Another Crowdfunded Gadget Company Collapses

You want something guaranteed to ship perfectly? That's what Amazon is for. The point of Kickstarter and its ilk is that it is a risk – that's why it usually comes with lower prices and the ability to have it first.

When you buy on Kickstarter, you aren't preordering. You're crowdfunding something that doesn't exist yet. On the Diffusion of Innovation chart, you aren't an Early Adopter... you're an Innovator [1]. The creators put in time; you're putting in money. As long as there's no fraud, I think failures like this should be treated as an acceptable part of this new method of funding.

(That being said, two caveats: first is that failures like this might be acceptable but they're still bad for Kickstarter+Indiegogo, and second is that I'd be a lot less rational and forgiving if I had lost money on this)

[1] https://upload.wikimedia.org/wikipedia/en/4/45/DiffusionOfIn...

The incentives are almost backwards: the earliest pre-order customers have come to expect the biggest discounts at a time when the per-unit costs are highest and the up-front investment is yet to be done. If product survival is really the goal, the price curve should probably go in the other direction: from high to low over the product lifecycle.

Manufacturing hardware is really, really hard, even for teams with experience. Super hard if your past experience was in shipping software, because you don't realize how easy you've had it!

(Disclosure: after a successful Kickstarter campaign, we shipped https://www.pantelligent.com/ to all our backers and were only a few weeks late from our original delivery estimate. Even for a team that's shipped HW and SW before, it was still very challenging. Most importantly, our backers are telling us that the product really delivers on the benefits of what we promised in the campaign -- and apparently that's a rare and noteworthy occurrence!)

You know, while I've only contributed to one such, and only because I thought it ought to be done, I view these as wagers. If the project works out, great! If not, my monetary loss is calculated to not grieve me.

Most backers assumed smoothing those prototypes out for production was a reasonable endeavor. Unfortunately as the project's unfolded it became more and more clear that the group of people running it didn't really have the experience to deal with production even though they clearly had a product. I think a combination of wanting the product to be significantly better than their initial prototypes and a poor idea of how to deal with Indiegogo/Paypal/Factories/Production kind of doomed things. Likewise, they haven't been very smooth or fluent in terms of their communications with backers.

All that said, as a backer, I'm mostly disappointed they didn't have someone with more communications fluency and experience with manufacturing to run things, as I think that alone would have enabled the product to be a success. I'm not in a position where the money makes or breaks me and I tossed it away several years ago. Pointless to get too emotional about a sunk cost unless it comes out that there really has been some kind of gross mismanagement/negligence and not just some random grad-student types getting in way over their heads.

But incompetence is a risk when you throw money into a Kickstarter/Indiegogo-shaped hole that smells like interesting technology. If it's obsequious and insidious incompetence, lump them in with the hand-less criminals. If they gave it a good long try, had consistent updates, release project IP and open source software, well... That's what we're here for. To try and get ideas off the ground. You're going to lose money at some point in the process. I regularly throw money into all kinds of electronics-shaped holes on Kickstarter and Indiegogo. It happens when the stars don't align that I lose my money. But if they aren't criminals about it, well, shit happens.

I would much rather pay 2x the price for a real product that has been shipped to stores and has a review, as opposed to a pre-order Kickstarter campaign. It's really interesting to me that based on a video, people are willing to drop hundreds of dollars on gadgets simply on trust.

Kickstarter or Indiegogo need to take more responsibility for these campaigns, otherwise they will find themselves dead in 5 years.

They need to:

1) Have the creators set the number of funders to a reasonable level. If you know how to build 100 devices, you don't know how to build 100,000 devices, it's an entirely skillset and price point.

2) Have the creators set an execution plan, where they need to his milestones with firm dates before money is released. Once it has been determined it hit a milestones, then the next round of funding gets sent to them. IF they miss a milestone, funders get the option of refunding the rest of their money back.

The thing that galls me is that they massively exceeded their funding target, but still couldn't do anything.

What was their plan if they only hit their target?? They didn't have a product --- they had to do all this development. So if they only took in like 100k of the kickstarter, what were they going to do?

They totally misrepresented the status of the project. It's right and proper that Paypal and Indiegogo didn't immediately release all the funds to them. The project didn't say they needed those funds for development. Otherwise, how could the funding target have been 100k?