Throughout the wait, Coin has been very cool, providing "VIP only" password protected updates, truly making you feel like a special customer. The updates, though a little light on details, were honest, insightful, and good. Then, as summer began and there was no word on dates, it started to feel a little uncertain, but hey, we'll see, right?
A little over a week ago, a news update! Great news: iOS users would get access to the app by the end of August; Android, by end of September. As an Android user, this is pretty depressing, as this was the first hint that there was some sort of advantage for iOS users; not the way you want to find out. They told us to stay tuned for details about when our Coin would ship, somehow vaguely associating it with the app release dates.
Then came last week's update, and oooh, boy, was it a doozy. The Coin...well, not quite finished. But hey, if you want to get in on the beta, you can! It works "85%" of the time and does not have the Bluetooth feature they featured so prominently in their site that alerts you if the card is too far away from your phone. Want in on that? They'll apply your $99 to it, and you'll have the ability to get a finished Coin for a small discount. Oh, and only 10,000 can get in on the beta. Oh, and the order of who gets "allowed" in the beta? Based on when you download the app. Not into the Beta, and rather wait of the finished Coin? Sure, no problem; sometime next "Spring."
The reaction, as you can guess, was universally "those bastards." Images of horrible crowdfunding scams leapt to mind, with sleazy founders spending their customer's money on exotic cars and shopping trips. It was a stunning turnaround for a product and company that had, mere weeks before, been a darling of the Internet. Except the narrative here was not the same:
- This was not a crowdfunding campaign. You placed your order on Coin's website, not Kickstarter, Indiegogo, or anywhere else.
- Customers' didn't "back" the Coin, they were asked to preorder it. You weren't joining a cause and taking a risk; you were conducting an e-commerce transaction, like you do every day online.
This is the way to address issues, and re-establish trust. Look at what they did here:
- They addressed this, fast, before it got too far out of control.
- They apologized, a tone that was missing from their previous two updates. That matters to people who feel they have been wronged. No Ferguson-like excuses; just copping to it.
- They acknowledged that they had not been transparent.
- They acknowledged that the clarity of their updates was inexcusable (making it seem, for instance, that beta participation would be determined by when you installed the app, rather than when you placed the order).
- They didn't try to put the onus on the customer: you want to be in the beta, great! That should not cost you a final working product. And after this, it won't.
- They increased the number available.
- They made it clear that those unhappy could cancel, an option that was not there before.
In short, a textbook way to handle such. That's not to say that this was all perfect:
- They addressed the customer as a "Backer." That's just wrong. Coin opted to go direct to sell this, not crowdfund; by calling customers "backers," they are either conveniently forgetting that, or trying to plant that idea in the customers' heads so that they will be more tolerant of issues in the future, as they would be if it were a crowdfunded campaign. It's not. They'd be advised to remember that: every credit card company will helpfully allow you dispute a charge for a preorder, if you try to cancel and the merchant refuses.
- They indicate that orders are considered part of a crowdfunding campaign; they aren't. Look, you chose this route, and you were damn successful at it; trying to rewrite history. Even today, they still are doing it:
The Coin team should be commended for the way they are recovering from a series of missteps. And truthfully, they are on a race against the clock: the card industry is pushing for a switch to the more secure "chip and pin" method that Europe uses, instead of the magnetic stripe method Coin is aiming to streamline. Already, the #2 retailer, Target, has announced it will make the switch, after their large card breach. With such economies of scale, the costs will come down, and expect to see it in a growing number of retailers quickly. With that pressure, Coin cannot afford too many errors like this.
There's still a lot Coin should be doing. What's the details of the "secure" method they have for selecting the right card on your Coin? How long will the battery last, and what's the method to replace it? What are the list, so far, of retailers it can be used with? How about the specific ones it can't? What cards are not replaceable by the Coin? The list goes on, but we should not lose sight of the fact that they have successfully turned from hype to hurt, and back to trust with good listening, savvy communication, and humility. Think of GM and their attempts to cover up the ignition switch disaster (which I am also a consumer of), and imagine they took a page from Coin and addressed it fast with humility: we'd be praising them as the "reinvented" GM, and a model of an old-school company learning from the new school.
Coin, keep it up. Remember the importance of radical transparency, and you will be rewarded by customers, as well as investors.