Whenever I see companies like this with a spectacular demo but no product to show, I always think of the Richard Feynman quote, "For a successful technology, reality must take precedence over public relations, for Nature cannot be fooled."
This is a good point, but demos (real, hardware-based demos, "not made in powerpoint") are also critical to prove that one has a working technology.
There is still a big step to make it cheap, reliable and appealing enough to be commercially successful, but "X is possible and we know how to do it" demo is good base to build from. My 2c.
You don't need working demos or even abide to physical laws to attract investors. Thanks to the power of social media you just have to choose a good cause, make it look cool and create a fake demo video. Most people just repeat what they read, critical thinking is a thing of the past.
See WaterSeer [0], SolarRoadways [1], Fontus self-filling waterbottle [2], ...
Sure, but all 3 of the projects listed had people very early on point out that back of the envelope calculations don't add up and warned them that their projects are going to fail. Each of those those groups proceeded to ignore or not understand the evidence presented to them and continued to collect money. At that point I consider it a scam. Ignorance is not an excuse.
That being said what we are seeing here is a education problem. The masses of people who (including government officials) who seem to be so gullible and lack basic science skills and critical thinking to understand how some of these technologies might work is astounding. And with the 3 efforts listed above it has slowly come out that the minds behind the idea did not know how it would all work either. A good example of that is fontus. This as dream big art design project. How awesome is that? We can make a 3d model of this cool device! A year later confessing to taking apart dehumidifiers to "understand" how they work as if it was some mistry. As if they could somehow crack this alien technology then they too could build one!
At the rate these too good to be true ideas are coming out one has to stop and think that maybe, just maybe, somebody is gaming the system.
It's easy to find someone who is certain your idea is impossible even if someone's already done it! Even when they're right they haven't accounted for anything that will work, they've just got one way it won't. Edison ended up finding ten thousand ways a lightbulb doesn't work.
There's a substantial difference between someone dismissing your idea, and someone demonstrating how it breaks the laws of physics. Every project will have its naysayers, yes, but when your idea is literally impossible maybe it's time to listen to them.
EM drive was just a recent example of my point - that people touting a little bit of science have been wrong to declare something impossible many times.
NASA and others are still testing those drives so last year might be a bit premature to write the idea off?
The difference is we don't know how the EM drive is working (or are we sure it is working).
The 3 projects in the parents flat out don't work, and we know why they don't work -- or at least know to what extent they will work.
By the logic you have presented then we should be funding projects that wish to compress all 8 bit connotations into 7 bits. I can go make a nice video of how awesome it would be if we could do this. How it would change the world. Literally, if somebody could compress every 8 bit combination into 7 bits it would change the world overnight. Should we fund a product that advertises it could do this with a nice video and a website?
>EM drive was just a recent example of my point - that people touting a little bit of science have been wrong to declare something impossible many times.
There is a big difference between Edison and what is going on with these projects. It's not merely that somebody found a way that it won't work, it's they showed the laws of physics will prevent it from ever being a reality. These projects are not billed as research projects. They are billed as "let's just make it" projects.
Anybody can come up with an product that if made would change the world. The hard part is coming up with a feasible idea that will change the world.
Not a single one of the projects listed in the parent ever produced a viable working prototype. They sold a promise they could not keep. Yet keep taking money.
True. I'm not saying Lily Drones was a scam, they could've made it to production under sane management, but there are other projects attracting a lot of funding even though they are bound to fail from the start.
I'm not sure if the people responsible are even aware that it won't work - they might be 'scamming' without knowing, due to lack of common sense. It's really sad and enrages me more than it should.
I think you're romanticising a past that never existed. Critical thinking is a tool only ever used by a small subset of the population, and even they are subject to their own biases.
Pedlars of snake oil have featured in cautionary tales since time immemorial.
Do you happen to know of any good scientific breakdowns of this project ala Thunderf00t and his Water Seer / Solar Roadways / Fontus videos? Doesn't have to be a video necessarily, just somewhere I can read more about why the project won't work as described. Thank you!
I think the killer was really the very low projected price of the pre-order, even today nobody makes a drone that does what Lily was supposed to do for less than $999.
They figure out they could do it but not at that price point, they would be losing a loot of money on each unit.
That's one thing that keeps me away from most Kickstarter projects and very early pre-orders from new or unknown companies.
Even if the technology is feasible and there's a working prototype, there's still a lot of work to do to get it mass produced, and problems and unanticipated expenses can crop up all along the way, especially for people who've never gone through the process before.
but next was well on its way to declaring bankruptcy...
Next had terrible sales.. even jobs said so. The factory they built was so underutilized, they assembled the computers by hand instead of using the equipment because it was less work than doing the maintenance on it. It was designed to produce 150,000 machines a year... next sold 50,000 machines total over 6 years (an average of 700/month).
After 6 years, Next abandoned the computer market, focusing on software. They tried to sell the factory to Canon, who pulled out of the deal. They laid off 2/3rds of their employees.
On multiple occasions, investors were forced to put in more funding just to keep Next solvent.
Just a couple of years after abandoning hardware, they agree to merge with apple.
I wasnt able to find an exact number, but the amount of money apple paid for next may actually exceed the total revenue next pulled in during the 12 years they were in business.
Seems safe to assume that NeXT's existence was predicated largely—possibly entirely—on Steve Jobs reputation to actually deliver millions of units. In the end, he arguably "made it work" by the thinnest of margins.
A better, if flawed, comparison to Lily might be the Apple I: entering an established, growing market with a product which lowers the threshold for adoption in very specific ways. (I'll defer to more informed, educated, and insightful individuals to carry this comparative analysis any further...)
Steve Jobs was one of a handful of people in the world who could pull off such feats. I think tyleo's comment still stands when it comes to everything (and everyone) else.
So, their demonstration videos were completely fabricated.
"Are you sure that the GoPro lens does not create a unique deformation/pattern on the image? I am worried that a lens geek could study our images up close and detect the unique GoPro lens footprint. But I am just speculating here: I don’t know much about lenses but I think we should be extremely careful if we decide to lie publicly." - an except from an e-mail by a Lily founder. [1]
There's optimism, there's prototyping, there's proof-of-concept demos... And there's plain, old deception.
"whom" is wrong in 3 different ways in my opinion:
(1) It should be "who", not "whom". I find that hypercorrection immensely annoying.
(2) But actually, since Lily is a company, it should be "which", not "who".
(3) But even "which despite raising […] has filed" is wrong. It actually should just be "Lily, despite raising […], has filed" or "Lily, which raised […], has filed". "which despite raising" subordinates "has filed […]", so the whole sentence turns into a noun phrase missing its verb phrase.
Point 2 to me was not about singular/plural, but about companies being animate/inanimate. It turns out that there used to be a very clear preference for "which", but by now, "who" is winning out in US usage: https://books.google.com/ngrams/graph?content=company+which%...
Always treating organisations as singular rather than plural ("has" vs "have") is something specific to American English, and treating them as plural isn't ungrammatical in English.
"68. Second, the Debtor will pursue a competitive auction and work to close a sale transaction. The Debtor intends to file a sale procedures motion shortly after the Petition Date to initiate that process. The Debtor has received indications of interest from a number of potential buyers of its intellectual property portfolio and believes that its planned 363 sale will realize value from the portfolio. Due to the potential loss of value to the IP if it goes stale, the Debtor hopes to expedite the closing of any transaction. "
The real question is whether there's any real IP to be had. Their demo video was faked, after all -- was there any work "behind the scenes" on a functional prototype, or is the portfolio limited to the (now worthless) brand?
$35 millions for doing nothing is quite impressive. I was watching the South Park episode "Go Fund Yourself" [0] just last night, and as often they are pretty much spot on.
They aren't just going bankrupt, they lied about what they had already developed while collecting the money (and are under investigation for that, and thus legal consequences could be happening).
Tools to make better and better hoaxes/vaporware are more available to more people than ever before. BS detectors need to be recalibrated at least once a year
I read a while back (did not independently confirm) that they used a DJI Inspire for most of the promo video footage. I think the Inspire can do a lot of the same stuff too.
I thought it was funny they were using an existing product from a competitor to simulate what they claimed their future product could do.
It seems the Mavick tracks objects by image recognition from the camera. I'm not sure the stuff shown on the Lily video where you track a presumably radio transmitter from a small device is actually a thing that exists. I was trying to figure out how to do it for tracking kids if they run off in stores etc and it's not easy. You could probably do it with a several feet across receiver so you could detect the timing differences.
In the Lily faked video the Inspire was flown by a human operator.
Guess it the tracker and drone both had gps receivers and communicated that could work although it still might be hard to get the altitude right.
That said, it looks like they're not shipping the second version anymore and are taking preorder money for the 3rd version so this company could be under duress as well. But the tech exists and is at least somwhat commercially viable.
Also it seems to just rotate a camera tripod mount and so doesn't have the altitude problem. Having mucked about with gps the lat and long are fairly accurate - typically off by 10m whereas gps altitude is often off by 200m which is easily enough to send your drone into the ground. I guess if it did differential timing between the two gps's that could work or they could measure ground altitude some other way. Dunno if Lily cracked that. Conventional aircraft in fog use barometric altimeters corrected for weather conditions. And that's only accurate to ~100ft.
I didn't quite crack the finding kids in a shop problem. Satellite gps wouldn't do it but I was thinking maybe ultrasonics - radio signal makes the tracker beep then you could use loudness / timing to a few microphones a few inches apart like human hearing locating sounds. Not sure if anyone's built something like that.
What amuses me about Kickstarter is that the stuff that's actually going to work, that's 100% definitely going to ship - that is to say, Alibaba resales, existing product repackaging, etc - are the one thing that Kickstarter doesn't allow.
But if you want to create a project that literally breaks the laws of physics, something which a high-school science student could demonstrate is physically impossible, Kickstarter will proudly slap their editor's recommendation on your project and help you pimp it to the media so you can widen your net and catch more suckers to siphon money from.
Stuff like Water Seer, Fontus, Solar Roadways, Triton Artificial Gills - that's all I think of when I think about Kickstarter now. Their brand is utterly toxic to me, and don't even get me started on Indiegogo!
I know someone who worked for Lily. Apparently, they hadn't progressed based the vicon stage in terms of actually getting their drone to fly indoors, let alone outdoors.
Expect the IP, if any, to be near worthless.
Who knows the reason(s) why, but it doesn't seem like they had very good engineers or leadership if they burned through all that time and money and couldn't even get basic flight working.
At least they seem to be shutting down in an orderly fashion (maybe because of the State intervention) and attempting to refund most customers. The bankruptcy court documents also talk about some potentially valuable IP and patents.
lol they raised so much with nothing in hand but a few cad files while we have a worldwide original test bench for drones made&done and can't raise a penny? deeper line being can you startup a single-model drone in an already populated, very competitive market?
That looks like awesome tech, but it also looks like your only major customers would be drone manufacturers or hardcore hobbyists/racers? Maybe perceived market size is the problem with your raise?
Efficiency certification going to be regulated pretty soon for safe flight permit so this would open a pretty big market for services, training of certificators and our novel universal efficiency benchmark, we think.
Supposedly 34 mil of customer money was in escrow. They were only operating of the 15 mil in investment. I don't know if that is true. If they invested that 34 million they could have made some money in interest.
> Supposedly 34 mil of customer money was in escrow. They were only operating of the 15 mil in investment. I don't know if that is true.
The bankrupcy filing posted above in the thread https://pdf.inforuptcy.com/pacer/debke/167122/dockets/2/1-A0... largely bears this out. On page 13, they declare that they still have $25.6M in their bank account, and a bit more than $31M of current assets in total.
By Kickstarter standards, this looks like a fairly responsibly run company.
1. Build slick marketing pitch.
2. Collect $35M in pre-orders.
3. Apologize after a year of "trying" and return the principle.
4. Make $1.75M in interest.
They supposedly didn't even fully pay the company that made that video on their homepage from over a year ago.
>According to a different unnamed source, the company who made the video, CMI Productions, has also not been paid in full for its work. A CMI employee did not respond immediately to a request for comment. CTO Bradlow did not respond to questions about the video payments before hanging up on FORBES. A Lily spokesperson declined to comment on the lawsuit to FORBES, though the company is expected to file a response to the district attorney on Thursday.
As samfisher83 pointed out, $34M was in escrow, so they were probably running on closer to $15M. When setting up a volume production line for a complicated product, it's really easy to burn through tens of millions of dollars. Kickstarter scares the crap out of me for this reason. Typically, I would recommend that a startup begin with a small domestic run of the simplest product possible, targeted at an early adopter market. There's so much a startup has to put into place for hardware: a contract manufacturer (and a sane contract, which takes time to establish), suppliers, supply chain, testing (development and production), certification, packaging, sales channels, distribution, support, reverse logistics, etc. Companies such as PCH, Dragon, etc. can help accelerate some of this, but there's still a ton of work to do. Trying to simultaneously tackle all of that and a complicated engineering design requires a ton of resources--more than a typical startup will have.
Setting up a reliable manufacturing line and test procedure typically takes about 6 months from the time your engineering team begins handoff to the contract manufacturer. Moreover, as much as we'd like it to be, manufacturing is not agile. All of that work is very change-intolerant. So, if you begin the handoff with a half-baked design (which most startups do, in my experience) that you have to change as you proceed through the setup process, you can easily blow away that nominal, 6-month timeline with tooling changes, contract renegotiation, supplier verification, etc. as your engineers scramble to work with the factory to make the design manufacturable and cost-effective.
Jumping straight into a full-blown manufacturing effort is not a cash-effective way for a startup to prove a complicated design. You can force it to work, but it's really expensive. Apple, for example, parallel-paths a lot of stuff. They can afford to discard a million-dollar tool and move on if it doesn't work out. They also send huge engineering teams to Asia for months at a time. Instead, I'd suggest that startups begin with more manual domestic builds in the low hundreds of units until the engineering team is confident in the manufacturability of the design and the manufacturing requirements are understood. These will, of course, have much higher per-unit costs, but you can iterate way, way faster because you're not constantly flying overseas to battle the inertia of a manufacturing line.
Unfortunately, Kickstarter--while still qualifying as an early adopter market--is driving first-run numbers way higher than they should be for the average startup, which is causing them to jump too quickly into scale manufacturing efforts. Because of this, I think we are seeing some spectacular failures such as Lily.
tl;dr: Manufacturing is expensive. Kickstarter is driving hardware startups into manufacturing too soon.
The price point of a particular product is a key part of its market positioning and viability.
Functionality X at $500 has a very different market than the same functionality X at $1500; if a startup is aiming to check for product-market fit, then the expensive manual domestic builds would be aimed at a different target market that also requires and uses different features, requires different marketing and sales channels, etc with requirements and preferences that often are entirely opposite of what the "real" product should have.
Such an iteration would help in handling the actual manufacturing, but would not help in building all the other parts of the business as intended as it would drive all of them in a wrong direction.
Furthermore, who funds the very large fixed costs of design and development? If they had chosen "more manual domestic builds in the low hundreds of units" then they would have saved money/scale in manufacturing but would not have the funding needed for the engineering team to make the actual product, whatever they had was funded essentially by pre-sales.
It's also reasonable to have products that are totally unviable if the volumes are low, because to get an adequate price you need economies of scale. A business plan that clearly states "we either go big or go bust" can be a valid business plan; many real industries have a situation where selling just 1000 units is worse than selling 0 units, you either manufacture at scale or close up the shop.
I agree with your points, especially around price point. However, a large part of hitting a price point is volume and negotiating power. Startups have neither (Kickstarter numbers aren't high enough to see a significant price drop), so--whether or not they're done domestically--the first runs of product are usually subsidized by investment anyways. Investment should also cover the R&D. If, as a startup, you're funding your R&D largely from pre-sales, I'd maintain that you don't have enough money.
Edit: Also, to your point about going big or bust--I think that's fine as long as the reason for bust is market powers beyond your control. But to bust before launch because you didn't have a viable plan/resources to get through manufacturing is just a shame.
Edit 2: I should mention that I see small domestic runs as one way to deal with the manufacturing problem. Another is to simplify the product for your first run. Another is to raise more money. They all have tradeoffs and I don't think there's a one-size-fits-all solution. I didn't mean to imply that.
Color me unsurprised. They marketed it as an action-sport-filming drone, but the top speed was utterly inadequate for essentially all actionsports where drone filming would be cool. It literally wouldn't keep up with Usain Bolt running the 100m, nevermind a regular person on a bicycle.
Shameless plug: a friend of mine is one of the founders of a competing startup making a self-filming drone that has more than twice the top speed, so is actually usable. They've been shooting on location with top athletes using pre-production models for the past year, first production models are going to final assembly these days.
Really? I'd rather read about the ridiculous ideas of a person who simultaneously runs an electric car company and a space rocket company, than about some unimaginative CRUD startup that is "Facebook for X".
I agree, and I apologise. Wrote the post quickly, and the second part went more towards "shameless plug" than what I thought about when I typed "full disclosure". Edited now to reflect this. (And for the record, I have no involvement, just a friend of mine is doing this and I think it's cool.)
Slow drones can be great for filming parkour runs, where the runner doesn't make a lot of forward progress but instead has a lot of vertical motion through interesting environments. e.g. https://www.youtube.com/watch?v=iS1itQxzAc4 had bits that were filmed with a DJI phantom, which isn't a terribly fast drone. Something slow with great obstacle evasion and auto-following would be perfect for parkour (not sure if Lily was supposed to have either feature, though).
Still, I'm sure that you're right about the vast majority of action sports.
Lily also promised enough 'coordination' to track an athlete from multiple angles over varying terrain and obstacles. That's a much taller order than "follow me", and it doesn't look like they ever managed to get something that could track a skier or kayaker the way they implied.
