It’s not ok for billion-dollar companies to crowdfund

If established companies were just a tiny bit better with the way they do presales, this might be okay. But I've bought too many products in the last five years that were literally broken (videogames are the prime example) after forking over $60. Some of those products have remained broken for months. That's unethical. What shocks me most is this has happened with flagship franchises, which tells me those companies simply don't give a damn. Why should they, when the pay now, deliver later business model works?

Companies need to prove that their product is valuable, you can't do that when you flip the relationship, the power dynamic is completely out of whack - we're the billion dollar company, but we want you, the consumer, to give us money now for a product which we promise will be good later.

As consumers, we should expect more.

Sure, compared to an unestablished company. But why would you ever want to do that when you can buy something that's out there and has been proven? You are much safer buying a product that's been put through it's paces no matter who's making it. You don't have to worry about honoring any type of arrangement because the product exists. You want a new Ford a year from now, then buy it a year from now. You've been told your model 3 will be delivered a year from now? Don't hold your breath. These companies are pre-selling little more than hype.

If Tesla goes bankrupt then what?

I don't have a problem with this as it is really just an ad hoc focus group. I think they do have a responsibility to make sure there is more upside for the early adopter like early access or unique skin/badge, etc.

But one situation where crowd funding might be appropriate is where a product manager or developers can’t get budget to fund development. So unless a crowdfunding project is successful, the product will never get developed.

That may or may not be the case here, but in general I can see a few scenarios where crowdfunding in large companies might be appropriate as a way of seeing if a real market exists and gaining traction internally, prior to development.

But evidently, lots of people disagree with you and, and, for one reason or another, do want to pay for some products before they are made.

I'm sometimes one of them - I will pay for a prerelease. Sometimes it's to help (e.g. I'll buy books on preorder to help authors I like), sometimes it's to help get a product made, sometimes I get benefits (it costs less than it will later, at least supposedly).

That's an interesting thought. Assuming that the company is already worth millions/billions of dollars, I wonder if it can give extra assurance of a money back guarantee to unhappy consumer backers. Especially if the company primarily intends to use crowdsourcing as a form of product validation.

There's also the risk of unhappy but influential backers going public about what they think. Crowdsourcing for big companies must not be as fun as your typical Kickstarter campaign!

To me, crowdfunding is more about testing market fit, which is especially critical when building physical products that need manufacturing - so it's for everybody. Actually, the simple fact that refund is automatic when campaign goals are not met is probably better than any usual presale.

Presales by established companies would not do that. Next are expected product features that turn out to be impossible/too difficult to deliver on time or budget. Happens all the time, there are entire software development processes built around this uncertainty. For presales, this is really solved by precise language clearly differentiating between the definite and the possible. With zero effect on customer enthusiasm and disappointment, because we all ignore them every single time. Just be careful to not "not-promise" too much.

Then there is the pre-sales rebate. The least suspecting of all pre-sale perks. But many products get cheaper over time. How long does the announced "post-presale price" have to stay valid so that the pre-sale rebate is not deceptive? Clearly it would be ok to slash prices when when the successor model is announced two years later. Clearly, it would be absolutely outrageous of they only sold one unit to a guy hired by marketing at the announced full price on release day, to then immediately go below pre-sales price. At what point between those extremes does a pre-sales rebate become deceptive?

In fact, large companies might bring some refreshing linguistic restraint into the game, as I would expect them to be much more cautious of claiming "best/first/only in the world" about products that are clearly not. I rarely see a product kickstarter that does not look like exactly how a highly polished parody of product kickstarters would. At least with a big company, you would know that they put more into the product than into the campaign.

What is currently ruining the platforms (well, at least ruining kickstarter) are campaigns were this is clearly reversed, e.g. campaigns trying to do a moneygrab with something as commoditized as USB power banks.

Unless the work is highly modular and distributable. But it depends on the product being worked on, some things work well (open source software development), other things don't (design, hardware, physical stuff).

The ethics aren't what you say they are either. First, while if a startup crowd funds a product and fails, you're SOL. When a billion dollar company crowd funds a product, even if the platform makes no guarantees, if it fails do deliver then you have recourse against the company. Second, Why should only small players be able to address previously unaddressed markets? Isn't that one of the complaints about big companies, that they ignore small markets? And now that they've got the ability to actually test out a market - and serve it in the process! - that's a bad thing too?