Back in late March of 2020, Silo CEO Tal Lapidot had a decision to make. The dark clouds of a global pandemic had gathered overhead, threatening to derail his company’s progress on finishing a product he’d been working years to deliver.
The product, called the Silo food storage system, was a new take on a stale category where most everyone used the same plastic containers their parents had used before them. The Silo featured lots of cool bells and whistles, including a built-in scale, Alexa integration, and spoilage notifications. The big idea, though, was a vacuum seal system that promised to extend shelf-life of food by up two to three times.
It turned out that lots of people liked the idea of a better food storage system and the company was flying high when it ran a successful Kickstarter campaign in 2018 that raised over $1.4 million. I was one of them, becoming backer #2531 after I plunked down $219 for the ‘enhanced basic’ reward package that included the Silo base and four containers. The promised ship date was April 2019, but after having backed a few hardware projects before this one, I knew ship dates were less hard promises than loose guidelines.
Lapidot and his team had been regularly posting updates on the progress of the company on Kickstarter, and the backers were, for the most part, both understanding and encouraging. With COVID-19 infections spreading and a whole lot of uncertainty about the virus, Lapidot felt he had no choice but to send his workers home. He posted an update on Kickstarter letting everyone know about the situation:
We hope this update finds you well, and you and your loved ones are staying safe. Since our last update, the world has changed in terrible ways. Unfortunately, this has significant implications for all businesses, including ours.
Silo recently had to pause all operations as the whole team is under stay-at-home orders, which, unfortunately, also caused the delay in sending this update. As a hardware startup, we have tried at first working from home, but this has proven to be highly inefficient as we cannot make actual progress without our team having access to our office lab and equipment.
Mothballing the project meant bringing his team back from China, where the company had been working with a contract manufacturer preparing to build the product. They’d already invested in the tooling for the product manufacturing run, one of the most expensive parts of building a hardware product.
“The idea was, once COVID subsided a bit, we would restore the operations, ” Lapidot told me in a phone interview. “But as you know, that took longer than expected.”
A couple of years longer than expected. While a big part of it was due to an inability to work on the product both in their office in Israel and on-site in China, an even bigger issue was the company soon ran out of funding. Although they’d managed to raise an impressive amount of money with their Kickstarter, the cost of engineering a product and manufacturing systems for over 5 thousand backers would cost much more than $1.4 million. Lapidot had expected this and managed to find investors for the company, but once COVID hit, one of them got cold feet.
“When COVID erupted globally, I got a phone call saying ‘hey, listen, we’re not going to transfer the funds’,” Lapidot said.
From there, with a furloughed team, stalled operations in China and a lack of funds to get things going, Silo entered a period of stasis as Lapidot just tried to keep the lights and preserve the company’s assets while he searched for new funding.
“The situation sort of stagnated, and we tried to figure out how we can get back on track.”
Two years on, things are finally starting to look up. The company has found a new investor to help fund the production run for the product, and now Lapidot is working to get the company back to where they were in the spring of 2020 when the world shut down. A big part of that is trying to reassemble a team and ramp up engineering and technical talent.
“We basically just send everyone home one day, and so there was no organized process of preserving the knowledge,” Lapidot said. “So we have everything, and now we’re trying to get to where we were.”
Other challenges include a lingering lack of critical components due to COVID-related supply chain disruptions. And then there are the continuing travel restrictions to China as the country tries to tamp down a new wave of COVID infections.
“We cannot travel to China because it’s 21 quarantine days just to enter, and it’s not very simple even to get that approval,” Lapidot said. “So it’s going to be a bit more challenging because we have to work more remotely instead of being there.”
According to Lapidot, the company has enough funding for an 18-month runway for the company, and his focus is on getting the first units of the product built. He has started building an engineering team and has reestablished ongoing contact with the manufacturers.
The biggest challenge, according to Lapidot, will be securing the critical components they need to build the final prototypes. They need those to finish debugging the system to prepare for manufacturing, after which they plan to send out factory-made units later this year.
In the meantime, Lapidot knows that the early goodwill he had among backers has evaporated as his updates have gone silent since last July as he has tried to figure out how to get the company back on its feet. Like many stalled Kickstarter projects, most of the messages from backers nowadays are less words of encouragement and more of the “what happened to my money?” variety.
Lapidot told me he plans to apologize to the backers and that he will be transparent about where things are in an upcoming update.
“I know people got hurt from the situation and I feel horrible. We didn’t want this situation. I’ve been a backer on the Kickstarter community for a while. Being in the doghouse after you have seen it from the other side, it’s not an easy experience.”
Michael,
I randomly came across this article while browsing my Kickstarter previous history and being saddened by my Silo backing. I was googling around and came across your article. I appreciate you reaching out to Tal and getting this interview.