The sad, frustrating story of crowdfunded products that never ship
When it comes to crowdfunded projects, I have to admit that I'm very lucky. Every project that I've backed -- five in all -- has eventually shipped product. Although some of those products failed to meet my expectations from the Kickstarter or Indiegogo hype, I felt that I paid a fair price for what I eventually received. But what about those projects that you drop your hard-earned bucks on that never make it to your doorstep or desktop? That's the subject of an Ars Technica post by Casey Johnston published yesterday.
Johnston highlights some of the more notable crowdfunding disasters, which hopefully none of our astute readers fell victim to. There was MyIDkey (seen above), which nabbed US$473,333 on Kickstarter and a total of $3.5 million of funding. The idea was a USB dongle that stored and displayed login information on a small display. It was even designed to provide voice search for your logins. Instead, the few devices that shipped were buggy and poorly built, and mismanagement resulted in a waste of all $3.5 million of capital on ... nothing.
Or how about the Indiegogo project for the Kreyos Smartwatch, a highly-hyped campaign that raised $1.5 million? This project was also a model of mismanagement, mixed with some highly questionable business decisions. A core team of four people was assigned to the project, most of which were part-timers. The company spent the nest egg on a manufacturing relationship with a Chinese company that kept delaying production despite having most of the funding money. The bitter end of the project resulted in a handful of devices actually shipping.
Johnston notes that "In the end, the few Kreyos watches that shipped met few of the team's original goals: they were not at all waterproof, they batteries did not last the promised amount of time, and the firmware was buggy." The company ran out of money after a handful of refunds were made, leaving many backers with nothing for their investment.
The road to success is littered with a number of ugly carcasses, and Johnston says that although there is no recourse available directly from the crowdfunding sites, the terms and conditions place the final onus on the project creators. Sadly, there are very few cases where disgruntled backers have been able to recoup money from failed projects.
The bottom line? If you back a project, go into it with your eyes wide open and with the realization that you may never receive the promised product.
