To all who back this project,
This is more of a personal update, than a company wide view.
We understand that we have two different camps, a majority that supports us and the other camp that has long given up hope due to the extensive delays and lack of communication.
I release this update in an effort to speak to both camps and provide a much needed explanation.
Conflict of vision
When it comes to seeking investors, we have also found ourselves in two camps: us against pretty much the rest of the investor world. Our vision is to release not just a sneaker, but a complete product experience that combines software, media, hardware, and apparel together. That’s multiple companies in one. What we are being told over and over by venture capitalists and corporate leaders is that we are “too ambitious” and “taking on the impossible” as an early stage startup. After talking to many of these experts, we’ve found that they want the same as many of you: just release a shoe. Their agenda is to simply create a rushed product that’s good enough, mass-produce, release, sell, and maximize profits. They encourage us to prioritize quick gains and ignore the true potential behind what could be a very exciting product, if not one of the most exciting products in the last decade.
Our view is, releasing fast and cheap has monetary potential for investors, but only in the short term. Most products’ user experiences lose value and excitement over time. Declining sales ultimately lead to an exhausted company, unable to deliver breakthrough technologies the world has yet to see, experience or enjoy. These technologies die out in labs, never to be seen or touched, but a few investors make their quick buck.
We continually keep hitting against the same wall with this type of thinking: “Go the easy and cheap way, release something fast.”
We strongly believe that this does not work and here’s why:
Hardware is difficult
According to Bolt Labs:
“All startups face a mountain of challenges. When you throw a hardware product into the mix, that mountain inherits sub-zero temperatures and a record-setting blizzard.”
Below are a few examples of extremely well-funded companies with great execution and good timing that met their demise soon enough. The theme is the same for all of them: focus on product release only and not on the functionality that creates an irresistible and long term user experience.
Jawbone created a fitness tracker with funding several hundred times the amount we raised and ended up dead. They aren’t the only example of this same story repeating itself. We received $1m on February 2016 to create a company with a product that brings in media for you to consume, advertising so you get paid to walk, sneakers and hats to fit your customization needs, hardware that would impress, and software being the glue that brings this entire social, fashion and gamified experience together. We accept that we cannot do it without the right investors onboard. The types of investors that truly believe in what we want to accomplish.
So far there have been some talks to consider doing an asset sale and give away our resources, connections, prototypes, software, and patents that we have worked very hard for. They would love to take advantage of our vulnerability. This would mean the company goes dead and we all fail. We refuse to do this. We will not give up. We are not going to abandon this project and our backers. At this point we have adopted just one gear, and it’s on drive, we must push forward. There are no acceptable alternatives.
A plan for all to succeed
We will continue our pursuit to find investors that help boost this project forward. Once the prototypes are production-ready, we have sponsors from major film studios and major brands that will get us advertising revenues by showcasing them on a global media tour. These revenues would cover most of the cost for us to go into full-scale production.
We are confident we can bring in the seed investment needed to help make this happen. It might take some time to find the right partners, but we are not sitting idly by and waiting. As many startups do, we intend to pivot quickly to ensure that we succeed. We are exploring options to keep all hardware/apparel development within the company by temporarily pausing work on hardware and focusing on the digital media software needed for the platform to function.
We can complete and release a software MVP (minimum viable product) within the next 6 months from when we receive seed investment. This software will be released under a separate entity and licensed out to all emerging and existing technologies that use media and advertising, including the ShiftWear platform. It will be tokenized and powered by its own cryptocurrency along with an ICO launch. Investors are more than willing to back the software because of its low upfront cost and high returns. Our software entity’s direct partnership with ShiftWear would both allow us to boost our path to production for the sneakers and hats and help us get better investment deals for the hardware business. While all this might sound confusing and complicated, it is a viable plan and one that we are confident can work.
I know this is not the news that you all wanted, but the fact is, we are still here fighting to create and deliver the product you all want. We’ve learned so much from all of this, we have a plan, and we refuse to give up on the project.
Thank you all for your patience and understanding.
David Coelho, Founder and President
A note from Nick Johnson, CTO:
Before I came to ShiftWear, I had a comfortable tech job at a big-name company with plenty of sick days, good pay, lots of travel time, great benefits, a 401K, and a pension! I left that behind because I wanted to do something exciting. Something that had never been done before.
If I knew how hard it was going to be when I signed on, I probably would’ve walked away, but I’m so glad that I didn’t because we’ve truly accomplished so much with so little.
This is what I’d like to address to our backers. I want to share with all of you what ShiftWear has accomplished in all of this time and answer all of the questions that have come up over the past few months, starting with:
What have we done with your money?
We built a team. First and foremost, ShiftWear brought in staff that could take care of all the things needed to run a company: administration to handle outreach and answer thousands of emails every day, a business development guru to help us hire good tech talent, create a strategy, and make the right connections, advisors from silicon valley and top research universities to help connect us the best technologies, a legal team to help set up and run our company, a web developer to keep a strong and professional web presence, engineers to develop our product prototypes, and plenty of contractors to help fill the gaps. This might seem like a lot, but every member of the team was spread thin. There never seemed to be enough time in the day to get things done.
We built software. Fun fact: it’s almost always faster and easier for a startup to hire an agency to develop software. These companies have full teams of designers, coders, quality assurance engineers, and project managers that know how to work together to produce products quickly. It also leaves us free to work on other things. We decided to go this route while we worked on our sneaker prototypes.
We built footwear. ShiftWear is a fashion company just as much as it is a tech company. We spent a lot of time designing the shoes for our IGG campaign and wanted to make absolutely sure that what we delivered was what we promised. Turns out, making shoes is pretty complicated. We formed partnerships with boutique fashion manufacturers in midtown Manhattan, underground shoe makers in Brooklyn, and veteran shoe dogs from Oregon who all created sneakers in different ways, at different speeds, and for different costs. We had to get our lasts (the wooden foot you build a shoe around) made in Mexico and space-age materials shipped in from China. Our prototypes ranged from sad and strange to beautiful. Eventually, we landed on a process that allowed us to integrate tech and fashion seamlessly.
We built hardware. Sneakers with flexible displays on them. Why don’t they exist yet? Not easy to create. We spent countless hours prototyping all of the pieces of ShiftWear apparel while in constant contact with industry experts and specialists. We experimented with different types of displays, different methods of attaching them, testing them. We created several ways to generate energy and store it in all sorts of batteries. We 3D printed sneaker and hat parts and built hundreds of frankenstein, half-fashion-half-tech devices. Finally, we built working prototypes that we could run in. We were very busy innovating, which leads to the next expense:
We filed patents. Patents are important for startups. They protect us when big corporations decide they want to use their resources to copy us and snuff us out. We developed a lot of brand new technologies that have never been built before and we needed to patent them to keep us safe. PSA: patents are not cheap.
We built connections. One of the most valuable things I’ve learned over the past few years is that no matter how smart or capable you think you are, you’re going to need help. In the tech industry, this means doing some old-school networking. We went to conventions all over the country, visited corporate headquarters, pitched to people we thought we’d never meet in buildings we didn’t think we belonged in. It turns out, the connections we made have turned out to be some of our most valuable assets.
Are we scammers?
All of our names are on our website. If it were our intention to take anyone’s money and run, we would probably be the dumbest scammers ever. All joking aside, we do understand the concerns – our lack of communication and updates made us look dishonest. We are owning this. No, we are not scammers.
What’s with the lack of communication?
This was always a point of debate at ShiftWear. On one hand, we wanted to keep our backers happy and maintain your support. On the other hand, the more information we made public, the more vulnerable we made ourselves to other companies listening in. We ended up pushing off and delegating communication and when the time came to sacrifice resources, these were the first to go. We apologize for keeping you in the dark.
What is this blockchain project?
Thanks for asking, I love talking about this. In short, our blockchain app is what will provide media and advertising for ShiftWear products when they launch. The idea behind the project is to create a platform that lets users post, discover, and share media: an easy-to-use app like instagram with more content, like Reddit.
The kicker is that users can make money just for doing the things they do everyday. Browse new media, share it, like it, save it, and get paid. Where does the money come from? Ads. The more you allow, the more you make – you can turn them off, but then you’ll miss out. By decentralizing the app, our operating costs can be low enough that the majority of our ad revenue can go right to our users. We want to reward the creation of media so that when ShiftWear rolls out, there are plenty of talented creators, designs, and advertising partners at the ready so that we can hit the ground running. No pun intended.
Why are you doing that when you should be making our shoes?
The simple answer is that fundraising through an ICO means we don’t have to give away equity.
Every investor knows that it costs a lot to build hardware. They also know that because they have money and connections, they have all of the power. For those of you that watch Shark Tank, you’ve seen that people asking for a lot of money tend to get really bad deals. This goes back to what Dave said before – if we give away equity, we give away ShiftWear. We’d be forced to spin out a quick product that peaks and fades away just like Jawbone, Juicero, Pebble, and the list goes on. We find that an ICO is our best shot at getting ShiftWear made the right way while also creating an amazing software platform that rewards its users.
We truly appreciate your support and your patience and we’re certainly not giving up on this project. There’s been a lot of sacrifice on our end; we have a lot more skin in the game now than just creating sneakers.
I hope you can all find comfort in that when you do get your products, even though you had to wait, they will be amazing.