What are they even going to do with all that funding? It really doesn't seem like the product is very complicated or expensive. (no offense or anything)
I thought the same thing when I started my startup (we make physical stuff too). Then I started learning about injection molding, tooling, materials, minimum order quantities, packaging, etc.
It turns out that very simple things are very expensive to start with because of the low quantities. I thought an order for 30,000 was massive, but some companies we worked with flat out laughed in my face.
So even though he raised a million bones, he's "only" making < 13,000 watches. That'll still be pretty expensive for him.
It really depends on the manufacturer. Some don't want to deal with you unless you're in the 100s of thousands. We were very lucky to find a company that will make a quantity as low as 300, but there would be no reasonable price we could charge for the product without losing tons of money. A quantity of 3,000 would basically be a wash, and 30,000 would give us a decent margin.
Another point I forgot to mention above is assembly cost. I was surprised to learn that automating tasks isn't cost effective even when production is in the tens of thousands (depending on the task of course).
I assume he planned for a lower quantity initial run, so his margins are probably pretty high now. The "fixed" costs of initiating manufacturing are probably the biggest component.
My new theory is that kickstarter actually works best as a demand gauging/preorder tool for a completely finished product that is in the process of working out a mass manufacturing deal. These guys already knew exactly where/who to go to and took care of all the business side of things for manufacturing very very quickly. I'm pretty sure they could and would have manufactured some of those watches with or without kickstarter. The only real problem kickstarter solved for them was knowing how many to manufacture. The fact that other successful kickstarter projects such as Glif, Lockpick tools, and C-loop succeeded under similar conditions seems to somewhat back this theory up.
Only if you pledge less than $25, which is just supporting the project. Anything more is considered a pre-order, and gets you one of the watch variants. Of the 13510 backers, only 128 pledged in the <25$ bracket - so less than 1% are merely paying for the opportunity to pre-order, as you put it.
