March Update: The Future of Project MIITO
To our backers who have supported us through this long journey and believe in our idea,
Unfortunately, there is never a good way to deliver bad news - but out of respect for people who have given us their time, money and input over the last months, we want to be as honest and transparent as possible with you.
As you have been following the updates during the last two years, the MIITO team has done everything to bring this project to life together with input from our backers and partners. While we knew we were embarking on an extremely difficult path to try and make our first product, it has become clear in the last months that we will not be able to deliver the product we initially planned. We have filed for insolvency and are shutting down the project (more details below).
We understand that this comes as a massive disappointment to our supporters. For this reason, we want to return all remaining funds to the people who have contributed. We have outlined the events in detail below about what has happened and how the money has been spent to date so that you can understand how we have gotten to this point.
Issues that led to this painful decision:
- Loss of Development & Manufacturing Partner
- Issues with certification testing
- Increased timeline & costs
We have prepared ourselves to be as open as possible with you about the events leading up to this decision. Please see each point explained under this statement. You can reach us at firstname.lastname@example.org with questions and concerns. We will gather the most frequently asked questions and address them in a follow-up update in April.
We want to acknowledge that we owe you a huge debt of gratitude for your support.
Nils and Jasmina
1. Loss of Development & Manufacturing Partner
Our partner for electronics development and manufacturing had consulted an external business advisor regarding the health of his business and the positioning of his company for the upcoming year. In January, under the advice of this new external business advisor, our electronics partner announced that to continue development on the project we must agree to the following terms or the partnership would be terminated:
1. Electronics partner would manage the entire product, including the mechanical parts and final assembly (both development and manufacturing), effectively eliminating input from MIITO team members including the ability to evaluate and pre-certification test the devices
2. Development and unit testing would be managed solely by the development and manufacturing partner- removing the input and oversight of MIITO team and eliminating the opportunity for us to guide the development with critical inputs.
3. Electronics Partner refused to agree to our requirement for pre-certification EMC and Safety compliance tests.
This scenario left us without the option to ensure the quality and standards for the MIITO. These two conditions paired with a major potential for issues with compliance by no in-progress pre-certification testing left us no choice but to dissolve the development agreement.
While it is a major setback to any electronics product to lose a partner, our team immediately turned their attention to finding alternative partners as soon as it became clear the partnership was in jeopardy. We reached out to our extensive network of induction experts and manufacturers getting quotes and discussing development with over 10 new partners. Unfortunately, all these discussions ended because either our timeline could not be met, the cost was too high or they did not have the right knowledge of induction heating required for the development of the MIITO product.
2. Issues with Certification Testing
While these discussions with many new partners were going on, our Head of Engineering continued development of the current system as it was left at the time of the terminated agreement. She began pre-testing the current system in an EMC lab here in Germany to make sure the system complied with EMC requirements (the EMC testing is the first step to make sure that your device will be compliant and eligible for certification upon completion - the product certification is a requirement by law in order to ship consumer electronics). The current system failed the EMC testing and would thus need further development to be eligible for certification. The main issue was that the PCBA radiated too many emissions.
Our Head of Engineering compiled a list of things that should be modified and tested to improve the emissions of the PCBA. This list was extensive and would require a significant amount of development effort to reach compliance.
3. Timeline & Costs
We explored dozens of scenarios with development offices and manufacturers both in Europe and Asia. Unfortunately, there were barriers with each new partner we vetted including lack of induction experience, prohibitively expensive, or excessively long development timelines (1-2 additional years). The most promising partner was an office located in Europe. We were tentatively excited as they have 20+ years of experience in developing induction hobs and proven ability to develop and manufacture induction powered appliances while following all regulatory requirements (EMC, Safety, etc.).
After discussing the product requirements, this new office explained they would do development if we used their pre-existing power electronics PCBA. This would require from our side a full redesign of the product - some of which would be detrimental to the intended functionality. Among the significant changes required to use their technology, these two proved to be the most concerning: The MIITO base must become a 24x24cm square instead of the original round design. The reason being that the potential development teams existing PCBA is a square (22x22cm) and the time, cost and risk of modifying this PCBA to fit a 20cm round MIITO does not allow for a redesign The MIITO rod would need to be increased from the initial 4,5cm diameter to 6cm. This increase would limit the flexibility of MIITO significantly - making it not fit in many glasses or cups.
While the design changes were significant, we carefully evaluated the option of a redesign. After an extensive look at the ramifications for timeline and cost of the device - it was obvious that delivering a completely different product with limited functionality was not an option. Additionally, the development timeline would still mean delivering no earlier than summer 2018 and MIITO does not have the funds to support that.
Given these events, there is no path for us to deliver MIITO as it was originally promised to our backers. Out of respect for our supporters and backers, we have made the decision to file for insolvency and return the remaining funds to our backers.
MIITO Fund Allocation To Date
In an effort to be transparent and honest about the use of the funds we have shown the breakdown of spending during the last two years. All funds from Kickstarter and subsequent governmental grants have gone directly toward the goal of delivering MIITO to your homes. Below you can see a breakdown of the funds used:
Refunds for Backers
- Within the next week, the court will appoint an insolvency practitioner who will be in charge of carrying out the filing and issuing partial refunds.
- The insolvency practitioner will reach out to the backers and explain the subsequent process.
- The practitioner will calculate the exact amount that will be refunded based upon the leftover funds, including some additional repayment of VAT tax for European backers, costs of money transfer for backers etc.
- After these calculations, the insolvency lawyer will notify the backers of the exact refund amount.
- (we expect) that the refund will be processed through the Kickstarter platform and returned via the original payment method used to back the project.
The MIITO team will not have a hand in this process as it is highly regulated by German law. Unfortunately, we cannot give an estimate of the exact amount or processing time. We will do our best to keep the backers informed about the process and request as much transparency as possible of the insolvency practitioner.
Once again we want to thank each of you for your support over the last two years.
While the outcome of MIITO is devastating, we are grateful for the incredible community that has been built around this product. We hope you will accept our deepest apologies. While we are ending MIITO here, we will do our best to be open about our story for future projects to avoid this outcome.
We will try to address your questions and concerns in a timely manner but it is unclear for how long we will be allowed to operate MIITOs accounts as this is a strictly Germanized procedure. It might be that we are asked to hand over all the companies accounts to the insolvency practitioner but to avoid a situation where we lose the ability to communicate with our supporters- we created a new email address email@example.com. Please contact us here and we will gather the most frequently asked questions and address them in a follow-up update in April.
Thank you again,
Additional note from the founders
MIITO started as a graduation project during our studies, where even at its very early stages it gained impressive public attention for its innovative design approach. Encouraged by MIITOs supporters and aiming to make a positive impact on the environment, we set out with a dream to bring MIITO to the mass market. It has been almost two years since we founded MITO GmbH and naturally, there have been many ups and downs: the excitement of seeing the MIITO system working and magically boiling liquids and then the frustrations and complexity of electronics development. We faced many walls. Walls we didn't even know existed. But while the outcome of MIITO is devastating, we are grateful for the incredible community that has been built around this product. We are ending MIITO here but the learnings of this experience will stay with us and we hope to share these with other brave entrepreneurs helping them on their journey of bringing innovations to life.
Jasmina and Nils