There are various crowdfunding projects which do not deliver or deliver only partially.
My biggest disapointement so far was Vanuatu on Indiegogo. The game was out on the retail market but I never got a copy as various other backers did not get it either. Even the project was delete from the website.
Then there are delayed projects like BugASalt because of shipping problems or other ones running realy long like Robot Dragonfly - Micro Aerial Vehicle.
But overall the success rate is still reasonable. You can't expect every project to be successful. What really annoys me are the one's like Vanuatu where they just grab the money and do not even try to deliver and still sell the product.
I backed a couple of kickstarter projects and did receive an early version of the pre-launched products. I don't consider my payment a pre-order but instead, I view it as helping to bring about a product that I would like to exist in the market. To me, Kickstarter is like nano-scale venture capital investment. At BEST, your return is a finished working product and more likely than not, something that kind of work but need further refinement and at worst, no return whatsoever. The website made this quite clear. Sponsor at your own peril.
I've backed 13 projects over the past year and a half. So far 4 of the projects have been delivered, probably only one was not delayed from the initial estimated delivery date.
My criteria for deciding whether to fund a project starts with the pledge amount. If it is under $25, I don't do much due diligence. If it is over $100 I spend much more time reviewing the project and it's founders.
Overall, I believe that the number one item to look at is the experience of the campaign founders. Have they had other successful Kickstarter campaigns? If not, do they have industry experience related to the project?
A number of the video game campaigns that I have backed (none of which have delivered yet) have been started by people with decades of industry experience. The pledge amount is low and your dealing with people who have done it all before. A safe bet.
A board game campaign that I backed (also small pledge amount) was started by a team that has a previous successful campaign. Another safe bet.
A digital music campaign I backed where the team has no experience is now 3 months late and might not be delivered, but at $10, I can live with that.
The next item to pay attention to is the scope of the project and what are the different skill disciplines required to make the project succeed?
What I mean here is that an electronic hardware project needs software design, a software game project or board game project needs graphic design, a music project needs a sound engineer. Usually, if a project has a low funding target, and a large scope (requires a big team), you can expect that it will have trouble delivering.
I view the things I fund through kickstarter as something between charity and pre-ordering. I've funded a couple of inexpensive games because I like what they are doing (Castle Story, Stomping Land etc.) but I don't have a lot of money invested so if they try and fail I am OK with it.
If I invested in something expensive and felt like the developers took the money and ran I would be mad about it though for sure. I understand the money I invest in Kickstarter isn't guaranteed and even if the product never launches I may not get it back but IMHO they dev is obligated to try.
I also find it hard to believe they were charging $75 for a monopoly clone and couldn't deliver for that price.
Kudos for bar-raising responsible reporting Gizmag. I often enjoy your Kickstarter and Indiegogo reports, but now that you mention it, perhaps the disclaimer about at your own risk should appear at the end of every such article.
I have learned first hand this hard lesson with Levitatr ipad keyboard. Not quite the same total value ($67.5K) but about the same per user investment.
The biggest disappointment in my case is that the creator does not seem to be very contrite about the situation plus he continued to sell the Levitatr on another site even when it was clear he was not going to deliver.
I would like to see the crowdfunding sites take a more active roll in protecting the consumer. They are becoming brand names and people are trusting them with their money. Hiding behind the legalize saying "buyer beware" is not good enough. I understand some projects fail but aiding the final purchaser in getting an accounting of where the funds went would be very appreciated.
That being said, I am still an active investor in kickstarter projects. I just tend to be more selective and look for small dollar investments or more established companies.
I'm not a frequent backer, but I've backed some projects over the past four years, and I have to say that most of the times, the results of the campaigns have arrived somewhat on time. Granted, some of them (like the Jetsam line of wallets), are of superb quality, and arrive when promised. Others (like my pair of IronBUDS), arrive almost a full year after the promised date, riddled with stories of manufacturing errors, conflicts when acquiring contractors, and the like.
Even then, I still believe in platforms such as Kickstarter. I love how fast ideas spread over there. My biggest beef has nothing to do with delivery, actually, but content. The amount of general stuff developed for iPhones is ridiculous. And it seems that since a couple of months ago, one out of 20 projects was a slim wallet of some sort.
As to what projects to back, I would recommend to pay close attention to the "Risks and Challenges" section in every project. To my understanding, that section was enforced by Kickstarter themselves after some legal conundrums earlier this year. Also, I would advice to be wary of highly successful projects. If the pledged funding is tenfold what the project requires, then just by considering economies of scale, and depending also on the nature of the project, all of the manufacturing processes and the like get complicated very fast.
Backed one project so far (musgaurd.com) and got the product just the way the Kickstarter campaign promised, I like it some much I'm going to order one for my other bike and one for my brother in law. It was a pretty low risk though as it was under $30 and a very simple product to produce.
Most often I think these crowdfunding people go wrong when it comes to the manufacturing. Thats a kind of netherworld that can mean dealing with people in china, or even in the US that you've never seen before. They have slick websites now, access to all sorts of equipment (so they say) that regular people dont have, and a whole vocabulary all to themselves. Who gets to pay when that vocabulary is misunderstood? The one doing the ordering.
Kscckstarter and IndieGoGo could do some major damage if they put together some assistance for projects once they became funded. Recomended manufacturers, some sort of legal vetting proceedures. Heck they could offer classes for like $1000 or something.
Its not in their model for now. If there keep being highly visible failures though it would be a way for them to save some face, and popularity.
Please do continue to report on Kickstarter projects. If anything, increase it. I like Gizmag's filters and think they would be well applied there to give us interesting alerts.
Pledging on sites like Kickstarter or Indiegogo should be viewed similar to buying shares on the stock market. You can do all the research you want, but there is always the risk that you will lose your money. Invest with the money that you can afford to lose. If a campaign delivers, then that is just a bonus. The advantage of these campaigns over buying shares is the low threshold. You could back a product or project for as low as a few dollars..
Paul Dutch Sandkuijl
Crowdfunding is like gambling on the horses, except there are no stewards or race officials.
There needs to be a regulatory framework before I pin my money on a vapour cloud.
I am an active backer on KS as well, so far I haven't had a problem with late delivery, so long as the creator post updates giving reasonable explanations as to why is is delayed then that is fine, if they don't I don't get angry I just take it as a chip on the shoulder and move on.
My first KS I ever backed was a fail, I'm not fussed by that as I put it down to my inexperience around crowd funding (and that the creator never updated much) but it has made me read through the comments and updates (if viewable) or pledge a lower tier until I am happy with the level of communication from the creator. but again I don't see it as anything I back as 'it is defiantly going to happen'. KS makes it clear enough that you back at your own risk.
I think a big factor in the ability of a project creator to meet his goals is the amount of work already completed. Funding something that is still just an idea is quite a risk. On the other hand, for example, I'm running a campaign on kickstarter right now to publish my book "How to Build Your Own Electric Bicycle" and I've already written the book, I just needed the funds to publish it. This has so far given my backers confidence knowing I'm already most of the way to completing my project. Anyone who wants to check out my project, there is one day left! http://www.kickstarter.com/projects/1354698863/learn-to-build-your-own-electric-bicycle-the-book
You're forgetting about the beneficial side effects of Kickstarter - It provides a forum for advertising innovation and also allows people to shape industry by indicating those products that have genuine appeal.
Has no one ever seen the Mel Brooks play/movie, The Producers? If not watch it and understand the article here.
3 projects in the last 2 years and none have delivered to promise and I suspect may not at all. Its seems too easy to make poorly thought-through committments and the owners clearly struggle to stay on top of their projects. I think the crowdfunding concept is great but the implementation is lacking and Kickstarter et al need to up their game or risk killing the market.
I think crowd funding is a fantastic concept, and I have supported 2 or 3 KS projects (spotted through Gizmag). I also know that (naturally) KS take a commission. I saw/heard an estimate of the amount recently, and it adds up to a lot of money.
So maybe it's either time for KS to lift their game to a new level, or an opportunity for a new crowd funding company, with a higher degree of due diligence. I am not saying I believe crowd funding must be risk free. However, I do think it would be good if KS, who are making good money out of it, shared the risk.
One option would be that KS pledged to establish a fund to investigate failures and take legal action on behalf of backers if there was good reason to believe the developer was fraudulent.
I like to back projects on Kickstarter because they seem like good ideas brought forth by good people who deserve assistance. I don't view backing projects as investing, purchasing or even pre-ordering. I view them as gambling.
As in gambling (or investing for that matter), never bring more to the table than you are willing to throw away. Keeping this in mind makes the entire process more fun and if things go bad, then chalk it up to experience.
So far, I haven't been disappointed with any crowd funding effort I've participated in. Some have been less than useful and even dangerous but in the end, the entire process has been fun. That's the point, isn't it?
I am sure there are failures in every nook and cranny of the business world but from my experience so far (I have backed four projects on Kickstarter) all of them have delivered as promised.
While there is always exception to every rule most of the campaigns on crowd funding sites tend to be run by honest and hardworking individuals and teams.
There is no reason to trash the sector because of a bad example.
Everyones comment very good on here.
Reading Gizmag every morning makes my day. I am a maker of things and innovator of sorts. I have owned 2 small manufacturing businesses in the past and am starting a 3rd. This time in the Consumer Sports Industry with a new product(Patented).
The reason I find the Kickstarter campaigns so enlightening is the fact that they raise so much awareness about new products, arts and innovations where they would be normally lost in the net. Kickstarter brings a focus where none existed before-they are creating a conversation on a whole new way we as individuals get to contribute to our community. We are kind of taking our individualism back when we get to innovate and share our ideas. Beware huge corporations-they playing field has changed right before your eyes.
Further, having offered equity in a business through a (PPM) for accredited investors before I must tell you that some of the campaigns I watch are lacking in their due diligence. Yes dreams and passions are great but what happens when your wife divorces you for spending too much time on your project, or a key partner God forbid falls ill? Did you risk manage for those as unpleasant events? Or worse- customs is holding your product for all kinds of reasons you cant even dream up.
I like what splatmans comment, yes it would be a good thing to fund their own fraud department. Or maybe, start a type of escrow for successful campaigns much like contractors who are building a home go through. They get draws as they show promise.
I have backed two projects- one on Kickstarter and another on Indiegogo. The Kickstarter one was a titanium pen that was delivered a couple months late, but was a very nice pen. The Indiegogo was a small basic cell phone (Micro Phone) that just ended. Now that I have read this I hope that I will get the two items I am supposed to receive as "Perks". I am supposed to get them by the end of August, so we will see.
I am looking at a couple other Indiegogo projects that, due to this information, I will wait to see how things are going (and do a little research) before funding. I hope that this type of problem is the exception rather than the norm, so I will most likely continue to fund these crowd funding projects.
I think splatman has it right: it's one thing if a Kickstarter fails (funding goals should be realistic, and not just meet the minimum to produce as expected, but sometimes things cost more than they should or business doesn't work out or... whatever) but it's another thing to make a contractual commitment to someone, then simply fail to deliver, while still producing the product for sale. If the business model doesn't work after funds were reasonably allocated to it then it's time to declare bankruptcy and move on, but not time to shrug off previous contracts and pretend business continues as usual. If money from the campaign was spent inappropriately, well... that wouldn't be okay in the stock market and it's not okay on KS or Indigogo, or even in a nonprofit like Kiva.
I suspect that, whatever legal self-protections Kickstarter and other groups put into their agreements, crowdfunding is going to start seeing litigation until people either realize that the penalties for cheating are not worth it, or until the funding companies begin to take a more active roll in policing their offerings. Until then, however, I still vote that (with projects like the Arkyd, the Makey Makey and the sensordrone) the creative output of crowd-funding outweighs any detriment.
Sure this is a problem , but when you give money to a Kick Starter project it's a donation you are not obligated to get anything in return . Now I think there should be some recourse when something is produced and sold other places and not delivered as promised to the sponsors .
For me Kickstarter is a mixture of charity and gambling. I don't expect to get the finished product (with one exception - Star Citizen, but that is a special case) the return on my investment comes from the inside view you get on the development process - win or fail.
Just like making a movie some projects make it all the way to the last dollar then they go tits up on you. It happens all the time in a capitalist economy. If you want to gamble come to Vegas you need to finish paying for those billion dollar casinos.
I only spend what I can afford to loose. I look at it the same way as if I was giving money to a friend.
I have backed one KS and it went viral so the person has 6 times the required money so I HOPE he's able to bring that home and at the end of the day I did just consider the amount I gave to be a donation and then if I did get my rewards I considered that a bonus. Now I consider them very much guaranteed.
I have a product already developed and now considering my crowdfunding options be that KS or Indigogo, I consider it more likely that I will do Indigogo as it is a more convoluted project with the finalisation of Industrial Engineering through another crowd scheme called Local Motors and meanwhile setting a a small production company to manufacture the machine but many of the jigs are already in place and the process to build them well known for new models.
My product is a new small vehicle, in leaning motorcycle. Its had 4 years of development and is on it 2nd patent of technology. I see many of these small vehicles appear here on Gizmag and even mine has featured in the past. One of the major issues I see with the development of these types of products is they dont understand rule one of vehicles sales 1. Its a very personal purchase and one size does not fit all so you need more than one model!
I am lucky that we will have a full range of product types to choose from in cruiser level bikes, adventure touring level bikes sporting level bikes and street sports type of categories in the most popular models in each area available. So these companies that enter the market with one model are destined to fail as 85% of potential customers seem destined to walk away as even in buying cars people actually like the car and walk away MAYBE to come back so you have to have a good "personal" sales team not a website and then be able to "close" on the deal, get people to spend the money they want to spend. So I would never if ever invest in a one product vehicle type. 5 products minimum.
As someone looking at a crowd funding scheme, the reward process seems so convoluted if their budget does not allow for a "Rewards manager" to be employed as well as the rewards produced then guaranteed you are not going to get them so look for simpler or straightforward reward schemes.
Lastly if its something you are passionate about OK be unhappy that it didnt happen but never invest more than you are comfortable in loosing depending on the viability of the project as only you can determine. Risk Vs Reward is a fine line sometimes if you are not comfortable as a risky investor then perhaps crowdfunding should be considered a donation UNTIL your reward comes sailing in the door.
Hopefully Anne Yonimus will be able to reveal their crowdfunding campaign on Gizmag one day too!! Good luck big spenders!!
I was very pleased with the Kickstarter Waka Waka project. It is a high-powered reading lamp and USB device charger combined, using a solar charger and a Lithium-Polymer battery for power storage. The makers also donated a lamp-only version to the poor in Haiti (and other areas) for each one pledged. The website was well produced, and our updates came frequently. Everything shipped on time and worked as promised. They even sent a waterproof bag with it. Some crowdfunding projects are great and well worth it. You can buy these items on Amazon now.
I have funded one KS project that I saw here on Gizmag.
I was for the Chillpuck. (http://www.gizmag.com/chill-puck-cold-drink/27021/ - Ed.) The video was so well done that I had to give money. (If you have not seen it check it out, hilarious! I got my money back just by having the "You hate puppies and beer" line lock an loaded the other week.)
I id get my chill puck and they are a hit.
I will be purchasing more with our company logos later this year.
So I have had a very positive response.
I will probably fund more projects but really do not look for much in return. I consider it a vote of support for someone who has a sense of vision about making something that interests me.
If I get something back great. If not hopefully I supported someone who was honest and did their best.
I only participate in things that really interest me. Sometimes the results are reasonable... sometimes not!
I totally understand and realize Kickstarter is NOT an online store to shop, however I do have issues when Kickstarter will not step in and deal with projects that have no outcome. I have been waiting on the Spike2 iPhone case for a year and a half and they are still only at the design stage. The iPlifier was a total bust, the project creator took off with nearly $10,000, closed his Facebook account and has not logged into Kickstarter in months (Kickstarter told us there's nothing they can do about this), and last, the Embrace+. It was my understanding all projects must have a working prototype, well this one slipped by. Once funded, the creators announced they are about to start creating the prototype and here we are 6 months later still waiting for a prototype. I'm done with Kickstarter, which is not fair to the honest projects but I've had it dishing out money for nothing. There is NO protection for us.