
Is Kickstarter covering up a scam? An open letter to CEO Yancey Strickler - nallerooth
http://joanielemercier.com/is_kickstarter_covering_up_a_scam/
======
ChrisGranger
I was surprised to learn that the familiar "Kickstarter Staff Pick" badge can
be used by any project and is sometimes an outright lie. That's ridiculously
deceptive.

~~~
Mithaldu
I don't understand how that isn't a huge trademark issue for kickstarter,
since american trademarks are on the base of "protect it or lose it".

Edit:

To make it clear, here are some quotes from
[http://www.inta.org/TrademarkBasics/FactSheets/Pages/LossofT...](http://www.inta.org/TrademarkBasics/FactSheets/Pages/LossofTrademarkRightsFactSheet.aspx)
:

"it is possible to lose rights in a mark by allowing third parties to use the
mark without controlling how it is used. This can include _failing to control
the nature and quality of the goods_ and/or services offered under the mark by
the third party."

"improper use by a _trademark owner_ or third parties also may result in the
loss of trademark rights. A trademark should _not_ be used in a manner that
_strips its significance as an indicator of the source_ of goods and/or
services."

(emphasis mine)

~~~
DanBC
You can only use it within the context of kickstarter projects. You can't use
it if your crowdfunded project is not on kickstarter.

~~~
ILIKEPONIES
I know someone who is currently running a Kickstarter and who is also a 'Staff
Pick.'

As far as I understand, some (not all) campaigns receive an email at some
point to congratulate them on being named a 'Staff Pick.' The email isn't 100%
clear as to what being named a SP means. KS actually discourages the campaigns
from putting up a badge, but many of the projects do anyway.

There is little to no policing. So, my guess is that some projects use the
badge regardless of whether or not they're a SP.

Personally, I think they should formalize the process and bop the heads of
those that are misrepresenting themselves.

------
aikah
For those who don't know Joanie Lemercier, he is a famous artist that have
been working with unusual displays,projections and hollograms for the last 15
years. I think he should be taken very seriously by anybody who is willing to
pay for Holus.

493 backers have paid 600$ in average for something they might not expect. If
you have a friend that backed that project, at least make him read the
article. If he still want to spend money on this so be it.

------
braythwayt
I think what we’re seeing here is that well-funded projects get a “most
favoured nation” pass to flout the already weak oversight that Kickstarter
exercises.

A true indie shop running a crowd-funding campaign has very little money to
buy marketing and PR, so they’re essentially consuming Kickstarter’s brand and
traffic.

Whereas, some of these new-breed well-heeled campaigns spend more money on
marketing than the campaign is designed to raise. These campaigns are not
consuming Kickstarter’s traffic and brand, they’re contributing to it.

And whatever we might think of using words like “hologram” for this magic
pixie-dust product, the odds are reasonable that _something_ will ship to the
backers, so Kickstarter’s reputation is less likely to be tarnished by a VC-
backed campaign than by a truly independent project where they don’t have the
budget to hire an experienced team.

So from Kickstarter’s perspective, well-funded “crowd-funding” campaigns that
are actually marketing stunts is very good business, and I predict they are
going to shift more and more of their emphasis this way, just as consumer-
facing companies often gradually shift to becoming enterprise-facing
companies.

As a prospective backer, this is far less attractive to me, so I am not
advocating for this shift. But I do believe it is happening, and I believe
that this explains why Kickstarter seem to have done little more than send an
email saying, “Hey, bro, cut out the CGI, this gadfly is turning into an
embarrassment for both of us. And good job, please bring us more campaigns, we
love doing business with you.”

p.s. I’m curious as hell about their pricing model. I wonder if VCs can
secretly negotiate lower fees than indies.

------
raesene4
I'd suggest that unfortunately the incentives for sites like
Kickstarter/Indiegogo/GoFundMe etc are to get as many projects successfully
funded as possible that that predicates against rigorous scrutiny of them and
exclusion of dubious projects.

There have now been quite a few examples of crowd-funded projects that just
haven't delivered and never will (Eyez was a good early example
[https://www.kickstarter.com/projects/zioneyez/eyeztm-by-
zion...](https://www.kickstarter.com/projects/zioneyez/eyeztm-by-zioneyez-hd-
video-recording-glasses-for) $343,000 taken in with nothing to show for it)

~~~
TeMPOraL
To be fair, Kickstarter et al. are not shops. We had this discussion many
times over the year, the point of crowdfunding was to invest in potentially
interesting ideas, and not to have a preordering venue. So the risk of a
project not delivering was always there, a part of the game. But when
Kickstarter was busy explaining people they're not a preorder store, startups
and VCs figured out that crowdfunding is an excellent marketing channel, so I
don't know if anyone is sure what the whole concept is supposed to be anymore.

EDIT: to commenters responding - fair enough. There's no equity so technically
it's not investing. Maybe "patronage" is a better word.

~~~
Lazare
> Kickstarter et al. are not shops. [...] the point of crowdfunding was to
> invest in potentially interesting ideas, and not to have a preordering venue

A purchase is when I give you money in exchange for a product. You're right,
this isn't exactly Kickstarter's business model. However, an investment is
when I give you money in exchange for an equity stake. This certainly isn't
Kickstarter's business model.

If you give a Kickstarter money, you might get a product; you won't get any
equity. Whatever that makes it, it's more a shop than it is an investment
platform.

~~~
toomuchtodo
> If you give a Kickstarter money, you might get a product; you won't get any
> equity. Whatever that makes it, it's more a shop than it is an investment
> platform.

Its a donation platform with _the possibility_ of receiving something for your
donation.

------
pbhjpbhj
The device proper appears to have some major flaws -
[https://vimeo.com/133052667](https://vimeo.com/133052667).

It is deceptive at 3m in that video the co-founder says "we try to bring this
holographic experience to families" \- weasel words for sure. The word
experience is there in anticipation of a future claim of fraud. He continues
saying "most of the holographic displays and similar device, products, are
focussed on [...]".

At 4:02 you can see that the system uses 4 separate images projected and is
not 3D holography. In views on an angle you can see the image doesn't wrap (eg
2:51).

Flaws to my mind include the massive opaque bezel and the poor viewing
position - all viewers need to be the same height. In the other use videos you
can see people craning to sit at the same height as the device - seems adults
and children or different height people of any age would struggle to use this
together. Also you can't view from above.

------
jobigoud
I'm still very confused about the staff pick badge… Is there anyone here that
ran a campaign that could confirm?

There are numerous articles dedicated to maximize one's chances to be a staff
pick, and numerous advantages like being in the newsletter, promoted on their
social network accounts, etc.

That would mean that there really is a staff pick category with hand-picked
projects, but that the badge itself can be added by any campaign. Is this
really true? I need more evidence, it doesn't seem reasonable.

edit: found some more info about it from a campaigner
[http://stonemaiergames.com/kickstarter-lesson-140-the-
kickst...](http://stonemaiergames.com/kickstarter-lesson-140-the-kickstarter-
staff-pick/). It does seem that being a staff pick means that _one_ staff
member flagged the project, and the badge icon usage is largely unrelated.

~~~
braythwayt
What we know to be the case is this:

Kickstarter does feature some campaigns as its staff picks, Kickstarter does
notify campaigns when Kickstarter selects them as a staff pick, but
Kickstarter will not admit that this particular project is abusing the staff
pick appellation, and Kickstarter is refusing to say anything that could be
interpreted as agreeing that this campaign engaged in unethical behaviour.

My personal conclusion is this:

This project gets a free pass. There is no evidence that any arbitrary project
can give itself the badge and not get censured by Kickstarter.

------
melling
This story had 7 points and was #3 on HN 7 minutes ago, then it dropped 20
spots. Are people flagging it?

Anyway, the Kickstarter project looks impressive. There's an entire company
built around it? If it's a fraud, it ends at 8am EST.

~~~
MichaelGG
It'd look that way, but perhaps Kickstarter incurs a penalty automatically? Or
maybe it's the crappy headline which sounds clickbaity. Maybe the author
should have used something solid, like "Kickstarter is promoting scam company
with fake holograph".

The video they have looks like it could have cost a fair bit of coin itself.
And they claim to have a CFO, CTO, and CEO, already? Their "Our Story" page
[1] says they've been around a couple years and have 20 people. So a $250K
campaign gets them what, another 6 weeks' runway? It's gotta be for the press
value.

1: [http://www.hplustech.com/our-story/](http://www.hplustech.com/our-story/)

~~~
xgbi
I believe the product to be actually real, and that it _will_ ship to the
customers. So in that sense, the project is not a scam, the users will get
something out of it. You can see people playing with the device in their
Vimeo: [https://vimeo.com/132837598](https://vimeo.com/132837598) I would be
willing to bet the price paid is actually a reasonable price for all the
custom-made components that the device is made of.

On the other hand, the product if far from something I'd call an holographic
display, so it's in a bit of a gray area for a Kickstarter, especially since
they CGI'd the first trailer with faked 3D views.

~~~
zamalek
> I believe the product to be actually real, and that it will ship to the
> customers.

I have no doubt that a bunch of people are going to get 4 inclined triangles
and a screen. I have some seaweed, which cures cancer, that the backers might
be interested in too.

~~~
pbhjpbhj
FWIW your claim "I have some seaweed, which cures cancer" is illegal in the
UK.

[https://en.wikipedia.org/wiki/Cancer_Act_1939](https://en.wikipedia.org/wiki/Cancer_Act_1939)

~~~
zamalek
That's extremely awesome. So many desperate people get caught out by claims
like that.

------
JacobEdelman
I wouldn't have much hope that its going to be addressed. I've been following
another kickstarter scam,
[https://www.kickstarter.com/projects/181239886/jaesa/descrip...](https://www.kickstarter.com/projects/181239886/jaesa/description),
promising legitimate AI far better than anything that actually exists that
appears to be little more than ELIZA plus ads. Its had over 50k USD in funding
and is 9 days away from its one year funding anniversery. Obviosly, no real
progress towards an AI has been made but the group has managed to keep the
scam, recently having claimed to be acquired by on of their backers who is in
talks with multiple investors for funding " to the level of a global
competitor".

Another example was the Goblins Comics board game, which featured the web
comic writer teaming up with a supposed board game maker who than ran away
with the money, scamming the board game maker and the comic writer. See more
at the second to last post here on the writers continued attempts to help his
backers despite being scammed by the board game maker:
[http://www.goblinscomic.org/the-blog/](http://www.goblinscomic.org/the-blog/)

------
zodPod
Sorry, but I can't help but chuckle. The low-information populous just spent
$600 a pop on this thing because the pictures were pretty? Good for them. I
hope they enjoy their angled pyramidal screen. Someone probably shared it on
facebook, their friends clicked it, looked at the pictures and clicked to back
them then clicked share. Just like seems to be the norm with satirical stories
anymore.

~~~
kjs3
$600 seems above the level of impulse buy, but you may be on to something.

------
Grue3
A scam? On Kickstarter? You don't say! There are a ton of those, and some of
them have bigger budgets than this thing. Like the infamous Arist coffee
machine [1].

[1] [https://www.kickstarter.com/projects/236195807/arist-
brews-c...](https://www.kickstarter.com/projects/236195807/arist-brews-coffee-
like-the-best-baristas-anytime)

~~~
draugadrotten
...or the SmartMaker scam by Harold F. Timmis and Dimitri Albino, which
kickstarter and indiegogo didn't stop. (1,2)

[1] [http://kicksucker2013.blogspot.com/2014/09/be-maker-
smartmak...](http://kicksucker2013.blogspot.com/2014/09/be-maker-smartmakers-
harold-f-timmis.html) [2] [http://www.mathias-
wilhelm.de/arduino/reviews/smartmaker/](http://www.mathias-
wilhelm.de/arduino/reviews/smartmaker/)

------
bhouston
To be clear, this device costs a couple million of VC to create. This
Kickstarter is a market launch activity and not raising useful money for this
project.

~~~
daturkel
Is that allowed on Kickstarter? Kind of defeats the purpose...

~~~
sbarre
Lots of Kickstarter projects are "proof of interest" ventures. If you make
your target, it triggers additional funding you've pre-negotiated..

I don't see how it's a problem in general (not talking about this particular
KS here) since it's a useful tool for showing investors that enough people are
willing to pay for your product.

Doppler Labs' recent KS for "Here Active Listening" closed successfully last
week with $635k in funding, and they just announced a $17M series B funding
round this week.

I'd have to assume these two events are related, and as a backer of the KS
campaign, I'm actually happy to see this, since it means the product probably
won't be a one-off, and they will continue to update the software post-
release, etc..

~~~
daturkel
I think a successful kickstarter to trigger funding is better than a fully
funded product which has a kickstarter as a launch. The latter isn't really
"fundraising" at all and so seems to stray from the KS mission.

------
empressplay
It's a little strange that they share their offices with an investment bank?
[https://www.bnymellon.com/ca/en/index.jsp#ir/offices](https://www.bnymellon.com/ca/en/index.jsp#ir/offices)

~~~
Shivetya
Generic shared space office building, I would be more interested if other
Kickstarter groups had offices there or members of the Kickstarter in question
were part of companies before their current.

------
alvarosm
Kickstarter will promote _anything_ that has the chance to make it big. Their
only goal is to make sure most pledged dollars go towards ultimately funded
projects, and that hype and funding grow in them to the maximum extent
possible.

Documentaries and so on, that's another story, I guess their cash cow are non-
art projects while what they enjoy are art projects. So don't expect a tech
project to undergo minimally rigorous analysis if it looks like it will make
it big. They only question your project to the extent it could be a waste of
real estate in their website for not getting funded.

------
snarfy
It reminds me of this old video game:

[https://en.wikipedia.org/wiki/Time_Traveler_%28video_game%29](https://en.wikipedia.org/wiki/Time_Traveler_%28video_game%29)

------
norea-armozel
This is why I've never pledged any money on Kickstarter or any equivalent
site. It's too easy to make something look too good to be true in an age of
CGI and clever pitches. I'm all for micro-financing, but the way I see sites
like Kickstarter as just another way to get around the known regulations for
financing (some which seem dumb, but some that are very effective imo).

If folks really want to help creators and artists make cool stuff then I
suggest do your homework and give directly to those people (and avoid
Kickstarter).

------
yitchelle
Isn't the startup mantra "fake it til you make it"?

\sarcasm.

~~~
TeMPOraL
Of some, definitely, with the meaning of "make it" not related to making a
working product.

------
phkahler
"Holus is a 2D display based on “Pepper’s Ghost“. The reflected image has no
depth, and has nothing to do with the term hologram. "

Wrong and Right. The reflected image will have depth and can be viewed from a
(small) range of angles. Just like a reflection in a mirror is actually 3d.
But NO, this has nothing to do with holography as stated.

~~~
Udo
_> The reflected image will have depth and can be viewed from a (small) range
of angles. Just like a reflection in a mirror is actually 3d._

Isn't that the same as saying that a drawing on a sheet of paper is actually
3D because you can change the viewing angle? At least when viewing a real 3D
object through a mirror you could potentially get more information by changing
your viewing angle. This project, however, appears to be more akin to viewing
a flat screen through a reflective surface.

~~~
phkahler
>> Udo 3 hours ago

> The reflected image will have depth and can be viewed from a (small) range
> of angles. Just like a reflection in a mirror is actually 3d.

Isn't that the same as saying that a drawing on a sheet of paper is actually
3D because you can change the viewing angle? At least when viewing a real 3D
object through a mirror you could potentially get more information by changing
your viewing angle. This project, however, appears to be more akin to viewing
a flat screen through a reflective surface.

Oh well that's different then. TFA likened it to an illusion that reflected an
object. If that object is an LCD panel then no it's not 3d.

------
typicalrunt
I got the chance to play with Holus last month during one of H+'s open houses.
The unit itself is pretty neat and the holograms (yes, they are just Pepper's
Ghost) is of good resolution. The use of iPhones and iPads to control the
perspective is really cool, but still glitchy.

However, my friends and I found no practical non-game application of the
technology yet; maybe this is the case with anything new, where it answers a
question nobody has yet to ask.

I do agree with the OP that the images in the KS campaign aren't real (or even
possible). The Holus simply doesn't look like that and I wouldn't be
comfortable if my company was promising images in a KS campaign like that. At
the very least, H+ should have added an asterisk on each image that said "CGI
rendered" or something to that effect to inform potential backers.

------
joanielemercier
Finally received a response from Kickstarter's CEO:

[http://joanielemercier.com/is_kickstarter_covering_up_a_scam...](http://joanielemercier.com/is_kickstarter_covering_up_a_scam/?fb_comment_id=880462758667910_881188285262024#f252aeb9c8)

------
kwhitefoot
I don't know if they cover up scams but they do not provide any good means for
people to voice concerns. I looked at a project for a portable wind charger
(on Kickstarter I think) and the claims that were made for it were rather
implausible so I did a few simple calculations and sent a message to the
promoter. All I got back was some well meaning waffle. And in this case I
don't think they were trying to cheat anyone, they just weren't competent. If
anyone is interested I'll try to remember which project it was.

~~~
frogpelt
[https://www.kickstarter.com/projects/skajaquoda/trinity-
the-...](https://www.kickstarter.com/projects/skajaquoda/trinity-the-portable-
wind-turbine-power-station)

Is this it?

------
swozey
I quit Kickstarter after that Potato Salad kickstarter crap got popular. It
lost all legitimacy to me at that point. I can't believe more people didn't
put up a fuss.

------
binoyxj
The Kickstarter bubble is finally starting to burst, for better or worse.
That’s a bit troubling for the creative and tech community. Bad press due to
these failures/ scams is a scary thing. I had personally written to KS about
another scam that unfolded right in front of eyes, but they didn't respond. I
even pinged the founders on Twitter but they didn't care a bit. So much for
trusting this system.

------
sableraph
Yancey Strickler answered. Here's my response:
[https://medium.com/@sableraph/kickstarter-failed-
us-e7b6d98f...](https://medium.com/@sableraph/kickstarter-failed-
us-e7b6d98f2342)

------
gregjwild
While Kickstarter clearly need to get sharper about identifying fraudulent
pitches, I think as a whole Kickstarter is a "hate the player, not the game".

------
eugeneross
I don't know man. No one got this upset with the Potato Salad kickstarter.

------
joanielemercier
some update on the holoscam.
[http://joanielemercier.com/kickstarter_is_broken/](http://joanielemercier.com/kickstarter_is_broken/)

------
elcct
To be fair, why don't you let people spend money how they want? People should
have a right to be fooled if they wish so...

~~~
MichaelGG
Blatantly lying to people by showing fake products and fake badges hardly
counts as "if they wish".

~~~
TeMPOraL
It's funny how people talk about voluntary trade when the whole point of
advertising and marketing is to remove the 'voluntary' part.

~~~
hvs
The "whole point" of advertising isn't to remove the voluntary part of trade.
It's to improve discoverability and to encourage you to buy. At no point does
it compel you to buy.

~~~
danneu
> At no point does it compel you to buy.

What?

[https://en.wikipedia.org/wiki/Marketing](https://en.wikipedia.org/wiki/Marketing)
&
[https://en.wikipedia.org/wiki/Advertising](https://en.wikipedia.org/wiki/Advertising)

It's a little more than brand names on bill boards.

~~~
oldmanjay
compel: force or oblige (someone) to do something.

nope, that's not what happens. really, really, really, really wanting
something is not the same as being forced to buy it. it's not even close, in
fact, even if the desire is super strong. the inability to make this
distinction is not a useful argument, it is a personal failing.

~~~
danneu
I see. When compel is used with an object, it always means "to force". And
advertising textbooks go out of their way to clarify that ads persuade but
they do not compel. Though you could call an ad "compelling".

