We’re about to see if BomBoard is finally ready to rev its engine, or if it will sputter.
After spending several years developing a smaller, cheaper, and modular version of the traditional jet ski, the Whitewater, WI-based startup launched a crowdfunding campaign for the product today. And there’s a lot riding on it.
The Indiegogo campaign gives BomBoard a chance to prove its theory that urban young professionals (and water sports lovers in general) will be willing to fork over a few thousand bucks for a jet ski that breaks down into pieces that can be stored in an apartment and fit in the trunk of a car, but is still, BomBoard says, powerful enough out on the water to scratch their thrill-seeking itch.
If BomBoard picks up enough pre-orders, it could help convince would-be investors to get off the sidelines, says Anders Stubkjaer, the company’s chief operating and chief financial officer.
“We think that the publicity from this, and the success of showing how many people were willing to buy this well ahead of being able to get delivery, would prove to investors that there’s not really a market risk,” Stubkjaer says.
BomBoard raised about $1.3 million in seed money, and has closed on another $635,000 in its ongoing Series A round—well short of that round’s $2.3 million goal, Stubkjaer says. All of the money is from individual investors, primarily friends and boating enthusiasts.
Fundraising efforts have stalled in part because investors are more interested in backing software than capital-intensive hardware products, Midwest investors are generally more conservative than those on the coasts, and “anytime you’re pre-revenue, it’s always tough,” Stubkjaer says.
The crowdfunding campaign could bring BomBoard some early revenue. It set a base goal of raising $100,000, although Stubkjaer says he’s hoping to hit $2 million. The first 100 buyers will pay $2,495, a $1,500 discount on the expected retail price.
If BomBoard raises a lot of money through Indiegogo, it wouldn’t need as much from private investors. Crowdfunding success could also enable BomBoard to dictate better terms in private investment deals, Stubkjaer says.
BomBoard is targeting delivery to crowdfunding backers in late 2016 or early 2017, Stubkjaer says.
That’s a long time to wait, but that’s not unusual for small, early-stage companies manufacturing physical products. Still, as we’ve seen play out in other hardware crowdfunding campaigns, BomBoard will want to follow through on promises or risk incurring backers’ wrath. Stubkjaer is fully aware of this.
“Obviously, it would be nice to deliver earlier, but one thing we’re not going to do is ship before we know we have a good, quality product,” he says. Otherwise, the company could “get a black eye” that would be hard to recover from.
BomBoard is already behind schedule, and its story illustrates how hardware product development requires plenty of time, patience, and willingness to adjust when early ideas don’t pan out.
When I interviewed Stubkjaer and BomBoard founder John West in spring 2014, they were planning to start selling their personal watercraft in the first quarter of 2015. But after putting the prototype through additional tests last year, they decided the 250cc engine “just was not as powerful as we hoped for,” Stubkjaer says.
They swapped the engine for a 450cc version, which boosted the BomBoard’s top speed from 40 miles per hour to 45, the company says. The changes also increased the weight of the craft’s middle section—the heaviest of the four pieces—from 80 to 90 pounds. (The fully assembled machine now weighs 165 pounds, the company says.)
“It was an OK tradeoff, we felt, to really get the jumps and extra speed,” Stubkjaer says of the heavier, more powerful engine. “At some point in time, we would love to have a more efficient or a lighter-weight engine that could produce the same horsepower, but they just don’t exist out there.”
Other modifications included tweaking the shape of the BomBoard to simplify turns, using a more efficient pump, and switching to an electronic fuel injection system, which should reduce the risk of gas spilling inside the engine compartment, Stubkjaer says. The company also added optional features, such as attachable wheels, that make it easier to transport between one’s motor vehicle and the water.
BomBoard has three full-time employees, plus some part-time help and consultants. The team was able to make those changes to the product in a relatively short period of time, but it still meant a delay in the company’s original plans, Stubkjaer says. “With limited funds, we couldn’t just go out and hire a bunch of professionals to do it for us,” he adds. “So, we ended up doing a lot of it ourselves.”
The company still has several to-do items before it starts shipping its watercraft to consumers, including finalizing the manufacturing process, gathering more feedback from trial users, and ensuring the machines pass EPA emissions tests, Stubkjaer says.