Pebble is a company I would have invested in if I were a VC. It seemed like such a great idea. Didn't they raise $10 million on kickstarter? what went wrong?
What's in the best interests of the VC isn't always in the best interests of the company, however, and in this case I think the VC influence was toxic. If they'd stayed small and kept sustainable (remember, their original kickstarter alone pretty much had them funded) then they would still be around.
Don't get me wrong, I definitely agree with you there, just pointing out the reality of the situation!
Over 40mil in three crowdfunding campaigns (I backed all three of those Kickstarters) plus a $375k angel round (which included YC) and a $15mil series A.
Their second campaign ($20 mil) happened RIGHT before the Apple Watch launched, and they promised full refunds up until the product shipped. I wonder how many people took them up on that once they saw what Apple was up to.
I'm guessing Pebble chose to use Kickstarter as a distribution channel - much like Apples AppStore - which was a way easier and cheaper way for them to retail their product that cutting global retail distribution deals. The "get your hands on the money before you ship the product" would have just been icing on the cake (at least after their first unexpected Kickstarter success...)
I was thinking more of using their own sales channel. They have sold through their own website since their first batch of products started shipping. They would still need to get the word out and everything, but there are lots of ways to do that via PR.
Kickstarter campaigns typically sell the product for less than retail. In the case of Pebble's second campaign they went for a 5-15% discount over retail. They had clearly already completed almost all of the design and manufacturing work by the time they launched the campaign, so that makes it more mysterious to me.
Discounting a product before launch is something you do when you have to -- your product is unproven, you really need the money, or you need to build a community day 1 -- it isn't something you want to do regularly throughout the life of the company.
But, while software (gaming), take a look at some interviews with Larian and Obsidian/inExile (I forget which one of those... probably both). They keep returning to the KS for fundraising and a large part of it is that even a successful campaign and perfect release doesn't necessarily give them the capital to start the next project without investors.
Personally: I backed the first pebble KS and got an okay product (looked like crap and not a lot of utility, but what it did, it did well). But I definitely got turned off by the multiple campaign thing (and the frequency of them) as it suggested a lack of long term support for the product.