Do you recall Flag? The app that wanted to take your photos and print them for free, funded by advertising on the reverse of the photo? If you do remember it, it’s likely that you were one of its Kickstarter backers. If you don’t, you’re forgiven. January 2014, when Flag launched its first Kickstarter campaign, was a while back. And it hasn’t exactly been delivering on its intended business model of ad-supported photos for free, and disrupting the photo-printing industry, since then, either.
So why am I writing about it, you might ask? The company hasn’t delivered anything and three Kickstarter campaigns and an unsuccessful Shark Tank pitch later it drifts on in a zombie-like state of unfulfilled promises, disgruntled backers, and belligerent entrepreneurs. Think of it as a cautionary tale.
The business model
The theory behind Flag, as it was initially pitched in its first Kickstarter campaign, was that users would download an app and from there select 20 images from their camera roll to be printed and mailed to them for free every month. The prints would be supported by ads, targeted using metadata garnered from the photos, printed on their reverse. The prints themselves were of superior quality to the majority of standard commercial prints and could be produced in any shape or size, as opposed to standard formats. If users didn’t want ads on the reverse they could pay a small fee instead.
Initially, users outside of the continental USA would have to pay postage for their prints; although it was intended to remove this as soon as possible. Alternatively, free international shipping could be bought with a higher Kickstarter pledge level.
The key players
Flag was founded by Samuel Agboola. On the first Kickstarter page, the Lead Developer was named as Alex Basalyga while Bernard Kahiga was in charge of Business Development. By the second Kickstarter, Alex Basalyga is named as the CTO, Savannah Cowley the CMO, and Will Aherne and Martin Roos also get mentions.
Samuel Agboola and Savannah Cowley remain involved in Flag at present, but the other characters’ involvement is less clear.
A brief history of Flag
I say this brief, but a three-year rollercoaster of (in)activity does need some exposition. I’ve tried to keep it as pertinent and succinct as possible. There’s also a slightly abridged timeline at the end of the article.
Flag launched its first Kickstarter campaign in January 2014. It aimed to raise $100,000 by offering alpha and beta iOS app access to its backers, with or without some advertisement space on prints, too. The campaign raised $169,000 and added the stretch goal of Android support. The expected delivery date was July 2014. July came and went and there was no Flag app, whether alpha, beta, iOS, or Android. The iOS alpha release happens in March 2016. No, not March 2015, March 2016. There is, however, a production issue and alpha level backers don’t begin to receive free prints until the end of May 2016. Some of those are delayed further, and when they do finally arrive, there are complaints of them looking washed-out.
The Flag beta was made available for download from Apple’s App Store in July 2016. So that’s only two years late, then. Anyone who wasn’t a Kickstarter backer could download the app, but they were placed on a waiting list.
Campaigns 2 and 3
By now, Flag has recognised that it desperately needs to bring its production in-house in order to reduce costs and speed up the process. In September 2016, Flag launched a second Kickstarter campaign with a goal of $500,000 in an attempt to facilitate the procurement of its printing plant. When it became obvious that the goal was unrealistic, Flag cancelled the campaign. It launched a third Kickstarter campaign with an adjusted goal of $10,000 a few days later. This campaign raised in excess of $330,000, but left quite a few of the original campaign’s backers confused and irritated. What had Flag done with their money? Why wasn’t there an Android app yet? How did campaign three’s rewards differ from the rewards they were expecting? And will it deliver what it says it will in March 2017?
The answer is, to anyone who’s been a part of the process or an observer, an unsurprised no.
In March 2017 Flag’s founder issues an update across both the first and third Kickstarter campaigns. In it, he explains that they have had difficulties attracting advertisers, that they have struggled to communicate effectively with their backers, and that the delays and set-backs–and subsequent complaints and accusations of fraud and malpractice from backers–have both demoralised the team and jeopardised relationships with advertisers and promoters. The crux of the 3,674 word update is this:
The first step is to formally cease print production until we’re ready to re-launch. Unfulfilled orders currently in the system will be credited back. We’re also going to set up a forum which you can participate in. It will have the tools the community deserves and help us sidestep the limitations of Kickstarter. We’ll be able to communicate better, and more often. The long delayed Android app will come online with the re-launch. No one’s missing out on anything while we’re not shipping prints, and there’s no point in launching it until we have the ads to support those users. It has not been forgotten but we don’t want to repeat our mistake, deliver early, disappoint, and dig ourselves a hole.
Meanwhile, Flag has closed down its Twitter, Facebook, and Instagram accounts, and despite being disappointed by its lack of media coverage hasn’t actually managed to respond to my questions emailed at the beginning of March. (I did receive an email offering a phone conversation, about a month later, but nothing in response to my suggested time and date.)
Finally, Flag appeared in episode 21, series 8 of Shark Tank on 14 April 2017. (Shark Tank is the US equivalent of Dragon’s Den for UK readers.) All five Sharks rejected Flag’s offer of 5% of the business in return for $375,000. The consensus was that the business model is unsustainable, that it cannot prove itself a feasible opportunity for advertisers, and that without any proprietary technology it is vulnerable to competitors.
There have been no further updates since then. The Flag team appear to remain determined to bring their business to fruition. Whether they will succeed or not I cannot say. I’ve never believed that Flag presents a viable business model, but I’m willing to be proved wrong. Regardless, I believe that there’s a great deal to be learned from the Flag fiasco.
So Flag’s raised how much?
The combined total of Kickstarter funds amounts to $501,136. According to the Shark Tank episode, Flag has raised a total of $1.6million. Whether or not this includes the $150,000 in advertising revenue mentioned by Cowley isn’t clear.
And what does it have to show for it?
Well, some backers have received prints. And there is an iOS app. But there’s no production facility. And there’s no Android app. There are also some laid-off staff mentioned in the 29 March backer update. The website it back up and running. But until the re-launch, there’ll be no more prints sent out to users.
What are backers saying?
Before the Shank Tank episode aired, backers were broadly divided into two camps: those who felt that Flag was at best ill-conceived and mis-managed and at worst a scam; and those who felt that the Flag team was bold and brave and trying something new and exciting and deserved support and praise, not ridicule or relentless criticism. There were also those who felt that Flag was on to something, but that the team’s communication with its backers was poor. And, as might be expected, there was a great deal more discontent among first campaign backers than those from the second campaign.
Following the Shark Tank episode, the mood among backers does seem to have shifted more towards disappointment or even anger. Plenty are demanding refunds. One or two are even mooting pursuing this through legal channels. I spoke with one backer who was philosophical about things, but clearly disappointed. As he said: ‘In the end, I know it’s Kickstarter – and that means sometimes things don’t work out. You have to accept that you’re potentially just throwing money away.’
What is Flag saying?
Right now? Not much. No one has come forward to say anything to the Kickstarter backers since the Shark Tank episode aired. But in the Shark Tank exit interview Agboola insisted that he wasn’t given a fair hearing and that Flag is a genuinely disruptive prospect. From the beginning, Flag’s creators have been reluctant to say too much for fear of either revealing something vital to their competitors or deterring potential advertisers or investors. Following the very long 29 March update detailing Flag’s plan to retreat and regroup, I expect that the team will remain quiet for some time. It’s worth noting that Flag has eschewed all social media for the while: ‘Social media is both vastly overrated and a commitment that needs to be kept. We can’t at present keep that commitment and don’t want to clutter your feeds with thoughtless crap.’
What can backers learn from this?
Before pledging money to a Kickstarter campaign, you need to ask yourself what you’re hoping to gain from it. If it’s the warm-fuzzies from knowing that you’ve helped some students to stage a play and your name goes in the programme, go ahead and toss your $25 into the pot. But if you’re expecting a material reward remember that Kickstarter isn’t a store. It’s a platform to help entrepreneurs raise funds and your reward is just that: a reward for helping them to achieve their vision. Yes, Kickstarter does expect successfully funded projects to deliver on their promises but the truth is, it might not happen. It’s always a risk. Always. So never pledge more than you can afford to lose.
That’s fairly obvious advice, and it’s been said hundreds of times before now. Still, it bears repeating. And I also think that there’s something else to be learned from Flag. You need to turn around the situation in your head. You might be tempted by the offer of free prints supported by advertising, but how will advertisers respond to this proposition? Ask yourself what types of businesses might put up money to put their name on the back of your photos. And then question the impact that ad will have on you. Will you even look at it? If you look at it, how much influence might it have on your purchasing options? If you can’t see how an advertisement on the reverse of a photo is going to have an impact on you, you need to think about what return an advertiser would see on their advertisement and therefore if it would prove feasible for them. Without an advertiser’s spend, there won’t be any free photos.
I’d also advise performing due diligence on the project. Has the team behind it successfully managed any previous campaigns? What’s the team’s background? Does everything around them feel legitimate? Yes, some teams are going to manage a first, or even second successful project and fail on a subsequent one. Others are going to have no experience in business and still manage to pull off a project on time and on budget. But don’t ignore or dismiss what’s gone before.
What can Kickstarter creators learn from Flag?
While all the supporting evidence here is pertinent to Flag’s campaign, the principles are universal.
First, that hardware is hard. Yes, the Sharks were correct in their assertion that Flag is essentially an advertising business. However, Flag isn’t just an app; there’s a physical product at stake, too. Outsourcing the print production proved expensive and time-consuming. Bringing the printing process in-house is also expensive and time-consuming. You need to have a lot of cash behind you to make this sort of project a success.
Second, that you really need to be certain of your business model. Flag’s entire model was reliant on advertising. How were they going to secure advertisers? Is it a sustainable operation, given how reliance on advertising is working out for the media right now? And indeed, would Flag’s users respond positively to the adverts, thereby generating a return-on-investment for the advertisers and an incentive to continue their ad spend with Flag?
Printing photos has been around for over a hundred years. Is there a reason why none of the established print firms have adopted this strategy? Just because something hasn’t been done before doesn’t mean to say that it can’t or shouldn’t be attempted. But it does mean that might well be a precedent for not going there.
Furthermore, is Flag able to compete against established print firms? Plenty of those offer free prints as rewards for loyal customers. Others only demand postage payment. They might require a little outlay, but if customers are getting their prints on demand then will they be prepared to switch.
Third: walk before you can run. The offers of unrestricted print formats and fancy frames might’ve been appealing for some users (and quite a few found the unrestricted sizes a bit confusing or irritating), but the priority should have been to ship standard prints on time. If Flag managed to pull off sending 20 ad-supported 6 by 4 prints to each of its thousands of users every month then maybe the ability to buy panorama-sized prints would be a reasonable up-sell. Identify your minimum viable product and focus on shipping that, and shipping that to the highest possible standard.
Fourth: sort your communications strategy. Looking over the backer comments for Flag’s first and third Kickstarter campaigns, the recurring complaint is centred around poor communication. So many backers have stated that they feel as if they have been kept in the dark, some have complained of the Flag team being rude or aggressive, and others have simply wanted them to get on a complete their project. You are never going to please all of the people all of the time, but you do need to be honest and up-front. And you do need to settle on how you are going to maintain open channels of communication with your backers.
Fifth: under-promise and over-deliver. Always, always, always over-estimate how long it will take you to achieve anything, especially if you are developing your own technology or systems. Looking at Flag’s timelines, I’m not certain the team had any sense of how long it might take to put in place an effective printing process, especially given that it was their intention to purchase their own printing machinery to enable double-sided printing. Was Flag working on a best-case scenario, or a timeline with sufficient contingency factored into it?
Is there anything here to give Kickstarter pause for thought?
I contacted Kickstarter to enquire if the second and third Flag campaigns weren’t in contravention of its terms of service. Specifically, were the follow-up campaigns sufficiently different from the first one to justify their existence. Kickstarter’s response was as follows:
We do consider the status of past projects before approving new ones. In this case the rewards for the first project were partially fulfilled before the launch of the second. According to the creator’s updates, the first project was to help fund the creation of the iOS app, while the second was to help build a production facility.
From Kickstarter’s perspective, Flag conformed to its policies, but if backers performed their own due diligence, they might’ve felt differently about things. It’s your money; you decide where to put it. Does this mean that Kickstarter needs to tighten its procedures? I don’t think that you can demand it on one project that hasn’t delivered yet, or the handful that have been stellar failures. But if the platform continues to grow, it might be time to consider if particular types of projects require closer scrutiny.
I’m not sure that the Flag team went into this venture fully aware of how complex, demanding, and fraught with pitfalls it might be. Or, as one of the Sharks on Shark Tank said, that they were in the advertising business, not the photo printing business. I think that a lot of backers were drawn by the shiny attraction of ‘free stuff’ but hadn’t quite discerned how it would be funded in the medium and long runs. Do I think that Flag can resurrect their business? I’m really not convinced, but a lot of people have put a lot of energy and money into this and seeing things fail is unpleasant. My gut feeling is that the project is too far gone; too much money has been wasted on it and because of that, its founders are unwilling to let it go gracefully. I think that the damage has been done.
A less brief history of Flag
This is still an abridged version. I’m not going to offer a précis of every update issued by Flag; if I were to, I’d be here for almost as long it has taken for Flag to not deliver on its Kickstarter. But it does give a sense of how the campaigns have panned out.
28 January 2014: Flag launches is first Kickstarter campaign. It aims to raise $100,000 in order to deliver free prints to its backers, supported by targeted ads on their reverse.
11 February 2014: The campaign closes, having raised $169,000, with a prospective delivery date of July 2014 and the stretch goal of an Android app in addition to the iOS version.
11 July 2014: Flag acknowledges it won’t make its summer delivery deadline and promises an upgrade announcement on 21 July 2014 as compensation for the wait.
21 July 2014: No announcement.
9 August 2014: The upgrade announcement is made, promising free photo storage and backup with no monthly fees or storage limits.
8 September 2014: Flag announces its Alpha app (both iOS and Android versions) will be available for download around the end of January 2015.
17 February 2015: Flag announces that print lamination issues have delayed its Alpha launch.
6 August 2015: There’s still no Alpha release, but Flag reveals that it has won Visa’s The Everywhere Initiative.
3 October 2015: Good news? An Alpha release date is mooted for Quarter 1 2016, but there’s no exact date.
30 November 2015: Better news? A more specific Alpha release date of February 2016 is announced by Flag.
2 December 2015: Contrary to its initial plan, Flag won’t be releasing the iOS and Android Alpha versions simultaneously. Android support is planned to commence during the iOS Beta phase.
15 March 2016: Flag’s iOS Alpha version goes live via TestFlight.
18 April 2016: Alpha backers haven’t yet received their first batches of prints because of a curling issue.
26 May 2016: Alpha backers’ photos are finally ready for shipping!
31 May 2016: Alpha and Beta backers can download the Flag app from Apple’s App Store.
14 July 2016: A bug in the system means that some backers haven’t received the photos they’ve ordered, or they’ve received only some of them. Flag promises that all of the delayed prints will be shipped by the end of July. It also reassures Android users that it is working on the Android app.
9 August 2016: Flag confirms that all of the delayed prints have been dispatched.
18 August 2016: Whoops! Some of the prints look washed-out.
24 August 2016: Flag launches its second Kickstarter campaign. First campaign backers are, understandably, confused about what the second campaign offers in addition to, or that is superior to, the rewards for their pledges.
9 September 2016: Flag cancels its second Kickstarter campaign. It is uncertain that it can make the $500,000 goal and decides to adjust this and launch a third campaign.
15 September 2016: Flag launches its third Kickstarter campaign with a goal of $10,000 intended to bring print production in-house. Backers’ rewards are expected to be delivered in March 2017. The campaign smashes its target, raising over $330,000.
6 March 2017: I email Flag’s founder and communications officer, seeking clarification about the expiry of Flag’s website certificate, the deletion of its social media accounts, and the business’ position.
29 March 2017: Flag issues its first update to first campaign backers since 21 October 2016. It provides four updates to Kickstarter campaign three backers in the intervening period. The 29 March update is duplicated across campaigns one and three and is extensive.
3 April 2017: Flag’s founder responds to my email, stating that he would prefer to answer my questions on a telephone call as opposed to by email.
5 April 2017: I suggest that we speak on Friday 7 April 2017. I do not receive a response.
13 April 2017: Flag announces that it will appear on Shark Tank (that’s the US equivalent of Dragon’s Den, for UK readers) the following Friday.
14 April 2017: The Flag team’s $375,000 investment request is rejected by all the Sharks. The consensus is that Flag doesn’t have a sustainable business model. There’s no proprietary technology involved and investment from advertisers isn’t guaranteed.