I'm guessing that pretty much sums up the reaction of everyone who backed the initial kickstarter. Sounds like a serious lapse of "dance with the one who brung ya" to me.
In the absence of laws or codified rules we should expect to fall back on manners. What Oculus did feels bad because its rude. At the very least, they should recognize that they are in uncharted territory. A bunch of random strangers gave them gifts because they believed in the vision. If that vision turns into a multi-billion dollar payday, they might consider giving a few gifts back to those kind strangers. Its not like they don't have a list of them all with contact info and everything. It would be polite to do so.
If I meet someone on the street that promises me to try out some new idea and I give them money the courts aren't going to give me any more credence than someone who handed a $50 bill to a bum. How is this in any way a new and novel legal situation?
The only thing that's new is that now due to the Internet more people have the ability to easily give out their money to potentially stupid initiatives.
So why do you think you have any rights beyond someone who's donating money to a cause that may never pan out?
It's perfectly fine to fund something through Kickstarter, but for some reason it seems that some people doing it think they're entering into a deal that isn't really there.
Generally when you give money through Kickstarter you're giving it away without any string attached, only if the company pans out might you actually get some small gift, not a share of the profit.
What's so hard to understand about that? The model's fine. The problem is that for some reason people donating to it think of themselves as shareholders, not donors.
What the person is trying to get across is that in any financial transaction there are non-legal aspects involved. There are human relationships. The world runs on favors as much as it runs on contracts. No single transaction stands alone: you have a personal reputation based on your actions and ethics dictate what other people are going to think of you. If someone gives you a deal on favorable terms, it's generally understood that you will remember that and act accordingly in the future.
It's not specifically outlined and it's not a hard rule, but in general, when people donate to a kickstarter they are doing so under the assumption that the person receiving that money is going to act in a way that doesn't undermine their trust. Turning around and selling your company to Facebook leaves a bad taste in peoples' mouths, since the company was built on the money they donated to make it possible. Do they have a legal right to compensation? Of course not. Do they have a right to be emotionally hurt by this? Sure, and it's not unjustified.
If you didn't chip in ten grand of seed money for that purpose why didn't you make that part of the deal then?
There are no non-legal aspects of financial transactions. When you give someone money they're going to try to retain that money and not give it back to you to the best of their legal ability. There really isn't a non-legal aspect involved in it unless you're a sucker who's willing to get screwed over.
Who cares about the value of their reputation when they've been bought by Facebook for some undisclosed value? Surely that's worth more to them than their reputation, seeing as they now have enough money to never work again with the people who'd care about their reputation.
> There are no non-legal aspects of financial transactions. When you give someone money they're going to try to retain that money and not give it back to you to the best of their legal ability. There really isn't a non-legal aspect involved in it unless you're a sucker who's willing to get screwed over.
This isn't really true, if you plan on doing business for more than one transaction. If you put a poison pill in a contract, guess what, you are blacklisted and can't do any deals in the future because nobody trusts you.
A similar thing is here. People chipped in money with the general expectation that Oculus was not going to sell out on the drop of a hat. It wasn't in the terms obviously but that was the expectation for many people. As such it's pretty much guaranteed for example that Palmer will never be able to do a kickstarter ever again (not that he cares at this point.) But it's a very real consequence, and so even though it was not in the deal in terms of legal consequences it is a very real outcome.
If you look at negotiations and transactions as if they are strictly independent events completely detached from human relationships you're probably a terrible negotiator slash businessperson. It's the difference between law and politics. I'll happily do a deal that isn't exactly a home run for me if I want to be sure I'll have a good relationship with that person for future opportunities.
I'm just saying that people need to learn the hard lesson that when they're "investing" in something like Kickstarter they're not actually "investing" in the general sense. They're making a donation with little or no string attached, at best it's a "you give us money and we send you some doodad in the mail" investment.
So they're effectively donating money with no string attached.
So if you donated money to the company thinking they were going to do X and they actually do Y they can and will fuck you over if they think they can make more money doing Y than they can doing X, accounting for all the alienation from their existing customers from doing not doing X.
So please everyone, if you want to invest in something and you want to have the expectations of an investor make sure you're actually investing, not just donating.
I'd say they are only investing in the general sense, but not the specific one. Because, as we've seen with the Kickstarter failures and flake-outs, regardless of the HN-conventional definition of the word, the donors are certainly and legitimately invested.
KS exchanges ownership in a project's human-level vision (and sometimes a early release of the product) for a donation.
People are like Notch are peeved because Oculus was not upfront when entering this social contract.
Of course nobody should be surprised if that turns out to be a bold-faced lie, but that doesn't mean it's not disappointing.
Sure there are plenty of projects for which the Kickstarter formula is perfectly valid. Funding companies isn't one of them, and that's where most of the money is.
If that stops happening, Kickstarter's may not be enough to keep them afloat.
You could invest in third world governments with interest rates that are too high for their S&P/Moody's/Fitch ratings. Look how revolutionary this idea.
So now notch is offended by a company he backed partly with the money he got from people like me, whose hopes of having a fully moddable open sandbox game made them invest, changing its strategy to allow them to reach a bigger market.
I can directly relate to that, but I cannot say that I sympathize. This is what happens, when you invest in something when it's still in an early stage of finding itself. Bad luck, move on.
Once they did that, any obligation they had to me was filled. Basically, that already danced with me. They're certainly free to move on to the folks with more money now.
$10,000 should have bought some small amount of equity, even if it was only non-voting and non-dilutable.
That cannot happen with other kickstarter projects that sell a final product like bumper stickers, buttons... In this case, the only difference with a normal purchase is that you buy the product before they manufacture it, so the startup avoids taking risks.
Donating to a Kickstarter may give you some superficial "control" over project direction, but it's a far cry from open source, and it doesn't have the future career impact.
If notch cares about "future career" (see parent posts concerning how much money he's got), donating to cool gaming projects and helping them get off the ground will actually probably earn him money in the long run. Positioning yourself as a benevolent benefactor earns not only good will, but influence. Certainly the 10k wouldn't have hurt when it came time to negotiate for Minecraft for the Oculus.
Kickstarter contributions mean you give your money away to a business without a contractual obligation to receive anything.
Yeah, it's hard to imagine he saw that coming.