
Another Crowdfunded Gadget Company Collapses - prostoalex
http://techcrunch.com/2015/11/07/another-1-million-crowdfunded-gadget-company-collapses/?ncid=rss&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+Techcrunch+%28TechCrunch%29
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gkoberger
Eh. It's not called Kickpurchase, it's called Kickfund. (Okay, this one was
actually on Indiegogo.)

You want something guaranteed to ship perfectly? That's what Amazon is for.
The point of Kickstarter and its ilk is that it _is_ a risk – that's why it
usually comes with lower prices and the ability to have it first.

When you buy on Kickstarter, you aren't preordering. You're crowdfunding
something that doesn't exist yet. On the Diffusion of Innovation chart, you
aren't an Early Adopter... you're an Innovator [1]. The creators put in time;
you're putting in money. As long as there's no fraud, I think failures like
this should be treated as an acceptable part of this new method of funding.

(That being said, two caveats: first is that failures like this might be
acceptable but they're still bad for Kickstarter+Indiegogo, and second is that
I'd be a lot less rational and forgiving if I had lost money on this)

[1]
[https://upload.wikimedia.org/wikipedia/en/4/45/DiffusionOfIn...](https://upload.wikimedia.org/wikipedia/en/4/45/DiffusionOfInnovation.png)

~~~
VLM
> When you buy on Kickstarter, you aren't preordering.

Its a really big elephant being felt by blind men. So... no.

One very specific example of a kickstarter that I participated in was a board
gaming project by DVG which is roughly their thousandth product shipped and
specifically was the 6th expansion to their warfighter game series. In that
line of business they have extreme front end expenses for printing and
shipping, and in exchange for what boils down to preordering, you get a
modest, fair discount.

Sure it as a product didn't exist other than in the minds of the producer and
the artist team, but the odds of them failing were approximately zero assuming
the economy doesn't implode or DVG himself get hit by a meteor. And there are
risks, they have had massive shipping delays. However as you'd expect
everything eventually showed up and looked as good as the last five expansions
and the base set.

No one in the traditional gaming community found this saga terribly
interesting or unusual... Given the lack of surprise, its highly likely that
in areas outside this and the area in the article, there are other fields of
endeavour that are running a boring pre-order operation.

Seriously, does anyone think anything can stop Jason Scott from directing tech
documentaries? It takes forever, but aside from getting hit by a truck, its as
sure as anything that "something" will be released sooner or later. I have
some money in for the 6502 documentary and I'm just not worried.

Interestingly Amazon offers preorders. I've already pre-ordered cstross's new
Laundry Files book which won't be released until mid next year. Nobody talks
about amazon pre-orders, but I've done it before with no problem and I've
never even heard rumors of a logistical fail. Perhaps the lack of failure
makes them too boring to discuss in public. What can you say about Amazon
preorders other than they work, which isn't good clickbait, compared to "many
or most kickstarter projects crash n burn" which gets the clicks.

~~~
sokoloff
For an Amazon pre-order, you risk nothing. You aren't charged until/unless it
ships and you get price-protection. Neither of those is true for the crowd-
funding world.

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funkysquid
I never see the articles about how investors need to be more careful, because
_some of the companies they 're investing in are failing_. That's sort of the
point of the platform - I give you money for something that currently does not
exist, and I get the chance to get that impossible thing if you're able to
make it exist. Stop telling me to "be more careful", and acting like I'd be
better served shopping at stores that don't fail to deliver. Stores don't sell
maybe-dragonfly-robots.

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compumike
Crowdfunded pre-order campaigns generally can't afford to cover any R&D work,
and it's a miracle if they even cover actual one-time manufacturing setup
costs plus the cost of the rewards -- let alone funding the engineering team
through all this time.

The incentives are almost backwards: the earliest pre-order customers have
come to expect the biggest discounts at a time when the per-unit costs are
highest and the up-front investment is yet to be done. If product survival is
really the goal, the price curve should probably go in the other direction:
from high to low over the product lifecycle.

Manufacturing hardware is really, really hard, even for teams with experience.
Super hard if your past experience was in shipping software, because you don't
realize how easy you've had it!

(Disclosure: after a successful Kickstarter campaign, we shipped
[https://www.pantelligent.com/](https://www.pantelligent.com/) to all our
backers and were only a few weeks late from our original delivery estimate.
Even for a team that's shipped HW and SW before, it was still very
challenging. Most importantly, our backers are telling us that the product
really delivers on the benefits of what we promised in the campaign -- and
apparently that's a rare and noteworthy occurrence!)

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hga
_This is just the latest example of how consumers need to be more careful with
crowdfunding._

You know, while I've only contributed to one such, and only because I thought
it ought to be done, I view these as _wagers_. If the project works out,
great! If not, my monetary loss is calculated to not grieve me.

------
Glyptodon
Meh. They definitely gave the appearance of having a working prototype with
the crowd-funding for a more refined model. If you look at 3:15 in their video
there's some footage of a prototype looking dragonfly actually flying. There
are also several photos of the same on the page.

Most backers assumed smoothing those prototypes out for production was a
reasonable endeavor. Unfortunately as the project's unfolded it became more
and more clear that the group of people running it didn't really have the
experience to deal with production even though they clearly had a product. I
think a combination of wanting the product to be significantly better than
their initial prototypes and a poor idea of how to deal with
Indiegogo/Paypal/Factories/Production kind of doomed things. Likewise, they
haven't been very smooth or fluent in terms of their communications with
backers.

All that said, as a backer, I'm mostly disappointed they didn't have someone
with more communications fluency and experience with manufacturing to run
things, as I think that alone would have enabled the product to be a success.
I'm not in a position where the money makes or breaks me and I tossed it away
several years ago. Pointless to get too emotional about a sunk cost unless it
comes out that there really has been some kind of gross
mismanagement/negligence and not just some random grad-student types getting
in way over their heads.

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fapjacks
I think criminals need to be prosecuted (e.g. the atrociously blatant Bleen
project: [https://www.indiegogo.com/projects/bleen-3d-without-
glasses#...](https://www.indiegogo.com/projects/bleen-3d-without-glasses#/)).
Nay, I think criminals need to have their hands cut off in town square.

But incompetence is a risk when you throw money into a Kickstarter/Indiegogo-
shaped hole that smells like interesting technology. If it's obsequious and
insidious incompetence, lump them in with the hand-less criminals. If they
gave it a good long try, had consistent updates, release project IP and open
source software, well... That's what we're here for. To try and get ideas off
the ground. You're going to lose money at some point in the process. I
regularly throw money into all kinds of electronics-shaped holes on
Kickstarter and Indiegogo. It happens when the stars don't align that I lose
my money. But if they aren't criminals about it, well, shit happens.

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derekja
_shrug_ this is kind of in the same category as glowing plant - didn't really
expect a usable end product but sounded like a cool longshot. I don't feel bad
about my "lost" hundred bucks. It's the projects that fritter away the money
that I feel bad about, but as long as a serious shot at it is taken it seems
like the platform is working as intended.

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steven2012
Stories like this are going to kill the crowdfunded gadget market, and it's
going to go the way of GroupOn as another mid-2010's Internet fad.

I would much rather pay 2x the price for a real product that has been shipped
to stores and has a review, as opposed to a pre-order Kickstarter campaign.
It's really interesting to me that based on a video, people are willing to
drop hundreds of dollars on gadgets simply on trust.

Kickstarter or Indiegogo need to take more responsibility for these campaigns,
otherwise they will find themselves dead in 5 years.

They need to:

1) Have the creators set the number of funders to a reasonable level. If you
know how to build 100 devices, you don't know how to build 100,000 devices,
it's an entirely skillset and price point.

2) Have the creators set an execution plan, where they need to his milestones
with firm dates before money is released. Once it has been determined it hit a
milestones, then the next round of funding gets sent to them. IF they miss a
milestone, funders get the option of refunding the rest of their money back.

~~~
robryan
I think 2 would result in worse outcomes. The people getting partial refunds
probably won't be happy. The people remaining will probably be disappointed as
well as a run on refunds will probably kill any chance there was of delivery.

~~~
steven2012
You're assuming that campaigns that can't hit their deadlines still result in
products that please their customers. I'm assuming that if the campaigns can't
hit their own deadlines that the end result will lead to disappointed end
users anyway, either in no product, or a really crappy product. Better for
them to give up and get their money back than lose everything.

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syllogism
I lost a bunch of money on this.

The thing that galls me is that they massively exceeded their funding target,
but still couldn't do anything.

What was their plan if they only hit their target?? They didn't have a product
--- they had to do all this development. So if they only took in like 100k of
the kickstarter, what were they going to do?

They totally misrepresented the status of the project. It's right and proper
that Paypal and Indiegogo didn't immediately release all the funds to them.
The project didn't say they needed those funds for development. Otherwise, how
could the funding target have been 100k?

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empressplay
$99 for a robotic dragonfly is / was definitely a punt -- what gets me are
people who price their campaign rewards effectively at the targeted retail
price of the product, then don't deliver. That's not a wager, because you
don't "win" if you get the product -- assuming it materialises, you could just
buy it then, for the same "price". You can only come out even or lose.

~~~
bitJericho
Kickstarter is not a casino. The TOS requires companies to deliver. Those that
don't open themselves to lawsuits. My recommendation to anybody who does a
kickstarter is to price it at the retail price or even more if you're talking
about limited or first run sales.

~~~
funkysquid
Yeah, but that's what Kickstarter decided to become at some point, they
weren't always that way. I'm hoping that other crowdfunding platforms don't go
this direction, and allow me to choose my risk without opening the creators up
to lawsuits (which feels like the most un-Kickstarter thing ever).

~~~
2muchcoffeeman
Why shouldn't they be open to legal action?

I went to a special screening of Iron Sky. Some of the production of that was
done in Australia. During the Q&A they were saying that due to Australian laws
they can't do something like Kickstarter in Australia. If they took money to
finance the film, the people giving the money would have been investors with
rights. Basically a legal and logistical nightmare.

This doesn't sound unreasonable.

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JabavuAdams
Did this thing ever fly? I was never really clear whether they had flown
untethered prototypes.

~~~
Glyptodon
It looks like they had a functioning prototype at the 3:15 mark of their pitch
video. (Obviously who knows - flight time might have been < 1 minute,
impossible to land, etc., but it does look like they had something that flew.)

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c3534l
As the adage goes: a fool and his money are soon parted.

