The thing about Matchstick was this line from the original campaign:
"The product is fully functional today, with the hardware design final, tooling complete, and manufacturing ready to ramp up in the next 30-60 days"
followed six-months later by:
"We want to update the hardware" and "is being updated to support DRM" amd the ship date being moved back to now.
A lot of people backed Matchstick because it was going to be open - the plans were all available for download, it was all ready to go, and we were going to have kit in our hands really quickly. Instead we were going to get something that was slowed down by six months so that it could have closed DRM-support added. And then it's cancelled because they added support for something that wasn't even part of the original campaign!
The old reality, with companies like Google, was that if you aren’t paying money, you aren’t the customer, you’re the product.
Then Kickstarter came along, and the premise was, “Gives us $X0,000 and we’ll do our best to give you product Y as a so-called-reward. But this is not a store.”
So now you’re giving them money, but you still aren’t a customer!
Because people are now using this as astro-turf marketing campaigns for products that are already funded by other investors, or as market research, or as a line item on their pitch deck to raise money from investors.
In this egregious case, the company seems to have had no intention of really entering into a “deal” with the backers of its kickstarter campaign, it was entering into a deal with its other investors, in accordance with a business plan its backers have never seen. Thus, they struggled to build DRM into the product, although DRM had nothing to do with the product they promised their backers, and everything to do with their other business dealings and plans. And now their backers are discarded like a one-night stand, but hey, here’s your own money back.
Frankly, this stinks.
If you go on Kickstarter and say you’re going to build product Y, that’s what you should do. If your business plan requires raising Kickstarter backing and then going after investors, you should say so up front and not pretend you are off to start work as soon as the project is funded.
And as for the investors, shame on you. If you invest in a company that has entered into an agreement with backers to build product Y, you should actually make them do that, or not invest in the first place.
Whatever pivot the go on to do, everyone has been forewarned that simply giving them money and receiving promises in return means very little to them, their attitude seems to be, “well, if we change our minds, we just give you your money back and do whatever we like.”
That is not a principled way to run a business. If they couldn’t build this thing with the funds raised on Kickstarter, then they shouldn’t have been on Kickstarter.
That is not a principled way to run a business. If they couldn’t build this thing with the funds raised on Kickstarter, then they shouldn’t have been on Kickstarter.
Sounds like they tried to take something to market with an investment, and returned those investments because they couldn't make it work.
Just because they didn't go to a series C and waste a ton more money doesn't make them any less "principled"
Except the “something” they couldn’t make work is not the something they promised to the backers making an investment. That’s the problem here: The Kickstarter gives the appearance of a simple proposition: Give us $X and we build $Y.
If you always needed $X+W money, and always planned to build product Y+Z, and Z sinks the whole thing, then you have misled the original backers.
I agree that if they couldn’t make the original Matchstick--the one they promised to their backers--work, they should return what they can. But if the thing that doesn’t work is a business that is a lot more complicated than the thing they put on the Kickstarter, they shouldn’t have been on Kickstarter to begin with.
First, he did not call the founders unprincipled, he said that this is not a principled way to run a business. I know that's splitting hairs, but I think the distinction is important. Granted, I just told a doctor about a grammatical error in her Emergency Department's mission statement, so this may just be a symptom... :)
Second, the surrounding events do matter. They claimed to be raising money to build a product. Then, their efforts bogged down because they tried to build an entirely different product than they originally promised.
Where I'm from, we call that lying. But, for fun, let's check out their own words:
Q: Why did Matchstick select Microsoft PlayReady ?
A: Matchstick intends to offer DRM on its platform and bring premium content to its users in the quickest timeframe possible. Microsoft PlayReady offers a mature technology, has relationship with premium content providers and is quick to deploy on the Firefox OS platform.
Funny how a solution that is so 'quick to deploy' could sink the whole ship, hey?
> Second, the surrounding events do matter. They claimed to be raising money to build a product. Then, their efforts bogged down because they tried to build an entirely different product than they originally promised.
Let's put it differently: they raised money to build X. They attempted to build X+Y, they fucked up. Maybe they were dishonest about their plans. But in the end, they decided to give the X money back, which raises them above 99% of companies out there.
In addition to what other commenters said, even once the money is given back, this still amounts to a loan without interest. I would call that unprincipled.
No, they promised to give the money back within the next 60 days. In the past, Kickstarter projects have had a very mixed record when it comes to actually making the refunds they promised.
If they were principled, they would have followed through with the original product. Instead they used the money to start building something slightly different. It was a bait and switch.
Giving people's money back is saving face to avoid a huge backlash.
Speaking as someone who has, several times in his life, tried to create various things, to object to a pivot of this infinitesimal magnitude seems mad. By this standard every successful entrepreneur on the face of the planet is dishonest.
> So Kickstarter companies aren't allowed to pivot.
In a word, no. Kickstarter explicitly forbids using Kickstarter to create and fund a company. You fund products on Kickstarter and if a company cannot deliver that product without "pivoting" or changing it dramatically, then give me my fucking money back. I'm not funding your adventures in learning how to run a business. I'm funding a fucking product.
Not without consulting their backers. 'Pivoting' means not delivering the item people backed. On the other hand, I think the refunds should be the end of complaints.
Refunds + appropriate interest rates for such a high-risk “investment” + penalty for not upholding their end of a promise + …. I don’t see how they could afford to satisfy any morally (if not legally) reasonable demands.
It's definitely not an investment (as Kickstarter continually remind you), and there were no penalties agreed upfront. Seriously, do you want more restrictive consumer protection on KS projects than when you buy offered products at retail that have the order cancelled because it wasn't in stock?
I'm normally the last person to get libertarian about "you agreed to this contract", but this seems to be one case where it's appropriate. Or does it need more warning that you're not buying an extant product?
AndrewDucker’s comment above, https://news.ycombinator.com/item?id=10002117 , does not look like “you’re not buying an extant product” to me. In fact, it looks like the exact opposite of that, more like “we’re finished and can start making these now”.
> Thus, they struggled to build DRM into the product, although DRM had nothing to do with the product they promised their backers, and everything to do with their other business dealings and plans.
You do realize that most HDMI chips require you to sign that you will adhere to HDCP?
I've always thought that "this thing might totally fail" was something that people understood when backing a kickstarter project.
The idea that if they fail, they have to refund everybody's contribution kindof stinks, since I've always thought kickstarter was for people trying new things (which is obviously going to have a lot of stories about failure)
What bothers me is the bad reaction the backers are expressing. The builders, for whatever reason, have decided a refund is in order. You are entitled to be disappointed, but not upset considering you have lost nothing. The insults and such are completely out of line considering the honesty of the project creators. I never thought I 'd see the day when people were UPSET about getting a full refund. Talk about entitled attitudes.
A full refund implies either they've spent nothing or have got way more money from elsewhere (i.e. used the kickstarter to back an outside investment push)
As far as I'm aware kickstarter isn't really supposed to be used as an interest free loan, which is the problem. That's not what people were funding.
No, it's not an interest free loan. And WHY they're able to offer a full refund is really no one's concern. The fact is they feel they can't deliver what was promised, and they're giving refunds. Somehow they're just as bad as the people who keep claiming "it's coming!" for years and never give money back? Seriously, kickstarter is a risk, if you get a product, great, if you get your money back, also great. You pays your money you takes your chances. Complaining about getting a full refund is ungrateful and ridiculous.
There's been a lot of persistent misinformation floating around about Kickstarter, and I don't really understand why. It's not complicated.
Yes, Kickstarter projects are legally obligated to fulfill their promised rewards, or else provide refunds. It has always been this way. Really, the only difference between Kickstarter and a preorder is that the schedule is a lot looser.
The KS Terms are a little more nuanced. The 'refund' stipulation, for example, only says that they must refund any 'remaining' money, not that they must provide a full refund. And there are several criteria that a project creator has to meet, in the absence of completion, to meet their obligations.
The effect is that KS can be used for projects that may fail. And quite right too, since that was its original aim (before it got saturated with companies using it as pre-sales / marketing / investment credentials / etc.
That is no longer the case in the current ToS. Among the current verbiage: "they offer to return any remaining [emphasis mine] funds to backers who have not received their reward (in proportion to the amounts pledged), or else explain how those funds will be used to complete the project in some alternate form."
As you say, the older ToS looked a lot like a pre-order which wasn't really the intention and didn't frankly make a lot of sense for a project that had some material probability of failing. After all, if the money is gone, it's not there any longer to issue refunds.
It made sense because it was the only thing holding Kickstarters accountable to the people funding them. With an investment, you're taking a risk but have some control over how the company's run. With a pre-order, you have no control but they have to deliver the product or refund you. Kickstarter now is the worst of both worlds: projects don't have to deliver anything and you can't even make sure they give it a decent try. Someone could promise the Earth, use the money to pay all their friends living costs for years while they tool around and fail to make a working product, then say "sorry, the money's all gone" and that's fine now according to Kickstarter.
Yes, but an ostensible requirement that the promised reward or a full refund had to be delivered no matter what simply never made any sense. You can't get blood from a stone and all. Now, like then, you could pursue legal action but this isn't a realistic option in most cases, at least outside of clear fraud. The current ToS does it pretty clear that not delivering a project or a full refund is a bad thing and also outlines other obligations. But, by not imposing requirements that are typically just not realistic to meet with most failed projects, to me it establishes a more useful baseline for behavior.
We already have a way of dealing with these kinds of debts that can't be repaid: it's called bankruptcy, it has a whole bunch of safeguards to stop people abusing it, and it's what you'd have to do if you took on any other kind of debt to fund your business and couldn't repay it. There is absolutely no reason why Kickstarter needs to be any different.
So now the Kickstarter project which has increased its costs by incorporating (though that's probably a good idea in any case) spends its remaining funds on bankruptcy lawyers and there's now nothing to return to the backers. Nothing is certain and Kickstarter projects certainly aren't. Whatever the ToS, it's probably not something you should use if you're looking for "satisfaction or your money back" sort of guarantees.
Maybe you should actually read the story: they decided they aren't going to build the product and they decided they are going to refund backers. The "stinking idea" is their own.
Please don't insinuate that someone hasn't read an article. "Did you even read the article? It mentions that" can be shortened to "The article mentions that."
This comment can similarly be improved by removing "Maybe you should actually read the story". Since it's merely a trope by which forum users take jabs at each other, HN can do without it.
Whether or not it was their idea to do so, it's interesting that there's a cultural norm that they refund all of the pledges. I don't see any claim in the article that they invented this concept on their own for fun.
Netflix is half of all Internet traffic (crazy), and all the content owners are hopping on board. We want to create an ecosystem built on open hardware and software so its easy for anybody to get to this great content, anytime, anywhere, without one of the "big guys" imposing their rules on who gets what, when, or where.
This is plain crazy. Netflix can't offer their service without DRM, Intel can't even release a chip without supporting DRM. How on earth did anyone expect this to be succesful without DRM? In the kickstarter movie they even show clips of Game of Thrones and John Oliver, how did people envision the Matchstick to play that content without DRM support?
And then the craziest part, after working for 11 months with I imagine a team of at least 3 but probably more, they fail which is understandable but then they refund the kickstarter campaign. That means they actually have 470k lying around. Probably from VC funding.
So they used the kickstarter money as leverage in VC negotiations, got funded. Then worked for 11 months on something the kickstarter backers didn't ask for which creates a backlash, then they decide to drop the kickstarter. I wonder what their investors think of it "Oh yeah, the initial 17000 people that believed on our project whom we woo-ed you with? Yeah they're not happy with the direction we're going in so we're dropping them". So now it's just going to be an HDMI TV stick which to my knowledge already exist right?
(BTW the proper way this should've gone is: After 11 months Matchstick admit they got nowhere because of supplier issues (i.e. they couldnt get DRM) have run out of money and give up. The backers sue for reimbursement. Matchstick LLC files for bankruptcy, court finds no wrongdoing, no one gets money. The end and everyone lives happily ever after. Faith in Kickstarter restored)
Yup, assuming they were on the up-and-up to begin with, they could have saved a bunch of time and effort by just asking anyone who had worked on video playing devices in the past 10 years if their idea was remotely feasible to bring to market while keeping both open source developers and content providers on-board.
The Sony Dash was the only locked-down "tivoized" (in the rms sense of the word) "chumby powered" device and also the only "chumby powered" device that had netflix support. These two facts are not unrelated.
Also: DRM-reading capabilities is a software feature, right? Couldn't they deliver it through a software update and just send me a frigging Matchstick not reading DRMs like I wanted it!?
I guess that wouldn't be the case: since they are using Firefox OS, the DRM would work like they do on the Firefox desktop. But there might be something I am not paying attention to.
They never promised DRM content during the Kickstarter campaign. Stretching for a feature that I don't want, running late, runnning later and then not building the product BECAUSE OF THE FEATURE I DON'T WANT.
Now that is gonna make me (and some others backers too) very angry!
To me this seems like the realization that they completely underfunded the project - not that DRM is a road block.
If I was in their position I would consider releasing without DRM. Then after it ships and assuming people like it - if they want netflix support tell them to phone netflix everyday. I doubt netflix wants their support lines tied up.
It's not really so strange. A common theme I've seen on kickstarter projects is that they come up with product Z. They find a supplier in China who gives them quote X. But they will also need some money for themselves (not being greedy but just a living wage so they can quit their jobs and work on this full time) so we will call that Y.
However, after they collect the money the supplier says - actually it will cost X+N dollars. (X+N) + Y > the kickstarter amount. Perhaps they also found other issues which will cost extra money (perhaps needing to hire another developer).
More useful tech destroyed by DRM. How long are we as an industry going to keep this up?
The only DRM that's even remotely defensible is like what KDE's PDF viewer has: a checkbox that says "Enforce DRM restrictions". For that, we don't need anything more than a couple of flags and some copyright metadata.
Step 0: There is no "we". There are millions of individuals in thousands of companies across dozens of industries with wildly divergent goals, priorities and philosophies.
> How long are we as an industry going to keep this up?
Depends who you ask. I imagine the RIAAs and the MPAAs would respond "We'll keep doing it until people stop pirating". Otherwise the response would be along the line of "Until they realise it doesn't stop us pirating anyway"
People will always pirate digital goods, so there'll always be DRM.
I'm a plex user (Local media server) and I've found after trying Chromecast, AppleTV+PlexConnect, and FireTV Box I've found that using a Raspberry Pi 2 running RasPlex (total of around $85 w/ media center remote, I don't use it but it got the USB->IR so I could use my universal) provides the best experience of all (by which I mean sub $100 sticks/boxes). Similar results can probably be experienced with XBMC.
Direct play for everything. Way less stressful on the server and you can skip around in the video without hardly any delay (this is something I've never experienced with any other clients). I also quite enjoy being able to browse my collection on the TV instead of just on my phone.
Yeah, I repurposed a Lenovo T420 that has a broken keyboard into a media center. Grabbed a DisplayPort to HDMI adapter, installed Ubuntu + KBMC (Kodi, now) on it, and it works pretty good. You can use various plugins to get a lot of features minus Netflix, of course, which will never work properly with third-party software under Linux because.... well, whatever.
I've been through just about every Plex client possible and in my experience the Roku offers the best combination of easy setup and reliable operation at a low price. It doesn't rock the flashiest interface, but it's the one I can run in my living room or park at my parent's place with zero further maintenance required.
Really bummed that the team came to this conclusion. I am a backer and found them at CES 2015 since they said they would be there with a demo. They had screencasting working and controlled it with an app on their phone. It was a little buggy and froze once, but totally worth the amount I backed them for. Around this time they decided to redesign the sticks with more processing power. I figured respinning the boards would take a while, but the software looked so good in January that I never thought it would be what brought the project to a halt.
Personally I'd be fine with transcoding videos on the fly from another machine to remove the DRM, but I suppose that defeats the purpose of a small hdmi stick if you have a full powered desktop running in the next room over. But really most of the stuff on my local netowrk doesn't have DRM and I don't do a whole lot of online streaming beyond Amazon Prime and I have an app on my TV for that. I suppose all I really wanted was screencasting without having to pay $100 for a WiDi adapter. Oh well.
But at least I'm getting a refund, so I don't suppose I have any ill will for the team. I have backed projects before that did a magic trick with my money - one shoe KS took $130 for a pair of boots and kept up a sham for almost a year, even claiming that production had started and we would see our boots in a few weeks (it was always just a few weeks away), and then abruptly vanished. So I hope whatever project the Matchstick team works on next pans out better for them.
> Will other projects feel pressure to refund if they don't pan out?
They should as it's one of the remedies Kickstarter requires projects to pursue should they be unable to complete the project and fulfill the rewards:[1]
> If a creator is unable to complete their project and fulfill rewards, they’ve failed to live up to the basic obligations of this agreement. To right this, they must make every reasonable effort to find another way of bringing the project to the best possible conclusion for backers. A creator in this position has only remedied the situation and met their obligations to backers if:
> [other required remedies]
> * they offer to return any remaining funds to backers who have not received their reward (in proportion to the amounts pledged), or else explain how those funds will be used to complete the project in some alternate form.
Well, obviously, if you still have the money, it's nice to refund the money. I think the parent meant more "will this create an expectation in Kickstarter backers that they'll always get either the product or their money back, thus creating some sort of reputational debt-slavery for the project creators who genuinely just use up the money and fail? And doesn't that defeat the purpose of Kickstarter?"
> will this create an expectation in Kickstarter backers that they'll always get either the product or their money back, thus creating some sort of reputational debt-slavery for the project creators who genuinely just use up the money and fail?
Hyperbolic imagery aside, the expectation is already there. They can't just walk away from the project with a shrug should it fail: they have a contractual obligation to demonstrate that they did not squander their funds and to provide the best possible outcome to their backers. If they fail to do that, the terms of the agreement allow backers to seek legal action:
> The creator is solely responsible for fulfilling the promises made in their project. If they’re unable to satisfy the terms of this agreement, they may be subject to legal action by backers.
In this case, Matchstick's project creators have assessed that they have enough money to pay everyone back, so they're doing exactly what the terms of the Kickstarter agreement between backers and project owners have obligated them to do: provide the best possible resolution to backers by, in part, returning the money.
Another project may determine that they can't pay everyone back: in that case, they're subject to the requirement that they "demonstrate that they’ve used funds appropriately and made every reasonable effort to complete the project as promised". If they can't do that to the satisfaction of every backer, they're still on the hook. That's why a lot of times, project failures will have a note about providing a refund to anyone who requests one instead of Matchstick's strategy of proactively refunding everyone.
Maybe it's more PR on their side? If they ever want to run another KS campaign it helps to not have already created a lot of bad will with the target audience.
"Rumor is that they're being bought out by the Chinese company they've been developing the unit with. So the refund is so that no can have claim the designs (like a bunch of people who bought a product because its all open source.)"
One of the executives' pages on LinkedIn says he manages 30 employees at the company. If true, it must have gotten some kind of venture funding, since the $500k they raised on Kickstarter is nowhere near enough to run a company that size for over a year.
I imagine a pivot is likely, given the tone of their message. Everything they wrote talked about how hard their goals, like the DRM portion, were under Firefox OS, and there was no talk about winding down the company. Leads me to believe that there will be /a/ product from them, just not one based on Firefox OS.
Look, if you want this it could undoubtedly be done much more cheaply by not building new hardware and taking one of the Chinese Android sticks and getting it to run Firefox OS. A hassle, and not an inconsiderable project, but much less so than building the thing from scratch.
I don't know why they are actually shutting down, but this explanation doesn't ring true. They're blaming DRM complications - a part of the project that no one cares about - as the lynchpin that has taken down the whole thing.
To be honest, I would be quite surprised if anyone receives any money back. The "everyone should have their money back by the end of September" thing seems quite long. Having seen some other, very similar scenarios play out, to me it sounds like they did something else with the money and are trying to stave off the consequences of it or are trying to buy time hoping for a miracle that will allow them to replace it.
Good lesson in keeping product simple. They could have delivered their original product. And the backers would have figured out what they'd do with it. Why wouldn't Netflix help them succeed I wonder instead of just scrapping it.
I wonder if this could, in any way, be covered under bait and switch laws. Yes, I know people are getting their money back. I'm just thinking to help prevent other people on kickstarter from trying to switch up their product midway.
As a backer now apparently getting a refund, I'm extremely disappointed with the way this project was managed.
The DRM that apparently blew up the project wasn't in scope when I backed it. This was supposed to be an open source, No-DRM stick. After they had everyone's money, they decided to build a Chromecast clone instead. Classic bait-n-switch.
Well as is mentioned elsewhere, being a successful Kickstarter campaign is amazing P.R. You can take that kind of hype to VCs and get some very real Series A from that if the proposed product is good.
So what could be happening here is that a big company was the target audience all along. Raise a bunch of money with a "disruptive" piece of hardware, garner hype, get some venture money, return the Kickstarter cash.
That seems totally plausible to me. To the VCs these guys look like semi-sure bets to get gobbled by MS or Sony or Netflix or, hell, anyone looking to enter this space.
I recognize that Kickstarter funds are donations, but the product I donated to is not the product that was being developed.
I was baited with this: "The product is fully functional today, with the hardware design final, tooling complete, and manufacturing ready to ramp up in the next 30-60 days. We also have fully functional sender apps for Firefox, Chrome, iOS, and Android - you can Fling from any of these platforms on almost any laptop or mobile device." [1]
And this: "Hardware is done! It was actually previewed in June-" [1]
That expectation was switched for this: "After struggling with the DRM development based on Firefox OS for most of this year, we realize continued development of DRM, though showing early signs of promise, will be a long and difficult road. We have come to the conclusion that we will not be able to reliably predict the completion date of the DRM development without significantly more research, development and integration." [2]
So I donated to a project that was 30-60 days away from start of manufacturing and instead found my donation being used to fund development of something else. Why is this not a bait-n-switch? If I'd known what they were going to build, I would have just bought a Chromecast back in October of 2014.
Yeah, for sure. I remember once I bought tickets for a large stadium gig. The gig was postponed at a late stage, for a year, and the options were:
1) get a refund, lose the ticket you'd been lucky to get at face value back into the pool, probably never to be seen again for the same price.
2) hold onto your ticket, wait a year, go see the gig
It therefore resulted in $millions being held by the organisers for over a year - there are extremely low risk ways to gain a meaningful profit from a large amount of capital. Intentionally or not, and whether or not it was invested by them during that year, this situation turned out to be a great way to get a huge, zero-interest loan of said capital.
I'm not sure if there are laws that prevent this kind of thing from happening, but it's certainly easy money in theory.
If you're looking for something extremely low risk, you're only going to make a few percent. (I'd be thrilled to learn that I'm wrong on this.) So, may not be worth it if you have other costs or people you have to share the profit with. 3 percent of a million is only 30K.
Depends on your definition of meaningful but, I was thinking more along the lines of 10 million -> 200-300k, almost guaranteed.
Obviously if the starting capital is less, you could potentially notch up the risk of the investment etc, but that's a very meaningful profit for most companies I should think. At the least it's a very valuable individual's salary for a year.
I've never looked into treasury notes. Am I right in interpreting this graph as showing how much you would make holding treasury notes over a one year period? So roughly between . 05 and .4 percent? Point being that it's not necessarily that easy to make money holding $400k for a year?
If so, I agree with that---hence my point that it would be easier to work.
I am completely out of the loop and hove no idea what the project is about, but apparently every one on the KS page is basically saying that they couldn't care less about this feature. I'm curious now at what really happened and why they shut it down, if their biggest hurdle is something so few people want.
I wrote up a response to this, but accidentally did it under the wrong comment (see my response to thieving_magpie).
In that reply I explain what I felt I was baited with and what it was switched for. Maybe you could explain how you feel the term should be used, since you feel my usage was incorrect?
Sigh, yes. "Bait and switch" is the "begging the question" of product forums. It has an actual meaning that nobody cares about and by now just means "I feel disappointed". This is one of the least unfair outcomes for what is a barely a purchase and it is still a "Classic bait-n-switch".
His point is that it was an attempted bait and switch. The fact that they failed and refunded the money doesn't change that. They purportedly promised one product and worked on a different one.
It's not even an attempted bait and switch. They thought that a certain feature was needed/wanted, so they tried implementing it. Extra features have killed projects before and will kill in the future.
Let's say I want to sell you shirt. You pre-order the shirt, then I decide that it's import that the same shirt has an additional pocket on the front. At that point, is it a bait-and-switch scam?
Like Sanddancer says, it's just feature-creep that scuttled the project, not a malicious misrepresentation of the product.
Agree! I even sent them e-mail telling them I didn't care about DRM, and, even though I got why, and I didn't wanted to oppose them, I DIDN'T WANTED THEM TO WASTE TIME ON DRM!
And I am sooo deceived now: they can't handle DRM? NO PROBLEM! They are running late? NO PROBLEM! Just get me what you promised me whenever you get there!
I wish I was offered a choice, here, instead of being forced to take my money back.
Given a half million dollars doesn't fund a hardware company with a few dozen employees, it sounds like they have other investors, with deeper pockets, that do want DRM. At that point, the KS money becomes more a liability than an asset, and refunding the money is a wise business decision. This frees them to make potentially necessary design decisions that would upset their kickstarter backers, like migrating from Firefox OS and adding DRM features, that would please their other backers.
"The product is fully functional today, with the hardware design final, tooling complete, and manufacturing ready to ramp up in the next 30-60 days"
followed six-months later by:
"We want to update the hardware" and "is being updated to support DRM" amd the ship date being moved back to now.
A lot of people backed Matchstick because it was going to be open - the plans were all available for download, it was all ready to go, and we were going to have kit in our hands really quickly. Instead we were going to get something that was slowed down by six months so that it could have closed DRM-support added. And then it's cancelled because they added support for something that wasn't even part of the original campaign!
It's not surprising that the backers are upset.