Kickstarter vaporware of the day, Lifx edition
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They're not stupid. They know this is happening, and they're _hoping_ that it'll all magically sort itself out; that people will be smart enough _not_ to believe in the $50-you-get-a-lamborghini pledges.
I mean, it's a great scam right? If you're a con artist, you make your money in one of two ways;
1) Steal someones money and make them too embarrassed to do anything about it (classic porn on the credit card)
2) Steal a little bit of money from a lot of people, all of whom can't be bothered to do anything about it. <--- Kickstarter.
Realistically, this is going to continue until someone sues Kickstarter for being complicit in mail fraud. That'll be a sad day, but you can already see it coming on the horizon.
* Actual project may not be a scam, but honestly there's not a huge difference between a poorly organised project that takes everyones money, tries to make something and fails, and an actual scam. If you're selling something, you're a merchant. There are laws around that.
Money on the other hand, is very easy to measure. So are your legal obligation as a merchant.
If you sell something online, and the person on the other side never receives it, that's mail fraud. No matter what your intensions were.
caveat: As a merchant you also have legal protections in this case, which is where refunds, reshipping, etc. come in.
(accountant)
I sometimes turn down the rewards. And I'm always offered the option to do so. Which means it's definitely not a normal for-sale arrangement. Who would order something from Amazon and then check a box saying, "Oh, just charge my card; don't actually send anything"?
As others have pointed out they are selling something. Nothing indicates that you can get the "thing" simply by sending an entry to the address and there is no obligation to buy anything. As happens with contests that don't want to appear to be a lottery. In other words you can't have someone pay for a chance to win something (in many legal jurisdictions particularly in the US not sure about anywhere else). But you can have people both buy things and enter with a very clear "no obligation to buy" as we have all seen (once again in the US).
So it is very clear and obvious that in exchange for paying money you are expecting to receive something in return.
Now of course they could probably work around this with the proper wording somewhere.
"We hope to produce this lightbulb. There is no guarantee we will succeed. Here is a complete list of our qualifications. Be aware that if we fail to deliver you will loose your money. Here is our record with other projects. Etc."
In that case the "game" becomes a little different and it is apparent and visible that you stand to loose just like paying to enter a marathon you pay money and are not guaranteed to win. (Not a great example but anyway..)
If someone truly takes the money and runs, that's a criminal offense. Kickstarter doesn't need special policies to make it so, and I'm sure they'd cooperate with a criminal investigation. I think they've even said as much!
(http://www.kickstarter.com/projects/schuyler/lockpicks-by-op...)
Wanted $6,000; got $87,000; completed funding in sept 2010; backers still waiting. Cheapest pledge to get product was $20.
Someone else has taken on the project. A few people have got "practice sets", but that's not what they wanted. They wanted the picks.
If legal action had been attempted and failed, that would be interesting! But here there's no indication that the matter has been brought before a court.
A project much more like an investment prospectus than it is a sales offering.
So I would be interested in knowing if the SEC has already had a look at the Kickstarter legal setup, and if not, it may well be the next step (ie not suing Kickstarter, but refering them to SEC)
The laws around prospectus and offerings are setup very explicitly to avoid your situaton 2) - so I would be very surprised if kickstarter projects are not somehow explicitly avoiding those regulations - or if they are in fact compliant
In the Kickstarter TOS, there is the following line:
Project Creators are required to fulfill all rewards of their successful fundraising campaigns or refund any Backer whose reward they do not or cannot fulfill.Legally, Kickstarter is just a channel for contributions. If you want, and if the project offers it, you can sometimes pre-order goods in exchange for your contributions. But you get no interest in the business beyond your pre-order, so it's not a security.
There is no question that they fall under consumer protection laws, products are being advertised and offered, and anyone can "buy" them. I'm sure the FTC already has an open investigation or investigations.
If you create a kickstarter project, pull in $1m+, spend it all legitimately and fail to deliver the project, you could end up being named in a civil suit. In the future there will be people who lose their houses over this. Just because you made the project in 2011 doesn't mean you won't get sued in 2014.
If you create a kickstarter project, pull in $1m+, spend it all illegitimately, on personal expenses, expect to go to jail. I predict this will happen to at least 1 person.
The larger question to me is what liability kickstarter themselves have. Whatever that amount ends up being, I think they can absorb it as a cost of doing business, as long as it remains on the civil side of the law.
I like kickstarter. So far I've stuck to using it for pen and paper RPGs, something I know can be delivered on. I think the core concept around kickstarter is going to radically change the world of consumer products. Its just too new to have much of a reputation system yet (but its coming.) May be kickstarter isn't the facebook/google of pre-funding projects. If they look like they are going to take a big hit, be ready to step up.
As someone who designs business projects the whole thing sounds like a personal nightmare to me. I know first hand how the simplest of projects on paper can take 5-10x longer than estimated to complete. Add in bells and whistles to make it look attractive to a bunch of people, ouch. Easier said than done applies very much here.
I have backed several kickstarter project, received the results of a couple, funded a project via kickstarter and promoted several projects. You could say, I'm a fan of the kickstarter model.
On the other hand, I've been predicting that one of these high-profile (likely physical hardware) projects in going to dramatically fail, and then we'll see the fallout.
I guess what stuck in my craw is "complicity allowing this sort of scam-project". Mainly because this feels like an unwarranted accusation.
To try and reassess my feelings, I visited the Kickstarter page to read the copy and get a feel for how protective they are of the backers.
How it Works "Every project is independently crafted, put to all-or- nothing funding, and supported by friends, fans, and the public in return for rewards." (Ok, so, explicitly stating that the funding is in exchange for rewards.)
"The filmmakers, musicians, artists, and designers you see
on Kickstarter have complete control and responsibility
over their own projects." "Rewards are things like a copy of what's being made, a
limited edition, or a custom experience related to the
project. This isn't Best Buy — rewards aren't shrink-
wrapped and ready to ship. Once the project is funded, the
journey to bring them to life begins."Clicking "Back this Project" on Lifx
FREQUENTLY ASKED QUESTIONS
Who is responsible for fulfilling the promises of this project?
Kickstarter does not investigate a creator's ability to
complete their project. The claims and responsibilities of
this project are solely its creator's.Guidelines
Are creators legally obligated to fulfill the promises of
their projects?
Yes. Kickstarter's Terms of Use require creators to
fulfill all rewards of their project or refund any backer
whose reward they do not or cannot fulfill. (This[1] is what
creators see before they launch.) We crafted these terms
to create a legal requirement for creators to follow
through on their projects, and to give backers a recourse
if they don't. We hope that backers will consider using
this provision only in cases where they feel that a
creator has not made a good faith effort to complete the
project and fulfill.So, basically, whether kickstarter is complicit comes down to a couple questions in my mind: 1) How much responsibility do they bear to vette each project for likeliness of funding? 2) Are they messaging backers well enough about everybody's responsibilities in these scenarios?
... And I don't know the answer to either. The information is there on the site, but a little hidden and the recourse for failed projects seems non-existant. Most of these larger projects are new LLCs set up for the project, and if all the money is gone, suing them is likely going to be fruitless.
(So... yeah, I've got no answers. Just some exploration.)
[1]https://ksr-assets.s3.amazonaws.com/creator-responsibility.p...
There's already a bunch of stories in the press about projects failing to deliver, and the more backers get shafted the worse this will get. If no-one wants to invest in Kickstarter projects that'll be bad for kickstarter.
There's a whole bunch of different things Kickstarter could do about hardware projects failing to deliver. Why they aren't taking action yet is a mystery to me.
Such as what? Like offering insurance for failed products? Doing due diligence into creators? Or?
Any solution you come up with (and I do really want to hear your suggestions) has problems. If they vet it puts more liability on them and legally that would place them in a different position. If they offer insurance then they have to vet and the risk shifts to them which isn't the idea of what they are trying to do. So your thoughts are specifically?
In a perfect world, Kickstarter could do just this - or even better, set up a prediction market* on whether the stuff will (eg.) ship on time. Then users could check the market price and decide whether the risk is small enough for them, and even directly hedge against loss.
If you browse this thread you'll find lots of suggestions from different people. Probably other people will have better ideas than mine, but for what it's worth: I'd require projects successfully raising a large amount (say, more than the price of a midsized car) for hardware to agree a series of milestones, releasing the funds to them in stages. The precise milestones would be agreed on a project-by-project basis, but could include: Some money up front, some money when they have a preliminary electrical schematic and prototype on breadboard, some money when they have a costed bill of materials and a final prototype, some money when they have a feature-complete mobile app, and some money as the products start shipping and the invoices from manufacturers start arriving.
To put it another way, creators can't have any pudding if they don't eat their meat.
My first reaction is that that's a good idea. But on second thought this would create quite a burden and bureaucracy at kickstarter to monitor and make sure the right thing happened. I would imagine that for that reason alone they wouldn't go for that but I could be wrong.
I agree admin costs would be a problem for smaller projects; if Kickstarter was only making $2500 total on a project they couldn't afford a thorough technical design audit. Some costs could be kept down with technology, e.g. prototype demo youtube videos, which creators should be doing to keep their backers engaged anyway. You'd risk rigged demos, of course.
Crowd funding is still a developing industry at the moment, and it's mostly assumption on my part that makes me think creators failing to deliver is going to be a problem. It's going to be interesting seeing what develops.
Of course people want to see their projects realized but I believe that far more good will come from disappointing projects. The horror stories will serve to remind people that these are still investments and as such: it would be best to consider funding these projects with non-profit-esque expectations rather than some hipster product marketplace.
That said, investors do serious due diligence (usually) before investing and ask hard questions. We don't see those questions on Kickstarter so you cannot make a more reasoned choice about investing or not investing.
Is it possible that kickstarter might be predicated on lowering inhibitions to invest below the levels necessary to consistently make sound, rational judgments?
But that is just my opinion of where its going, it may turn out to be as revolutionary as eBay was in the casual sale market.
The currently used comment system there is just horribly insufficient - it's basically impossible to have any real discussion there.
Basically, they shouldn't mention on their page at all that they will be getting the product. So whether you're donating $1 or $100 or $1000, it's just that - a donation to the cause. You're not "buying" anything. That should make things a lot more clear, although I expect the project donations to drop, but probably better than for Kickstarter to get its reputation ruined forever because most projects "don't deliver" the products people were "expecting", when they thought they bought it or "pre-ordered" it.
Kickstarter does not investigate a creator's ability to complete their project. The claims and responsibilities of this project are solely its creator's.
Kickstarter is an amazing concept but the coming wave of failed projects is going to mark the cumulative jumps of the shark.
From an earlier interview with Kickstarter's founder[1], "I don't know. I mean, no, I don't think that we would. But certainly, the kind of thing you're talking about is not a bridge that has been crossed yet. Someday it will. And you know, I think if something did go awry, it would be — it wouldn't be my favorite day."
So Kickstarter is a "It would be awesome if this product came to existence and I'm willing to buy the alpha version even if it doesn't exist yet and may never exist" kind of thing. It's the pledge that I buy one of those, unseen and unproven because it would be cool if I had one of those. You just need to be aware of the risk and you won't feel screwed over as badly. And don't go for kickstarters that just look too good.
It's a hard to solve problem, but I think the only thing that kickstarter can actually do is to better communicate the risk.
I don't believe it's Kickstarter's fault in any way if people view it otherwise.
And I'm on your side: It's not kickstarters fault, if people think otherwise - still they could make that point a little stronger.
I the long term I also think this is better for the campaigns - a lot of hardware projects seem to struggle shipping if they get a significantly higher number of orders than predicted. I'm sure in the moment it's exciting to see how many orders you can pull in, but painful in the long run when it is difficult to deliver on your promise, especially if you're planning on building a long-term sustainable business.
This point is counterintuitive but here it is: Assuming that there are relatively rigid time constraints, you might be able to make a profit at 200 units, and a profit at 200,000 units, but not at 20,000 units. This is because there are thresholds where you suddenly have to invest in infrastructure, and setting up infrastructure fast is particularly expensive.
If you're raising capital to produce your widgets, you can lay out a business plan and predict with reasonable certainty that you need to sell X widgets before you can break even. You present that to investors and they decide if they think you can sell X widgets.
On Kickstarter, you are implying a fantasy claim of arbitrary linear production scaling that says "I need $25/widget and I will make however many everyone wants!" And hell, that doesn't even work for selling commodities.
So what the model should be for people starting a business selling a tech product is that they say "We're developing a prototype, and if you pledge $X you can get a prototype". Then limit that to a small production run and raise enough money so everyone can involved can quit their job. Now they have time to look for investors, and a great proof of concept that the idea is marketable.
So the usual place where you see an unlimited number of backers is for digital products. See the Amanda Palmer or the Planetary Annihilation: They had limits on any backing that required a physical or personalized goods, but unlimited pledges for digital-only pledges - and there the assumption of "the more I sell, the more I gain" holds true.
In order to bring to market a product you want that is not currently available and would not be feasible to bring to market without first knowing there is a sufficient market for it.
Kickstarter is the ultimate fail-fast, it cuts out a huge chunk of market-research when trying to build a business around something. If people don't want to kickstart it, others are unlikely to buy it.
But removing the possibility of offering a product seems too much. I think that, after a little while and a few big "unfortunate" projects, the process (specially for deliverable goods) will be more understood and there will be more pressure in showing the team skills, previous products, etc. Right now that's not very clear (though you can research on your own, of course)
But I'm actually surprised that projects like Lifx are able to get any funding at all. A cursory thought in the direction of the project would reveal that the pitch is essentially a) others with tons of experience have invested lots of hard money in this space b) to no real success so far but c) we have the answer and only need a hundred grand to make it large. And d) actually, we don't even need $100k, it's more like $25k plus materials, so as you can see this project is really 99% done now.
This is classic hucksterism; you will see it at any business meetup in any town. Somebody has built a better mousetrap in his garage, leaping over giants, and only needs $25k/$50k/$100k to get to market. The key is they never need large sums of money, only relatively small sums to get to market; a larger sum would indicate that the project is not 99% done, which I assure you it is.
The obvious question: if you have built a better mousetrap and only need $100k to take over a major industry like lighting, why not go max out your credit cards and just build it? Or show a prototype to anyone over 50 who might be able to connect you with an angel investor? Occam's answer: because you haven't a clue how to make it work.
Again, I don't know if the Lifx guys are hucksters. But their pitch follows a classic huckster pitch to the letter.
I have no idea if this is or isn't the case with Lifx, but I always viewed Kickstarter as a funding/marketing package.
== MySaver ==
- Project was delayed for over 5 months.
- When I got the product it wasn't the colour I had requested.
- When I contacted the project leader he told me that they didn't have any more products of that colour, so he chose the one he thought convenient.
- False statements: "The MySaver is the only cable protector that we know of and we fully-assemble it on a OEM quality replacement dock connector to USB cable". I can't insist how false this statement is. The cables I received where assembled using some kind of industrial glue gun - by no means "OEM quality" - and they are now falling apart.
- Contacted Kickstarter about this issue and said that "if the project gets fully funded it must be a legit business/product"
== Elevation Dock ==
- Backed in February 2012, still waiting for the product.
- I will be changing my iPhone 3GS to iPhone 5, but guess what? It's a different dock connector. Yes, partly my fault, but its been 8 months since funding closed and 9 months since everybody knew this project was already 100% funded.
== Conclusion ==
Many projects (primarily hardware) are very poorly managed. Project leaders, instead of being rational from a production capacity/constraint point of view, they simply want to "beat all records", and be at the top of the Kickstart funding list. This is just bad entrepreneurship and management skills. These guys are risking production, product quality and customer satisfaction over a "vanity" metric: How much is the maximum I can raise?
I've given up, I'm not backing any more projects, I'm not going to be anyone's guinea pig. I'd rather wait for the products to be available in stores at a higher retail price, where I can see their "quality" finish. I'll judge then.
What purpose? The purpose of delivering an obsolete product by the time it reaches customers months after?
Companies and individuals go to Kickstarter to create great products - that can't be financed in no other way (bank debt, VC capital, etc.).
More capital (pledges) result in more orders, more inventory, higher working capital and a production/logistics nightmare. None of the hardware projects/companies I've seen to date on Kickstarter have the required infrastructure to handle "as much capital as possible" or as many orders as possible.
Just because it is not implicitly stated doesn't mean that the business owners do not have that motive. Just because some business owners cannot scale effectively does not change their original motive. Just because you would personally run the businesses or the website different does not change the motive.
I'm not going to waste any more time having a speculative "internet argument" with you on this.
Having taken the elevation dock apart, it is entirely do-able.
Now the very first Kickstarter I ever backed... it was to cover the editing and production costs of a documentary that was supposedly already completely filmed, it just needed to be put together. Funded in early Feb 2011 and not a single update on the project or comment from the creator since that day either. Still bummed about that one - I genuinely wanted to see the documentary, and my pledge was supposed to get me a copy of the DVD.
I tend to think that kickstarter is a fad and that if it survives at all, it will be in a much reduced and much more controlled form. How long will it be before the authorities decide they're complicit in a fraud?
EDIT: The ScanBox project looks like something I could make for $5 in parts and have fun doing over in an hour or so.
Edit: The shipping date is October 12[1].
[1]: http://www.kickstarter.com/projects/limemouse/scanbox-turn-y...
This actually makes me wonder: If one would want to scam Kickstarters, one could just create new project and PR their way into millions of dollars without having to deliver a single thing.
If the shipping was 50% done, I would agree but this isn't the case here
There is something about Kickstarter that makes HN irritable, hoping for failure. I'm not sure what it is exactly and its out of character. I'd like to give the benefit of the doubt but I can smell toilet excuses.
I'm sure that kickstarter has issues and maybe its not a big thing in the long term. But, its a nice idea. It seems to be working. Why is this mob so cranky?
Personally, I love Kickstarter. I've funded a project with it myself. It's has great potential for an individual or small team with "1000 true fans" to make a living, and I think we'll see a lot of success stories come out of it.
And some notable failures, of course. But I don't see that as an indictment of the Kickstarter model. Personally, I wouldn't back Lifx. It's expensive, I'm skeptical of its ability to ship, and I don't need color-changing light bulbs. But if someone wants to spend $70 to take a flyer on something cool, more power to them.
The typical entrepreneurs of Hacker News are consistently told that an idea has little value and that actual execution is so much more. You must almost always build out at least a basic product before you have a hope of money trickling in or gaining investment.
I think any crankiness might be related to that.
I very skeptical it's possible to deliver these at those price points.
Just consider as a hacker the master bulb;
They gloss over how you actually connect it to your home wifi network; it either has to interface with your laptop or phone via a cable for the initial setup, or it has to be able to create it's own wireless network you can hook onto, to then in turn tell it which is your home network, so it can hook onto that, and then relay to all other bulbs. That's a hell of a lot of technology to pack inside a groundbreaking lightbulb that's going to be running at high temperatures, at a $70 price point.
The 'smart bulb' stuff aside, a decent plain white LED bulb sets you back around $30. Have you ever tried those colour-change LED light sets you get for garden decking or under the kitchen units? Even those cost more per unit that this, and they light they put out is harsh and well bellow 10 watts; hence why they're just used for ambient highlights.
In my opinion the companies best positioned to deliver these kind of technologies are the likes of NEST[2]. They already have a constantly powered, integrated master device, it has a zigbee chip (which makes much more sense than wifi), an API, large processing power, and lots of data on the household. All they need to do is update their firmware (which they can do automatically already) and publish an API. Then any licensed 3rd party vendor from China can now deliver 'slave bulbs' using whatever technology and price points they desire. A ground up solution proposed here is short sighted, and realistically in the long run more expensive.
They don't seem to have much interest in pushing for wide adoption (at least, they seem to want to sell $400 controllers, not $50 controllers).
This screams "We have no idea what we are doing"
(And those buying into the project certainly don't know a lot about it as well)
This is like saying "We are building an electric car... with shiny paint", whereas the real problem is "building an electric car!"
They probably tried to fit a RaspberryPi inside first
And even the article says (and they agree it's an OEM lamp):
"The Lifx is priced at $49 per bulb, which means that you’re basically buying a basic WeMo switch and getting the LED bulb — and all the technology merging the two into one bulb-sized piece of hardware — for free. It just doesn’t seem likely."
They can prove me wrong, sure, by shipping the product.
It is not overpriced if you factor the cost of electronic control of the lamp
"Heck, I could dissect a router and glue on a relay in a smaller package for under fifty"
Cheapest WeMo is $50 so you're almost there already
You can try to have a homemade solution for less, sure but you'll have a small price advantage and maybe not follow all standards relating to switches (isolation, etc, it will work, though). Not counting the software work.
Now, for their lamp they would need 3 power channels, instead of one 'on-off' control, which is certainly more expensive and complex.
This is not a fifty dollar wifi device with a free light. This is a thirty dollar light with a ten dollar wifi device slipped in.
Wifi is probably overkill on a lamp, but it's not completely without precedent. High-end LED aquarium lighting setups (the kind you need to grow exotic corals) often have wireless interfaces and/or dedicated controllers.
If money were no object, I would have these panels all over my house. http://ecotechmarine.com/products/radion/
Is it a donation or is it a purchase?
This question comes up constantly ( http://news.ycombinator.com/item?id=4506601 e.g.) when kickstarter projects are featured here, TFA is actually about this topic more-or-less specifically. At the risk of sounding cynical: I think it's in kickstarter's financial to not answer this question- they're better off with the confusion & everyone seeing the fee-paid/donation as they want it. That way it's a payment for a product when you have your wallet out- it's a "donation" when the project fails and you are left with nothing. :)
Perhaps my results with tech have been good because I am an engineer with lots of experience designing and manufacturing hardware/software products. I have seen projects on Kickstarter that have me question whether or not the person fully understands what it takes to take a project from concept or prototype to a finished product. Needless to say, I don't back such projects.
The article gives a sense that making hardware products is hard and expensive. The author is most-definitely correct. A product like this light bulb could easily burn-up above US $100K in regulatory testing (UL, FCC, CE, TUV, etc.). This is particularly true if the designer isn't well versed in this area.
The article looses a little authority in my eyes when the author says things like:
> The heat sink is crucial, especially if you want to put lots of wifi electronics into the bulb.
Which is complete and utter nonsense. WiFi has nothing to do with the requirement for a massive heatsink. If it did, you iPhone would be a huge block of aluminum with fins. No, the heatsink is required because 80% (or more) of the energy going into an LED is converted into heat, not light. This data is from a few years ago, but I suspect it hasn't gotten much better than that. Most of the power you shove into an LED converts to heat that you have to manage, hence the large heat-sink.
I did a project a while ago that managed more than one thousand one Watt LEDs in a very small space. I was personally responsible for the design of the electronics, mechanics, optics and thermal management. Thermal management alone took about six months of FEA simulations and validation through prototypes before converging on a solution. I had to design the thermal management system to handle over one thousand Watts. It was safer to assume that all input energy (and more) was converted into heat in order to have some operating margin for derating the cooling system.
I went on reading the article and thinking that, while I agreed that multi-disciplinary hardware projects are hard, this guy was being a little mean-spirited. After all, he was right in that this project required having an understanding of electronic design, mechanical design, thermal management, optical design and the myriad of manufacturing and regulatory disciplines that come with bringing something like this to market.
The author's incorrect statement about the reason for having a heatsink created a negative reaction in my mind that carried over as I continued reading the article. I knew I was biased. I tried to ignore that and continued reading. Then I came to the point in the article where he told us that the project originator was also behind another project that amounted to not much more than some folded carboard. A project that was supposed to ship in July and, as of four hours ago, hasn't started shipping yet. That was enough to change my mindset. I was, at that point, aligned with the author in sharing his skepticism. If this guy (or guys) can't deliver a cardboard box in nearly three months I can't see any hope of delivering a complex product such as the LED light bulb in six.
Keep in mind that I have always been a believer that small motivated teams can run circles around large companies with lots of money and people. Projects like this don't cost ten million dollars at a large company because that's what it costs to design the product. They cost that much because such organizations burn a lot more cash per unit of time than a small team. They have a lot more people, resources and infrastructure to support. A large R&D organization could burn a million dollars a day whether they stand still or are working on something. In sharp contrast to that, a small focused team working out of a garage or a modest environment could do the same or very similar work for hundreds or thousands of dollars per day, depending on the nature of the project.
This to say that I am not skeptical of their probability for success because the project is difficult. My skepticism comes simply from the fact that they/he have another fully funded project on Kickstarter, one that my teenage kid could probably --with some some help from dad-- execute on in a month, and they have not delivered yet. It's like proposing that you can build a house when you haven't even demonstrated that you can build a tent.
The question here is more one of execution rather than anything else. I'll estimate that if you are really frugal and have to design this from scratch you are looking at a cost of about $500K. This means real design for manufacturing, thermal design, testing, testing, testing (did I say "testing") --which includes environmental testing-- tooling, certifications, procurement, etc.
That means that, at the current funding level of $780K for a little more than 13,000 light bulbs, they have about $20 per bulb left over to manufacture, test, package and ship. Ouch.
Even if my design cost estimate is off by 100% and they can get this ready for manufacturing for $250K, that means that you only have about $40 per bulb to manufacture, test, package and ship. I am not sure that's enough unless you commit to manufacturing tens of thousands of these per month. One thing is for sure, nobody is making a dime on this one.
Remember, business costs and overhead don't stop at manufacturing. There's far more below the tip of that iceberg.
EDIT: I could say a lot more about the nature of bringing such products to market. Here's an important point that I felt warranted an edit: A product like this can burn down your house. It is imperative that its design take no shortcuts. Testing before release must be extensive and thorough. This could take dozens of iterations until a solid and reliable design is converged upon. This, again, takes money and expertise.
I believe the author meant that without proper cooling, the excess heat would fry the WiFi controller
That being said, I have no clue what the operating temperatures of today's WiFi systems are
You probably wouldn’t want your LED lights to be much hotter than that (with heatsink) for maximum life. I looked up the most powerful white LED that my local electronics distributor sells, and it’s a 24 watt Cree. It’s rated for up to 150°C, so I guess with Wi-Fi you might need to cool it more than you otherwise would. Most of these lightbulbs are controlled by microcontrollers or other ICs that max out at around 125°C anyway.
>> The heat sink is crucial, especially if you want to put
lots of wifi electronics into the bulb.
> Which is complete and utter nonsense. WiFi has nothing to
do with the requirement for a massive heatsink. If it
did, you iPhone would be a huge block of aluminum with fins.
Yes, the embedded system inside this lightbulb will need to be rated to operate at higher than usual temperatures when compared to, say, the electronics inside your VCR.
Typical commercial-grade integrated circuits are rated for a range from 0 to about 70 degrees C (32 to 158 degrees Farenheit). Industrial components typically push the upper limit to 85 deg. C (185 deg. F).
Yes that is a bit uncharitable to call this: http://www.kickstarter.com/projects/limemouse/scanbox-turn-y... a foldable cardboard box, but it is a whole lot simpler than putting together a light bulb that out performs every other bulb in the market for less money.
So when someone who knows how tough putting something like this together is, sees folks buying into it, they twitch. Seems like the author of this piece twitched pretty hard.
With an ecosystem like kick starter somethings are going to work and some aren't.
Also don't forget projects in other areas like designing, furniture, games etc.
I think delays with this type of thing are to be expected, and by themselves are not the worst sign.
This is what gets me about some of these Kickstarter projects:
A project like LIFX is, without a doubt, impossible to get done with $100,000. Not a chance in hell anyone could pull that off. At least not for a real product that passes all testing, safety and reliability requirements that go into making a consumer product.
What would have happened if they reached their $100K goal and maybe a little more? Say, $150K. It would have been a complete bust. No way to deliver.
Are these projects fraudulent from the start or are they simply innocent or uninformed wishful thinking? You are asking for $100K of other people's money. If you know full-well that it won't be enough, what does that mean? If you don't know how much it will cost, what business do you have even posting a project like this?
As it stands right now they are at about $800K. My guess is that, to do this right, you need about two million dollars.
To be open minded, this doesn't necessarily have to come out of Kickstarter. Maybe someone is willing to invest in these guys. Someone sees this as an MVP of sorts, comes in and puts $1.5 million on the table for a big chunk of the business. I wouldn't, but, hell, I probably wouldn't have invested in Facebook in the early days either. What the hell do I know.
I wouldn't be so sure. There is a company here in LA called Oval Integration that has been doing stuff exactly like this, just hacking and integrating off-the-shelf electronics, see a demo here: http://www.youtube.com/watch?v=4X6sHabSXwg .
If garage hackers can bootstrap it like this then why wouldn't a team with significant kickstarter funding be able to do the same? (edited to fix youtube URL above)
My comment specifically stated that this lightbulb could not have been done for the stated goal of $100K. This is absolutely true.
I won't get into all of the details. I'll just mention that regulatory testing alone could easily eat-up anywhere from $25K to $100K. And, BTW, you cannot sell a device such as these lights without full FCC, CE, UL, TUV and other certifications. And, BTW, you can EASILY burn-up two months going through regulatory testing.
Beyond that, you have to develop tooling and dies. That ain't cheap.
Making a mass-market consumer product requires a lot of up-front investment and planning. It also takes time. Unless you have full in-house expertise you'll have to hire qualified mechanical designers well-versed in the technologies at play (plastics, stamping, machining and die-molding are different disciplines).
There's also the requirement for extensive testing on something that could potentially set fire to a home. This is serious business. You can't assume that production units will perform as a garage prototype might. There are manufacturing variances and issues that need to be tested and accounted for.
The project just passed the million dollar mark with about 20,000 units sold. We'll see what happens. It sounds like a lot of money, but you'd be surprised how quickly it can become "not enough" once real design and manufacturing costs start to pile-up.
My rough educated guess is that you could make a run of 100K units for about $20 a piece, packaged and landed in the US. That means that you need two million dollars plus engineering and other costs, which could reach $500K. In my eyes, at $2,500,000 the project starts to make sense. At this rate they could reach that number as they nearly have two months to do.
My real question is: What would they have done if the project only funded just past their original $100K requirement? There's no way to get this done with only $100K. Save outside investment it would have been a mess. Not sure how Kickstarter deals with such cases.
The author of the article had some very solid points and all they answered was something along the lines of "don't feed the troll".
I also think your $ 2,000,000 budget is extremly optimistic because it doesn't include the costs of building the lab (that they most likely don't have), legal fees, and just keeping the building afloat while they wait for certifications to pass.
This is similar to what Groupon have had to do, because it was killing their reputation. People are estimating "Well, we could make about 500 of these", then receiving orders (and the money) for 50,000 of them. Suddenly the predicted ship dates go out 2 or 3 times as long, and people get upset.
It would perhaps also drive up orders early in the cycle, as people can't wait until the last few minutes when they see a project has been funded.
Personally I think the simplest option would be allowing a 10% "overshoot" fund, and beyond that the project automatically closes to new backers - this should ensure that despite the various reasons why the money wouldn't come through from individuals (credit card rejected, etc), a funded project would get it's full amount.
That is your opinion, in my opinion this would be bad for KS.
I don't know why some grow ups people need someone else to put limits on the money the can spend on something, like they are dependent children who need to be controlled what they do with their own money.
Or worse, they want to tell other people what they can spend. They are totalitarian in the inside.
A Ten years ago I started a hardware company that developed an advertising sign based on LED's. It was basically a motor with a stick of RGB LED's attached like a propeller. When you spun the stick and modulated the LED's just right you could paint full color disc shaped picture seemingly in free air. An FPGA would control and modulate the LED's (at the time it was the only affordable thing that could modulate a LED 400.000 times a second) The whole thing was online via an OEM phone module and would automatically update with ads, weather, etc. from a server where customers could buy campaigns online. Campaigns could of course be customised wo that you could get your ad only on the displays you wanted. I was in charge of getting this whole bandoogle from an idea to a product, and while it was hard I managed develop and bring it to market for around $200.000. Remember this was ten years ago where you had to tap directly into the a carriers network and hack around just to get an IP address, and five years before the iphone.
The point of the story is that sometimes small nimble companies that are set on doing something actually succeed. I'm not saying that these guys have solved all the problems, indeed it sounds from the article that there are some huge obstacles. I'm just saying that you should never underestimate the power of a small team whose only goal in life is to make something happen.
If they can deliver what they say with $100,000 then the fact that they now have 10x that probably means you don;t need to contribute to see the benefit.
Mea culpa.
Some of my friends know these guys and by the sound of it this is a case of a "overnight sensation" that has been years in the making.
The bulb on the light is quite lovely
Sorry to be offtopic, thought that was kind of interesting.
This drives me nuts. There may be insufficient evidence to say that Kickstarter is "a good way of providing startup capital...", but there's not zero evidence. If you're trying to come off as the measured, realistic alternative, flailing hyperbole doesn't help.
Even then, there are at least a few very successful videogame projects that fit the bill, Al Lowe's Leisure Suit Larry and Jane Jensen's Pinkerton Road being the most prominent.
I think it's worth looking at Kickstarter for different industries in very very different ways. For hardware manufacturing (which seems to be the only thing discussed on HN), it's a huge risk. For just about everything else, it's well-established and fairly predictable.
I don't believe that large companies with hundreds of millions of dollars are always the right people to find the solution. Isn't this something we tackle a lot of the time? Being the small fish in the big pond? I do think that we should be wary of the snakewater salesmen of the world, but don't discount someone just because they don't have a large, bureaucratic organization backing them.
That being said, it would be really nice for some sort of rating system to be put into place. Force these inventors to generate brand loyalty even if it is to them as a person.
Are they naive to the challenges of deploying a hardware project? At least some of them are, but the lead engineer has been in this field for a long time. Are they trying to defraud anyone? Absolutely not.
I hadn't heard of this project until I read this article, but knowing the team involved there's just no way these guys are putting their reputation on the line over something they don't personally believe can be done.
Must have missed the memo where the Hacker News community collectively decided to stop seeking funding and shooting for the stars. Reading the tone of these comments, we should now only tackle the problems that we... sorry, you the commentator... 100% know can be solved.
Also, I think the major difference between funding in the usual HN startup sense and funding via Kickstarter is that startup funding is almost always classical investment whereby you get a share in the company and the rewards of their hopeful success - but Kickstart funding could well be money for nothing.
They will never ship the bulb and you cannot fund such project based on a video.
This will perfectly enforce the realization that it's INVESTMENT with risk and not a purchase of the item.
Some of the hardware ones I thought were the neat and obviously producible (like weird light fixtures/shades) in a short a time frame also either had stupid reward tiers, or, I guess, just weren't interesting to anyone else.
All that said, I don't really get the people who expect stuff in 6 months for hardware-based Kickstarters. Do you have any ideas about the product development lifecycle? Going from prototype to manufacturing can take quite a while, especially if you need to visit factories in China or some such.
When I back something that's more complex than 'I'll draw a picture' or 'I'll sing a song' I assume it might take a couple years, and that's been borne out at least once, though that level of expectation has also allowed me to be pleasantly surprised.
Despite the above, I'm not saying I think these LED lights are on the level - it seems like a very very poor idea to start a new project without finishing the first. But I also don't think they're as impossible to make as everyone is saying, though offhand I'd also think it'd make more sense to control the lamps with Bluetooth than with wifi.
But if I have this right, and they get the bulbs from someone else in bulk and just pop on a really cheap controller/wireless interface, it seems like the price works out, especially if they aren't worrying about making them 'secure.'
As for 'certifications' and such, I really don't expect they'll even get them, let alone know that they might need them or that they exist.
A few years ago the U.S. investment universe could have been stylised as two mutually exclusive sets: regulated securities available to everyone, e.g. exchange traded stocks, and loosely regulated products for sophisticated investors, e.g. hedge funds. Common to both sets is that the agent, e.g. public company CEO or hedge fund manager, has a fiduciary obligation to act in the best interests of the principal, i.e. the investor. The JOBS Act muddied the line between sophisticated and unsophisticated investors but maintained what constitutes an investor protected by their fiduciary rights and what constitutes someone giving money away. Enter Kickstarter.
Kickstarter says its campaigns are donations and not investments. This is crucial as it keeps them from having to comply with securities regulations, which have a higher bar for fraud than consumer or donor regulation. For example, failing to deliver a promised product would be grounds for scrutiny into whether the company acted in "best interests" of its fiduciaries - presently, a Kickstarter campaign has loose to no fiduciary obligation to its donors. Felix Salmon argues that Kickstarter campaigns are closer to investments than not and so should be fiducially obligated to their donors/investors.
The greater debate is about who should be protected by fiduciary rights, who should be allowed to participate in what kind of investment, and how we trade off inclusion in capital gains against the risk of fraud and public disillusionment in the capital markets. Whether WiFi circuitry can reliably survive 85 degrees Celsius is a side, albeit still interesting, concern.
Flagged immediately for this statement. Troll journalism.
Spending money on getting that nice warm colour would be money well spent.
Also, the video mentions photographers. I'm not sure, but I'd have thought that multiplexed LEDs would be a horrible idea for some photography.
Isn't the problem more along the lines of "amateur investors making amateur investments"? Is it Kickstarter's fault if people believe the "pretty much anything" that can be said in a video?
And he's right. This article should have been written by, say, GigaOm. I'd want a Wired article to go into more technical depth than this one does. I'd guess that, if I found the articles that pointed to the Kickstarter, they don't.
The reputation of a buyer is the mean of the reputations of the projects they've backed (times some confidence metric).
The reputation of a project six months after it started is 1 if they kept their promises (as measured by confirmation emails sent to the backers) and -1 otherwise.
The reputation of a project before six months is the mean of (the mean of the reputations of its backers (again times some confidence)) and the reputation of the person who started the project.
I know that technically you make a donation, but some of those "projects" feel like borderline scam. Can't the donors or even kickstarter themselves turn back on the project owners if they receive a huge amount of money and fail to deliver anything? Especially when they say they have working prototypes in the introduction video.
I'm really convinced that the average kickstarter donor sees their donation as a pre-order more than an "investment". I'm sure many of those who donated to a project that failed to deliver felt like they've been scammed, and that may hurt kickstarter in the long run.
http://news.ycombinator.com/item?id=4523753
The 2nd one I'm still hoping the backers will come through or at least refund the backers. So I'll hold that one for now.
I have backed 16 projects and the first was TikTok Nano watch band which funded Dec 2010. Out of the 16 only 2 have me very concerned.
I just backed two more projects one for $1,299 which is a 3D Printer and the other $99 for 3D printer software. I will continue to back things but I look carefully at their estimated ship date. It must be within 60 days, and I will dispute any charge from a project that doesn't deliver within that window.
That might get kickstarter's attention as well.
First let's go over the current marketplace:
• There are very nice 60 watt equivalent bulbs available for <$25 in quantity one.[1] Without looking directly at the bulb you will not tell them from incandescent. Single color, using phosphors to shift blue LEDs down to nicer frequencies.
• At quantities >500 LED bulbs which look like the illustration on the kickstarter page are under $10. [2] This gives a rough estimate of cost of materials assembled.
• A thumbnail sized microcontroller module with wifi is <$30 in quantity one.[3]
It certainly looks like there is room for a $50 that includes a light and a wifi enabled microcontroller. The cost model gets easier though. Each customer only needs one master bulb with the wifi, the rest only have the cheaper 802.15.4 mesh radios.
Before we look at the article anymore, lets consider what is different about the Lifx than the $10 bulb above.
• More efficient. It needs to be a bit brighter to meet the Lifx specs. This adds cost to the LEDs to run more current within the thermal limits.
• Tri color. It is going to need at least three LED colors. Ideally the sum of them is going to be a pleasing white so you get a usable color at full brightness. The other colors are achieved by running some of the LEDs at lower duty cycle. Notice they chose a bulb with a diffuser. That keeps you from getting blotchy spot light effects.
• More power switching FETs. Their total power handling will be the same, but it will be a higher component count.
• A microcontroller and radio added to the circuit board.
• Software, a couple weeks for the bulb innards.
For that they get to roughly quintuple the sale price. Sounds doable to me.
Most of the article is just an "On no! The sky is falling!" piece on Kickstarter feeling like a store. He uses some other company that took a run at the "just like incandescent" market and apparently got beaten by Philips. For some reason, he has a side-by-side set of photos which the Lifx illustration bulb and possibly the ugliest LED bulb I've ever seen. (Said ugly bulb is proclaimed indistinguishable from incandescent when inside a lamp shade, so it has a use case. Just don't let anyone see it naked.)
As the article progresses it just gets embarrassing. He declares it impossible because other smart people haven't done it and confidently predicts every negative lightbulb attribute he can think of will afflict the bulb. He throws out some ridiculous straw men for the product and imagines a huge barrier for configuration of a UI free wifi device (hint: solved long ago by many products, e.g. Apple's Airport Express) and that somehow the 0.05 watts from the wifi will overheat the bulb which is dissipating ~10 watts already.
At least it was run as "Opinion" instead of "Fact".
Here's my opinion on Lifx: The masterbulb concept is a mistake. Too confusing. Have a controller that plugs in the wall. Keeps the confusion down but also keeps people from switching off the master bulb or having to have a battery in it. They may need to give a bit on the total brightness to keep the heat under control. If they try to grow to something large, they will probably be killed by a patent lawsuit. If they make it far enough to make a nice PAR20 version (diffusion is much harder), I will happily buy 30 of them.
EOM
[1] http://www.homedepot.com/Electrical-Light-Bulbs-LED-Light-Bu...
[2] http://www.alibaba.com/product-gs/601830276/led_light_bulb_e... For ballpark reference only. Never trust the specs.
Look at that Phillips bulb, isn't it neat? When they won the L-prize for a bulb that could do 60W equivalent for 10W input, some of the coverage said that they had spent just over $28M developing that one bulb. They didn't open source anything they discovered in that process about making LED light bulbs. And granted LEDs have improved in the last 3 years since the Department of Energy ran its $10M 'kickstarter' campaign, the bulb linked is a 12W for 60W equivalent, and its only one color.
So one has to wonder, if it seems easy but the only one company was even able to complete and entry for the L-prize, what did they know that I don't?
I wonder if it is a form of suspended disbelief, if its far enough away from your direct expertise but seems practical and one really loves the concept, one can invest a level of belief into someone saying they can do what you want.
The one that will be interesting will be a Kickstarter to bring an herbal supplement to market that stops aging. I'm sure its coming, or a perpetual motion machine, maybe a project to get the Rossi cold-fusion machine into production. They keep saying if they have a million dollars they can build a functioning power plant.
[1] http://energy.gov/articles/department-energy-announces-phili...
Personally I'm not worried about kickstarter being generally vaporware, although in some instances it will be.
Also it is a little too early to be calling this VaporWare. Give them a chance to prove themselves.
Its funny that reuters is writing this, because, they were shepherding a lot of people on an inferior product too, The iPhone 5.