What happened to iCache?
A year ago, Jon Ramaci and his company, iCache, seemed to be on the cusp of something big.
2007: Jon Ramaci founds iCache, the company that will make the Geode digital wallet.Late 2010: After a period of talks with Microsoft, iCache partners with Apple.March 2012: iCache launches the Geode Kickstarter project, sparking both orders and an excited discussion between backers and Ramaci.April 2012: iCache raises more than seven times its Kickstarter goal of $50,000, attracting $352,918 in pledges from 1,784 backers. That’s in addition to significant money Ramaci and investors had already put into the project. May: First production batch made in Kentucky. Kickstarter backers are already asking when their Geodes will ship.June: Ramaci officially launches the Geode at iCache-sponsored San Francisco-area music festival BFD. Kickstarter backers’ anxiety and questions intensify. Ramaci tells them a manufacturing glitch — “a slight imperfection with the molds for the liners” — has delayed deliveries.July: Geodes start shipping, through Amazon, and Kickstarter backers begin receiving them. The immediate reaction is mixed, with complaints ranging from the universal card to the iPhone app. iCache responds with fixes, again with mixed results. Meanwhile, iCache sues Massachusetts consultants it alleges fraudulently steered iCache toward a manufacturer from which it would receive a kickback.August: Some backers report successful use of their Geodes, but many continue to struggle with a variety of glitches and complain about the company’s response. Former iCache president Jonathan Cool sues iCache and Ramaci for allegedly not paying him salary and stock owed. The company posts its last update for Kickstarter backers on Aug. 29.September: Apple announces iPhone 5. Ramaci acknowledges the need for a new Geode and steps down as CEO to lead that effort. Geode customers are offered the option to switch to the iPhone 5 version, while iPhone 4 Geodes and new Geocards are still being sent.October: The talk on the Kickstarter comment board is now about obtaining refunds or unloading shipped Geodes. Massachusetts consultants James DiBurro Jr. and Round Rock Consulting sue iCache and Ramaci in federal court for breach of contract and fraud among other counts.November: Ramaci and several of his fellow executives leave the company.December: iCache is cited as an example of a Kickstarter project gone awry in The Boston Globe.January 2013: Customer complaints continue. Facebook group “Robbed by iCache” set up. iCache’s lawyer in the Massachusetts consultant case withdraws, and shortly thereafter iCache’s new lawyer signifies he won’t pursue the litigation. Status of that dispute is unclear.February: iCache customer support section of website no longer works. U.S. District Judge in South Carolina awards Jonathan Cool $1.23 million, 1.2 million shares of iCache stock and his legal costs in a default judgment against iCache.March: Entire iCache website down. Future of company unclear.
Ramaci, a Citadel graduate, had conceived the idea of the Geode digital wallet back in 2007, and after a series of tweaks to the design and business plan, it was about to come to market.
To gauge demand and raise money, Charleston-based iCache had campaigned on the crowd-source funding website Kickstarter, offering the Geode for $159. The response was tremendous: 1,784 people pledged a total of $352,918.
Production began shortly thereafter, and Ramaci officially launched the mobile payment device in early June at the BFD music festival in San Francisco.
Rock on, right?
Not quite. Instead, the music was already starting to stop.
There were manufacturing problems, leading to delays in delivery and stirring anxiety among Kickstarter backers. Even after the Geodes began shipping, some of the programmable magnetic-stripe cards, which were supposed to become anything from a credit card to a gift card, didn’t work quite right.
Then came the lawsuits, one involving a former iCache consultant and the other a former employee.
And then in September, Apple Inc., with whom iCache had been partnering, released the iPhone 5, which was longer and thinner than the iPhone 4, had a new kind of connection port and featured Passbook, an app that did some of the card storage the Geode offered.
By November, Ramaci and many of his top deputies had left the company. The customer complaints continued, growing ever sharper in tone.
The customer support page on the company website stopped working, the board of directors and advisers shrunk to one person each, and earlier this month, the website disappeared altogether, leaving questions, disappointment and resentment in its wake.
How did a project so long in the works, one that appeared so promising to hordes of techie consumers and one that won awards and glowing media coverage last spring, go south so fast?
The whole story may never come to light, but it includes a devastating combination of technical difficulties and the introduction of the iPhone 5 just as iCache was struggling to stabilize its iPhone 4 version.
It’s also a story that shows while many Charleston tech companies have achieved public success recently, not all have.
While the current chairman of iCache did not respond to requests for an interview, Ramaci did. And even though he said he is bound by nondisclosure agreements, he shed some light on what happened, noting that “innovation and new product development is not always a very clean process.”
“Even our huge neighbor, Boeing, with resources well beyond the resources we had, can run into issues,” he said, referring to the planmaker’s 787 battery problems. “But that’s part of the process of how new things get developed.”
The Geode had been an especially long process for Ramaci.
After The Citadel, he worked for name-brand companies such as Duracell and Oracle before starting and then selling a database management company. After getting a master’s degree at the Massachusetts Institute of Technology, he moved back to Charleston and, in coordination with a team in Cambridge, Mass., started iCache.
Self-funded at first, iCache eventually took on other investors, who chipped in at least $4 million, according to a lawsuit filed by the company’s former president. Over the years, the team, based in Cambridge, Charleston and Dubai, took the Geode from a standalone device to an iPhone “appcessory.”
What resulted was an enhanced case that plugged into the iPhone and featured the universal card and an e-ink barcode, accessible only after running a fingertip over a biometric reader. An app tied the hardware together with the phone.
People were impressed. The Kickstarter response was overwhelmingly positive. A TechCrunch blogger called the Geode “truly awesome.” The device twice took first place at the former Cellular Telephone Industry Association’s E-Tech Awards. Ramaci said the Geode would be available in 30 days.
“Life is Good,” he said in a statement at the time.
It wouldn’t last.
As production proceeded through May, Kickstarter backers already were getting anxious about deliveries.
“Kinda stinks they are already for sale on Amazon and no update on shipping for the backers,” a backer named Barrett Roberts wrote in the project’s comments section on June 1.
On June 13, Ramaci replied.
“We are working very hard to get you a quality product by the end of June,” he wrote. The delay was because of “a slight imperfection with the molds for the liners so I had them scrapped & redone as I want to ship a really great product to all of you.”
On July 16, Ramaci announced the Geodes had started shipping. But then came a new wave of complaints about defective cards and other problems. Ramaci acknowledged the issues and promised a fix.
Last week, Ramaci said the glitch was traced to the lamination, which somehow short-circuited the Geode’s battery. Faced with that “unforeseen technical issue,” iCache sent out new Geocards while Ramaci wrote thank-you notes to backers, offering iTunes gift cards to soften the blow.
“We tried to do the best we could by the backers that we had on Kickstarter,” he said.
But the issues continued. According to the Kickstarter comments section, the replacements didn’t work either in many cases. The positive press from the spring turned into negative reviews in the tech press.
The last official update from iCache on Kickstarter came in late August, at which point many backers still were unsatisfied. And then came the new iPhone.
While iCache had a partnership with Apple, it received no official warning. Ramaci had heard the rumors of a longer, thinner shape and a new connector, and he had begun thinking about a new Geode model. And he said he wasn’t concerned with Apple’s Passbook, an app that did some of the card storage the Geode did, but not all.
Ramaci said the iCache board decided he should step down as CEO to focus on the iPhone 5 Geode. Erik Ross, iCache’s chief strategy officer, became the new CEO, Ramaci said.
At the time, Ramaci said iCache had 15 employees, with nine in its new offices on eWall Street in Mount Pleasant. Ramaci went to work collaborating with, among others, a design university in Europe.
Time to go
By November, Ramaci, Ross and several other members of the team Ramaci had assembled were gone.
Time to go
Ramaci denied he was fired and declined to say whether there was a funding crunch or disagreement with investors. He just said that after six years it was time.
“I felt my deliverable was to get the product to the next phase, and we had accomplished quite a great deal in a short amount of time and a very short budget as far as development of the card and the product itself,” he said.
After Ramaci left, there was speculation on Kickstarter and elsewhere that he had disappeared with the Kickstarter kitty. Ramaci dismissed that as “hogwash.”
“I was in Milan working on version 2 of the design, but somehow that got twisted into I had left the country and was leading this ‘Jason Bourne’ kind of life,” he said.
One Canadian backer’s complaint to law enforcement led a Mount Pleasant police detective to visit iCache’s offices. The landlord told the officer “he suspected problems with the business because they hadn’t been seen for some time,” according to the police report.
Ramaci claims as many as 90 percent of the Kickstarter backers got their Geodes, and that the remaining 10 percent were people who opted for the iPhone 5 version. He doesn’t know what the status of that device is but expects it to come out at some point.
“Last I knew, it was continually being perfected,” he said.
What has happened with the company since is a mystery. The company no longer has an office on eWall Street, a recent visit confirmed.
Chairman Richard Scott did not respond to requests for an interview placed through Ramaci and a former member of the company’s board of advisers, Arthur “Artie” Pingolt Jr., who declined to comment on iCache.
While some people have been able to get refunds from Amazon, many Kickstarters seem to still be out of money (Kickstarter does not refund the projects it hosts on its platform, leaving that between the entrepreneurs and their backers.).
They have continued to comment last week, and one backer started a Facebook page, “Robbed by iCache.”
Meanwhile, in federal courts in South Carolina and Massachusetts, the litigation involving the iCache consultant and former president appears to have reached a stopping point. The company’s website has shrunk in functionality until this month, when it went down completely. Last week, Ramaci said he didn’t realize that had happened.
He said he still lives on the Isle of Palms with his wife and children and still holds a “significant” share of iCache but is no longer involved in the business. He describes himself as a self-employed “New Product Innovation & Business Development Executive” on career networking site LinkedIn and says he’s got a new business idea in the works.
As for the Geode, he maintains it’s a “great product” and hopes iCache can keep it going.
“As I said, I’m an investor myself, and I’ve put a lot of time and a lot of sweat equity in it,” he said. “So I’m certainly rooting for the company.”
Reach Brendan Kearney at 937-5906 and follow him on Twitter at @kearney_ brendan.