On Monday, the 22nd of January 2018 Navdy (www.navdy.com) sent an email to all customers, myself included, that basically states that they are going out of business. They have entered into “An Assignment for the Benefit of Creditors”. You can read the email they sent below:
As you may be aware, on October 26, 2017, Navdy, Inc. (“Navdy”) entered into an Assignment for the Benefit of Creditors (“Assignment”) and, as a result, Navdy is unfortunately no longer conducting business. An Assignment is a state level insolvency proceeding undertaken in accordance with state law, in this case California. The Assignment entity is a California limited liability company known as “Navdy (assignment for the benefit of creditors), LLC” (“Assignee”). The Assignee is a special purpose entity established to take title to Navdy’s assets, liquidate those assets for the most money possible, compile claims, and distribute proceeds, if any, to creditors according to their priority established in the California Code. You should note that with the exception of the relationship created by the Assignment, Navdy and the Assignee have no corporate affiliations to each other.
The Assignment process is funded by a limited budget that goes towards winding down Navdy’s business affairs, paying for certain services to keep Navdy’s units running properly, and running a sale process to find a buyer for Navdy’s assets. While this sale process is still ongoing, the limited budget cannot fully support the costs of Navdy’s recurring services indefinitely. Regrettably, the Assignment estate will not be able to continue to support current Navdy units much longer.
What this means for you as a Navdy customer is that sometime within the next couple of weeks, your Navdy unit may stop functioning properly. Features like turn-by-turn navigation and voice recognition could fail and it is possible that this may cause the device to fail completely.
The Assignee is continuing with its efforts to find a buyer for Navdy’s assets, and hopefully one who will continue to support current Navdy’s units, but loss of functionality of your Navdy unit is an unfortunate and very likely outcome given that there is likely not going to be an imminent sale to a buyer; the Assignment estate has limited funds; and there are no sources of immediate funds available to the Assignee to enable the Assignee to continue to pay critical vendors.
If you have a claim against Navdy, please click here to file a claim: Navdy POC Notice – eSubmission
This came as a huge surprise for me. I (and I think everyone else) thought Navdy was doing really well. They got rave reviews everywhere. You can read their reviews for example on TechCrunch and DigitalTrend.
Quick primer: What is Navdy?
Navdy made HUD (Heads Up Display) for cars. A picture says a thousand words, so a video definitely says more, check this video to know that their product is:
A bit of History on Navdy
They started preorders in 2014 on their website, where they got $1 million of preorders in the first week, went on to get a total of $2.4 million of preorders (including my own contribution in 2015). And secured several rounds of investment. Starting with a $6.5 million seed fund, then going on to raising a $20 million Series A round and went on to get almost $42 million in total funding, including from Harman International Industries and Qualcomm.
Everyone believed Navdy had a bright future ahead, but the startup statistics obviously still hold; 9 out of 10 startups fail, and unfortunately for Navdy, they weren’t amongst the 10% that succeed.
In my surprise (and disappointment that my own Navdy unit will soon stop functioning), I thought about why would Navdy with its futuristic and high quality product fail. Here is what I have in mind so far, in my humble opinion that is:
1. The price point was too high for the average buyer.
During the preorders, which is when I got mine, the price for a unit was $299 + shipping. Which was steep, but I supported them because I really liked what they were building. Cars + Augmented reality; That’s the dream.
And like me, many were interested, but if $299 was hard to shell. The after launch price of almost $800, which was later dropped to $499, was still high for most people. After all, the Navdy was marketed as “a way to modernize your old car”. So it was hard pressed to find many people who would buy a $500 accessory for their old car. I know for a fact that most people who saw my unit (which I got after 2 years of the preorder) was impressed. But none was impressed enough to shell out $500 for it.
2. They did not have the right Sales Model.
Much related to #1 above, I dont claim to be a business expert. And I’m sure Navdy had access to people more experienced and knowledgable than I am, but in my humble opinion, having the business model where customers made a huge one-time purchase and that is it, is not the best. Not only does this not create a recurrent revenue stream, and decreases the ROI (Return on Investment) on the customer acquisition. Because since you cannot make money off existing customers, those whom you have already paid to get to purchase, means you have to keep acquiring new customers. Which was not easy the first time. But also they have to keep paying to support you and give you updates.
There is a reason almost everyone is going to the subscription model nowadays => Recurrent income stream.
They did say they partnered with Harman and Renault to build OEM HUD, but apparently that didn’t come through for them.
3. They developed their own software instead of leveraging existing ones
A Navdy unit is not standalone, it had to be paired to an iOS or Android smartphone. So why not leverage that with Apple CarPlay or Android Auto instead of having a bespoke solution using Here maps? Yes that would mean some licensing fees, but it would also mean access to more apps making the device even more compelling, even for app developers. Developers are what makes or breaks a platform.
4. They didn’t release an SDK for 3rd Party apps
Building on #3, app developers make or break a platform. So if you dont have CarPlay or Android Auto, at least have an SDK for 3rd party apps. When you have a developer community, they will push you forward. Do you remember why Windows Mobile failed? They couldn’t build a platform lucrative enough for developers to support.
I am personally bummed about Navdy. Not only for the fact that my unit may stop working within the coming weeks, but also because I really believed in what they were doing. I hope somehow, they recover from this.