Adoption of Blockchain Applications Part 3

Yet another disastrous example and managerial consequences of the MIT experiment.

 

Coolest Cooler

Another example of a product that turned from a loved one to a really hated one because of the mismanagement of the early adopters is Coolest Cooler, a product that became the highest-grossing Kickstarter campaign of all time. At the time of the campaign, its creator has raised over ten million dollars of funding in exchange for selling over fifty thousand coolers. At it later turned out, the product featured in the campaign was just a prototype of a cooler with Bluetooth-enabled speaker, USB charger, built-in blender, storage for plastic plates and utensils, and a sectional cooler.

Ryan Grepper, the creator of Coolest Cooler originally planned on shipping the product to its first backers in February of 2015. That month, he pushed the shipping date to July of 2015, explaining that he needed more time to add features to his cooler and find a manufacturer that could produce the coolers at scale. Grepper later revealed that when he started working on making his prototype scalable for the mass market, he realized that he would have to deal with many obstacles that he did not foresee initially. For example, some parts that he created for the prototype would be too expensive to produce in mass quantities. With other parts, the durability and testing have become a significant issue. Finding all of this and dealing with all these issues cost Grepper a lot of money.

Later in 2015, Grepper started selling his cooler on Amazon before finishing shipping the coolers to Kickstarter backers of the product. In November of 2015, Grepper’s company has announced that the company has spent all the money it received from the Kickstarter campaign and that the production and shipping of the cooler cost way more than originally planned, which was the reason why the company decided to sell some of the items on Amazon before shipping the ones it owed Kickstarter backers.

Because of this, the product has received a ton of 1-star reviews on Amazon from angry customers who thought they’d get their coolers in exchange for their Kickstarter contribution before anybody else. You can see the comments for yourself at https://www.amazon.com/Coolest-Cooler-in-Classic-Orange/product-reviews/B016VXVLFC/ref=cm_cr_dp_d_hist_1?ie=UTF8&filterByStar=one_star&reviewerType=all_reviews#reviews-filter-bar

In 2016, the company offered early backers an option to pay additional $97 to get to the front of the line of those whom the company still owed coolers. Also in 2016, the price of the cooler on Amazon has temporarily dropped to $199. All of these events have led to Oregon Department of Justice looking into the company and reaching an investigation settlement with Coolest Cooler in 2017.

 

Managerial applications of the study by Catalini and Tucker

The study by Catalini and Tucker shows that principles that smart companies use to launch their products apply perfectly to the world of blockchain and to be successful with blockchain, organizations need to figure out how to use the same principles that Disney, Hollywood and companies like Apple use when they introduce new products.

The introduction of Gmail has been a success in part because Google relied on a waitlist, identified early adopters and was making the product available to them first. Initially, Google allowed only a few thousand people to sign up for Gmail. These several thousand people had invite functionality built into their accounts and could invite their friends to try the platform, which is how Gmail subscriber base grew originally. This social nature of the process of getting an account and the status of an early account holder has led to people willing to pay over $100 for an early invite to get a Gmail account.

This is the same process that Hollywood and Apple have been using for a long time.

With Hollywood movies, there are typically reports and leaked photos from the scenes of the movie when the movie is being shot by a studio. Then, there is a short trailer six months to a year before the release of the movie. Then, are there TV ads. Finally, actors go on morning and night TV show giving interviews a few weeks before the movie hits the screens. Today, there are also social media campaigns, Reddit Ask Me Anything events with actors and screenplay writers, and all kinds of other events.

These campaigns always create a lot of buzz and hit multiple demographics in a short period of time. By coming to morning, daytime and nighttime shows actors cover all the demographics: those who watch TV in the morning, those who watch TV in the daytime and those who watch TV at night after work.