Canonical and the failure of the Ubuntu Edge

Well, that magic moment has come, and gone. Canonical’s audacious drive to source $32 million for the purposes of creating a breakthrough handset that provided a unique and functional smartphone as well as a desktop experience is over. The goal was not met unfortunately, and by all accounts so far, that is it for the project.

The Ubuntu Edge was going to be a full-fledged computer that fit in your pocket. The idea behind the hardware was going to be disruptive, top-shelf power, gobs of storage and RAM. Such hardware, if made, would be a huge boon for the Ubuntu operating system as well.

I have been reading a lot of conjecture in the comments of the fundraising campaign that Canonical set this up for failure solely to give exposure to itself and Ubuntu, free media exposure and advertising. To me that just seems to be a coping mechanism, rationalization, “Oh, it was never going to reach that goal. They just wanted to find out how many people would spread the word.” While it is not beyond businesses, politicians or individuals to go to such lengths to earn some mindshare, I reject the claims that Canonical had any ulterior motives.

The Proof of Concept was Ready, Canonical was not

First, Canonical has proof of concept already working on this platform and what the Ubuntu Edge would do. Second, the company has amassed strong carrier interest in Ubuntu Touch, easily surpassing Firefox OS (which has remained largely out of the spotlight lately). Third, Canonical has been an earnest evangelist, spreading the word about Ubuntu, Ubuntu Touch and its vision for a converged user experience. There are many more reasons, but those three sum it up. Indeed, Canonical wanted the Ubuntu Edge, it just did not think this part through quite well enough.

For all the good things that many developers and geeks might have to say about open sourced platforms like Ubuntu, when things like that are free, it becomes an awful challenge to ask for money. Canonical makes its money by selling technical support and other services related to the Ubuntu operating system used by companies and consumers.

Off with a Bang

The beginning of the campaign was a blockbuster, no two-ways about it. In less than 72 hours, more than $6 million had been raised. Then, funding growth pretty much flat-lined, rather it turned into a creep of incremental growth. Less than a week into the campaign, the campaign would fall behind and never recover.

A few of you might ask how such an exciting idea could fail, but anyone that has been paying attention to the campaign knows why. The trouble is that Canonical took two weeks to figure it out. The answers are simple: price, quantity, choice, Canonical and us.

First Hindrance

First point was the restriction of accepting payments solely through PayPal. Yes, Indiegogo passes on extra fees for credit card processing, but there are a great number of people that do not or cannot use PayPal. Some may only have it tied to a checking account and did not have the disposable cash to make their pledge. If someone wanted to put the money on a credit card, it would have been an acceptable option, and Canonical could have negotiated the fee rate with Indiegogo in the process given the huge commission that the site would have gathered from the campaign (more than $1 million).  At the beginning of the campaign there were also a number of reported problems of just getting a payment processed through PayPal.  Such a bottleneck can sour the milk quickly.

Scarcity was not Incremental Enough

Next, issue was the pricing scheme of $20, $600, $830, $10,000 or $80,000. That is not an effective use of the “scarcity tactic” to address costs in the face of increased demand. The math worked out for reaching the goal, but it did not account for what was still being viewed as a consumer form factor, a smartphone. To its credit, Canonical introduced a 2 for $1,400 ($700 each) and a host of other perks, but that was after the first few days, and like most stores, once a customer walks out without buying, they are buying somewhere else.

Momentum slowed again as those new perks were exhausted and another week would pass before some additional lower cost perks were added, like a T-shirt. Again though, the luster of the campaign was already fading. Then, with less than two weeks on the clock, a flat $695 perk for the device was added. Sadly, just like the other perks, once a customer leaves…

Personal Finances and Economics

Another factor that directly relates to the price points is personal finance. The overwhelming majority of this project was to be funded through individual contributors. Most people are generous, and pledging money to support a cause is not a new concept by any stretch in developed economies. However, such causes are funded through much smaller dollar value donations. In any median household, a $700-$800 purchase is a major consideration, and it is even more difficult to justify when you will not have anything to show for your spent dollars over the better part of a year. That is a critical factor when you consider that the overall economies in several major markets are still reeling from the economic meltdown a few years ago.

Quantity Should have been Secondary

The desired quantity of Ubuntu Edge devices, 40,000 overall, puzzled me a bit too. Why 40,000? I understand the confines of cost versus quantity, but why not 50,000, or even 100,000? The economies of scale can work in your favor with increased quantity, and the Ubuntu Edge would be just as special if it were 1 of 40,000 or 1 of 100,000 or even 1,000,000.

If Canonical was serious about not making money on the project, then economies of scale must be taken into account for those that were interested but did not have $700 laying around the house or the small business that did not have $7,000 on hand to plan this project for their business (both very real scenarios).

Us

Then there is the most important variable, us, the source of crowd funding. The campaign ended with a little over 27,000 people giving something to the campaign, of which, about 7,500 or so threw in $20, $30 or $50. Because the tiers (perks) were changing several times throughout the campaign, it is difficult to get a firm number of handsets that would have been on order, but it was definitely somewhere south of 20,000, a far cry from the goal Canonical had in mind.

The strange lack of support had little to do with the enthusiasm of those that actually backed the Ubuntu Edge, but try as we might, the message of the Ubuntu Edge did not resonate. We can only hope that the publicity and demonstrated proof of concept work for Ubuntu Touch will translate to manufacturer enthusiasm sometime in 2014. With the right partners, we will see solid hardware come to market “for the masses.” It will not be anything like the Ubuntu Edge could have been though.

Canonical’s to Lose

Finally there was Canonical. No one can say this was a completely thought through initiative. Don’t get me wrong, Canonical is on the right track with Ubuntu Touch overall, but a campaign of this magnitude had way too many twists and turns for it to succeed. A question that was asked during the “Ask Me Anything” on Reddit, I asked if Canonical was leveraging its existing relationships with its clients to support the Ubuntu Edge. The question was not answered, but the answer should have been “yes.” Given the obvious lack of enterprise support, it does not appear the Canonical sales team was tasked with any goals in that regard.

As the campaign drew to a close, comments from backers ranged from the hopeful to the ultra-critical to those that had relegated themselves to basic trolling and those offering a thanks and congratulations for amassing more than $12 million in backers as the minutes ticked away. The promise of what the Ubuntu Edge might have been is not lost on anyone despite the failure. As far as this being a cheap attempt at publicity, it is far too elaborate a scheme to pass as such. No, Canonical had a great idea with a less than ideal execution. All things considered, Ubuntu Touch got great exposure, the idea of a crowd sourced cutting edge device excited a lot of people, but all the variables just did not come together in the right way. All other things taken out of consideration however, for a platform that is used by “millions” of people around the world, this campaign was Canonical’s to lose.