Technology
19 Weird Crowdfunding Campaigns That Failed Spectacularly
Crowdfunding has been a game-changer for getting new products off the ground.
Platforms like Kickstarter or IndieGoGo have allowed aspiring entrepreneurs to get their ideas in front of millions, while generating invaluable amounts of buzz and publicity. Highly successful campaigns include products or proposals such as Ethereum, Oculus Rift, Pebble, or Star Citizen, which have combined to raise hundreds of millions of dollars in new capital.
However, because crowdfunding is open to everyone, not every campaign brings home the bacon. In reality, some campaigns are just plain strange or border on being nonsensical in nature.
Other ideas just bomb spectacularly. Either the concept has no product-market fit, or the prototype simply doesn’t do what it is supposed to do.
Weird Crowdfunding Fails
Today’s infographic comes from SSLs, highlighting 19 crowdfunding campaigns that were not destined to change the world in any meaningful capacity.
Note: These are all reward-based crowdfunding campaigns. Along the right-hand side of the infographic, it shows the platform used, amount raised, and the fundraising goal. Down the middle, it highlights the most ridiculous reward that was offered to backers, and how many people claimed the reward.
Where did some of these projects fall short? What can we learn from them?
Some projects such as the Induratus nuclear bunker were destined for failure because they were inherently selfish. The product could have been great, but if it doesn’t benefit the backers, it’s not going to take off. Sadly, the Induratus raised just $1, and as a result the project’s creator is now left very vulnerable to nuclear attacks.
The Triton, a set of artificial gills that could allow a user to breathe underwater, had the opposite problem. While the creators behind the project got the hundreds of thousands of dollars of funding they needed, the idea turned out to be scientifically impossible. In fact, the development of similar technology has eluded the world’s top scientists and military contractors for years. The group behind the product was forced to refund backers to the tune of $900,000.
Other projects were scientifically viable, while also solving a perceived market need. However, the problem with these products were that they did not serve a large enough market to make sense. The Sauceman’s Satchel is a good example of this.
While the creator loved the idea of a “convenient, carry-able, flyable, sauce transport” for camping and travel needs, the market overwhelmingly did not. That’s why it only raised about 40% of its funding goal from 105 backers. Now, the Sauceman Satchel is only serving sauce-lovers in product pitch heaven.
Technology
Nvidia Joins the Trillion Dollar Club
America’s biggest chipmaker Nvidia has joined the trillion dollar club as advancements in AI move at lightning speed.
Nvidia Joins the Trillion Dollar Club
Chipmaker Nvidia is now worth nearly as much as Amazon.
America’s largest semiconductor company has vaulted past the $1 trillion market capitalization mark, a milestone reached by just a handful of companies including Apple, Amazon, and Microsoft. While many of these are household names, Nvidia has only recently gained widespread attention amid the AI boom.
The above graphic compares Nvidia to the seven companies that have reached the trillion dollar club.
Riding the AI Wave
Nvidia’s market cap has more than doubled in 2023 to over $1 trillion.
The company designs semiconductor chips that are made of silicon slices that contain specific patterns. Just like you flip an electrical switch by turning on a light at home, these chips have billions of switches that process complex information simultaneously.
Today, they are integral to many AI functions—from OpenAI’s ChatGPT to image generation. Here’s how Nvidia stands up against companies that have achieved the trillion dollar milestone:
| Joined Club | Market Cap in trillions | Peak Market Cap in trillions |
|
|---|---|---|---|
| Apple | Aug 2018 | $2.78 | $2.94 |
| Microsoft | Apr 2019 | $2.47 | $2.58 |
| Aramco | Dec 2019 | $2.06 | $2.45 |
| Alphabet | Jul 2020 | $1.58 | $1.98 |
| Amazon | Apr 2020 | $1.25 | $1.88 |
| Meta | Jun 2021 | $0.68 | $1.07 |
| Tesla | Oct 2021 | $0.63 | $1.23 |
| Nvidia | May 2023 | $1.02 | $1.02 |
Note: Market caps as of May 30th, 2023
After posting record sales, the company added $184 billion to its market value in one day. Only two other companies have exceeded this number: Amazon ($191 billion), and Apple ($191 billion).
As Nvidia’s market cap reaches new heights, many are wondering if its explosive growth will continue—or if the AI craze is merely temporary. There are cases to be made on both sides.
Bull Case Scenario
Big tech companies are racing to develop capabilities like OpenAI. These types of generative AI require vastly higher amounts of computing power, especially as they become more sophisticated.
Many tech giants, including Google and Microsoft use Nvidia chips to power their AI operations. Consider how Google plans to use generative AI in six products in the future. Each of these have over 2 billion users.
Nvidia has also launched new products days since its stratospheric rise, spanning from robotics to gaming. Leading the way is the A100, a powerful graphics processing unit (GPU) well-suited for machine learning. Additionally, it announced a new supercomputer platform that Google, Microsoft, and Meta are first in line for. Overall, 65,000 companies globally use the company’s chips for a wide range of functions.
Bear Case Scenario
While extreme investor optimism has launched Nvidia to record highs, how do some of its fundamental valuations stack up to other giants?
As the table below shows, its price to earnings (P/E) ratio is second-only to Amazon, at 214.4. This shows how much a shareholder pays compared to the earnings of a company. Here, the company’s share price is over 200 times its earnings on a per share basis.
| P/E Ratio | Net Profit Margin (Annual) | |
|---|---|---|
| Apple | 30.2 | 25.3% |
| Microsoft | 36.1 | 36.7% |
| Aramco | 13.5 | 26.4% |
| Alphabet | 28.2 | 21.2% |
| Amazon | 294.2 | -0.5% |
| Meta | 33.9 | 19.9% |
| Tesla | 59.0 | 15.4% |
| Nvidia | 214.4 | 16.19% |
Consider how this looks for revenue of Nvidia compared to other big tech names:
$NVDA $963 billion market cap, 38x Revenue
$MSFT $2.5 trillion market cap, 12x Revenue$TSLA $612 billion market cap, 7.8x Revenue$AAPL $2.75 trillion market cap, 7.3x Revenue$GOOG $1.6 trillion market cap, 6.1x Revenue$META $672 billion market cap, 6x Revenue pic.twitter.com/VgkKAfiydx— Martin Pelletier (@MPelletierCIO) May 29, 2023
For some, Nvidia’s valuation seems unrealistic even in spite of the prospects of AI. While Nvidia has $11 billion in projected revenue for the next quarter, it would still mean significantly higher multiples than its big tech peers. This suggests the company is overvalued at current prices.
Nvidia’s Growth: Will it Last?
This is not the first time Nvidia’s market cap has rocketed up.
During the crypto rally of 2021, its share price skyrocketed over 100% as demand for its GPUs increased. These specialist chips help mine cryptocurrency, and a jump in demand led to a shortage of chips at the time.
As cryptocurrencies lost their lustre, Nvidia’s share price sank over 46% the following year.
By comparison, AI advancements could have more transformative power. Big tech is rushing to partner with Nvidia, potentially reshaping everything from search to advertising.
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