$30M in sales and still can't make money
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Lily Drone is dead despite $34 million in pre-orders
Lily Robotics stormed into the world with a follow-along camera drone that earned $34 million in pre-orders. But the company has now admitted that it can't deliver the product, and will wind down in the near future. In a blog post, co-founders Antoine Balaresque and Henry Bradlow explained that...
Lily Drone made huge promises a few years ago. They were basically promising a product that they thought was feasible in the immediate future. You can look more in to their idea if you want. But that is not really where the
is.TRWTF is that they have 34 fucking million dollars in pre-orders and they are walking away from them a few years down the line, while also promising refunds.
There is no possible way they have that $34M to refund. If they did, they would soldier on. No company of that size ever folded with $34M in the bank. At their size that has to be several years in burn rate on COH. If they really have $34M in the bank to make those refunds, why would they fold?
Also, that was $34M in presales that were never crowd funded. That is $34M in sales through their website. No Kickstarter, no Indiegogo.
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More seriously Wikipedia says they Lily raised like $14million on top of the pre-orders.
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@Polygeekery said in $30M in sales and still can't make money:
No Kickstarter
At least Pebble/Fitbit gave me my money back (as did various other companies who failed to deliver their products funded via Kickstarter).
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@loopback0 possibly?
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This might explain it...
San Francisco District Attorney files lawsuit against drone maker Lily for false advertising | TechCrunch
After raking in tens of millions in preorders and venture capital, the drone maker — if it can really be called that — Lily is shutting down. But its problems won't end there: San Francisco's District Attorney filed a lawsuit today accusing the company of false advertising and unfair business...
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@Polygeekery "it's, like, totally a coinkydink that we decided to call it a day at the same time as we were getting sued"
A Lily representative tells TechCrunch that the refund and wind-down was in the works for this week anyway, and that the warning from the DA came at just the right time, or wrong, depending on how you look at it
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@loopback0 said in $30M in sales and still can't make money:
"it's, like, totally a coinkydink that we decided to call it a day at the same time as we were
getting suedabout to be brought up on consumer fraud charges"FTFY. ;)
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@Polygeekery said in $30M in sales and still can't make money:
This might explain it...
San Francisco District Attorney files lawsuit against drone maker Lily for false advertising | TechCrunch
After raking in tens of millions in preorders and venture capital, the drone maker — if it can really be called that — Lily is shutting down. But its problems won't end there: San Francisco's District Attorney filed a lawsuit today accusing the company of false advertising and unfair business...
"There’s also a slightly technical issue that forms a second front in the DA’s lawsuit: the fact that they went with an independent “pre-order” strategy rather than an established crowdfunded development site like Kickstarter. That makes Lily’s money qualify more on the side of internet sales than investment in an idea, which exposed the company to certain consumer protection laws."
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@El_Heffe yep. They should have crowdfunded. Then they could have skirted consumer protection laws.
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@Polygeekery Tom-ay-toh, pot-ah-toe.
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@Polygeekery said in $30M in sales and still can't make money:
There is no possible way they have that $34M to refund. If they did, they would soldier on. No company of that size ever folded with $34M in the bank. At their size that has to be several years in burn rate on COH. If they really have $34M in the bank to make those refunds, why would they fold?
Not to mention the $15M+ they have done in investor funding.
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Lily has promised to return the money, and we’ll see how that goes, but if the DA prevails, the company will also have to pay civil penalties: $2,500 for each of the violations described above.
Depending on how the judge interprets things and how the lawyers state their cases, that could amount to either a lot of money or a hell of a lot of money. Worst-case scenario is around $300 million in penalties
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@Polygeekery said in $30M in sales and still can't make money:
@El_Heffe yep. They should have crowdfunded. Then they could have skirted consumer protection laws.
Laws haven't caught up to crowdfunding.
I'm sure the old geezer lawmakers don't feel too bad for people that throw away their money for the potential of a profit, without being an actual investor.
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@xaade said in $30M in sales and still can't make money:
Laws haven't caught up to crowdfunding.
Or perhaps it is just law enforcement that hasn't. If things go south enough, the crowdfunding sites might end up getting the sort of legal judgement against them that they really don't want; an “if it smells like sales and quacks like sales, it is sales” would hurt. (Uber's getting pushed this way in much of Europe, where their “they're just contractors” schtick isn't schticking to the wall whenever it actually reaches the point where a court can make a ruling.)
And I'd be laughing myself silly…
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@dkf said in $30M in sales and still can't make money:
“they're just contractors”
I have to admit that I don't quite understand Uber. However, if they ain't just contractors, then that's going to bust a lot of these "insurance sales contractor" positions. You know, the one where a friend calls and "asks for help", and you find yourself attending a 3 hour sales pitch from ANOTHER person other than your friend.
Also, what about those "beauty supply sales positions" where you get "paid" by a discount for the product?
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@xaade said in $30M in sales and still can't make money:
However, if they ain't just contractors, then that's going to bust a lot of these "insurance sales contractor" positions.
Maybe…? I really don't understand the legal niceties, but (I believe the argument is that) there's some sort of dividing line that has been crossed. However, this sort of thing is why it's all going through the appeals process; rulings in the lower courts are widely agreed to be not where it is going to stop precisely because of the fineness of the arguments.
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@dkf There are a lot of businesses that are blurring those lines. And when those lines blur, it looks suspicious.
I was talking with someone that worked for one of those businesses where they train you, you work like you're an employee, but you only earn commission and you have to pay them a fee to work at their desk and use their phone, etc.
Then a friend of mine got wrapped up in one of those things that felt like a pyramid scheme, where people earn off of the people that they recruit. Turns out it's legal as long as you're selling a product. Problem is that the product always seems to be something that you only need to buy once, or it's a scam product. When all of the employees own the product, that's a red flag.
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@xaade said in $30M in sales and still can't make money:
@dkf There are a lot of businesses that are blurring those lines. And when those lines blur, it looks suspicious.
Speaking about a proposed government policy a few years back, one French politician said "if it's blurry, it's fishy" (well, the same in French, but it had the same nice rhyming sound). Usually quite true, whatever the domain.
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@remi said in $30M in sales and still can't make money:
"if it's blurry, it's fishy"
Or it's after a very good lunch with plenty of wine…
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@dkf said in $30M in sales and still can't make money:
Maybe…? I really don't understand the legal niceties, but (I believe the argument is that) there's some sort of dividing line that has been crossed.
IIRC it was that the nature of working for Uber is a state that looks like employment and quacks like employment. They may have called it "independent contractors," but there was very little independence involved: Uber told the drivers who to pick up and where, where to drive them to, how much they were allowed to charge for it, etc...
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@masonwheeler said in $30M in sales and still can't make money:
IIRC it was that the nature of working for Uber is a state that looks like employment and quacks like employment. They may have called it "independent contractors," but there was very little independence involved: Uber told the drivers who to pick up and where, where to drive them to, how much they were allowed to charge for it, etc...
But, there is also a fairly standard litmus test of "defined working hours". If I try to tell a contractor that they have to be in the office between the hours of 8AM and 5PM Monday through Friday, they are not a contractor. They are an employee. I believe that Uber was arguing the other side of that. If their drivers can work essentially when they wish to, that puts more weight on the argument that they are contractors.
IANAHRP though, but I am married to one. This is something we have discussed, for obvious reasons.
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@masonwheeler said in $30M in sales and still can't make money:
but there was very little independence involved: Uber told the drivers who to pick up and where, where to drive them to, how much they were allowed to charge for it, etc...
Aside (as @Polygeekery noted) stuff like when and where they worked. But that's all using American standards. For European markets you probably need to make the thing use a bike, anyways.
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TechCrunch said in San Francisco District Attorney files lawsuit against drone maker Lily for false advertising:
If that weren’t enough, court documents describe an email chain in which co-founder Antoine Balaresque worries that people will be able to tell certain video purported to be from a Lily was in fact shot on a GoPro. “I think we should be extremely careful if we decide to lie publicly,” the email attributed to Balaresque reads. [emphasis mine]
Whoooooops. :P This is why you never put anything in e-mail you don't want to air in public, ladies and gentlemen.
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@Polygeekery said in $30M in sales and still can't make money:
@masonwheeler said in $30M in sales and still can't make money:
IIRC it was that the nature of working for Uber is a state that looks like employment and quacks like employment. They may have called it "independent contractors," but there was very little independence involved: Uber told the drivers who to pick up and where, where to drive them to, how much they were allowed to charge for it, etc...
But, there is also a fairly standard litmus test of "defined working hours". If I try to tell a contractor that they have to be in the office between the hours of 8AM and 5PM Monday through Friday, they are not a contractor. They are an employee. I believe that Uber was arguing the other side of that. If their drivers can work essentially when they wish to, that puts more weight on the argument that they are contractors.
IANAHRP though, but I am married to one. This is something we have discussed, for obvious reasons.
I'd add another litmus test: Am I allowed to bargain about the money I'm paid?
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@Polygeekery said in $30M in sales and still can't make money:
This is something we have discussed, for obvious reasons.
So, in the end, you're a contractor or an employee to your wife ?
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@Rhywden said in $30M in sales and still can't make money:
I'd add another litmus test: Am I allowed to bargain about the money I'm paid?
I can't see that being useful. Both employees and contractors legitimately bargain all the time.
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@Rhywden said in $30M in sales and still can't make money:
I'd add another litmus test: Am I allowed to bargain about the money I'm paid?
I guess I fail to see what that would prove?
