Zano

What did it do?

Zano was a palm-sized, remote-controlled quadcopter drone with a high-resolution camera, funded on Kickstarter by the UK-based Torquing Group. The project promised features such as autonomous flight and swarm flying.

Why did it shut down?

The team lacked the technical experience and resources to take the product shown in the campaign into mass production. After the CEO resigned in November 2015, the venture collapsed and entered insolvency proceedings. The company managed to ship only around 600 of 15,000 orders, and even those were only partly working devices. Mark Harris, the journalist commissioned by Kickstarter, confirmed that only 4 devices reached backers and wrote that he had found compelling evidence that the promotional videos were faked.

The story

It is not often that Kickstarter commissions a journalist to find out why a project collapsed. Zano earned that attention with the wreckage of one of Europe's biggest Kickstarter campaigns up to that point.

The project from the UK-based Torquing Group promised a mini drone that fitted in the palm of your hand, carried a high-resolution camera and could fly by remote control or autonomously. Running from 24 November 2014 to 8 January 2015, the campaign raised £2,335,119 against a £125,000 target. It was billed as “Europe's biggest Kickstarter”, was picked as a staff favourite on the platform and made Popular Science's list of the 100 most notable innovations of 2015. With pre-orders taken after the campaign, the number of orders reached 15,000.

Questions surfaced early. In May 2015 Ars Technica asked whether the team had the technical know-how and capacity to build the promised product. On 10 November 2015 CEO Ivan Reedman resigned, citing health problems and irreconcilable differences. Eight days later Ars reported that the venture had collapsed; the company entered insolvency proceedings. By then only around 600 of the 15,000 orders had been shipped, and those devices did not fully work either. On 24 November Torquing apologised to backers and published an unaudited breakdown of its spending.

The report of more than 13,000 words by Mark Harris, the journalist commissioned by Kickstarter, revealed that only 4 of the devices distributed had reached Kickstarter backers, with the rest going to customers who pre-ordered after the campaign. Harris concluded that the team had made a serious, good-faith effort to develop the product but lacked the experience and resources to build what it had promised. The report also stated that there was compelling evidence that the promotional videos in the campaign had been faked; these findings came from the journalist commissioned by the platform, not from any official authority.

Zano shows how long the distance is in hardware between an impressive promotional video and mass production. The more money you raise, the heavier the burden of delivery becomes; a team's capabilities, however, do not grow with the campaign's success.

Lessons for founders

• Before launching a hardware campaign, have an independent party test a working prototype that is close to mass production.
• Overshooting your target many times over is a warning sign; recalculate whether the money raised is enough for manufacturing, certification and support.
• Showing backers unrealistic promotional footage destroys trust completely when problems arise.

Sources

1. Torquing Zano (Wikipedia)
2. After raising record $3.4M on Kickstarter, UK drone startup collapses (Ars Technica, 2015-11-18)
3. Zano: The rise and fall of Kickstarter's mini-drone (BBC News, 2016-01-20)
4. Europe's biggest Kickstarter has gone bust after raising $3.6 million (The Verge, 2015-11-19)

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