The $20 cardboard bike is getting a lot costlier

And the developers' crowd-sourcing strategy isn't going over so well with donors who are now told they're really not needed.

By Jason Notte Jul 5, 2013 6:52AM
Video still of Cardboard Technologies cardboard bicycle (Cardboard Technologies via YouTube, $20 cardboard bike has hit a few obstacles on its slow ride to reality, and we don't mean torrential downpours or ne'er-do-well kids armed with box cutters.

When Israeli inventor Izhar Gafni (pictured) announced his plans for a bike made completely of recycled cardboard and car tires, he made a few really bold claims. He vowed the tires would never puncture. He insisted the frame's folded and glued cardboard could hold a 275-pound passenger. He claimed a mystery resin applied to the bike's exterior renders it not only waterproof but fireproof.

More important, according to Fortune, he claimed the $9 to $12 cost of materials for each bike would allow the bikes to sell for $20 apiece. That would make them affordable enough to "help kids in under-developed countries get to school and help their parents get to work," according to the project's IndieGogo fundraising website.

Unfortunately for Gafni, that promised $20 price tag has made the bike's path to the marketplace a lot rougher than he or his donors realized.

For reasons the cardboard bike's backers at Cardboard Technologies are struggling to clarify, the bike first hit Indiegogo with a price tag of $290, or roughly 14 times the promised sale price. By Monday, a week after the campaign set its $2 million fundraising goal, only 24 bikes had been purchased and $24,000 raised. By Tuesday, the price had dropped to $95, plus a $40 shipping charge, and original donors were offered a choice of a refund or two more bikes.

Cardboard Technologies chief executive Nimrod Elmish says the higher price for donors in Western cities will ensure extremely low prices for buyers in impoverished countries, much like the now-defunct Give One, Get One campaign used by the One Laptop Per Child initiative that required a $400 donation for what were initially billed as $100 laptops.

"We want to bring a social business model that will make (the cardboard bike) available to all," he added. "We don't have a price tag, we have a value tag."

Although lowering the price a bit had goosed donations by about $4,000 by noon on Wednesday, Elmish's declaration to Fortune that the company basically didn't need crowd funding to begin with hasn't helped. While it's great that Cardboard Technologies has investors including former Timberland CEO Jeff Swartz lined up to help mass-produce the bikes, even crowd-sourced donors don't like feeling like they're being used as social show ponies.

"We wanted to give people the chance to join us and be part of" the project, Elmish told Fortune.

If the online donations are just a token gesture, then what's the incentive to wait around for the bikes' delivery in March 2015? Why help the founders hit their $2 million goal when they apparently already have it in the bank?

Even socially conscious donors need to feel like they're actively contributing. Otherwise, they're just angry consumers like the folks who donated money for the computerized Pebble watch, only to seethe each time it was delayed.

More on moneyNOW

Jul 5, 2013 10:25AM
Westerners will pay more to help impoverished countries? Isn't this what my tax dollars already do with millions in aid going to corrupt politicians in these countries? 9 - 12$ in costs to build and only selling for 20$, that should have been a red flag, not enough markup for any manufacturer to be successful and cover operating costs. There is more markup on a t shirt. Sounds like someone wants to get rich using the image of helping others with others money.

Jul 5, 2013 10:27AM
Even if this bike works at a price tag of 290 dollars I can buy a regular el cheapo bike that is not made of cardboard
Jul 5, 2013 11:07AM
"social business model" is liberal code speak for "rob the rich, give to the poor...and take your cut"
Jul 5, 2013 10:21AM
So the whole thing was a public stunt?  The bike is $20 only if Westerners donate the other $80.
Jul 5, 2013 10:40AM
At $290, that's more than the cost of a conventional bike. I bought a Huffy Beach Cruiser for about $120.
Jul 5, 2013 10:43AM
Everybody look, its a "Social Business Model"! oooooooh! aaaaahhhhhh!

Jul 5, 2013 9:56AM
Think medical bills caused by this failed device would soar above total costs of the bike and production..

Jul 5, 2013 12:10PM
Jul 5, 2013 11:24AM
its good to think out side the cardboard box..
Jul 5, 2013 11:34AM
So they're screwing over investors in the west to help some filthy savages in 3rd world nations? I hope they go bankrupt.
Jul 5, 2013 11:56AM
It would be cheaper to just send reconditioned old bikes over to where they are needed.
It is so sad that greed stole this mans dream to help others. Since when should something that costs $12 need to sell for $290 or even $95 in order to be profitable ?  $25 should be enough to not only cover costs but to make a good profit. But if you let a "corporate group" get into the mix their greed is never satisfied.
Jul 5, 2013 1:25PM
that's the same reason we in the US have to pay a fortune for medication when it's extremely affordable in canada and mexico, we get screwed so the everyone else enjoys the benefits
Jul 5, 2013 1:42PM
You'd have to be pretty dumb to invest in this thing.  Anybody with half a brain should be able to look at this and see that it's going to cost a lot more than $20.

First off, you are going to need quite a few steel parts in this, including the front and rear wheel bearings, bottom bracket bearing, drive chain, front chain ring, rear sprocket, plus probably steel handlebars and headset bearings.  How are you going to integrate these steel components into a cardboard frame?  By the time you buy all of these components, you are already over $20.  You're not going to be making bearings out of cardboard!

A fool and his money are soon parted....
Jul 5, 2013 2:01PM
I can see 20.00 worth of steel parts in the picture.  Just another dumb idea like the 100.00 laptop that was going to let every starving African sit down and cruise the internet and see all the stuff everyone else has- 
Jul 5, 2013 3:01PM
Lance needs a new sponsor and this dude wears yellow shirts, it's a sign.
Jul 5, 2013 6:24PM

Cardboard Technologies chief executive is named Nimrod.  That tells me pretty much everything I need to know about this man, the company, and their 'social business model'.


Jul 5, 2013 4:31PM
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