Manufacturing Company Becomes a Design Firm, Rips Off Designers?

August 23, 2012 7:07 PM

Boingboing has the short version of a sad story in which some young independent designers have an unexpectedly successful Kickstarter for a novel idea for a pen. Young designers turn to Joiga, an American-Chinese manufacturing firm that "minimizes the risk of turning an idea into a market-ready product." Joiga underdelivers, causing massive delays for the designers. One year later, a new "men's gift" company offers a bad copy of the designers' pen made with the same plans at the same factories. The sad and sorry punchline? The manufacturing company and the men's gift company are run by the same guy, Allen Arseneau. Long version at Notcot.
posted by cloudscratcher (51 comments total)

I should add, Torr Pens (the "men's gift company") went to the trouble of obscuring their provenance. It was discovered with a whois lookup on the domain.
posted by cloudscratcher at 7:09 PM on August 23, 2012

cloudscratcher: ""minimizes the risk of turning an idea into a market-ready product.""

Wouldn't you want to maximize the risk of your idea turning into an actual product?
posted by Joakim Ziegler at 7:15 PM on August 23, 2012 [10 favorites]

Did someone... hack their site?
posted by Apocryphon at 7:17 PM on August 23, 2012 [3 favorites]

incoming search terms!
posted by boo_radley at 7:17 PM on August 23, 2012 [1 favorite]

Also, 150 dollars for a steel cylinder and a box to put it in?
posted by Joakim Ziegler at 7:19 PM on August 23, 2012

The Internet Hate Machine is just warming up. This guy had better get a dog and some curtains.
posted by Sticherbeast at 7:20 PM on August 23, 2012 [7 favorites]

It looks like the counterstrike has landed.
posted by Salvor Hardin at 7:21 PM on August 23, 2012

Hey, they're better off than Fellowes Inc., and their paper shredders. They lost $100 million.
posted by benito.strauss at 7:21 PM on August 23, 2012 [9 favorites]

Hm...

Exactly how much effort would someone in the "product design" category of Kickstarter have to put in before putting their item up to avoid scenarios like this? I feel that lawyering up would be difficult for most people putting up a kickstarter.

I hope that CW&T come out of this alright.

(Also: it's totally worth the $50 I paid for it. $150? Not sure. Would pay $75 for a US-made one, though!)
posted by raihan_ at 7:23 PM on August 23, 2012

The sad thing is, this guy could go to some Chinese business to apply for a job, and if he were to link to this story in his resume, they'd hire him before he set his briefcase down.
posted by Bathtub Bobsled at 7:24 PM on August 23, 2012 [1 favorite]

When I say "this guy", I mean mr. arse-hole
posted by Bathtub Bobsled at 7:26 PM on August 23, 2012

offers a bad copy of the designers' pen

It's not a bad copy, it's not even a copy, it's the same thing. This is a common problem when outsourcing manufacturing to China - the factory owner makes more products than were ordered, then sells them on the side. It's often how that manufacturer managed to afford to be the lowest bidder.

These designers should have manufactured the pen locally anyway - it's a very simple bit of machining, and they could have afforded it given the premium price. They kept their Kickstarter backers waiting for months while they tried to squeeze extra margin by making it in China.
posted by w0mbat at 7:28 PM on August 23, 2012 [39 favorites]

By the way, the Torr pen has a better-designed point, smooth conical steel instead of several cylinders of different sizes. I'm still not paying that kind of money for a pen that doesn't even come with ink, though.
posted by Joakim Ziegler at 7:29 PM on August 23, 2012

To me, this kind of intellectual property law seems a hundred times more interesting and relevant than music and movies. I'm an e-cig user, and my go-to company for gear, Smokeless Image, is designing a set of new cig-sized and eGo-sized clearomizers (nicotine juice tanks with atomizers, for the uninitiated) and absolutely refuses to spill any details until they have them manufactured (here in the US, I believe) and in stock, because they know they'd get burned by some of the Chinese manufacturers who can reverse-engineer the design or a close approximation from the details provided and have them manufactured and out the door before Smokeless Image has a chance to get their own in stock. It's fascinating to me in this "taste of things to come as 3D printer designs evolve" way. Some hints about a design on the internet legitimately run the risk of getting a factory and a whole marketing, selling and shipping apparatus running thousands of miles away to beat you to market.
posted by jason_steakums at 7:30 PM on August 23, 2012 [3 favorites]

I will be devastated if cheap knockoffs of Sylvester Stallone's pen begin to circulate.
posted by nicebookrack at 7:34 PM on August 23, 2012 [1 favorite]

It's not a bad copy, it's not even a copy, it's the same thing. This is a common problem when outsourcing manufacturing to China - the factory owner makes more products than were ordered, then sells them on the side. It's often how that manufacturer managed to afford to be the lowest bidder.

This happened to someone I know. Invented something, worked out a deal to have it manufactured in China, and saw it for sale on the internet with another label on it before the order even reached him. He lost ten or twenty thousand dollars all told; the factory made money from him and from their side deals.
posted by Forktine at 7:42 PM on August 23, 2012 [3 favorites]

I just went to the link above for 'new "men's gift" company', and a Javascript popup said "this guy is a douche".

The peasants have found their pitchforks and torches, I fear.
posted by fatbird at 7:42 PM on August 23, 2012 [11 favorites]

w0mbat --

This is a common problem when outsourcing manufacturing to China

well, Allen Arseneau is Boston-born, Stanford MBA who was supposed to be protecting them from such problems. It turned out the American was the problem all along.

These designers should have manufactured the pen locally anyway - it's a very simple bit of machining, and they could have afforded it given the premium price. They kept their Kickstarter backers waiting for months while they tried to squeeze extra margin by making it in China.

They're manufacturing in Vermont now, at considerable expense. What they started long before this Torr Pens mess.

And I take your point on the delays, but maybe we have to consider kickstarter for what it was originally intended to be -- a way to help grand projects get done -- rather than what it's become -- ordering stuff we like that hasn't been made yet. In this latter capacity, it falls short of conventional expectations around price and time.
posted by cloudscratcher at 7:44 PM on August 23, 2012 [8 favorites]

Yeah, I think we need to do more of that.
posted by Bathtub Bobsled at 7:44 PM on August 23, 2012

And if you are going to Kickstarter to get stuff made that hasn't been made yet, maybe find out if the guys and gals on the other side of the laptop screen know anything about managing a supply chain.
posted by notyou at 7:48 PM on August 23, 2012

The best advice I've ever received about entrepreneurship: cash flow is more important than your mother. The second-best piece of advice: find a reliable lawyer before you sign any contract with anyone about anything. The failure to heed either or both of these pieces of advice is one of the fundamental problems with a lot of failed startups (of any kind, not just Silicon Valley-related).
posted by dfriedman at 8:02 PM on August 23, 2012 [5 favorites]

Wow, it's like they dug the images in that article out of a ROM dump or something.

Yeah, I haven't seen Floyd Steinberg error-diffusion dithering for a long time.
posted by w0mbat at 8:03 PM on August 23, 2012 [2 favorites]

The second-best piece of advice: find a reliable lawyer before you sign any contract with anyone about anything.

I would actually love to see a "competent contract lawyer willing to represent us pro bono" level at the top of the donation tier on some Kickstarters.
posted by jason_steakums at 8:05 PM on August 23, 2012 [7 favorites]

Exactly how much effort would someone in the "product design" category of Kickstarter have to put in before putting their item up to avoid scenarios like this?

The problem is that the kickstarter campaign got more backers than they were able to make pens for, which is why they felt the need to look into outsourcing.

I think the solution is to limit the rewards. They needed orders for 50 pens before it made sense to produce these. Then they should have limited it to 500 pens. Kickstarter lets you do this. But instead they got stuck making 5000 pens. It's gratifying to hear that so many people are so excited about your product, but I'm sure they knew they couldn't make 5000 of these things by hand.

After you've shipped 10x as many pens as you planned on making, then you have an idea of what shipping another 10x as many will entail, and you can start taking orders for those. But now you've demonstrated that the market's there, and you've got the capabilities and follow-through to satisfy it, and you should just get a loan and start a regular business instead of doing it on kickstarter.
posted by aubilenon at 8:05 PM on August 23, 2012 [9 favorites]

I almost backed that project. I love pens and I love kickstarter, but I found my pen of choice and I like to fund the little guy. Once these guys hit a hundred thousand I knew I wasn't buying. Also, I couldn't get myself to pay more than $25 for a pen I knew I would lose.
posted by cjorgensen at 8:09 PM on August 23, 2012

Okay, I just ordered some cheap plastic Hi-Tec-C pens to see what all the fuss is about. Even if I love writing with them I hardly ever use pens. I'm a sucker for awesome things though.
posted by aubilenon at 8:16 PM on August 23, 2012 [2 favorites]

Back when I worked for a machine shop, we made a product for a local company out of brass that was silver-soldered together. We had to raise the price because of the price of brass, silver and all the handfitting to make it. Me and the owner designed a new one made out of stainless steel that we could make with a computer-controlled punch press (here's a pic of the actual thing). When I visited the shop a couple years ago, my former boss said that suddenly, orders for these stopped coming in. Later he learned that they had sent one to china to be copied. But what really pissed him off was that they never even tried to negotiate for a better price.
posted by 445supermag at 8:23 PM on August 23, 2012 [2 favorites]

It's greed. Sure, that is blaming the victim, but ya know, as pointed out, they could have limited orders. You dance with devil....
posted by Bovine Love at 8:35 PM on August 23, 2012

Incidentally, it appears that the site outputs search terms that people used to find the site. These are probably extracted from the referrer field, which is sent by the browser. Someone modified their referrer field to send a value that, when decoded, turned into javascript that opened an alert box saying "this guy is a douche."

Moral of the story: Don't embed unfiltered, browser-submitted data in your webpage.

Also, don't be a douche.
posted by justkevin at 9:06 PM on August 23, 2012 [10 favorites]

It's greed. Sure, that is blaming the victim, but ya know, as pointed out, they could have limited orders. You dance with devil....

Well, as stated, I do think folks need to limit it, but I am taking a more charitable view. One of my hobby projects, a puzzle game, had more people who wanted to play in it than we could accommodate. It was extremely difficult to turn those people away, when they're so excited about the thing we were making, even when we didn't have any alternatives, sketchy or no. And it's pretty understandable that someone not experienced in this world wouldn't know which options are sketchy.

So I think that even acting 100% in good faith, even if they're solidly focused on their backers' interests, this could just be a case of them letting the rush of 4000 people worth of excitement overwhelming a sense of reality. So I think of this as the result of an understandable but unfortunate error, rather than comeuppance for a scoundrel.
posted by aubilenon at 9:23 PM on August 23, 2012

I am trying to put together a Kickstarter of the "order stuff you like that hasn't been made yet" variety-- in my case, reproduction vintage dresses-- and this has given me a lot to think about. I plan to do my manufacturing in the United States, though, so hopefully I can avoid some of these pitfalls.

...Man, as if I wasn't nervous enough about this project already.
posted by nonasuch at 9:35 PM on August 23, 2012 [1 favorite]

nonasuch: Don't worry! Most projects don't even get funded!

No but seriously, the more you can keep the project small, the better you'll be. Smaller projects get funded more, and if you do get funded, you're much more likely to have big delays if you get way overfunded.

So put a upper bound on it, keep the minimum funding level as low as you can bear, communicate a lot, and good luck!
posted by aubilenon at 9:38 PM on August 23, 2012

They kept their Kickstarter backers waiting for months while they tried to squeeze extra margin by making it in China.

Yep, pretty much this. They made outsourced the production of their bed, and now they can sleep in it.

You want to maintain ownership of your product and its associated designs, intellectual property, etc.? Maybe you should consider having it manufactured in a place that actually gives a shit about such things, instead of trying to squeeze an extra few cents of profit out of it by making it somewhere without environmental standards or labor laws worth discussing.

I really cheer the Chinese knockoff artists at this point, because they're ones doing the best job making the case for bringing manufacturing back to the US and Europe. Every "counterfeit" (generally not really counterfeit, but the real deal produced on the sly) product slightly increases the cost and risk of sending manufacturing and its associated jobs and technical expertise overseas. They're the best friends that domestic manufacturing has.
posted by Kadin2048 at 9:53 PM on August 23, 2012 [9 favorites]

The second-best piece of advice: find a reliable lawyer before you sign any contract with anyone about anything."

Lawyer ain't gonna amount to a hill of beans in China, unless you get a local one that can bribe judges like your competition - even that may not be enough if your competition is a Chinese-owned company.
posted by smoke at 10:44 PM on August 23, 2012 [1 favorite]

Kickstarter needs to lock this shit down before people get tired of getting burned.
posted by Blazecock Pileon at 11:19 PM on August 23, 2012 [1 favorite]

Blazecock Pileon: How do you think they should do that?
posted by aubilenon at 11:28 PM on August 23, 2012 [2 favorites]

I must have somehow missed the part in their video where CW&T offer a share of their profits to Pilot for the original, inspiring Hi-Tec-C that they so love. I guess they won't be able to now that someone has jacked their design.
posted by fredludd at 11:38 PM on August 23, 2012

Outsourcing to China is easier if you have something complex to make - get the Chinese to make the component parts but keep the key technology and assembly in-house.

You'll still get problems with people cutting into your spares market, but you have a lot more control over that if you sold the customer the original.
posted by YAMWAK at 11:46 PM on August 23, 2012 [2 favorites]

Derail:

As others pointed out, Floyd-Steinberg dithering is beautiful. I've just looked at the simplicity of the algorithm, and had flashbacks to rendering them out in The Art Department Pro on an Amiga 2000.

As you were!
posted by davemee at 12:27 AM on August 24, 2012

Further derail: the 1 Bit Camera app for iOS does Floyd-Steinberg dithering perfectly.

Separate detail: I imagine this is the plot for Expendables 3. Some Chinese factory is making knockoffs of Stallone's pen, so he gets his group of action stars to go to China and blow up the factory. Featuring Chow Yun-fat as the head bad guy.
posted by sleeping bear at 1:01 AM on August 24, 2012 [2 favorites]

Regarding the dithering-derail, I’m partial to Atkinson’s algorithm myself. It seems to offer a much nicer contrast in the dark areas, as you can see in this comparison. Here’s an implementation in Python showing how simple it is. I’m pretty sure the 1-bit Camera app does Atkinson rather than Floyd-Steinberg; I love it.

The TORR thing is a fiasco, but there’s something to be said for someone who can actually deliver a manufactured object in a sane amount of time. The design is at 21 years old anyway.
posted by migurski at 1:37 AM on August 24, 2012 [6 favorites]

I'm lacking a little sympathy here. The creators jerked around their backers and misrepresented the product and its delivery schedule. And it was an overpriced piece of hipster crap.

They then reneged on their implied commitment to manufacture in the good old US of A, and offshored to China - for even more profit.

The Chinese company (even if coordinated by a US national), did what they always do, and over-manufacture and sell the excess. They tool up for manufacture, the only way to force them to tool down is to actually go to China and personally destroy the tolling, withholding final payment until destruction is confirmed. Ask me how I know this ;-)

The creators had the option of taking out design rights protection, but didn't, otherwise they could stop imports and sales into countries where these rights were taken out.

There is nothing patentable here.

I can't see any foul here, just poor planning.

Considering the lack of respect they showed to their backers, I can't have much sympathy when their business partners also treat them with disrespect.
posted by jannw at 2:39 AM on August 24, 2012 [5 favorites]

migurski, what you say it is true,

but there’s something to be said for someone who can actually deliver a manufactured object in a sane amount of time.

but that's exactly what's so upsetting about it... cw&t started working with "JOIGA" almost a full year ago, with an eye on both ensuring quality manufacture and Joiga's "mission to improve the lives of their workers in China."

So here we are a year later and it's Joiga that was unable to deliver. But somehow TORR managed to deliver -- with the same guy (Allen Arseneau) overseeing the manufacture, using the same design files and the same factories.

And yes, the design was first thought up a long time ago, and that's a good point. But it's not just about how Torr saw the idea and thought it would be neat. It's about a Stanford MBA who spun up a factory to make someone else's pen, kept everyone waiting only to never deliver, and then poof! there they are, with his name on it, being sold by him.

It's not about China, and it's not so much about protecting IP. It's about a cunning act of fuckery.
posted by cloudscratcher at 3:25 AM on August 24, 2012 [6 favorites]

Didn’t they only start working with JOIGA after it became obvious that they couldn’t deliver on their Kickstarter promises themselves? This all seems a bit scorpion-and-frog to me, and just underscores the unbelievable naivety of many Kickstarter product pitches. Manufacturing and industrial design are hard to get right, with many subtle gotchas and pitfalls that require experience to foresee, even without factoring in the complexity of coordinating an international supplier. The communication skills needed for an attractive idea and a high-quality pitch video are completely orthogonal to the manufacturing experience needed to actually deliver. It would have been a major hassle but for $280K they could probably have done it right in Brooklyn. The charlatans at Best Made do their artisinal axes in Manhattan, surely these $100 artisinal metal tubes could be done similarly?

I’m sympathetic to CW&T in the same way I’m sympathetic to a pickpocketing victim: yes, it sucks and a crime was committed, but maybe don’t leave your shit out in the open next time?
posted by migurski at 4:20 AM on August 24, 2012

It seems to me that the knock-off is an improvement on the original. The kickstarter pen has a long, exposed tip. When it rolls off your desk (and it will, since it has nothing to stop it from rolling) it can land on the tip, bending it, ruining the cartridge and even worse for this design, prevent you from being able to pull out the old cart and insert a new one. But the knockoff has a conical tip to prevent the exposed shaft from being bent. Yeah the original design looks cool. But the exposed shaft is a design problem known to everyone who uses serious technical pens and pencils. I just lost my beloved 20 year old Rotring 0.35 mechanical pencil to this problem. It has a retractable tip so it is harder to accidentally bend when you're not using it. But I broke off the clip, so there was nothing to stop it from rolling off my desk. That's why you have a clip, not because you are going to carry it around in your pocket protector full of technical drawing instruments, but to keep it from rolling off your desk.

But there are other reasons why this design is probably the worst possible design.

1. Perfectly smooth stainless steel surface is slippery and impossible to grip
2. Metal container has sharp corners to cut through your pocket
4. Container keeps pen tip in contact with the end, so the tip will always be resting in a blob of ink that can't be accessed to clean out.
5. Perfectly round barrel will roll off your desk.

The original Hi-Tec C pen is vastly superior to this piece of crap Hipster Pen.
posted by charlie don't surf at 4:59 AM on August 24, 2012 [4 favorites]

Hrm. I tried my hand as a manufacturer last time I played Eve Online, and it was pretty satisfying. If I do so again, this will be in the back of my mind as I submit my blueprint for a production run... knowing that nothing bad will happen. It's maybe the first time I've ever thought that Eve Online needs to support more forms of fraud.
posted by Durn Bronzefist at 6:45 AM on August 24, 2012 [1 favorite]

The charlatans at Best Made do their artisinal axes in Manhattan, surely these $100 artisinal metal tubes could be done similarly?

Best Made axes are currently made by Council Tool in North Carolina. Formerly made by Snow & Nealley (website defunct) in Maine. They are probably painted and finished in New York City.
posted by helicomatic at 6:48 AM on August 24, 2012 [1 favorite]

How do you think they should do that?

I'm not certain, exactly, but this outcome seems sleazy to me. Some percentage of funds go into an escrow account, maybe, which get released as targets are delivered upon, or as the project gets overseen in some way by an independent third party, perhaps. Maybe some of this is already done. Otherwise, it seems like the spirit of the unspoken agreement between initiator and backer is easier to break, and that hurts Kickstarter and people's willingness to back future legitimate projects.
posted by Blazecock Pileon at 8:52 AM on August 24, 2012

I suspect that Kickstarter is very careful to avoid any situation in which they're seen as at all responsible (and thus, liable) for the outcome or operation of a project. As long as they're a facilitator of the relationship between funder and funded, I think they're in the clear. The minute they appear to accept any responsibility for the outcome of a project, they become the arbitration board for every dispute imaginable.

Next to that, having some pissed off contributors because a project went badly is small peanuts.
posted by fatbird at 12:41 PM on August 24, 2012

Blazecock Pileon writes "Some percentage of funds go into an escrow account, maybe, which get released as targets are delivered upon, or as the project gets overseen in some way by an independent third party, perhaps."

The former is exactly what kickerstarter is in theory supposed to overcome. If I need $10K to initiate a manufacturing run only releasing half the money isn't going to help much.
posted by Mitheral at 6:34 PM on August 24, 2012

Had a feeling they were headed for trouble. They went over to china to check out the manufacturing and there were like old codgers making these pens in their basement by hand. It is hard to believe they couldn't have just done it here.
posted by Ad hominem at 10:16 PM on August 24, 2012