Navdy

What did it do?

Navdy made an aftermarket head-up display that connected to a smartphone and projected navigation, call and message notifications onto a transparent screen in the driver's line of sight. The device was controlled by hand gestures above the steering wheel and by voice commands.

Why did it shut down?

Having taken $1 million in orders in the first week of its pre-order campaign in August 2014, the company planned to deliver the device in early 2015. The product only went on sale in October 2016, at $799, far above the $299 early backers had paid; the price was later cut to $499. Head-up displays never became a mainstream category, and rivals such as Garmin and alternatives starting at under $50 crowded the market. Having raised close to $42 million from investors including Harman, Qualcomm and Upfront Ventures, Navdy began an assignment for the benefit of creditors on 26 October 2017. In January 2018 it told customers that it was no longer operating and that the devices might stop working within a few weeks.

The story

Navdy was a hardware company founded in San Francisco by entrepreneur Doug Simpson. Having gone through the Highway1 incubator programme in 2013, it worked with PCH International on manufacturing. The goal was a head-up display that could be fitted to any car, letting drivers see navigation, calls and messages without taking their eyes off the road.

The pre-order campaign launched in August 2014 exceeded expectations, gathering $1 million in orders in the first week; by October 2014 confirmed orders had reached $2.4 million. In the same period $6.5 million came in from investors including Upfront Ventures, Lightbank and Ludlow Ventures. The company planned to deliver the device in early 2015.

The hardware timetable, however, slipped. Navdy only went on sale in October 2016, at $799, far above the $299 early backers had paid. The device was generally well received in reviews, a partnership aimed at carmakers was set up with Harman, and Qualcomm joined the investors. Total investment approached $42 million. Even so, head-up displays remained a niche product; rivals such as Garmin and alternatives starting at under $50 crowded the market. The price was cut to $499.

In autumn 2017 the company went quiet on social media and began leaving customer questions unanswered. On 26 October 2017 Navdy began an assignment for the benefit of creditors, a process used in California as an alternative to bankruptcy. A few days later Simpson said the company was operating, but in January 2018 an email to customers announced that the company was no longer doing business, that its assets were being liquidated and that the devices might stop working within a few weeks. Navdy's story shows how, in hardware, delay wears away price, competitiveness and customer trust all at once.

Lessons for founders

• In hardware, missing a delivery date is not just a delay; in the meantime prices, rivals and customer expectations change, so build your plan around that risk.
• Do not mistake pre-order excitement for mass-market demand; close the gap between the price given to early backers and the real cost of production before launch.
• Hiding from customers and the press in hard times destroys trust; after months of silence, Navdy announced by email that its devices might stop working.

Sources

1. Navdy contacts would-be creditors, prepares to liquidate (TechCrunch, 2017-11-27)
2. Navdy says units may stop functioning (Digital Trends, 2018-01-22)
3. Navdy's Heads-Up Display for your car starts shipping for $799 (TechCrunch, 2016-10-25)
4. Heads-Up Display Navdy Hits $1M In Pre-Orders During First Week (TechCrunch, 2014-08-14)

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