I can't find the reason in the article, but I'd like to propose that it's because making new things is hard and people are optimists?
An interesting comparison would be to know how many projects in general are shipped late. Otherwise it will be another case of "1/4 of all crimes in London are committed by foreigners!" where 24% of Londoners are foreigners.
> Why are so many crowdfunded projects blowing their deadlines?
>Over and over in our interviews, the same pattern emerged. A team of ambitious but inexperienced creators launched a project that they expected would attract a few hundred backers. It took off, raising vastly more money than they anticipated -- and obliterating the original production plans and timeline
It is sort of buried, at one of my startups we made a 1U server that went into the phone closet, we found a place in Milpitas that could make us 20 - 30 at a time, and then when we started growing and needed 100 at a time they basically told us "No, we can't do that."
That was my first experience with a manufacturer where I got to see what it was that making 100 changed vs making 20. In our case it was mostly all of the various parts that came from different places, so you needed to stage a bunch of things and that difference in delivery times meant that to build a 100 reliably for some components you were holding on to stock of like 500 of other things. That tied up a tremendous amount of money, and the risk was if something went wrong you might have parts to make 80% of 500 things but not the same 80%! It was maddening, and very complex. We had a gal whose job it was was to talk to suppliers basically all day every day and help get things 'kitted'.
This is why I'm very, very skeptical about hardware Kickstarters by people who have never shipped hardware. Manufacturing is a hugely complicated endeavor that outsiders like to trivialize ("I bet it cost $1 in China!"), and ambitious entrepreneurs like to underestimate.
It's the same reason I didn't fund Ouya - I didn't see anyone on the team who has actually successfully shipped a hardware product. It's the same reason I did fund Pebble, because they have, albeit on a much smaller scale.
This shit is hard, and people need to realize this.
Manufacturing and supply chain is one of the most complicated processes that occurs at businesses, by and large. We're talking about logistics to get your stuff to the warehouse, storing said inventory, monitoring inventory levels to know when to order, manufacturing goods that take time, then storing the finished goods until they can be shipped, and finally, sending them on their way. I've seen companies from all walks of life, and manufacturing goods is by far the most complicated process I've ever had to dive into.
People think it's easy because it's simple on the small scale. There's nothing I know of that's harder to scale than manufacturing operations.
As someone who works in hardware design, I don't think I would fund a hardware Kickstarter, unless there is someone involved that has shipped at least couple similar products.
You are completely right, it is hard, sure the part is only worth $1, but you still have put in months going back and forth with vendors getting that part because they cut a corner or misunderstood what you wanted regardless of how clear you tried to be. Then you need to deal with them on a production scale.
"we found a place in Milpitas that could make us 20 - 30 at a time"
How true. Inefficiencies add up quickly when you multiply many times.
Think about stuffing envelopes by hand. If you need to do 10 no big deal you can fit it into any open time period. If you need to do 10,000 you need a machine or much more labor. (Same with scanning by the way try to do volume scanning with a scan snap you'll get burried).
If they didn't have so much money then the reason would have been that they were strapped for capital.
The nature of successful Kickstarter projects is that they are are solving hard problems. Hard problems are very difficult to estimate and the cost of being wrong on your time estimate is very low. So why would anyone not just provide an optimistic delivery date?
Kickstarter is an interesting mix of promotion and distribution. Projects are seeking not just money, but to find an audience of evangelists and early adopters for their products.
Delivery on time (by providing realistic estimates) can help make sure that people don't turn on the project and start generating negative publicity about the project.
> It took off, raising vastly more money than they anticipated -- and obliterating the original production plans and timeline
I wonder if Kickstarter allowed projects to set a maximum number of backers (or a funding cap), if projects would take advantage of it.
Honestly, such a move wouldn't help Kickstarter (fewer fees to collect), so I'd have my doubts that such an option would be offered. Even if it were, I wonder how many teams are aware enough of their limits to take advantage of such an option.
"I wonder if Kickstarter allowed projects to set a maximum number of backers (or a funding cap), if projects would take advantage of it"
They do; kickstarter project teams can set a cap on each individual tier they offer. However, most projects foolishly have chosen to not place caps on anything except the most "exclusive" tiers -- those that usually offer a chance to name something in a game, or a custom character representing them, a flight to some faraway place to meet the developers, etc. for thousands of dollars.
If the tier involves a tangible product, then there should always be a cap. And most of the software projects I've seen should at least triple their estimated project completion time if they haven't started yet or aren't at least "50%" complete.
I think picking the "top 50" projects is just asking for trouble. Those are victims of their success, and have to scale from 0 to mass production on a tight schedule.
Going from zero to a few hundred early adopters is much more feasible.
That's what I figure it is, just take a look at the filabot [1]. It's taken in far far longer than anticipated but he's still keeping at it, just sent another update today. I would be very surprised if this wasn't the cause of most of it, with another big cause being the ones that end up getting far more attention than expected, needing to ramp up manufacturing to a level they didn't even consider possible (i.e. printrbot [2]) at the time.
Honestly, I'm surprised so many of Kickstarter's top projects shipped at all. I'm not being snarky here. 68% is a much better success rate than I'd expected, even taking into account that these are their most famous (and therefore, likely, most over-financed) projects.
If I managed to finish 68% of my projects, I'd die a happy person.
It all depends on the project. For example, I backed Double Fine Adventure, which is on the bottom section in the lateness diagram. The thing is that it got overfunded by a factor of 8. The original plan was for a $400,000 game, and you can't spend much time on such a game if it is to be feasible. But the funding exceeded $3 million, so of course the game is going to take longer to design, because it's going to be bigger.
"Kickstarter co-founder Yancey Strickler responds. Backers are signing up to participate in the development process, including all of its obstacles and setbacks. "If you want a watch, you can go buy a watch," Strickler says.
I don't know that Kickstarter can be any more clear to backers than they are that when you back a project you are not buying an item and you are not guaranteed a successful result.
It's better to ship late than to ship a piece of hardware you later have to recall (I write this as a bit of hardware from a recent kickstarter project awaits pickup by Fedex. It's being recalled by the manufacturer to fix a firmware bug. They were kind enough to send a postage-pre-paid box). :)
I backed HexBright in mid-2011. I should be getting my flashlight sometime in the next few months. I was under the impression I'd be getting it in time for Christmas last year, but going back through their updates I don't see them mentioning a specific date so I'm not sure why I was under that impression. In any event, a year and a half is a pretty long wait, but I think it will turn out to have been worth it.
I also backed the Hexbright. You're remembering that you'd have it by last Christmas because that was the original shipping date. I think the FAQ was changed once the delays were announced. I agree, it looks like we'll be getting a great light, but it took entirely too long, imo. The creator had a video with a functional light during the backing phase, so I assumed it was nearly complete, but sadly it wasn't the actual light we were backing in the video and development took a year longer than expected. The creator has been perfectly upstanding and handled things quite reasonably, it just took far longer than expected to design and manufacture the thing, sadly.
I think this is one of those cases where he got so overwhelmed with the support he decided to do something completely different and better than what he was originally asking for backing to do, and it looks like it's turning into a full-fledged company. I'm pleased--I just want my programmable flashlight. :)
This seems like a problem with the UX of KickStarter and not project creators. Instead of asking a creator to predict the future with relative accuracy, instead model development like real life. If project creators were prompted with two questions asking when your product would be shipped if everything goes (right||wrong) then you would have a more realistic shipment range, and more products would ship "on-time". Backers would have more realistic expectations for product shipments, and wouldn't panic when the first deadline is missed.
Yes, I'm not sure that Kickstarter's missed deadline rate is any higher than anywhere else. Humans almost universally underestimate complex tasks, a phenomenon so widely known there is a particular phrase for it: the Planning Fallacy (http://en.wikipedia.org/wiki/Planning_fallacy). The question should really be, why would anyone expect Kickstarter projects to meet their deadlines?
I've never started a project on Kickstarter, but it seems like it would be good for them to offer materials, guides, and potentially a mentor network for entrepreneurs. Maybe even going as far as explicitly walking new applicants through a business guide before they can submit their project.
This article is factually inaccurate. At least two projects they list as Where the ^%$# is it!? (Castle Story, Light Table) have delivered on time. I have played castle Story, and have used Light Table. This is nothing more then link bait.
The Castle Story "dev diary" just had a post three days ago titled "Rewards sneak peak"[0] which implies that the rewards haven't shipped yet. The comments have a bunch of people asking for the beta, so it sounds like that's not available yet either.
Maybe this is why they thought it hadn't shipped yet?
So shipping the initial product and being a month late with the final product is considered "Where the ?!$#!" is it ? Especially with a team that has been in _constant_ contact with their backers about status updates and progress reports. Like I said the article is link bait plain and simple.
If the table's inaccurate I suggest contacting its author. The information I found seems to agree with the information in the table, so if the game has actually shipped then the table's author is probably unaware.
If the final product has not shipped yet, though, it does belong in the "Where is it" bucket. Everything else on the table has delivered.
A mistake in one field in the table hardly invalidates the whole article, which I think you should probably read rather than jumping to invalidate the whole thing.
Hi, Stacy from CNNMoney here. We talked to all 50 project creators to get the shipping info -- it's all firsthand data. The beta was the "main" project the Kickstarter was intended to finance, and that's not finished yet. We included a link to Castle Story's dev diary in the profile (click the square) and made clear that it's in active development.
And I can't see the problem if the developpers communicate about it and explain why it will come late.
Furthermore, most industry projects with classical funding come late, I don't think Kickstarter's projects are an exception.
I wonder how this data compares to real contract projects in the Government and private sector? My hypothesis that the numbers are fairly similar because frankly; no one really knows what they are doing :).
Because there's absolutely no economic incentive to ship on the estimated ship date, unless you plan to do more Kickstarter projects.
At a guess, funding will go up inversely with the estimated wait for shipping, and that relationship will be counteracted by some believability factor that is directly related to the apparent complexity of the project/apparent expertise of the project leaders i.e. people will not believe that you are shipping a flying car a week after the funding date, esp. if you don't have any pictures or graphs and you're three art students.
Unfortunately, the apparent complexity of the project/apparent expertise of the project leaders is going to be consistently way wrong, due to the credulity of the general public.
If you only plan to do one Kickstarter, fancy renders and other graphics + the earliest physically possible estimated ship date is the rational choice. Then just blow the date. There's absolutely no consequences. If what you get to the backers (late) turns out to be awesome, you'll still end up getting nothing but positive press.
The only time I've seen people get really irate about Kickstarter shipping late (but shipping) is when the backers' "exclusive" promos were also sold in other venues, or when retailers got a hold of stuff before backers did.
The 'early dev' editions have started to ship. People are reporting that they're getting shipment notifications. However, the 'early devs' are under NDA - so if they keep their word you won't hear much until the embargo is lifted or until the standard shipments start.
I find it interesting that Light Table's delay is largely blamed on YC. It seems kind of strange to me that after having raised a large amount of funds from one source, you'd risk pissing off those investors in order to secure a smaller amount of funds from a second source.
The tentative plan is to release a full beta around the turn of the year and have an official launch May of next year. As it stands currently, it will include all the things I've shown in the video for both JavaScript and Clojure, but should we continue to get more funding we can add even more.
The problem seems to be that no one has figured out the "right" balance of power for these projects.
With VC, they're a small, tight-knit group and can ruin your reputation if you waste their money or fail in bad faith (or if you fail in good faith and they're upset about it). However, this capability is abused all over the place. One of the reasons why extortions like multiple liquidation preferences and participating preferred exist is that the VC can pick up a phone and turn off other interest in firms that should be competitors.
On the other hand, with Kickstarter, average donors on the scale of $100 don't have the "teeth" or incentive to fairly punish those who fail them in bad faith, and in the absence of such punishments, you either get a scammer problem (bad-faith failure is unpunished and recurs) or an overreactive "lynch mob" behavior (good-faith failure is punished).
What's right for a growing business and artistic projects is between those two points, I would think.
That said, if anywhere close to half of all Kickstarter projects succeed eventually, then it's doing way better than corporate software. I'd bet that what is completed is of high quality, as well.
Also, the reason I really want to see Kickstarter succeed has less to do with the funding model and more with the making of cool stuff. Kickstarter means more people can work on useful, meaningful projects rather than serving The Man, and that's a great thing there should be more of.
This is why I prefer bridge loans for seed phase startup funding (project funding, like kickstarter is completely different). With convertible notes, the early owners retain control and there's less risk for the investor. If everything goes well, the early investors get in on a "proven" success. If things go sour, there's still some chance of debt being repaid in a bankruptcy. Also, there's less pressure all around, as early investors can opt to just have their debt paid off, so they aren't anxiously waiting for the next round of funding or a liquidity event.
I really dislike the idea of entrepreneurs taking personal debt, if that's what you're suggesting. I think that's horrid. And when a software company goes bankrupt, how much is there to pay investors back with?
Here's an idea, more oriented toward software but applicable to hardware as well. Every project has a hard deadline that is some multiplier (maybe 5-20x) on the expected time-to-completion (i.e. the soft deadline). That's mainly intended for work that is abandoned, not regular shit-happens lateness. If you're within the deadline, you own the IP outright. If you miss it, or abandon the project, the code is open source and the work is in the public domain, so anyone who wants to pick it up can.
An interesting comparison would be to know how many projects in general are shipped late. Otherwise it will be another case of "1/4 of all crimes in London are committed by foreigners!" where 24% of Londoners are foreigners.