Plastc: Another Warning About the Dangers of Crowd Funding
posted Saturday Apr 22, 2017 by Scott Ertz
One of the more successful preorder products that brought widespread attention to the concept of crowdfunding was Plastc. The company promised a smart credit card, but one that was a lot different. In addition to being able to attach a variety of cards into a single device, Plastic was to have a traditional mag strip, the newer smart chip, NFC, and RFID. But where they really wanted to differentiate themselves was with a touch-capable E-Ink display.
The overarching idea was that all of your cards, from credit and debit, to gift and security, would all be entered into the Plastc card, and with the swipe of your finger on the display, you could select which card Plastc would emulate. Need to use your business card? Swipe to it and go. Entering your office with NFC security? Same deal.
On the surface, this product sounds great, but it never stood a chance in the market. The product was based on the idea that you would still want to carry around a card that links to your phone, rather than simply use your phone. Apple, Google, Microsoft, Samsung and more have all talked about the idea of retiring the physical wallet and digitizing it, while Plastc would have required the continued usage of a specialized device for all of these features.
Despite this massive failure in concept, the company received $5 million in pre-orders in the first week, and more from private investment. After all of this money and not a single product shipped, Plastic has let all employees go and shut down operations. This leaves all paid pre-orders out in the cold, receiving nothing for their $155. A Chapter 7 bankruptcy is right around the corner, and the assets and liabilities of the company could end up in someone else's possession, meaning that there is a very small chance that a product could come to market, but not from this team.
It's been a long road with a lot of obstacles. The support of our amazing backers has been incredible, which makes this announcement even harder. We were so incredibly ready for production in order to hit our deadlines but without capital it is impossible for us to move forward and we will not be able to fulfill any pre-orders.
We are disappointed and emotionally distraught, and while we know this is extremely disappointing for you, we want our backers to know that we did everything we could to make Plastc Card a reality.
With more of these pre-order products failing to deliver lately, such as Lily Robotics and Skully, it should highlight the dangers of giving money to a company that does not yet have a product, but simply an idea. If the company has never successfully brought a product to market, it is very likely that they will underestimate the extreme cost and difficulty of that task. Before you back a project, either on a crowdfunding platform, or a company's website, look into their history to try and minimize your losses.