Like warm beers around the campfire, the saga involving the infamous Kickstarter project Coolest Cooler took another sad turn over the weekend as the company announced it was shutting down operations and won’t be fulfilling orders for thousands of backers.
CEO Ryan Grepper, creator of the product which combined an ordinary cooler with a blender and a bluetooth speaker, wrote in an update to customers Friday night that U.S. tariffs imposed on many products imported from China proved to be the final “insurmountable challenge” for the Portland-based startup that announced its product five years ago.
It’s the latest in a long string of disappointing updates from Grepper and Coolest, which was hampered by broken promises in the wake of a project that originally raised more than $13 million from 62,642 backers to set a Kickstarter record at the time. More than 20,000 people ultimately failed to receive a reward that cost them $185, plus $15 shipping and handling.
Coolest Cooler is now regarded as the crowdfunding platform’s biggest failure — even though, as the The Oregonian pointed out, you can find it listed as a “Project We Love” on the site. In a statement to GeekWire on Monday, Kickstarter reiterated that there’s no guarantee that all projects will work out.
“Kickstarter is a home for creative projects. There’s always a risk in creating something new, and some projects won’t end up working out. In this case, unfortunately, 1/3 of the backers won’t receive the reward they were promised,” Kickstarter’s statement read. “We’ve worked hard to make it clear that Kickstarter is not a store. And in the five years since this project was funded, we’ve taken steps to help creators be more transparent with backers, and to better understand what it will take to bring their project to life. Our goal is to help improve the chances that a project will work out for everyone, with the understanding that the risk will never be fully eliminated.”
In his email update on Friday night, Grepper thanked those who supported the company and — if they managed to actually get a cooler — enjoyed using the “dream product.”
“For those who have not received a Coolest, it’s devastating for us to share this, and there is no way of expressing our full upset and disappointment that we cannot keep the doors open or fulfill your order,” he said. (The full email is below.)
We’ve reached out to Grepper for comment, and will update this story if we hear back.
The closure comes a year and a half after a June 2017 update in which Grepper said an Oregon Department of Justice investigation into the company had been resolved. At the time he told backers who had already been waiting two years for a cooler that it could be another three before the product would be shipped.
The fact that the coolers were being sold elsewhere only added to the frustration for the Kickstarter supporters who felt that their orders should have been fulfilled first. But Grepper contended that Coolest couldn’t manufacture more coolers without making profit off sales first.
On the Coolest Cooler website on Monday, the company was offering existing inventory at deep discounts. “Get ’em before they’re gone,” a banner image read.
“We are liquidating all inventory as we close the company and must use that to pay our creditors,” Grepper said. “We have zero funds to create or ship anything unless people pay for the existing inventory as it is dispersed at various locations now.”
He also said if a backer or anyone else still wants to get their hands on what he considers a “truly great product,” they could try eBay or other resale sites.
Grepper said that those who have not received a cooler “may be eligible for up to $20 per the terms of the Oregon Department of Justice AVC agreement from 2017.” GeekWire reached out to the Oregon DOJ, which said that Coolest has until June 6, 2020, to make the $20 payments to the remaining eligible backers. (See the settlement document located at the bottom of this story).
It’s not clear whether Grepper, who was borrowing money to try and get coolers produced over the years, has cash on hand to settle the matter.
“We learned a lot of lessons these past few years, and no doubt we made plenty of startup mistakes,” said Grepper, whose creator profile on Kickstarter says he’s “part visionary, part mad scientist, and a passionate supporter of the DIY revolution.”
“Once again, we are sorry and as frustrated as anyone,” he added.
Kathy Gill is clearly among those who are frustrated. Gill, a program manager at Microsoft and a digital media specialist who teaches at the University of Washington, said there “should be a unique place in purgatory” for projects like Coolest Cooler after she received a promo email for a $99 cooler — five years into her wait for the product she spent $185 on.
There should be a unique place in purgatory for @kickstarter projects that (a) ship a product but fail to send backers the product and (b) four years later sell the product for less than a backer paid while the BACKER still has not received their @Coolest_Cooler . pic.twitter.com/KtOirAkdQ6
— ⚡️Kathy E Gill (@kegill) December 6, 2019
Gill said in another tweet that her experience with Coolest Cooler has been so bad that she no longer looks at Kickstarter projects.
“Did I imagine that it would be delivered? Sure,” Gill told GeekWire via email. “What I did not imagine was for them to start deliveries but never fulfill their backers. What I did not imagine was a demand for money in order to get a delivery (that was first done in 2016, I think, but I’m pretty sure it happened more than once). Why would they not offer backers the less expensive (no blender) cooler?”
Gill has supported a few other projects since 2014, but only was attracted when they surfaced via a friend. She mentioned a couple.
“Both shipped and then opened their products up to non-Kickstarter backers,” Gill said. “That’s how this is supposed to work!”
Others shared in Gill’s frustration on Twitter, and on the Coolest Cooler Instagram where the replies to older posts were full of complaints.
@Coolest_Cooler How come I’m getting emails saying you are selling coolers for $99 when you still haven’t sent me mine and I gave more than that in crowd funding?! Crooks!
— Jeremy Sturch (@JeremySturch) December 6, 2019
@Coolest_Cooler so let me get this straight….Ryan Grepper has to pay me $20 because he’s a crappy businessman & didn’t fulfill his obligations to customers, but where is the rest of my $180??
— amanda s bridgers (@amandasbridgers) December 7, 2019
Almost 2,000 days ago I spent $200 backing the @Coolest_Cooler and now the company has closed down – 20,000 backers haven't received a product.
I know the risks of Kickstarter, but this one really sucks considering the promise of the product.
Ya win some, ya lose some I guess.
— ᴍᴀᴛᴛ ᴅᴏɴᴅᴇʀs (@mattdonders) December 7, 2019
Kickstarter pointed to a 2015 study by the University of Pennsylvania that found that 9 percent of projects fail to deliver rewards. The company shared steps it has taken over the last five years to “strengthen the Kickstarter system”:
- Actively discouraging the kinds of marketing techniques and hype that are typical on shopping sites.
- Introducing a feature called Project Budget that helps creators think through what they’ll need and, if they wish, share their plans with backers.
- Updating our Terms of Service to detail what a creator’s responsibilities are if a project can’t be completed.
- Creating a System Integrity team that is fully focused on product changes and policies that protect the long-term health of our service.
- Explaining to first-time backers that backing is not buying, through an on-site banner and an email.
- Giving creators the ability to set shipping rates by country or to decline to ship to some countries, helping them avoid shipping shock.
Here is Ryan Grepper’s and Coolest Cooler’s full email to backers, and the settlement is below:
Hello Kickstarter Coolest Cooler Backers,
As you may know, late last year the U.S. government imposed 10% tariffs on many products imported from China. Like many small businesses dramatically affected by this situation, we viewed this as a short term situation where, hopefully, calmer heads would soon prevail.
However, as of early summer, the “trade war” continued, and the tariff was increased to 25% which affected our entire Coolest product line. It was devastating to our business, and I know it was felt by many of you in one way or another as consumers, and thousands of small businesses everywhere.
Today, I’m sad to report this has proved to be an insurmountable challenge for Coolest and we are forced to close down operations.
For those who have been following our updates for the past few years, you’ve seen us work around every imaginable challenge, and with your support, we kept going.
We kept going when it became immediately obvious that the Coolest would cost much more to manufacture and ship than anyone paid for it on Kickstarter. That meant we had to take loans to cover the difference and while many said it would be impossible to make and ship, we kept going and to date delivered forty thousand of them to our backers.
We kept going when there were manufacturing strikes abroad that stopped us for months, racking up unbelievable bills.
We kept going when there were recalls on product parts we had no money to pay for.
We kept going when thousands of people became upset that we couldn’t go faster.
If you opened our updates along the way, you saw how we were immediately in the hole, making no profit as a business, taking on vast sums of debt to keep the doors open and ship to backers. You saw how we eventually had to attempt to sell Coolest products at retail in order to make any profit which would be used to ship Coolests to our remaining backers.
Still, we kept going. We had volunteers, friends, neighbors jumping in, lending money, offering help any way they could.
For five years.
We knew there would be obstacles, especially when we broke all records when this concept resonated with so many more people than we ever dreamed, but that’s part of the process of Kickstarting an idea into life. Creators propose an idea, backers fund the idea, and then we work as hard as we possibly can to bring it to life. We’re tremendously proud we were able to bring the Coolest Cooler we promised to life and into the hands of so many of our backers, but tremendously sad that we didn’t manage to get it to everyone.
In our last updates over the last two years we shared how we switched factories to reduce overall costs, then tried to earn more revenue by creating additional products to sell like the Solar Lid and the Vibe soft sided cooler; the idea being if we could make a profit on those then we could use that money to make and ship more backer rewards. To do that, we leveraged the good graces of our manufacturing partners and took on more debt.
But unfortunately that all happened just as the trade war intensified and then the Trump administration increased our tariff from zero to 25%.
In the end, that tariff, and this ongoing trade war, destroyed our last options to continue.
If you are a backer and missed any updates along this long and difficult journey, please see this link for our major updates — you can see we shared nearly 60 backer updates on Kickstarter, along with nine months of our Manufacturing Blog and ongoing email updates, that we fought every day for this idea, for this dream, for each and every backer:
For those who don’t know much about how the tariffs have hurt almost every business working with China, please consider the following—there have been levies placed on over $360 Billion worth of goods from China. Certainly we are not the first US company to be ruined as a direct effect of this trade war. Here are a few links about the situation
Obviously, any time politics are involved in something like this, lots of emotions flare up. We understand that.
But this isn’t a political statement. It’s a business reality that has led to our business no longer being able to operate.
We’re just as angry as we know you will be, and frustrated these tariffs were the nail in the coffin for something that we’ve worked so long and hard on. This is not the way we wanted our Kickstarter journey to end.
Our Appreciation and Disappointment
Whether you are for or against these tariffs, and whether the world’s biggest economies can move ahead and resolve this, I’m sorry to report that we can’t hang on long enough to see how it ends. And so it’s with a heavy heart I have to share that we must close the company.
For those who have read every one of our updates and cheered us on all along, you have more appreciation than we can verbalize. As you know, it’s been a very difficult and public process that generated a lot of love for our product but equal disdain that we couldn’t fulfill it fast enough.
For those who received their Coolests and supported us and enjoyed so many days in the outdoors with this dream product, thank you for carrying the torch and realizing our vision of getting outside with your families and friends.
For those who have not received a Coolest, it’s devastating for us to share this, and there is no way of expressing our full upset and disappointment that we cannot keep the doors open or fulfill your order. We’ve had to begin winding down the company because of the tariffs. We know that there will be a lot of anger and upset that people didn’t get a product they backed on Kickstarter. While everyone knows that’s a risk with Kickstarter projects, no doubt you’ve seen us try relentlessly for five years to make it happen for you. We are especially sorry that, after all this effort and time tackling what felt like an insurmountable list of problem-after-problem, we were driven out of business as just another a trade war casualty. Please know we did all we could.
For our families, friends, neighbors, and those in the Kickstarter community who supported us, lent time and money, sent encouraging notes, volunteered, gave us personal hope in a very hard and humbling entrepreneurial journey, I thank you the most. You kept us going and saw how hard we tried when everyone else didn’t know. Thank you.
1. We are liquidating all inventory as we close the company and must use that to pay our creditors. We have zero funds to create or ship anything unless people pay for the existing inventory as it is dispersed at various locations now. If there are any product(s) left as you read this, you can find them on this page available for purchase at a discount while supplies last. https://coolest.com/
2. If you have not received your Kickstarter reward, you may be eligible for up to $20 per the terms of the Oregon Department of Justice AVC agreement from 2017, which gave us time and instructions to fulfill backers rewards. To qualify to receive that payment, click this link to enter your Kickstarter Backer information, your updated address and a Tipalti payable account to receive a maximum of twenty dollars payable by June 30th of 2020. You will be receiving a separate email directly from Tipalti to register shortly.
3. Coolests have appeared on eBay or secondary sales sites throughout these years and no doubt this announcement will begin the resale market of these units. We can’t control that but we hope that one day everyone has the opportunity to use a Coolest product. They truly were great products.
We know that none of these 3 options are ideal or replace your belief and patience in this process.
While we are not the only Kickstarter project to fail, we do know that we’ve all been in this for a long time together. We are sorry we came up short and we did all that we could until this trade war forced our hand.
We learned a lot of lessons these past few years, and no doubt we made plenty of startup mistakes. For now, we are focused on liquidating the products, attempting to pay creditors, and winding down the company. But we hope you felt heard as we responded to hundreds of thousands of backers emails along the way and shared updates every time we hit a major obstacle or achieved some momentum. People may judge the Coolest Cooler and Kickstarter because of our end result, but we remain grateful for a process that enables entrepreneurs with a dream to find people willing to support an idea that wouldn’t otherwise exist in the world.
Once again, we are sorry and as frustrated as anyone. This was our dream project and we could never have anticipated the year’s of struggle or this last year’s U.S.-China relations leading to this final anticlimactic outcome.
As we enter the holidays, all we can do now is share this sad news and again our appreciation for believing in us in the first place. We are wishing you and your loved ones a happy holiday season and a new decade filled with outdoor adventures.
Ryan and the entire Coolest Team throughout the years.