The perils of crowdfunding
Contributor JC Fletcher breaks down the world of crowdfunding in "What you need to know about Kickstarter, Indiegogo and the concept of crowdfunding." (aol.it/1jjLpMF)
We planned to run this article this week anyway, but coincidentally, you might've heard about one man's desire to make potato salad (aol.it/1qrUEZW). Zack Danger Brown has become a bit of a celebrity, turning what was a small goal to make the famous side dish into a over-funded (and controversial) Kickstarter effort. Though he has a lot of chances to prove he is capable of producing that much salad, most aren't optimistic.
This story reminded me of "The Doom That Came To Atlantic City," a board game that raised $122,874 and the project creators decided to not move forward with the project due to "ego conflicts, legal issues, and technical complications." Backers were "shit out of luck" because nothing in Kickstarter's policies protected them. (more: aol.it/1qrUeCS)
"Backing" something on a crowdfunding site can be risky, if you don't understand what you're getting into. It's not a "store," you're really contributing from the goodwill of your heart first and expecting a reward second. I vowed to not back another Kickstarter campaign after pledging to two gadget projects in 2012 which ended up being several months late and total failures. But then there's other efforts that truly are about goodwill, such as The Lizzie Project (aol.it/1s4gHtF) a documentary that follows around an inspirational woman who I follow quite a bit on social media. I wanted to contribute to that with the reward just knowing the film was being produced and maybe I'd get to see it someday.
Now it's your turn: what crowdfunding efforts did you (or someone close to you) participate in? Share your experiences, good and bad.
As to kickstarters, I haven't donated any money. There's a subreddit for the bad(shitty) kickstarters, reddit.com/r/shittykickstarters. I think this subreddit just highlights the need for these scams and poorly thought out campaigns to be removed.
One of the first projects I ever backed was for the Olloclip lens for iOS devices. It ended up being successful and they've gone on to launch multiple iterations of the lens -- and it's been a lot of fun taking fisheye photos with my phone. I think it's something that has more than justified its price. And on top of that, the Olloclips that are sold today are more expensive than the Kickstarter backed editions. So, that's awesome!
On the flip side, there are a lot of examples that have similar stories to what you mentioned up above. Stuff just doesn't end up working out or the product doesn't live up to expectations.
One thing that I thought was surprising was the strong opinions of Oculus Rift backers after Facebook acquired the company. A lot of people who backed the project felt like they ended up getting nothing out of their "investment." Guess what? You did! You got an Oculus Rift VR headset before most people. I for one am insanely jealous!
Not to mention, this mindset is the wrong way to approach things and it's why Kickstarter goes out of their way to call you a backer, and not an investor. The only thing you're (almost) guaranteed to get out of a project is a cool product and the warm feeling in your heart that your dollars contributed to their success.
Of course, things have come up, or gone wrong (a tree fell on the guy's workshop during a storm and caused all sorts of damage), and it looks like we're going to miss that date. According to a recent update, the factory in China hasn't even created the right tools yet! It's been one excuse after another. I'll be surprised if it even arrives by July of 2015 at this point.
- Machine of Death (card game)
- To Be or Not to Be (interactive fiction)
- Broken Age (video game)
Unfortunately investors and venture capital can not give or have no interest in evaluating each project. Thus, excellent product can simply die for not investing. See the Oculus Rift and many others.
Crowdfund is a risk? Do not doubt it. But the alternative is not creating any new product, not a competitor for various products that do not improve simply no competition.
See my project: igg.me/p/774155/x/4078819 when finish my campaign, I can imagine how good or not it was.
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Too often we crowd-fund on a whim because we want one of whatever they built on a discount off the suggested MSRP. Yeah its a well done video they probably floated money to get. Yeah it's a well-done wordpress theme they probably floated money to get. Yeah its a "working?" prototype that they probably floated money to get... All those things cost money, and they are probably using your money to pay that back to themselves.
Then you add the fact that they suck at planning because they're idealists, and they've got some friend of theirs with a factory connection who says "yeah we can have that done with our 3d printers and all that at such and such time... it's going to cost $$$." Then they turn around and ask you for money, then it all falls apart because they found a glitch and can't go to production, but they're too embarrassed to tell you, and afraid you'll demand your money back at the first bump. so they hide...
The real problem is the "working" prototype they built with an Arduino and a few 3d printers...
Do it right people. If you have an idea, find a product developer and pay them to help you see all the issues, who has the manufacturing built in to the product proposal. There's lots of them. But in South Florida, we believe it can be properly crowd-funded if done right.
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