It began with a comment over the weekend, when a Spoon reader told us that Mellow, the connected sous-vide appliance company, had started charging a monthly subscription. Companies charging a fee with their connected gadget is nothing new, but Mellow is now charging $5.99 to its existing owners in order for them to access formerly free features like pre-set cook programs.
But it turns out when you pulled on this thread, new fees were symptomatic of much bigger ongoing issues with Mellow.
In reporting about the new subscription fee, The Verge wrote (emphasis ours):
Late Monday evening, Mellow released a statement on Instagram explaining the justifications for its “premium” plan, citing financial hardships in the wake of the coronavirus pandemic and claiming that many potential investors and acquirers interested in the company walked away, and arguing that the servers responsible for the cooker’s smart features cost too much to operate.
The Mellow statement was via an Instagram story, so it disappeared after 24 hours, but The Verge grabbed a screenshot of the post, which described the cost of running the connected service, how the company lost money, how COVID impacted its ability to get investors or be acquired and basically how the subscription was the only way to keep itself going.
The Spoon spoke with a source that has an intimate business relationship with Mellow. This person told us that while people are angered over the new fee, it is the only way to keep the Mellow functioning at all. AWS bills continue to pile up and if they can’t be paid, instead of limited functionality, the Mellow device will be completely bricked.
According to our source, the problem lies in a third-party chip and the way the original Mellow was designed. This chip prevents the company from doing something like releasing the code as open source and letting the community build a workaround. Additionally our source said that there is just one person left at the company, so there aren’t any resources to even do such a technical project.
But this new fee is just part of a larger set of problems that have plagued Mellow. According to our source, the company previously raised $3 million in funding. Crunchbase doesn’t list a specific amount raised, and only lists three undisclosed Seed rounds from Springboard, Techstars, and Hard Gamma Ventures, and a convertible note from Highway1. All of that money is gone, according to our source.
As per the Instagram story, Mellow had been involved in a number of discussions with potential investors, but when COVID hit, all of those discussions evaporated.
We reported in May that Mellow launched an equity crowdfunding campaign to raise $1 million through the SeedInvest platform. The link to that campaign no longer works and Mellow is no longer listed as an offering on the SeedInvest platform. Our source told us that the campaign failed to reach its funding goal.
Mellow had been the beneficiary of crowdfunding its products before. The first generation Mellow ran a successful crowdfunding campaign in 2014, and in November of 2019, the company launched another Kickstarter campaign for the v2 Mellow Duo. The Mellow Duo cost between $149 and $299, depending on the model and when you backed. The Duo campaign was also a success and raised more than $211,000 from 892 backers with an initial ship date of October 2020.
But an update from the company on July 13 on the Duo Kickstarter campaign said that because of pandemic, that ship date has been pushed six months. Though given all the turmoil, who knows if it will make it that long.
Sadly, all of these troubles are nothing new for Mellow. It’s initial v1 product was delayed, it lost its original CEO (and just about everyone else, subsequently), and when the v1 product finally reached the market, a 1 out of 10 review from WIRED labeled the product as “too risky” and all but killed the Mellow before it had a chance to gain any traction. As we reported previously, as part of its equity crowdfunding disclosures, Mellow said that “Over 6,400 Mellow V1 units have been activated, with the average household using it to cook 1.7+ times per week.” Our source said that the number of active users is closer to 2,000.
This whole situation is another stark reminder of the downsides of crowdfunding hardware projects. Making hardware at scale is extremely difficult. It’s also another reminder of the inherent issues when buying a connected gadget. Those gadgets may offer a lot of convenience, but also run the risk of being bricked either by the whim of a company or by its downfall.