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Interesting read, Trogdor! They brought up a good question though. "Is this incompetence or is this deceit?" Due to the lack of regular updates and response to messages, I say deceit. I also say deceit because I feel like they're just throwing up random financial information in the hopes that we're all too stupid to understand it and will back down with whatever legal action we may have in mind because the new user agreement allows it.
It seems some smarter people are already identifying flaws in their financials, so I hope they end up paying up and having to apologize.
Good point, Sean. eBay it is!
Burns you're better off trying to sell that to someone who hasn't already paid $130 for one. Plus, we backers who read the updates know that thing probably aint built to last
ill trade you mine, as soon as it comes in, for yours right now.
It seems I was one of the lucky ones. I received my CST-01 in early February. Unfortunately, it is too small for my wrist. I emailed CST immediately, hoping to exchange for a larger size, but of course I never heard back from them.
It is a black CST-01, size medium. New-in-box; in fact, never left the box except for the one time I tried it on. Anyone interested? If you still want this watch, here's one that could be yours. If interested, email Burns! at cst4sale (at) gmail (dot) com.
ok, little update from me. I backpacked one CST in Feb 2013 and sended 129$ via amazon payment. Then i sended few weeks later next 15$ pia paypal for the shipping to germany. And this 15$ came back on April 2015.
Vondle, O'Leary and the rest of the CST crew: Not only did you gamble away people's money, you broke their spirit. Congratulations!
With all the sad and depressing CST stuff I thought I would share this video.
Its completely unrelated except for showing what humans can achieve if they really feel passionate about something and don't "fake until they make" or don't...
Made me so happy I had goosbumps.
I got a letter today from the Illinois Attorney General, CST will not respond to them either
@Jamie O'Rourke - you ask the right question. My guess is that Jerry & David signed lousy contracts with their suppliers and manufacturer and have no recourse for refunds or rework or warranty. They can't prove defects without someone to test the parts, and the manufacturer won't test (and fix the production line to deliver working product) without their $1 Million.
And THAT's why you hire Supply Chain people. And Lawyers. And Operations experts. Because what you don't know will hurt you.
Sort of like us backers, no? Next time I feel like burning $129 on a dream, it won't be through Kickstarter.
Either that or more likely that PayPal is refunding the charges under their Purchase Protection program. Then they will go after CST via collections and litigation.
It also proves the financial graphs CST is posting are false. They have the money to refund pre-orders, which is the graphs show that money as spent I guess you can find money when it means keeping your butts out of jail.
Well, folks who ordered the CST-01 directly from the CST site are getting fraud reversals for hundreds of bucks. Kickstarter backers are SOL.
Outside of KS--outside of the unenforceable formality that is the ToU--what happened here is straight up fraud. That's why pre-orderes are receiving their money back, and we are not.
Lesson learned. Pre-order directly--forget crowd-sourcing. When you donate through KS, you are practically signing away the rights to your cash. You are enabling 1.5 million dollar, 500% funded project fails.
Must be hard getting internet in the van...
CST Jerry, David Say something, do a Q&A comment, do anything
@jamie i agree, but im starting to think its all bs that was fabricated, its this persons fault, its this person etc etc.
Anyone asking for a comment, believe me they know we would all like our money back. It won't happen, please let it go. The money and then some is gone.
I hate the fraud, a previous backer found all the pictures posted in this last update were from previous. Dates on the stuff show are from early 2014. Nothing about their behaviors is truthful, I wish them nothing but failure in the future.
I don't mind if the project fails, as long as there was real effort to succeed. From all the updates there was no real effort.
I think that is one of the big key questions;
"Why are you not holding the manufacturer responsible for supplying you with failed products?"
i just cant get over the amount required to move forward, an additional million plus. it just doesnt make sense to not have any inclination of that amount, i feel like thats impossible to not know. and i dont know why your not holding manufacturers responsible for the screw ups which cost you money.
and it was stupid to not do a better cost analysis around the thinner bands. i freakin hate anyone who voted on that crap, stupid.
No wonder no one ever offered on my watch "future" concept...
I think they would be more worried about a fraud law suit from the direct web site sales. Kickstarter's ToS makes it much harder for backers to sue CST. They may have purchased all the parts and spent the money as they say, but it seem very unlikely due the past misleading and vague updates they continue to post.
But by not saying anything to us, they're not fulfilling their duty according to ToS. So they're banking strongly that backers are just going to give up.
this gag order is more likely to be from CST's own lawyer to keep them from stating something that could be used against them in court.
@corporate3-6 . Everything you say seems to be the most plausible course of events. It is a shame they could not say so themselves. This whole gagging order issue sounds very suspicious and I wouldn't be surprised if Flextronics made a play for IP rights and materials for pennies on the dollar.
It all shouts of lack of corporate experience within CST. Which is the opposite of what I had been led to believe with their KS video.
They cannot completely absolve themselves of fault.
This was my first Kickstarter *sad*
We've seen a few, certainly nothing on the scale of what they claim. I don't care about the money, I'm more bothered with the constant lies and deceit. Half of the things they have shown us appear to be from the prototype stage anyway.
I understand what you're saying, but I'm sure you'll agree, a manufacturer has no right or ability to withhold items that have been paid for. And over there in the States, you seem to be very trigger happy with the lawyers, I really can't see Flex keeping all of the parts. Not to mention, they've said they bought all the parts in one bulk order (who does that!?) but in the next breath the battery manufacturer went out of business so they couldn't get the batteries. They appear to contradict themselves.
Likewise, on what planet does anyone tolerate such failure rates from a manufacturer AND be held financially accountable. It just doesn't add up. And the whole gag order, wtf is that about. There's not even a reason for that. You don't gag your own client.
With the reposting of old photos and low unit numbers being displayed - there is no tangible proof these parts exist at all.
Maybe a statement from Flex would help?
You are way overstating your case. I understand you are upset that you lost your money, as are many - but your anger is clouding your judgment. eInk does not make a few dozen custom displays for anyone - and we have seen dozens of displays. Same with the flip chip wafers. You can't just buy a few - and we have seen those parts. Clearly, CST purchased large volumes of these parts. And if this was all an elaborate scam, there would be no reason to purchase volumes of some parts and not others. They have gone "beyond a reasonable doubt" that they did in-fact purchase the parts.
The problem is that they have accepted they do not have the $$ to finish this project, but they have close to a million in parts. The update says those parts are @ Flextronics, and it also says Flextronics has ceased production and is refusing to deliver completed units until they are paid or some other arrangement is in place.
Meaning the big question is - what about the almost-one-million in parts that are owned by CST but in possession of Flextronics? CST shouldn't have gone into debt with Flextronics while letting them retain possession of a million $$ worth of parts that backers money was spent on.
Their plan A/B/C for going forward hinges on some critical information we don't yet have, such as... are the parts in possession of CST? If not, why not?
The encapsulation machine, the tooling and fixtures and the parts were all paid for by CST. Those items are critical to manufacturing the watches. If someone comes along and picks up where CST has left off, it's possible or even likely they will elect NOT to use Flextronics as the assembler of the watches - in which case, the tooling, parts and machinery are *critical* to making this project work.
And if Flextronics is refusing to let CST have that stuff, it means either a buyer would need to pay Flextronics the "estimated" $1.2 million just to get the ~8,000 watches made before they could manufacture any for themselves. And presumably, the CST guys are expecting to get paid for the IP and rights to the parts and tooling.
The exact status of things with Flextronics makes a HUGE difference. It sounds like the relationship is bad, and Flextronics has most of the cards. Perhaps Flextronics is even pushing to get ownership of the IP in lieu of payment. If Flextronics has positioned themselves as the only company capable of making these watches, and to change that would require a costly legal battle to get ownership of the parts + tooling + machinery, then this project is even less likely to be rescued.
I don't think flextronics took them for a ride at all - I, personally, don't believe the parts exist.
If they do, they have been paid for and no one, particularly in America, is going to go more than 12 hours before calling in the lawyers if a manufacturer is refusing to hand over goods that have been paid for.
what i understand from the comments , we can't refund our money and we can't complain
thats not any kind of satisfacoty accounting at all! independent financial review asap. pie charts and line charts are not enough!! these mock-ups can be faked as easy as making a demotivate poster. and what about pics of all the parts. its unbelievable that you don't have more pics of raw parts. everybody has a smartphone or a tablet, I imagine tech nerds like yourselves have several each. the reposting of old pics which in no case shows the thousands of units you claim to had spent our money on is really a weak point in your story! you cant possibly expect the backers to take your word for it. I mean, some backers are, but enough of us arent and are saying over and over that you need to show us records and photos of the parts you claim are being held ransom.. as far as Im concerned, your still in violation of KS terms and conditions to deliver, refund, or give a proper rundown of what went wrong where. you cant deliver, you cant/wont refund, and your story so far is woefully insufficient. and to even think of willfully entering a confidentiality agreement to regain access to (possibly) a few hundred more unit while leaving the rest of us out in the cold is worth condemning. dont do it, and please provide real finances and real photos showing our money is siting in boxes unable to be assembled.
CST, if you were screwed over by a manufacturer or a few of them then you owe it to us to tell us every last detail. This project is dead so there are no more bridges to burn.
@Blake Chang - did you not read their last couple of updates?
I need a refund. Please contact me.
My read is similar to @corporate3-6 in that Flextronics took you for a ride.
Unless you have some basis to believe that you will be able to obtain funding elsewhere I do not see it as worth signing any agreements with ?Flextronics? to not discuss certain manufacturing issues. Re:
But, in order to ship the in-process and completed units, our manufacturer is requesting we sign an agreement that would prohibit us from talking openly about some of the challenges we’ve faced during our manufacturing journey.
I think the situation is worse than people are realizing.
Of the $1.5 million, you spent roughly $1 million of it on parts (batteries, displays, IC's, bands). These parts are at Flextronics, you don't have possession of them.
Flextronics bilked you out of much of the remaining $500k but weren't able to produce watches reliably. Now they are saying you owe them a bunch of money - and they aren't going to release the 135 completed watches or the 200 in process watches unless they get paid.
Presumably, they are also holding your parts and tooling hostage, right? If not, why haven't you gone there and collected your parts and tooling personally? That is the only tangible thing you have of value.
Some questions stand out...
-Why did you accept 20% failure from eInk displays? Even if nothing was specified about this in the T&C, there is still an expectation that purchased goods work. You were too concerned with damaging the relationship that you let them take advantage of you (and the backers)? That is absurd.
-Did you not discuss the goals, costs and responsibilities with Flextronics? It seems like you worked on a "time and materials" open-ended basis, but you had a very limited and fixed budget to spend on R&D. That is incompatible with T&M work. It sounds like you got totally take advantage of by Flextronics and have wound up in a situation where they have $1 million worth of backers goods that they aren't going to give back willingly.
And FWIW, one of CST's responsibilities to backers is taking us along for the ride including disclosure of problems. You already screwed up this responsibility earlier by refusing to deliver bad news when you were aware of it. But to agree not to disclose the full accounting of what happened to 100% of backers just so that 4% of backers might get a watch is absolutely not acceptable.
Also, do you have some kind of prospectus of proposal for Plan A/B/C? I do some venture capital investment and I work with other VC's in the NYC area. I also have a business relationship with a USA based watch company and with the CEO of one of the largest watch companies in the USA (publicly traded, multi-billion dollar company - not a small independent shop). I am possibly interested in seeing if there is any interest in either the watch company taking over the reigns or perhaps in a group of interested VC's in putting together a package to take this idea over... but there is a lot more info needed.
They dont even have the balls to respond to questions
Jamie O'Rourke about 8 hours ago
You say that the battery manufacturer went out of business so you couldn't buy any batteries - so how do you account for the $600,000(was it?) in parts that you have paid for if you actually haven't bought the parts?
I don't think this started off as a scam, but it certainly is now. Every update is laced with lies and every update fails to provide any tangible evidence of your claims.
I don't care about 170 odd dollars I spent, I shit more than that before breakfast, but what I do care about is being scammed and lied to. I genuinely believe that you screwed up well over a year ago, ditched the project and syphoned off the money for yourselves.
^ What he said.
CST claims to have spend hundreds of thousands of Dollars on material already (!) The material gotto be somewhere. Pictures of that material, batteries, bands and displays.
Please Please Please Please Please Please Please.
If not I must assume CST hasn't bought it and pocketed the money instead.
I have seen things like this in India. You pretend something goes south and with it the money you used to buy all these things along the way and then the company has to take the loss while the CEO and people who organized it share the money which was never spend in the first place.
An easy deal to go south is if your company buys a private startup with an IT idea maybe not even implemented and overvalues it. The company spends 10 Million on whats worth 1. The startup owners and the buying company head(s) share the 9 Million difference and the buying company's other shareholders takes the loss. They'll be angry at the bad investment choice but cant prove that their own leaders got a cut from the startup company and knew it would fail.
It feels counterproductive to fail on purpose, but that makes it such a genius trick.
Not saying it happened here but until proven otherwise people will speculate the worst.
Seriously, is it to much to ask to see some picture of all the thousands of parts which have been bought already according to the charts?
I've mentioned it before:
Kickstarter ought to donate the money earned from failed projects like this one to charity. One can argue the definition of fail in some cases...but by their own admission the creators are pretty much through...
Thats right, they freakin changed the design which cost more money, stupid, that probably played a huge role
Our best course of action is to make absolute certain that every conceivable tech company knows their history, and precludes them from working in design and tech EVER again. I've reached out to exec friends at IDEO to make certain they're permanently unwelcome at their old employer.
They wanted $200K. They got 5X that, and now they say they need another $1M+? Fuck'em. Enjoy working at McD's the rest of your life Vondle et co.
As I said before kickstarter made around 50k from this campaign (Amazon another 50k). Projects that grow to this size kickstarter should have some governance over to ensure that failing projects are wound up as early as possible to return as much money to backers as possible. Ie acting in the best intrest of the backers.
Instead they just wash their hand with it.
This project failed well over a year ago. The creators knew this, and what upsets me is their dishonest approach in hiding it. Misleading (boarding on fake) updates. Fake reviews, pictures of people they work with watch saying I got mine, the list goes on....
Cst-01 the first million dollar kickstater bust.......
I sent them multiple requests for refunds way before they started living in a van according to the timeline they sent. They just straight up ignored me. I agree with Sean. We don't have much recourse but we can do whatever it takes to make sure they don't do this again. The screwed us from the get go with their poor project management. They led us to believe the watch was production ready and that they had the expertise to drive this to completion. Over a million dollars squandered because these guys were just faking it in hopes they would make it.
I'm amused by the backers still posting here "please contact me for a full refund", "please give me a refund".
Geez, take the time to read the update. Do you actually think anyone is going to get a refund now? Dont waste your finger energy asking.
@Sean Exactly!! We know it's an investment. It doesn't absolve them of responsibility.
I am growing tired of reminding people of the binding contract Vondle, O'Leary, and their LLC, CST, entered into by accepting our $$ via Kickstarter. People like to say "this is not a store", as if that absolves creators of any sort of responsibility to fulfill their rewards.
As for refunds, yes...they're highly unlikely. That's what happens when you squander 1.5 million dollars. CST was a company created, at least initially, for the sole purpose of making this watch. it can now declare bankruptcy (literally...they are bankrupt), and have their outstanding debts (to us) forgiven. And then it can just fold and disappear into the ether, never to exist again.
Well, that may be true, but we can make sure they can't do this again. the magnitude of this failure is sort of staggering. project over 500% funded, creators unable to execute because of fundamental design flaws, supposedly hammered out over 2 years ago. We must make sure people know this. THAT is our recourse here.
edit -- I see it says sold out -- at least they stopped doing that