Kickstarter, Trademarks and Lies
arduino.cc
arduino.cc
However, I really think the kickstarter team needs to take a closer look at how things are going today. This is but one example. Out of the many kickstarters I've contributed to, only one has shipped and only one more appears to have had any progress in the past 6 months. My friends have had very similar experiences and all of us have said we probably won't be contributing as much for a while. It kind of ruins the idea if a very large percentage of the projects fail or are halted (e.g. trademark disputes).
If you're an angel or VC, the low success rate is countered by the large upside - a Kickstarter has no upside besides the cool t-shirt/game/gadget you were promised. The risk needs to be commensurate with that.
If however the delivery rate is only 1/10 then that game actually costs me $200 (since I probably need to fund 10 games in order to get one I can play).
Therefor if I only want to pay $20 for a game, I shouldn't pay more than $2 for a pre-order.
The result of this is that genuine projects who stand a good chance of delivering have to grossly undercharge for pre-orders which starves them of the level of funding that they actually need.
If its value is around the price you're funding it at or slightly higher, then you should only fund things which have a high chance of success; from a proven team, that has shipped plenty of products before. For instance, a band that you like that's released several albums and is raising money for a new one, a studio that is developing a new game based on an existing engine, and so on.
If it's a riskier campaign, like development of a new hardware product from a new company that has never shipped anything before, or an artist's first album, or some amazing new game with an amazing new engine that has all kinds of really neat features, with a game designer you like but a rookie team, then you should only fund it if it has significantly more value to you than what you are funding. Maybe you just think it's such a good idea, that even trying and failing and learning from that is worth the money you spend. Or maybe you think that it is a game worth $200; it's such a perfect game for you, that you would be willing to shell out $200 for it, or the equivalent, fund 10 such games for $20 and get one working game out of it. Or maybe you're just a big fan of the person you are funding, and don't mind giving them $20 even if you think they might not complete the project.
So yes, you should be aware of the risks when funding something; that's why it's funding, and not buying a completed product. You should decide if what you're going to get is worth the risk. Far too many people seem to see Kickstarter as a pre-order system, where the product is basically ready but they want funding to determine how large to make the first batch and fund just the final manufacture. Maybe people think that because it does act that way for some products; but you really should not expect it to work that way for all products.
If Kickstarter limited themselves to the pre-order model, that would vastly limit the kinds of things it would be good for. You seem to want only pre-orders, not to fund development, so maybe that would work for you. But some people want to be able to fund riskier, more wild ideas, and accept that risk. I think that they should be able to; the only trick is that there seems to be a good deal of confusion on the part of funders as to which projects are which type; people don't seem to be very good at judging the risks involved when funding a project.
Some buyers are also savvier than others, for example is it riskier to fund an indie platformer or an arduino replacement? A HN reader might be able to guess but the general consumer might well have no idea.
There are also other factors, like might this fail because there isn't enough funding? or might this fail because it is just an outright scam?
So basically what we have is information asymmetry which will lead a lot of people to assume some mean level of risk in funding a project so the required value payoff will be higher than something bought off the shelf, what the "value coffecient" will be will take time to discover though.
The point is valid though that for example a game which I would love but would never be funded by a game studio might be worth $200 for me.
"...consumer..."
This is the problem. If people are thinking of themselves as consumers, rather than investors, then yes, you have a problem. This is why Kickstarter changed their rules on physical products, to not allow people to buy multiple quantities of something, in order to discourage people from treating it like a pre-order system.
Yeah, there's a certain amount of information asymmetry. I'm not sure you can ever do away with that, without killing the idea of crowdfunding entirely. If you require legal filings and financial disclosures and the like, all of a sudden you can't do it for small projects, you need to hire lawyers and accountants and things like that.
The best way to solve this is to convince people only to crowdfund people that they really trust. Don't look at an idea and say "hey, that's cool, I'll buy one of those." Look at the creator and say "this person can deliver, I'll give them some money to do so."
It's the same as buying a second hand car. I have no idea how well the last owner really looked after it so I either have to do a lot of due diligence (difficult with a kickstarter) or I have to guess how likely it is to have mechanical problems down the line.
When you preorder you are entitled to demand the product or your money back, but with kickstarter if it fails after a good faith effort you probably have no recourse. With most preorders (not all, but most) the product is near completion when you put in the order, but with kickstarter that product is often little more than plans at the point of pledging. It is similar to a preorder, but the differences matter.
Kickstarter goes out of its way to try to make sure people understand that it is not a preorder service, and many projects include a "risks" section specifically talking about how it could fail.
There would be a clear case for fraud if the people asking for contributions just took the cash and walked. But in the event of a good faith effort that failed, I think the court would find that the contract was probably upheld. The possibility of failure was always there and what was promised was the effort.
Kickstarter should promote the trust of backers in a similar fashion to the way that Ebay promotes the trust of purchasers. Kickstarter should be seeking to increase accountability in any way that it can through reputation systems, project completion metrics, background checks, and full transparency of the entire process.
Besides the sad response to the Arduino founder in this article, I would point to the backer-only forums and updates on each Kickstarter project. How are potential donors to see what's going on in that project?
I would certainly hope not. Get screwed by a buyer? Tough luck, deal with it, cost of doing business. Ebay is the most merchant-hostile pack of morons I've ever had the displeasure of doing business with, on par with PayPal.
Also, if they go that route (even not into full idiot mode territory like Ebay), their reason for existing will go away - make it more onerous for small startups and individuals to operate while making way for the larger, more organized companies, and Kickstarter as we know it dies.
I'm not ready to sacrifice kickstarter on the legislation altar, especially considering how many amazing things have been launched from it and how many more are still in the works. I'd say the occasional trademark kerfluffle is well worth what KS provides.
PayPal is owned by ebay. So at least they are consistent :)
(A) no more than $1,000,000 is raised via crowdfunding in any 12 month period; and ...
http://blog.fundinglaunchpad.com/2012/04/investment-crowdfun...
http://allthingsd.com/20121105/kickstarter-ceo-no-ipo-for-us...
“We think the most disruptive aspect [of Kickstarter] is the removal of the investment component,” Chen said. “People are supporting projects because they want to see them happen. It’s so different than giving money because you want to make a profit.”
Some of the things I've back have been on the "sure thing" side (Amanda Palmer) and some on the "hey that's a neat idea" side (obos). But I've never contributed more than I'm willing to lose, even for Wasteland.
For what it's worth, I've had my own reservations [1].
Since then:
- 2/9 have shipped, one precisely on schedule.
- 1/9 is shipping now after a forgivable hurricane-related delay and just might meet the schedule.
- 1/9 has barely gotten started, but has a relatively generous schedule, veteran team and continuous updates.
- 1/9 appears to be just marching right along, unremarkable.
- 2/9 are behind schedule, but have been providing enough in the way of updates and/or early access that I remain quite confident. However, I will say that in both cases, their schedules appeared plainly unrealistic from the jump.
- 1/9 appears to be floundering and has gone a month or more without updates at times.
- 1/9 is so massive and ambitious that I can't help but expect problems even though a lack of updates has been the only issue so far.
The impressions I gather from my admittedly tiny data set:
1) If the schedule seems unrealistic, it likely is. One year is probably a good starting point for creating anything from scratch.
2) Exceeding the funding goal seems to correlate to delays.
3) Experience counts. Veterans have performed better at delivering and much better at providing updates.
The fact that so much project status communication is "backer only" makes it very hard to get a sense of project progress from the outside.
The two things I have funded (a laser cutter for our hackerspace, and The Temple of Juno at Burning Man this year) have both been built, and both have delivered on their prizes.
Of course the "I'm going to totally smash an industry with $100,000 and...and....ANDROID!" aren't going to work.
I just want to make sure we're not blanket conflating branding concerns with ability to ship, because they're entirely different issues.
I see _many_ complaints from people who don't view Kickstarter that way, and in one sense I feel sorry for them, because I think it's at least partly Kickstarter's fault and partly some project's fault. The recent changes to KS's hardware policy were clearly aimed at people who thought they were buying products in a shop. I think Kickstarter, and the people starting projects on Kickstarter, need to make things much more clear that it's not an "online shop" - because in spite of words/phrases like "funding platform for creative projects", "funders", "pledges", "projects", and "creators"; I see lots of people, including smart people who I respect, complaining that their "purchase" at Kickstarter isn't turning out as they expected. I think those peoples expectations were wrong, but they still had those expectations, and were still upset when they weren't met.
People need to understand there _are_ places where you can buy products online and have them shipped to you within reasonable pre-agreed timeframes. They're called "online stores", there's _heaps_ of them out there - try amazon.com for example, or ebay.com. Kickstarter is _not_ one of those. Kickstarter, and Kickstarter project creators probably need to do a better job of making sure people understand that before taking their money off them.
One film project completely halted when a big studio started sniffing around it. Not happy about that one, honestly, but I guess it's good for the people involved. I half-expect nothing will come of the studio interest and then the guy's burned all his bridges on both ends, but I see how he got to the decision he made.
I've also backed some large game projects which haven't yet reached their scheduled delivery dates, so we'll see how they go.
I'm a backer of the project and have been following it closely. You don't seem to want to get to the bottom of this so much as yell from a soapbox. Calling a guy and asking 'have you ever heard of this guy?' isn't really enough research for the accusation you made.
When you found out that he does have people on his team who were on the Arduino manufacturing team you still call him a liar. When he claims to have order invoices from your company and asks for your permission to make them public, he hears nothing.
There's a bit more nuance here than you presented, so how about you two get in to a substantive discussion before you hurl any more volleys over the wall at a guy who, though you disagree with, is making a quality product advancing your platform, and who has been trying to talk to you about this?
It must be said - bitch all you want about the claim that these guys manufactured Arduino, but on nuance, it appears supportable. When team members who built something (or worked on it to a significant extent) move on, the work they did previously is in their portfolio whether you like it or not. This practice is standard in other industries, too, especially marketing. And of course, the obvious: if, as is claimed in the post, Arduino is afraid of damage to the brand, why not complain about all the other BLAHduinos out there?
This makes Arduino look bad, and if the founders of the contentious project are actually shady, they are loving the cred this reaction will earn them.
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Hi All,
I recently launched a Kickstarter project as well, that ended about a month and a half ago: http://www.kickstarter.com/projects/18182218/freesoc-and-fre...
Dimitri, the creator of the smARtDUINO project got in touch with me a few weeks ago to collaborate on creating a smARtBUS adaptor for our platform.
We’ve exchanged over 40 emails since then, and my impression is that he’s an earnest, upstanding man, who really cares a lot about the electronics community and making it easier and less expensive for people to do creative things.
We had a discussion about Kickstarter in particular, and one of the things he mentioned to me in our conversation was that he felt his campaign placed too much emphasis on the “Arduinoness” of the project, and not enough emphasis on the true innovation, which is the smARtBUS interconnect system.
We discussed the perils of successfully marketing a Kickstarter project, and said in retrospect, “If we communicate better the project, I have no idea were we can be now that it should be clear this is not just another Arduino.” (this was about a week ago, near the end of his campaign.)
I think if you can honestly blame him for anything, it’s not effectively conveying the message of the product in an concise way. If his workers were indeed manufacturing Arduino in Italy, there’s nothing wrong with claiming it. I’ll admit that the claim might look deceptively grand at first glance, but my intuition tells me this has more to do with Dimitri’s English ability, rather than a malevolent attempt at hijacking the Arduino brand.
Also, to clear up a misconception, Kickstarter doesn't pay the project creators, Amazon does. It pays the creator individually for each backer, and then money is transferred to Kickstarter from the Creator's payment account.
So the individual backers pay the Creator, the Creator pays Kickstarter. But it all happens automatically.
So I guess the unresponsiveness is on their side...
Really, you don't want some private company acting like a judge here. We don't have the legal knowledge or interest.
Your choice here, essentially is "Shut down everyone who gets a complaint" or "try to be the judge" (e.g. only shut them down if the complaint isn't obviously bogus) or 'forward the complaint on and let them deal with it'
There are a lot of reasons why you, the customer, would want #3.
(Also, I wonder, could they have a "warning, this project legitimacy has been challenged, read here" message for stuff like the one in TFA?)
Arduino has been very generous with what they have given away, I know if I had received the above letter I would have at least asked the other side for their story.
ISPs are data conduits and we don't expect them to police everything.
In fact, with things like the DMCA, that's codified into law.
Content processors like YouTube have already been shown to have an obligation to support take-down requests from IP holders.
In this case, Kickstarter got the equivalent of a polite take-down request from Arduino and they said, "nah".
While I see the common carrier strategy they're pursuing, I don't think that it makes sense in the long run. It will crumble like a house of cards when the first team of lawyers takes a whack at it for serious infringement.
Worse yet, by that time Kickstarter's reputation for protecting the interests of backers will likely be irrevocably damaged, thus destroying their business model anyway.
Throw in some competitors to their business model who add in some sense of protecting the interests of backers and Kickstarter will end up being the Myspace of crowd funding sites.
An obligation in-so-far as the DMCA is enforced. YouTube might be doing additional things as a company, but they aren't required by any law I know of. Maybe it's an agreement with IP holders, but it's not a law.
> Kickstarter got the equivalent of a polite take-down request from Arduino and they said,
That isn't the same thing as a DMCA take-down request.
> It will crumble like a house of cards when the first team of lawyers takes a whack at it for serious infringement.
The DMCA protects them. Their is no indication they received a DMCA request.
The problem is that all this discussion started from much different topic.
Here we are talking about someone, Massimo Banzi from Team Arduino, that wrote on the public blog of Arduino, which have for sure hundreds of thousands followers, if not more, that a company doesn't exist and that another person, stated with first and last name, was claiming something that he didn't.
Reading the Kickstarter page, including the bio, the faqs, the comments and the huge quantity of updates, can see very easily that this person always made very clear he's living in China so, why publish something so unfaithful?
When then it came out that the problem was on the table since October 29th, few hours after the launch of the Kickstarter project, why wait almost one month to complain.
The registration certificate went public so, the company exists and this is proven. Nobody heard about any apologize for the false statements.
The only think Massimo Banzi tried to do, here as well, was to try to change the topic.
The question is: is it right that the owner of a so popular blog write false statements, but when become clear to everybody that he was wrong, he try to change topic, instead issue the owed apologize?
This remember me when Steve Jobs (R.I.P.) is supposed he stated: "there is nothing wrong with iPhone 4, they are holding it not properly".
Massimo Banzi is for sure member of a group of very clever peoples that created such a good thing like Arduino, but he doesn't have the right to attribute to others the false and pretend that nothing happen here.
Massimo, you asked the Arduino community for comments, so here’s mine.
It’s obvious that Dimitri isn’t trying to do you or Arduino harm. Did he over-represent his team’s association with Arduino? Perhaps, though not to the degree that you claim, and your repeated accusations that he’s a liar go over the top.
While you’ve made it very clear you don’t like the term ‘Smartduino’ this is a slope that Arduino has navigated before, trying to find the happy medium between building an open platform and community of developers and manufacturers and protecting your own intellectual property.
Regardless of where Smartduino falls on that line it clearly doesn’t fall very far away from it. So again, whether Dimitri is right or wrong he certainly doesn’t deserve the lambasting bordering on libel that you’re dishing on him.
For someone who has such a leadership role in the Arduino community, your actions today have done a very poor job of promoting it. At the heart of the Arduino movement is the idea that hardware development doesn’t have to be about huge companies that build walls around their IP with lawyers manning the battlements.
This is how THEY solve their conflicts. This is not how WE solve our conflicts.
Got issues with how the Smartduino project represents itself? Talk to them. Work with them. Don’t try to whip us into a frenzy of torches and pitchforks because every single person in this community is trying to expand it and move it forward, a sentiment I see throughout these comments, but not in your own words, where I would most expect to see them.
Perhaps they could implement a 'Flag' system, that allows IP owners to signal illegal use/infringement, after which a review (in which both the complainer and the starter should be involved) can decide whether or not the project can proceed. This could easily sail into DCMA hell or lawyer heaven if a big corporation feels threatened, which could file complaint after complaint just to stall the competition.
But where do you draw the line?
Further commentary reveals that the people who have backed this guy are happy that he is the real deal, and that the problem has mostly stemmed from English being his second language, leading to a mis-communication over quite what part they had in manufacturing arduinos in Italy.
http://tcattorney.typepad.com/ip/2008/06/what-are-common.htm...
Are you suggesting there is a simple resolution to this set of law conflicts, and the answer is "it's not okay"?
Note besides the issue that there may be many countries involved, the company may also own different trademark rights in different countries.
Trademark law is only mildly harmonious and different countries definitely have very different fair use.
Who decides?
What are the rules for this decision?
etc
The problem is you are basically suggesting they set up an alternative judicial system. Outside of doing it with alternative dispute resolution methods (IE arbitration, mediation, etc), this is a really bad idea. ;)
Because just maybe Kickstarter has already considered the legal, logistic and ethical aspects of their own business, and possibly even consulted with lawyers and other experts.
This will likely get them sued eventually for not doing anything, but this probably won't happen until later in life (if Google, Yahoo, Facebook, etc, are any benchmark). So far Google's had a good record, at least in the US, of not having liability, trademark wise.
On the other hand, if they actually start to take down projects or otherwise deal with trademark disputes, they bring all sorts of possible liability onto themselves. Plus the hassle of trying to verify trademark claims, and effectively being asked to judge whether the usage of a given trademark is infringement. All bad ideas to be involved in. There is literally no upside for them.
Worse, despite nice TOSen that disclaim liability for everything under the sun, you can't always remove all liability. It's like grocery store parking lots that have large signs saying "not responsible for lost or stolen possessions left in cars". This is done because in a lot of places, they are actually legally responsible, and they are just trying to get people to stop suing them all the time.
The trust and responsibility aspects are certainly a significant concern, but this has little to do with whether they should get involved in the business of disputes between projects and trademark owners. Heck, if you wanted to encourage "authorized" projects, you could even have some nice logo display program where verified sponsorship means you get to display some logo, and it only shows up on those kinds of projects. Or you establish some sort of "trustrank" scoring or whatever where relationship with trademark holder or IP holder is a scoring factor.
Whatever the solution, there are plenty of ways to incentivize good behavior and happier trademark holders without making yourself an arbitrator.
I have almost exclusively backed technology projects. Out of those, not one of them has failed to deliver. And, not one of them has delivered on time. Out of all the projects I have supported only one has ended-up in the trash can. However, that was not because the widget was not executed well or it was junk. It was simply a case of my idea of the utility of this gizmo failing to align with reality once I got it. No issues on my part. I've done that plenty other times even buying stuff from brick-and-mortar stores.
If I allow myself to presume about the reasons for my "success" I'll have to say that the only thing I can reasonably point to is that I have a lot of experience actually designing. manufacturing and, yes, shipping technology products. I am intimately familiar with the design, sourcing and manufacturing process (and issues) of most products that entail software, electronics and mechanical components using various technologies.
This, to me, means that I have a fairly decent "bullshit" filter when it applies to these kinds of projects. Not to pick on them, but my most recent "this is bullshit" call was the LIFX light bulb:
http://www.kickstarter.com/projects/limemouse/lifx-the-light...
Why did I call this BS?
You have to rewind to when the project first posted. Their pledge goal was set to $100K. A project like that could easily burn-up half a million dollars just in engineering, NRE's and regulatory testing. Very easily. In fact, my immediate thought after reviewing the project was that the project needed somewhere in the order of two million dollars.
When I see something like that I have to ask: Are the project originators truly clueless about what it might take to get the project done? I don't like to think that fraud is involved. I am one of those saps who believe that the vast majority of people are basically good. So, no fraud. Yet, $100K?
What would have happened with LIFX had they received funding just about their requested $100K goal? Say, $150K. Well, in my world that would have meant that there was no way to complete the project. No way. At least not with anything that I'd want to plug into a lightbulb socket at my house for a myriad of safety reasons.
I avoid such projects.
As it turns out, they have raised about $1.3 million. This may or may not be enough to get this done. Keep in mind that bringing in partners isn't free. COGS must include all costs.
With regards to the ARDUINO issue. I saw that project come up and immediately went to the known Arduino sites. I saw nothing promoting the project or making this connection of having an ex-Arduino manufacturer behind the Kickstarter project. So, I stayed clear.
I see the relationship between Kickstarter and their vendors very much like that of a shopping mall owner and the stores it might house. Imagine that one of the stores decides to sell counterfeit Gucci bags or defraud people in some other way. I can't see the mall owner as being guilty of the crime being committed. If a direct nexus is established, well, then, that's a different story.
I also see the buyer as having to be responsible for the decision they make. If someone sells you a perpetual motion machine and you were not smart or informed enough to realize that this can't possibly work, well, in many ways, it's your fault. Be an informed buyer. That's the only way to protect yourself.
EDIT: I should say that I like Kickstarter very much. I don't have a problem with the service. If you know what you are doing both as either a project originator or a project backer, it's wonderful.
However the cool thing about it was that they saw an actual demand for programmable LED bulbs with RGB capability and came out with 'Hue.'[1] I suspect they took the Apple Store only route because it was a single partner who could conceivably move enough product to technical saavy people. It seems to have worked as they are sold out in the Bay Area, not sure how many kits or bulbs that was in the initial batch but probably a few. They also sell the bulbs for $60 each, which is another interesting number. If you take all of the money raised for LiFX and divide by the number of bulbs they are committed to shipping out as rewards it comes to $55/bulb.
[1] Full Disclosure: I bought a starter set of "Hue" lights when they were announced and did not back the kickstarter campaign for LiFX.
Comparing startup development costs to huge company development costs is non-sensical. For starters, Phillips would need to worry about multi-multi-million dollar lawsuits. LIFx won't. And there are many similar issues.
A small motivated team without the baggage and overhead can certainly do thing far, far cheaper than a large corporation. In fact, it can put a large corporation to shame in terms of productivity and the ability to pivot and innovate.
Where things get difficult for a startup is when it is time to move to manufacturing. Unlike software projects, making physical products is really capital intensive. The first phase is, of course, the upfront design and DFM work that has to be done. Then comes all of the prototyping and testing. Finally, setup for manufacturing, procurement, manufacturing, packaging and shipping. If a startup isn't well funded it might be able to get through the design phase but not survive to reach manufacturing without an additional influx of funds.
(If anyone's interested, check it out here - "A Lamp with a LAMP stack" should be aimed exactly at most HN readers demographic: http://www.kickstarter.com/projects/cloudlight/light-1 )
My only reservation might be that there seems to be very little room for error and the assumption is that they are going to get orders for some 7,000 units as well as $40K in $5,000 contributions (which I think is unlikely). On a project like this one I would like to see around $200K or $300K buffer.
In other words, double their costs. the spreadsheet comes out with a profit of $39.72 if they raise a little over $733K. At $700K you are already over $30K in the negative. I would have gone for $1,000,000.
The good news is that they are not asking for $100K as LifeX did, which would have been ridiculous. I would really love to know what LifeX would have done if they just got the $100K they asked for.
I am considering backing your friend's project. I need to think about it a little. I really do think that they need more "insurance money" for the unknowns that always rear their ugly heads.