In 2014, the "Coolest Cooler" became the #1 Kickstarter project of all time. It raised $13,285,226 from 62,642 backers. It was the viral hit of the decade.
Five years later, the company shut down. Thousands of backers never received their product. The founder was sued by the Oregon Department of Justice.
How does a company with $13 million in cash fail to deliver a plastic box with a blender on it?
It wasn't a scam. It was a failure of Unit Economics Validation. They validated that people wanted it, but they failed to validate that they could build it for the price they charged.
The Viral Trap
The Coolest Cooler launched with a price tag of $185 (specifically $165 for early birds).
The pitch was incredible: A cooler with a built-in blender, Bluetooth speaker, USB charger, and bottle opener. It was the ultimate party machine.
Demand was massive. They aimed for $50,000 and hit $13,000,000.
The Problem: When they actually went to manufacture it, the cost of the blender motor, the waterproof electronics, the battery, and the shipping came out to much more than $185.
"Every time they sold a cooler, they lost money. And they sold 60,000 of them."
Validation has Two Steps
Most founders stop at Step 1.
- Demand Validation: Do people want this? (Yes, 60,000 people bought it).
- Margin Validation: Can I make this profitably? (No, they priced it too low).
The Coolest Cooler set their price based on a guess. They looked at other coolers (Yeti, Coleman) and picked a number that "felt right." They didn't lock down their Bill of Materials (BOM) or manufacturing contracts before taking the money.
The Downward Spiral
When they realized they were losing money on every unit, they were trapped. They had already spent the $13M on tooling, R&D, and overhead.
They tried a desperate move: They started selling the cooler on Amazon for $399 (the actual sustainable price) to generate cash to ship the $185 units to Kickstarter backers.
The backers were furious. "Why can strangers buy it on Amazon while I've been waiting 2 years?" The brand reputation collapsed. Lawsuits followed. The company died.
How to Avoid the "Coolest" Fate
If you are launching a physical product, you cannot just validate demand. You must execute a Price Sensitivity Test before you commit to a price.
If the Coolest Cooler had run a Validatr experiment, they could have tested two landing pages:
- Page A: $185 Price Point
- Page B: $299 Price Point
If Page B still converted well, they would have known they could charge $299 safely. That extra $114 per unit would have saved the company.
If Page B didn't convert, they would have known that the business model was broken before taking $13M in liability.
The Lesson: "Too Good To Be True" Pricing
As a founder, you are often afraid to charge high prices. You want to give people a deal.
But a low price is a death sentence if your margins are thin.
Validation protects you from your own optimism.
Don't guess your price. Don't guess your costs. Run a test. Find out the maximum amount the market is willing to pay, and build your business model around that number.
Validate your price before you launch.
Run an A/B test on price points today. It might save your company.
Run Price Test
