were constantly reached out to byhuge
companies who wanted to sign us up on retaildistribution,
partnerships, distributors who fly in from all overthe world just
to discuss exclusive distribution in their country.
To wrap things up, Kreyos is really done, our reputation
isalready shot beyond redemption and I wish we could providefurther
remedies, fixes and refunds, but the lack of availablefunds wouldnt
allow us to do so. We did all we can up to thispoint.
It has been a extremely tough journey during these 2 years.
Wethank you all for your support, and we are very upset that
wewerent able to hit our expectations of this product and also
notable to continue working on Kreyos. My team and I really didour
very best salvaging whatever we can but ultimately it didntwork out
well due to Viewcooper, if they are willing to even usethe actual
amount of money for what we paid for, things mighthave turned out
really different for Kreyos.
WHAT WE WILL BE DOING:
Releasing all source codes, documentations available until1.
-
now for the Firmware, iOS, Android and Windows Phone 8apps as
open source either in Github or BitBucket. Will postupdates when
ready.
Kreyos will shut down all operations worldwide by end
ofSeptember 2014.
WHAT VIEWCOOPER WILL BE DOING:
Viewcooper will continue to provide updates and fix
knownfirmware issues.
Viewcooper will provide exchanges for waterlogged watchesand
quality issues. Please [email protected] for
exchanges.
Thanks for your time in reading this!
- Steve
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WRITTEN BY
Steve Tan
https://medium.com/@stevekreyoshttps://medium.com/@stevekreyos