How a half-million dollar Kickstarter project can crash and burn | Hacker News Reader

How a half-million dollar Kickstarter project can crash and burn

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113 pointsaaronbrethorst130 comments

Wow, that sounded so painful, and painfully obvious to anyone who has designed and built hardware. I think lesson 5 should be lesson 0 and re-written:

They wrote:

As soon as the Kickstarter money hit our account, we should have hired an experienced hardware product manager.

And it should be:

Before contemplating a Kickstarter campaign, we should have hired an experienced hardware product manager and had them price out what such a product would cost to bring to market at various volumes.

Kickstarters work when they are the "D" side of R&D and fail when they start with the "R" side and try to get to "D".

>Kickstarters work when they are the "D" side of R&D and fail when they start with the "R" side and try to get to "D".

I feel like we can extend this from Kickstarters to certain types of larger companies, where their expertise is in the D phase and their R efforts are largely fruitless (though granted, this is a bit of an exaggeration on my part).

In a way, it takes discipline to stick to the D phase and let others do the seemingly sexy R work.

Yeah, yet another example of "Gee, hardware is actually hard."

These guys should be crucified. $100 retail means $30 BOM. This is easily a $30 BOM project provided you supply the labor.

Yeah, you're going to be working your own 3D printer. Pouring your own silicone rubber for molds. Soldering your own chips. etc.

However, you got $500,000. That's enough to fund two people (one hardware and one software) an entire year and still have $250K left for development.

They didn't learn crap.

> provided you supply the labor

That's the #1 lesson. You can't consult away all the challenges, especially not the core of your product. As he found out, no one else is going to give a crap like you will, and if you don't have expertise in that area yourself, you're going to pick the wrong people.

I'm still trying to figure out how the BOM got so high without alarms going off.

BOM cost sneaks up on first-time projects. My first big project I was a fanatic about price and I was still shocked how fast it added up.

This is one of the ways an experienced hardware engineer can really turn things around from impossible to affordable- they can handle BOM cost as a major design parameter and drive down cost in ways a novice can't.

You'd have thought they'd have learnt some lessons from their first kickstarter.

http://www.gizmodo.co.uk/2012/01/triggertrap-the-story/

Maybe they did :-/

While I agree completely with having an experienced designer spec hardware costs before the campaign, having run a kickstarter campaign for a small Bluetooth device, where the campaign failed miserably, I can offer an interesting but sad observation.

Everybody, but everybody, but everybody… And I do mean everybody, gave me the same advice over and over and over again. And that was to focus on the marketing and the message and to pick a price point before actually designing. Even putative campaign backers told me that they thought being able to match up specifications and deliver on promises was just a technical issue.

The reality is, as many others have noted, producing inexpensive commodity consumer-electronics is a far more expensive proposition than many realize, especially when you're talking about low manufacturing volumes or surprisingly tricky and expensive operations such as FCC regulatory compliance.

In the end I think this sort of thing is quite common… People hear and believe what they wanted to be true. And then they complain when companies cannot deliver on promises they made out of naïveté.

Sorry for potato quality grammar and occasional incorrect homonym… And being forced to use text to speech!

You make a good point, and the reality is that both have to be true. A good marketer will figure out at what price a device could reasonably be sold for. A good hardware designer could then tell you how close you could come to that, given the desired price point. A number of time folks have come to me with a "really great idea" but when priced out it didn't make sense. People just wouldn't buy it for what it would cost to make it, and "betting on the come" which is to say making 100,000 to get the price down on the hope that after you've sold 10,000 or so you will be able to sell another 90,000 is a risky business indeed.

This though is part of the "nice thing" about Kickstarter. Which is you can set your price point for the quantity of units you offer on KS. Don't get funded? Couldn't make the market work, get more than you needed? Might be able to add a couple of points of margin to the bottom line. Danger of course is that if you get waaay more than you needed you'll be tempted to build V2 right away. Don't do that. Ship V1, pocket the margin and use that to design V2 with less risk after you've shipped V1.

I'm curious about your bluetooth experience. I've got a project I'm advising and any previous experience is always good experience in my book. The BT vendor (TI in this case) has offered to help with EMC certification although the project already has a bid for that from a local lab at a cost of about $50,000.

Heh. Take a look at the EEVblog form for 'dogy crowdfunded projects' for some fun reading (http://www.eevblog.com/forum/crowd-funded-projects/). The experienced people there can often rate a project's "bull$hit factor" just by costing out the BOM and assembly and comparing it to the offer price.

Regarding Bluetooth (LE), I've got a history with ARM stuff so stuck with Nordic's offerings. Cypress & CSI have nice stuff, but they really lock you into their environments, IMHO. I've got a nice full-stack gcc-4.9 based dev/debug flow for the full Nordic stack, and that makes my development way easier (and much, much cheaper since I don't need to hassle with IAR or Keil).

Mind you, I'm also comfortable with writing newlib CRT routines from scratch, so what's "comfortable and cost-effective" for me may not match your dev team's experience.

Anyway, back to BLE and KS. I found that the vast majority of 'small BLE device' Kickstarters seemed to massively underestimate the cost and complexity of both EMC design/certification, and Bluetooth SIG compliance/certification. That stuff is expensive!

As you may or may not know, if you design your own circuitry, you need to qualify your entire radio PHY and do a hardware re-qual. That's on top of FCC/IC/CE/TELEC certifications. It ain't cheap and it ain't a pretty process.

I ended up going with an Insight SiP ISP130301 Bluetooth LE Module because they had awesome antenna characteristics, were mechanically robust, they included the optional timing crystal that I wanted, and were relatively inexpensive (~8 USD in Q1000).

Using one of those, you do NOT have to do B-SIG qualifications (as long as you use the qualified vendor BLE stack), and as long as you use an approved antenna (usually fixed and included on the module) you only have to do FCC (or equivalent) testing that any/all consumer electronics need to go through.

For under Q10k, that's a no-brainer in price and ease-of-integration.

It's actually quite amazing how it feels that the author doesn't really mind that he's failed, and sees it as a learning curve. It almost reads like he's proud that he's blown half a mill, just read the title. This is real people's money. Whether or not it was more expensive than you originally planned, whether or not you feel really bad about it, you should not be allowed to just have another go at it. It makes an absolute joke of the entire concept of crowdfunding.

For a Kickstarter that budgeted 50k, received 300k, and was still nowhere near production, that's just really poor management and people like that shouldn't be in the business of making promises and taking other peoples' money.

"you should not be allowed to just have another go at it."

Yes you should. Since when did we get the idea that failing at something (even spectacularly) should preclude you from trying again? Nearly everyone who reads HN has benefited enormously from the mindset that allows entrepreneurs to keep trying.

The entrepreneurs you're talking about lose a lot more when they fail in the real world. Networking contacts, trust, even become bankrupt. This company literally just moves on to the next product like it's nothing with no repercussions. Failing at something is fine, being naive and irresponsible with other people's money - without repercussion - is not.

> This company literally just moves on to the next product like it's nothing with no repercussions.

You just flatly assert that. Is it actually true? I don't know, but surely they've at least got their reputation, with backers and others, from this failed product.

> Failing at something is fine, being naive and irresponsible with other people's money - without repercussion - is not.

You're failing to acknowledge that kickstarter backers know -- or should know -- the risk. It's their choice to back a particular project.

It appears that this company is taking the "lessons they learned" and the intellectual property they developed from spending $400,000 of other peoples' money on R&D to get VC investments for their next thing. They've taken other peoples' money and turned it into personal gain while giving nothing back in return. This isn't behavior anyone should encourage.

If there are people who are willing to give them more money to try again, why should the rest of us have any say in it? I probably wouldn't fund them myself, but if there's some investor who is fully aware of what happened here and still wants to fund them, I don't see a reasonable basis to object.

If they aren't lying to anybody, where exactly is the problem?

The $400,000 they spent is now, effectively, an investment into their future product line. It's not a surprise that VCs see that $400,000 of free R&D isn't valueless. The actual individuals who funded this investment will see 0% of the return on it, while the company that fucked up plans on profiting from the software, hardware, and niche-specific expertise they developed while not delivering anything.

Well, to be honest, Kickstarter is not a shop. Even though nowadays it's mostly a marketing tool, it's original idea was to be a way to invest in ideas you like. That is, take a risk with your money.

I think the idea here is that Kickstarter investors are NOT aware and are easily hoodwinked. Why, even this project appears to have been a lie- it's just that the founders were lying to themselves, too.

The assumption being that the Kick starter investors ought to essentially be protected a little against their own gullability.

This of course all serves as a nice allegory of how rules requiring accreditation for some types of investment were born.

You're right, but on the other hand it should be a little harder so that you can't make a habit of dumping the loss onto others. For example, it might be reasonable to be barred from crowdfunding websites going forward, and have to raise money through other channels like regular VCs.

Trying again is perfectly fine. Trying again with other people's money is perhaps less fine.

What would change your mind? Him writing how he felt? I doubt he was ecstatic about failing, I feel this is more of a "alright, this happened, lets just break it down". I appreciate the writeup.

I agree that the author seems very nonchalant about this. He made rookie mistakes that were completely unnecessary. The project was essentially dead from the get-go because they had no idea how much money they needed to raise. The financial projections were comical. Thinking 500k is an nearly unlimited amount of money is shockingly naive for somebody who already has 5 people on the payroll from their existing business.

That said I think some perspective is necessary. Businesses of any size squander money every day of the year. So does the government, obviously. When a billion dollar business squanders $100M on a boneheaded idea nobody blinks an eye. Even though that money could have gone to employees or shareholders. When government projects go way over budget we don't care, because it's par for the course. It's only when tiny 5 people shops mess up that we become judgmental. I don't think that's right.

Squandering 500k is bad, but the 2008 crisis wiped away trillions. Countries start trillion dollar wars on the flimsiest of pretense. Lousy CEOs crash billion dollar companies. In the big picture, a 500k mistake just isn't that big of a deal.

That's not at all the impression I get. To me he sounds almost burnt-out, and it is admirable that he is being completely (?) honest. No need to get hysterical and all teary-eyed. Obviously they got in over their heads. It sounds like a harrowing story.

Regardless of how blame is apportioned, I appreciate the clinical look at how they failed (though it was light on details, like how they actually miscalculated their BOM so drastically). With Kickstarters, it seems you're expected to publicly flog yourself if you fall short of expectations, but that's not necessarily productive.

Not seeing the screamingly obvious trademark problems with using the name 'Red' before launching the Kickstarter is sort of astonishing to me. That sort of naivete would have been a huge red flag from the outset. These days 99% of trademark collisions can be avoided with a Google search and a little time to get familiar with the basic legal issue involved. I mean, you have to call a product something in order to sell it to more than 3 people, and if it has a name it seems like basic common sense that you'd want to avoid overlapping with similarly named products in the same market sector.

I saw similar red flags in other places.

"Internally we expected that at worst 20% of people who had signed up to the newsletter would pre-order, and at best 50% of people on the list would convert into sales."

I work for a brand whose customers are fairly passionate about it and those expectations are insane. A little market research would have shown that the 1.5% that they got was right in line with the standard.

I think one factor is that people imagine their Kickstarters to be backed by a high percentage of people who visit the page when this probably isn't the case. If Kickstarter provided more lucid 'conversion metrics' to campaign runners, then they would have more realistic expectations of post-campaign sales promotions and this would help them to budget and plan more accurately and soon enough to avoid some problems.

Seems crazy to do a project like this with an agency doing the software and hardware design. That's going to be crazy expensive. I would think you need the skills in house to make it affordable.

Or you need the skills in house to make the price predictable.

Yeah, my disbelief just kept growing as it became more and more clear that they seem to have completely outsourced the software and hardware. I'm completely astounded, especially given the aggressive price target that was an integral part of their product.

This sounds a lot like the Kreyos story — that guy outsourced everything, including the blame. At least this one took responsibility himself. https://medium.com/@stevekreyos/the-rise-and-fall-of-kreyos-...

This idea that a product based company can be founded purely on marketing is infuriating. As if every other part of the business (but not marketing) is fungible. It's like the Idea-Guy, come back to haunt us.

> To me, Kickstarter backers aren’t just customers. They’re our friends. They are mavens. They represent our most passionate, most ardent and most enthusiastic customers.

> Yes, that’s it. I failed. We failed. It feels horrible, and it’s the end of Ada. But not the end of Triggertrap.

Uh... if I was your "friend" I would be livid that you weren't going bankrupt to sell off every asset you had to pay me back in full.

*Edit - My post was more about the use of the term friendship to absolve the author of guilt. Seems to have been effective This seems like shady business ethics to me.

If I was his friend, I'd buy him a drink and tell him that we all fuck up and things will get better.

In the friend scenario, you gave your friend a hundred bucks so he could try to build his dream widget. Would you really demand that your friend be declared bankrupt over a 100 dollar debt?

(I'm not sure I agree that Kickstarter backers are that kind of "friends" to companies who took their money, but that seems to be the argument...)

Some "friend" you are then.

I am glad that my friends feel differently (and that I feel differently about my friends and their success/failure).

> To me, Kickstarter backers aren’t just customers.

No , the people you took money from aren't even your customers, because you didn't give them the service they paid for. So don't even insult them saying they aren't just customers, they aren't even customers to you. If there were, you would have delivered what you promised. They are just easy money with no strings attached.

If you are expecting to be paid back in full then you should not be spending your money on Kickstarter!

At the same time, though, being paid back shouldn't be a low priority.

At the time they launched this project the TOS said "deliver the product or offer a full refund".

That seems like completely unrealistic terms. How can you afford to pay for a refund if the product fails?

Don't ask me. https://www.kickstarter.com/terms-of-use/oct2012?country=GB

> Kickstarter does not offer refunds. A Project Creator is not required to grant a Backer’s request for a refund unless the Project Creator is unable or unwilling to fulfill the reward.

> 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.

> Project Creators may cancel or refund a Backer’s pledge at any time and for any reason, and if they do so, are not required to fulfill the reward.

That "at any time" para is possibly going to cause problems to the backers.

So if you are successful, you are required to fulfill your terms. Or you can back out by refunding money.

But if you fail, you have no such obligation.

Yeah but that's not if you succeed at MAKING the product, it's if you succeed at FUNDING.

Oh, I see...

Its perfectly realistic terms if:

1) The rewards aren't dependent on project success, or 2) The rewards are dependent on project success, but the project is being Kickstarted to fund something that is prototyped and ready to go into production, and the funding level is set appropriate to pay the production costs for the delivered rewards plus whatever premium the company expects to need to go forward.

Its only unreasonable if the project sets the rewards and funding levels at levels that are unreasonable.

When the project sets the funding target and the offered rewards, its not unreasonable to expect the project to be responsible for actually being able to meet the promised rewards if it meets the funding level it set.

No one forces you to put a project on Kickstarter, or sets the funding target or reward levels for you.

That's why many projects use a bunch of non-product rewards where the costs are unpredictable, like t-shirts, stickers, and other stuff whose costs are completely predictable and which serves a sort-of marketing function, without being dependent on the core technology.

Then every dollar from those rewards can go into development before getting to the manufacturing stage. Those lower-value rewards can easily be fulfilled, and if you realize there's some sort of fundamental problem with the project you have the possibility to shut it down and refund device payments before that pledge money is spent.

I realize that this is a very idealized approach and that in many cases the amount raised from ancillaries isn't that much, the bulk of funds come from potential buyers for the device. But perhaps that's part of the problem. I'm considering doing a crowdfund project myself later this year (for a film) and although I'm months away from making any decisions I am trying to think through contingency situations now.

Far more lucrative, and easy to screw over customers, become a supplier to the kickstarter projects, rather than start your own KS.

Naiive business people who have suddenly received 100,000s in capital are the easiest to con

Ah yes, the old "sell shovels" game. You might be on to something.

Running a campaign, you'd be amazed at how many messages you'll get from service providers. It has become a hotbed for this. Now it really makes a lot more sense.

If their company isn't folding they need to refund 100% of the money they raised from Kickstarter. There is a clear expectation of Kickstarter being a pre-order system no matter what the fine print says. I bet if the backers sued them they'd get a judgement in their favor.

Don't listen to some EE expert tell you the product can't be developed for less than a million. These guys are used to working at big shops that routinely throw that kind of money into the garbage. This product could have shipped, if only they had run the numbers first.

With a cheaper chip, better project management and using a shop like Proto Labs for tooling they could have made it happen. Resourcefulness, not resources. $99 is pretty aggressive, but it could be done with a slim margin.

Run the numbers first, THEN spend the money.

Resourcefulness, agreed! I have made consumer products for less, with resourcefulness, careful planning and sweat. Key is to do a bunch of the work yourself. If you don't have those skills and can't learn them, get cofounders who do. Or use the skills you do have as constraints when developing new product ideas. Don't try to do too many new things at once — you're compounding risk.

>the electronics agency claimed that the original microprocessor didn’t have enough memory

This sounds like an attempt to pass blame. How could their engineers not know from the datasheet if there was enough memory (presumably program flash)? They had a prototype before the KS campaign. They must have had some way to estimate the space requirements for the final design. Flash is cheap. Bumping up to a bigger memory can't possibly be the main cost driver.

Memory == SRAM, not flash. SRAM is not cheap, and if you are not efficient with your SRAM usage you can suddenly find yourself stepping up several entire classes of microprocessor.

Embedded applications like this don't need lots of RAM. One has to wonder why such a simple application that boils down to a controlled delay was hard to achieve for them. It seems like they were too focused on a sexy LCD interface driven by god knows what over-engineered software crammed into what should have been a simple device.

Now I see that the prototype was an Arduino, probably implemented within the safe shell of the Arduino libs rather than working with the baremetal AVR. Clearly they were way over their heads from the start.

No kidding, this project could have been accomplished with a cheapo PIC. I've basically already built this project...Hmmm, kickstarter idea. :)

Main question - what led this company to think they could even get close to a $99 price? Did someone give them a misleading estimate early on, or did they just come up with that number out of thin air?

Desire; they asked themselves how much they wanted to pay as photography consumers, asked other people if they'd buy into a device at $99, and convinced themselves that it should be easily doable at that price, most likely by deconstructing the marginal (per unit) costs without considering the large fixed costs that allow you to manufacture anything in volume.

In fairness this seems to be a normal blind spot in many peoples' thinking. When I've discussed film piracy and market economics with people on HN, many people focus on the duplication cost of printing and packaging a blu-ray disc or suchlike in order to argue that films are extremely overpriced, or assume that there is a conspiracy among distributors to obstruct availability of films in order to extort money from consumers. It takes lengthy explanation to clue people into the numerous hidden costs of distribution (eg language-specific marketing materials, soundtrack-dubbing and so on), and that the considerable up-front costs of film production are typically financed by pre-sales agreements, and that most films do not have hyper-lucrative tie-ins like action figures, theme park rides, and worldwide audience anticipation that pretty much guarantees everyone will make a profit.

People tend to focus on the objective and then tell themselves a fairy story about how they're going to get there. I'm not immune. Now when I'm planning a project I try to come up with my best estimates on everything but then I go through and multiply lots of them x 2 because of the things that I don't know I don't know.

I think you're largely right in that optimism led to a bunch of unforced errors. Evidence: They thought that they'd get 20% conversion on preorders (probably because it made their numbers line up), when those interested had their expectations set at ~$99 and instead got $350.

But specifically about not rolling in the fixed costs, it's much larger than that. Their BOM alone blew up 3x. Even if you planned poorly up to that point, what you then do is cut. You find the biggest cost drivers and get them down. Find a cheaper way to make a less-polished case. Ship with 40 hours of battery life instead of spending developer-months getting to 400.

Anyway, I really appreciate that he posted this post-mortem. There are too few of these for others to learn from. I hate when someone who obviously loves Kickstarter (and has successfully used it before) is called a scam artist. It may be all the same to a backer, but he's only guilty of mismanagement.

Perhaps he should put his vendor quotations online, along with his BOM choices?

I design products for a living and I'm finding it hard to believe that the component BOM for this would be anything over $15.

Additionally, their case is a pretty simple two half-shell design. I can think of 5 vendors off the top of my head who would make the mold for about 5-8K.

I want to take his word about mismanagement but the disclosed details don't add up, unless he really has no product knowledge and is being taken for a ride by his supplier.

Yes, project planning docs with hard numbers, for better or worse, would be particularly valuable for others to learn from. Though I suspect that the difference is that the BOM he built early estimates on was composed of optimistic guesses, and the later BOM was compiled and padded by his consultant.

It's not exactly two parts. You've also got the pad for the buttons, perhaps the window over the display, and there appear to be three different body variations, for a total of maybe 8 pieces. Still, $50K is high for Chinese molds.

If you don't understand manufacturing well, you won't be able to effectively design a low-cost product - that's knowledge that should inform your early decisions. For starters, I wouldn't have made several modules - that's essentially making several products at once. Start with the minimum useful product and add modules after you've shipped.

I agree. It was very poor project planning. The multiple radio modules doesn't make sense for starters and in fact all but laser could easily be built into the current design for little cost (PIR, Light intensity, sound intensity).

As for the mold (and this is just an exercise at this point) I considered that the window would just be built into the mold and would be parallel to the parting line. The buttons could easily be cap sense buttons, and not membrane. It would only need an inexpensive pad printing operation, which they're doing anyways for branding.

20% refunds (promised, not yet delivered).

And the company's going to stay in business.

How embarrassing.

That's the beauty of Kickstarter. No downside for those who get the money, very limited upside for those who pledge.

Why are you singling out Kickstater? You statement holds true for any form of investment.

There seem to be a misconception what Kickstarter is. Their FAQ is clearly explains it is funding. I'm sure if everyone who backs a project would read it, there wouldn't be so many complaints.

Because in a standard investment there is a potential for a huge upside, the product is a huge success and and you make a bunch of money. Kickstarter the upside is capped at getting your reward.

I've read their FAQ and I won't participate in Kickstarter. I consider it a bad deal. If I see something on Kickstarter I want, I'll wait until it gets retail release and buy it for probably the same amount and have no risk. And if it doesn't get a retail release I'll live without it.

That is completely situational. They are what they are. If you ignore the contract/FAQ it is only your fault. You seem to do so, which is great, but slandering is not honest.

Kickstarter is not a form of investment. It is at it's base a donation with some purchase aspects for some the projects.

With an investment you get the upside for the risk as well as the downside.

If you agree that the language you are speaking is English we all speak, then it is certainly a form investment or funding.

You are making an assumption that investment guarantees some stake, it doesn't. You only get what is in the contract.

'Investment' generally has connotations of owning a financial asset, and potential future profit-sharing. It's a legal term of art, and that's why Kickstarter makes it very clear in the terms of service that backers are not investors - otherwise Kickstarter would become subject to a lot of complex regulation which would wreck their business model.

Casually, you might say that you 'invest' in a new computer that you bought at the computer store (because you plan to make money by using it). But legally, a purchase and investment are two very different things.

It is technically a donation:

http://www.forbes.com/sites/chancebarnett/2013/09/09/donatio...

...when I first heard about it, it was frankly obvious that kickstarter was a devious way around SEC investment rules regarding the category of "accredited investor". Nothing since then has suggested to me otherwise. But that's how the scam works. It's a donation that feels like an investment.

If people are actually stupid enough to donate money thinking they are "investing" that merely shows the success of the con.

I wish people stop saying that. Backers are not investors.They are essentially pre-ordering a product,whatever it is. Today the language is vague enough to confuse the "bakers", Kickstarter knows it. What's even more amazing is that no backer has successfully sued Kickstarter for a failed project yet, because one could clearly get the money lost from them directly. They are a store, period.

That is your impression. You seem to be relying on word of mouth i.e. the general public representation of what Kickstarter is. Unfortunately that is not accurate.

Simply reading FAQ will shows they are not a store, quoting:

At the same time, backers must understand that Kickstarter is not a store. When you back a project, you’re helping to create something new — not ordering something that already exists.

you might think they are( a store ), but that doesn't make it true.

You talk about investment, I ask you where is the Equity? it isn't an investment.

It doesn't matter what Kickstarter FAQ says, a judge need to decide once and for all what Kickstarter really is and how can its customers defend themself against fraud and scams like Triggertrap. "I was an idiot who didn't know what he is doing" is never an excuse when you take other people's money and you promise them something.

It actually looks as if there have been some changes to the Kickstarter TOS. For a long time, it seemed to imply that you needed to return the money if you didn't deliver the rewards. (However unrealistic that was--blood from stone and all that.)

Now it seems to explicitly refer to returning remaining funds. ("they offer to return any remaining funds to backers who have not received their reward (in proportion to the amounts pledged), or else explain how those funds will be used to complete the project in some alternate form.)"

Kickstarter has been tiptoeing this line forever between Not-a-store and Not-giving-people-what-they-paid-for-is-a-very-bad-thing.

At the time the triggertrap ada completed funding the TOS said full refunds if the product isn't delivered -- according to comments on the kickstarter page.

https://www.kickstarter.com/projects/triggertrap/triggertrap...

Interesting. I thought the terms had changed. While I'm sure not everyone will agree, the new ones seem to make a lot more sense. After all, if you had the money why would you run a Kickstarter (other than for the marketing/feeling out the market) if you were really, truly, personally on the hook to give it all back no matter what? And, if you didn't have the money before the Kickstarter, there's pretty much an inherent risk that things are going to go south as in this case.

I understand Kickstarter wanting to keep the pressure on project creators while minimizing the perceived risk in the eyes of funders, but the current TOS seems to mirror the reality much better than the old one. (Threats of lawsuits and so forth notwithstanding.)

EDIT: Ah. This seems to have happened last fall: http://arstechnica.com/business/2014/09/kickstarter-tries-to...

The fact that nobody has sued them over the (many, many) failed projects suggests that people in general understand the risk involved with Kickstarter much better than you seem to. It is all about backing speculative projects which may fail. I don't understand how you can know anything about Kickstarter and not be aware of that.

It may be true that no one has sued Kickstarter, but people -- including the State of Washington -- have sued failed Kickstarter projects.

If no one has sued Kickstarter, that may mean that Kickstarters has been successful at direct responsibility to projects rather than Kickstarter itself.

Look at their webpage: http://triggertrap.com/

"Compared to a traditional remote trigger (...) it represents superb value for money - Trusted Reviews"

How about they add something like: "Took 500,000 from 'customers' and gave them nothing in return"

At least this wouldnt be misleading

I'm guessing this is the trademark he's referring to:

http://tmsearch.uspto.gov/bin/showfield?f=doc&state=4807:9r4...

The search link has expired. Could you please provide the query you used?

His link works for me right now, but it is these guys: http://en.wikipedia.org/wiki/Red_Digital_Cinema_Camera_Compa... http://www.red.com

They really should have seen it coming. Red is pretty well known, even if you aren't in some sort of camera-related industry.

Yup. I wasn't sure if this is what he meant, but if it was this, then indeed, Red is a very known name in camera-related industry. Hell, even I know about this (via HN) and I have absolutely nothing to do with photography.

That link is broken:

This search session has expired. Please start a search session again by clicking on the TRADEMARK icon, if you wish to continue.

Here's a better link (I hope).

http://tsdr.uspto.gov/#caseNumber=77668132&caseType=SERIAL_N...

For the sake of its customers, Kickstarter needs to be doing a better job of evaluating projects, as it sounds like this project wasn't viable from the outset. This hurts their credibility and makes me wary of funding in the future.

In the "Refunds" breakdown on the Kickstarter page, it shows that they're refunding the remaining 20%, while Kickstarter is keeping the 5% fee. Shouldn't Kickstarter be refunding their cut?

Will Visa be refunding their cut?

Kickstarter did their middle-man job in good faith; why should they be liable?

It seems like the take home lesson to all hackers and hobbyists out there:

Hardware is HARD. Fullstop. $500,000 is nothing for even something as 'small' as this.

I don't think that is the correct lesson. The lesson is that if you are building a product and you don't already have all the expertise in house to finish the design, then you cannot predict what it should cost.

Building hardware is actually "easier" in some senses than building software because it is so testable. More importantly building to the 'proof of concept' stage, or prototyping, is essential in a hardware design.

I expect that building their device for $500K was eminently doable, with an in house hardware engineer, embedded software engineer, and a mechanical/manufacturing engineer or someone who is really talented and can do all three acceptably well. You don't get their fancy injection molded case, you get something much more boxish, and your controls are simpler.

Perhaps the better lesson is don't assume anything you cannot do yourself but can describe is either easy to do or simple to do.

The thing with hardware is that there's a lot more "works" or "doesn't work" to it. That's a gross oversimplification of course but software has a lot more latitude to be in the sorta works but is also pretty buggy and doesn't really do everything promised camp.

I agree that there seems to have been a gap in even knowing what they didn't know. But an informative and honest post.

I thought the summary at the end was true though, but I still think that the takeaway for hobbyists and hackers is that getting a hardware device to market is HARD (caps intended). Cloning software is trivial, while getting things from China or wherever is not. If you are a hacker with all 3 skills you mentioned, then you probably can say that it is merely 'tough', but then again, you probably already have a great job with stock options, as you are rare in these fields.

In this case the issue is not that it is HARD but that they don't have people with the right experience in their team. Also in pure software projects, you can cover for your mistakes with personal sacrifices and working crazy hours but with hardware, some mistakes really cost money.

The idea behind the "hardware is hard" message isn't that hardware is impossible, but to get software engineers starting hardware projects to stop trivializing it. Engineers have a tendency to dismiss all disciplines outside their own as easy, the sort of thing you can pick up in a week if you need.

Indeed. Two of my friends managed to build a custom robotics platform that bridges Lego Mindstorms and traditional electronics for way, way less money. They managed to do that because both are EEs who were fully competent to design and manufacture the prototypes of the product. They're on Kickstarter now (https://www.kickstarter.com/projects/1992634922/robocore-the...), with a finished product (seen it myself, it works as advertised) and they're aiming for 1/10th of the amount.

The lesson should indeed be, don't go to Kickstarter unless you are dead sure you have all the expertise you need to finish the project in-house.

Kickstarter is a great social experiment.I wouldn't give a cent to any project. But if people looking for some thrill or some desire to make something happen give money,they are free to do so.

Yet I find pathetic people then complaining on kickstarter forums after a scam,what did they expect? there is nothing to expect.Because these consumers are not really protected,and kickstarter itself doesn't give a fuck about them.

On the other hand sooner or later, "backers" need to have a legal status.Donators,investors,consumers whatever, it needs to be regulated, like any other industry. Right now it isn't,but it will, mark my words.

This 2012 Gizmodo article talks about their previous kickstarter efforts.

http://www.gizmodo.co.uk/2012/01/triggertrap-the-story/

I've said it before and I'll say it again. Kickstarter is basically Skymall 2.0 with added suspense. Will they actually ship it?! Will it actually work?! Will it actually work well?!

The whole system has become so unhealthy for hardware startups. Kickstarter pushes everyone to overpromise and underdeliver, which is precisely the opposite what any good startup should aim for.

It would be awesome if they open sourced the hardware. Then hackers could build their own Triggertrap Ada to interface with their mobile app.

Well, they are using the audio jack for i/o. Convert audio signal to a logic level voltage, then use that voltage to activate a solid state relay. Camera remotes are normal open momentary switches, and the relay would serve as the switch. The app is pretty much a timer that outputs beeps. Why not make that too?

From what I read, it sounded like they already built the thing, they just don't have the means to bring it to production.

Selling kits wouldn't require them to bring it to production, while at the same time letting people experiment and use their app. I don't want to re-create their product, but it would be nice for people who still want the product and are willing to do a little work.

There's a lot to criticize here, but one suggestion I've not seen anyone make is some kind of commitment to backers to make them whole.

This is an ongoing enterprise, so there are any number of ways that might happen. One is just to say, "Look, we don't have the money to pay you back now but we are converting your contributions to loans at interest rate $X and will pay you back when we have the cash, which we expect to be $DATE." Or give people a discount on some future product. Free software updates for life. Something. Otherwise this reads as kind of narcissistic: "It's been so painful for us to spend all your money!"

They also made any number of mistakes that are so large and well-known as to be nearly inexcusable. They were clearly learning on other people's dime, and that's kind of a problem when the product never materializes.

Outsourcing design and development is a terrible mistake for a boutique product. While this was a product management failure, the lack of in-house resources was an even bigger error.

For a $500K budget, zero money should be have been spent on design. Let the engineers decide how it looks. You can make it pretty on the second iteration. The first one will be charmingly ugly, and it will exist. Design people can suck down an astonishing amount of cash arguing about fonts, and that kind of thing makes a difference if you're selling to the mass-market, but for a niche/enthusiast/industrial product? No one cares.

I once worked on an industrial product where a design company burned a huge amount of money on everything from UI layouts (mostly unusable) to icon design, to fonts. I re-did their UI so it could actually be implemented with the development and hardware resources available, added a few icons they had missed, and replaced their pricey commercial font with a free one. Number of complaints about the UI from the people who had approved the design dollars in the first place? Zero. No one could tell the difference (I'm sure a designer would have gone spare looking at what I produced, but our customers weren't designers... they almost never are.)

Good design in a mass-market product can be a huge big deal, but hitting that perfect sweet spot the way Apple does so often is incredibly difficult and expensive. The odds of hitting it are so low for a project with limited resources that you're far better off not trying until you've got a shipping product.

Here's a pie chart of how the money was spent: http://petapixel.com/2015/03/02/triggertrap-has-failed-after...

Still not very useful. $135,000 on "staff costs" doesn't say much - did one guy just pay himself $100k for the hell of it? $5,000 on travel expenses, did they expense all their gas for commuting and take a business trip to hawaii? $7,000 for "kickstarter campaign" - what are they possibly spending $7k on? This is a separate amount from the fee that KS takes. The lack of transparency is dumb.

As a backer of projects, I'd rather have them slowly make 3D printed / hand-made editions for their backers, than get a % of my money back. But I understand why they don't want to spend any more energy on hardware.

Aren't the high costs of injection molding well known?

Yes, and it seems clear from the article that this was understood going into the project. They got screwed when their production volume dropped from 50,000+ (viable for injection moulding) to 2,000 (not viable for anything), after it became clear that the product they had designed was not sellable in the market.

The whole point of Kickstarter is supposedly to let people fund projects that require a minimum investment to be feasible, without their money going to waste if that minimum isn't met.

If they knew their business model was only viable with 50,000 orders at $99 each, they should have set their target at $5million. Anything else is dishonest and deceptive.

I can't understand how these idiots didn't think to use ProtoMold so that their tooling costs would be reasonable.

http://www.protolabs.com/protomold

$10k buys you a LOT of tooling there and they'll do the maintenance on it if it starts to wear. Yeah you pay more per part, but who cares if it's a $0.20 or a $0.30 part when you're talking about going from $1 to $0.10 of overhead per part.

This whole thing reeks of massive, gross incompetence.

Consider that a "major camera manufacturer" cost this enterprise many thousands of dollars by sending a letter.

An expense the enterprise could have avoided entirely with a little bit of effort and common sense in advance. Here's the top results for 'trademarks for dummies': http://www.dummies.com/how-to/content/patents-copyrights-tra...

I'm not saying they should have spent $$$ on legal advice before setting pen to paper. Trademarks are A Thing in the world of business and not a particularly hard thing to learn about. If you're going to call your product 'Triggertrap Red' you shouldn't be too surprised when you get a letter from 'Red Camera' objecting to the apparent linkage between your product and theirs.

I mean, if you invested some sort of automotive accessory, would you call it the 'Javajosh Lexus'?

It's funny that both you and the other commenter assume I'm taking an editorial position on this. I was taken aback by the asymmetry of effort and cost. They hired a "small team of lawyers" to deal with a letter. It wasn't a lawsuit. It was a piece of paper with words on it!

Sort of similar to when you launch a big AWS cluster and when you hit "enter" you know you just spent a lot of money.

The piece of paper with words on it was created by a bunch of highly paid lawyers to get their attention. If it was a typical demand letter, it probably demand not only that they cease and desist from use of the infringing mark, but that they turn over any and all material employing the infringing mark for destruction, as well as a complete accounting of their financial interest in said mark. I imagine Triggertrap's legal bill was about 10% for the time to explain 'they're right, you're wrong, give it up already' and 90% for the drafting of a reply letter and compliance sufficient to get the injured party to call the matter closed.

Now, that's a lot to ask for in a letter - usually a Trademark C&D goes along the lines of 'stop or I'll sue' - but in the context of a money-raising campaign, and given the fact that Red Camera company had historically and famously employed the pre-order launch strategy themselves, I think it would have been appropriate to come down on Triggertrap like a ton of bricks. Don't forget that trademark law works on a 'defend it or lose it' basis - if you don't vigorously contest infringement of the mark, then some later infringer can raise a defense of constructive abandonment.

Not a lawyer, but I've long been interested in this subfield of law. Monitoring and defending the mark against potential infringers isn't cost-free either.

>The piece of paper with words on it was created by a bunch of highly paid lawyers to get their attention.

You do know the difference between speculation and knowledge, right? I'm not saying that you're wrong, but I want to point out how much you're reading into this situation. Consider the possibilities: what if that letter was a fake, crafted by an early stage competitor just to waste their valuable time and money? An effective hack, because it's probably not even illegal.

Triggertrap's legal team would begin by verifying the provenance of any demand letter. Any letter like that is going to start by introducing itself as being either from a firm's general counsel or (more often) a law firm acting as outside counsel, and it's not hard to verify the sender's legal credentials and client relationship. A fake letter would be easy enough to identify and might even attract criminal penalties. In some states, legitimate but overzealous demand letters can be grounds for civil fraud action by the recipient, eg http://www.stormoenlaw.com/extortion-risks-from-overzealous-...

Of course I'm speculating about the contents, but I am familiar with the legal issues, know lawyers who practice in this area, and the camera market, as well as people at Red Camera. I think you overestimate the ease of the 'hack' you're imagining.

Consider that this enterprise chose a product name that was clearly suggestive of the trademark of the 800 pound gorilla in the space.

I'll be starting a build-it-yourself computer company soon. I'm going to call them Apple iBuilds or IBMs (I Built Myself!), I haven't yet decided.

I just don't understand this. I read this to mean that they only started looking into the cost of production after they finished R&D...

No matter how you look at it that's pretty retarded.

Criminal negligence

Please, Please, stop publishing articles in these ridiculous 600 pixel text widths. The other 73% percent of my screen is there for a reason.

Have you ever read a newspaper? There's a reason that text is typically contained in columns: readability. Presumably these writers want their content to be read.

Newspapers can't be responsive.

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