June 26, 2016

Crowdsourcing Bombshell: Jolla Won’t Have Enough Tablets for Investors


jolla tablet 2

 

“New Year’s Greetings: thanks for your money, but no Jolla tablet for you!”

That is essentially the message in a New Year’s blog post by Jolla, the Helsinki, Finland-based company that raised $2.5 million in an Indiegogo campaign to fund development of a new computer tablet, the Jolla tablet.

In a blog post entitled “New Year’s Greetings from Jolla!” dated December 31, 2015, the company pointed out that it would ship a small batch of Jolla tablets to early backers in 2016. But Jolla went on to break the news that it probably wouldn’t be able to send all investors a Jolla tablet:

“The bad news here is that we are not able to complete the production to fulfill all contributions. In other words, all of our backers will not get a Jolla Tablet. However, you can be sure you will not end up empty handed. We might even have some positive surprises in stock for you. But more on that will follow, feel free to speculate!”

Investors are indeed speculating in the comments — and it’s not pretty.

The blog post stunned and angered investors. And they are being outspoken, some openly fearful that their investment will be lost. For example, one investor used profanity to express displeasure, and others vaguely suggested legal action. Others were unhappy about the possibilitiy that instead of getting a tablet, as expected, they would get some sort of consolation prize.

Writes an investor identified as damien.vanderbijl:

“Whatever it is you’re thinking about, it better not be another Jolla Phone. Most of us already have one or more. Also, we were given to understand that the meeting ‘after Christmas’ would give us the answer. The options on the table were finishing the tablet project or refunding. The refund option is now apparently off the table?

And honestly, it is rather inappropriate to write ‘feel free to speculate’. Firstly, we don’t need your permission to speculate. Secondly, we’ve been speculating far too long now for lack of real information. Personally I’m done with that.”

Yet some investors are more philosophical about the Jolla situation. An investor identified as koenig writes:

“The campaign was explicit in that there was no guarantee for a delivery. We all went in to this with open eyes, did we not. It was a gamble with a certain risk and I for one was fully aware of it. Yes, it sucks if I not get a device but I knew what I got myself in to. The pros and cons of crowdsourcing are as Lemmy put it: “You win some, lose some, all the same to me, the pleasure is to play”

The jousting continues on Twitter. One Twitter user writes:

Jolla raised $2.5 million in an Indiegogo campaign that achieved 480% funding in 2014. The campaign was closed in September 2015.

At the time of the campaign, the company billed its device as the “first crowdsourced tablet.”

The campaign generated over 21,000 investors, many of whom paid between $250 and $350 each. Investors were to receive one of the new tablets.

Jolla ran into trouble in late November 2015 as well. A key investor pulled out in a C round of funding and the company was forced to temporarily lay off most of its small staff. The company says it is now on better financial footing despite not being able to follow through on its commitment to crowdfunding investors.

Image: Jolla

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Shawn Hessinger - Editor


Shawn Hessinger Shawn Hessinger is the Executive Editor for Small Business Trends. A professional journalist with more than a decade of experience in the traditional newspaper business, he has another 10 years of experience in digital media for trade publications and news sites. Shawn has served as a beat reporter, columnist, editorial writer, bureau chief and eventually managing editor with responsibility for nine weekly newspapers, the Berks Mont Newspapers.

6 Reactions

  1. No matter how they phrase it, it doesn’t sound good for investors. It’s a promise broken no matter how you look at it.

  2. Even in crowdfunding, a key part of investing is a risk of loss. If that risk didn’t exist, it would simply be a purchase rather than an investment.

    • I beg to differ. No one has the right to take your money, try something out, fail and say oups I am sorry and get on with his life as if nothing happened. This is even more the case when you have signed a contract. When one starts an indiegogo campaign one agrees to the terms and conditions of the platform. It is clearly stipulated there that in the event that a campaigner can not fulfill the perks they are bound by the Terms of Use to work with contributors to find a mutually agreeable alternative and that these terms can be used to bring a suit against the campaigner. Also what Jolla did here is clearly embezzlement, they used the tablet money to make their OS more appealing to potential buyers in the hopes that they would get funded to be able to fulfill their tablet commitment. The funding failed and the were caught. In other words they used the tablet money to better their company for their own personal gain…

  3. This illustrates the dangers of crowdfunding platforms like IndieGoGo and Kickstarter. The fine print clearly says you have no legal recourse if the project doesn’t deliver. People need to go in with their eyes wide open. Even the largest projects that get funded way above goal aren’t immune.

    • The fact that project failed is not the source of our ire, it’s the fact that Jolla has been silent and in some cases flat out lying about the progress of the tablet project. A lot of the information that backers discovered about the project came from 3rd parties (Media outlets), you can see the investors really starting to turn on the company starting in late summer, and it’s all Jolla’s fault, their lack of communication has flat out destroyed the good will and community support they once had. I understood the risk of crowdfunding, but I least expected to not be treated like a child during the project.

    • On the contrary, the following text is verbatim from the IndieGoGo Terms of Use.[…Campaign Owners are legally bound to perform on any promise and/or commitment to Contributors (including delivering any Perks). Indiegogo does not recognize any third party and/or agency affiliated with the Campaign as a Campaign Owner. If a Campaign Owner is unable to perform on any promise and/or commitment to Contributors, the Campaign Owner will work with the Contributors to reach a mutually satisfactory resolution, which may include the issuance of a refund of Contributions by the Campaign Owner…][…If you are dissatisfied with a campaigner’s alternative, you do have the ability to use our Terms of Use to bring a suit against the campaigner…]

      It is explicitly stated that the Terms of Use can be used for legal action!

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