Has Kickstarter finally hit rock bottom?

[beefcake]

He has made a hell of a lot of cash! Well done!

[Cubs]

Get ready for a tidal wave of copycat Kickstarters. For $46K (and counting) I don't blame them a bit.

I remember years back someone who put and advert in 'Private Eye' magazine in the UK saying he'd like to be a millionaire and asking for donations. The guy was inundated with money and he put a special thank-you out to an anonymous donor who gave him half a million pounds!

If you can do it and no-one gets hurt, why not?

[Conquistador]

I am not sure if this is the right place to post this. But I am sure a mod will move it then..

I just saw this new kickstarter.
https://www.kickstarter.com/projects/4thwar/4thwar-equipment-wargaming-table

It is a cardboard gaming table!? And it is being marketed by a rather largebreasted woman.
For a long time I have felt that kickstarter was being used and abused by people with projects that did not really need a kickstarter. Why for instance are Reaper, CMON and Mantic doing kickstarter, they are large established companies. When they have a project they should just do it. They only use kickstarter as a an anvertising tool and to take pre orders. And I don't think that was the original idea behind kickstarter.

And then there are people with halfbaked completely unoriginal ideas who try and raise money for yet another dungeon crawl/zombie apocalypse game and swear that it is completely different from the hundreds of other similar games out there.

But with this particular campaign I kind of feel like a new low has been hit.

This is far worse:

http://kotaku.com/how-a-successful-kickstarter-lost-half-a-million-dollar-1608877998

'nuf said.

Gracias,

Glenn

[FramFramson]

What's interesting about that situation is that it's actually closer to KS's original intent - crowdsourcing startup seed money for new ventures.

The failure is in this case one of incompetence rather than intent, but still serves as a warning to people to read terms carefully.

KS has become an odd mix of things. Sometimes you're just funding a new project from an established company too small (or lazy) to front the cash for a big new product. That's when KS is more like a preorder. Sometimes you're genuinely funding something entirely new. That's when KS is more like an investment. It can be hard for people to tell the two situations apart and there's very little recourse if you get things wrong - so be careful!

[Conquistador]

FramFramson,

When I think of all the times I have, (in the past, I consciously try and avoid this today, except   for M-i-i-i-i-i-c-e in S-p-a-a-a-a-a-c-e!,) jumped on a/an <insert project> only to see it produce a product that underwhelms the company making the effort to produce what people say they want (then don't buy - at all or less than they projected,) I think some niche product (see above,) kick starters are exactly what companies need to be sure they are making a product where they profit.

Gracias,

Glenn

[Cubs]

One of my pet peeves is when people talk about the trials and tribulations of their private life as an excuse for business failures. That's what your personal Facebook account is for. We all suffer setbacks and small tragedies in our life, it is not a valid reason for business failings and frankly a customer should not be expected to swallow it, nor even be exposed to it.

If you cannot separate your private and work life and don't understand the difference between a 'woe is me' moan and a business statement to an investor, you are simply piling failure upon failure.

Your loved ones are there to give you sympathy and a cuddle, your customers are there to give you money. It is inappropriate to treat one like the other. This is why it's also a really bad idea to have family and friends invest in a business venture.   

[Conquistador]

One of my pet peeves is when people talk about the trials and tribulations of their private life as an excuse for business failures. That's what your personal Facebook account is for. We all suffer setbacks and small tragedies in our life, it is not a valid reason for business failings and frankly a customer should not be expected to swallow it, nor even be exposed to it.<snip>

Possibly not in this case, but I do think my wife getting terminal cancer, or my kids dying in an airplane disaster, or my getting deployed to Afghanistan, or some other major disruptive event in a life might derail a project.  The honorable/correct <even if not legally mandated> thing to do, if possible, is to refund as far as possible the funds people invested in your failed project. 

IMHO.

YMMV.

Gracias,

Glenn

[Sangennaru]

Possibly not in this case, but I do think my wife getting terminal cancer, or my kids dying in an airplane disaster, or my getting deployed to Afghanistan, or some other major disruptive event in a life might derail a project.  The honorable/correct <even if not legally mandated> thing to do, if possible, is to refund as far as possible the funds people invested in your failed project. 

IMHO.

YMMV.

Gracias,

Glenn

i agree with this.

But basically, what he wrote was "we finished the money, then i continue working for free so hard that my wife left me". The tragic event is a side effect, not the cause of the failure.

What he said was basically "i'm incompetent and i messed up, but i'm not dishonest".
Which is something, imho, but not enough to justify the mess.

[Cubs]

Perhaps I worded that poorly. I'm not arguing that your private life won't affect your work life, nor that a disaster in the one isn't a valid excuse for failure in the other. I'm just saying it's inappropriate to be using those details in a business statement and it smacks of a lack of professionalism, which is hardly what a disgruntled customer is going to want.

Tell 'em where the money is, tell 'em where the project is, tell 'em relevant business details and most importantly, tell 'em what you're going to do about it.

[grant]

I got what you said.

I like the expression "that sounds like a personal problem to me" when people moan about why something didn't get done, and it's not for relevant reasons. My dog died, my mom got the cancer, uncle bob is a woman, fuck who cares. Get the job done - and leave the drama to the television types. It's that simple.

[FramFramson]

It worth pointing out that this is Kickstarter - these people are often amateurs, with experience of business plans or other such professional things. I find it harder to come down on folks like that because they really did have no idea what they were getting themselves into.

That's where a backer needs to understand that they are backing a high risk project. Caveat Emptor! Amateurs are pretty easy to spot, the biggest flag being no previously completed project.

As far as refunds go, if the money's gone, it's usually gone. Been paid out as salaries, or blown on an overseas manufacturer who dicked them around (oh the nightmares I've heard from folks thinking "... and we'll just get a factory in China to produce it cheaply!"), or frittered away in any of the thousand ways a business neophyte can lose their shirt.

If the project was actually conducted in good faith (i.e. salaries and suppliers were actually paid and the money wasn't just embezzled), I find it hard to justify punitive action. I mean, this is the whole original idea behind Kickstarter - amateur, crowd-sourced, venture capital. That's risky stuff!

The confusion comes in where people think that projects on Kickstarter are guaranteed, which has become a problem due to established companies using Kickstarter as a lazy preorder system. In my mind, it's much more that Kickstarter is to blame for this state of affairs than any individual creator, since they are obscuring the risk involved in a project by taking a hands-off approach to risk assessment, by letting large established players muddy the waters, and refusing to provide any sort of ranking for risk, which gives investors a false sense of security.

I think that what Kickstarter should be doing is assigning a two, three, or even five-tier risk category. Example:

(1 - Greatest Risk) A new project from an untested creator with no history, with a large or ambitious financial goal (say anything over $25,000)
(2 - Moderate risk) Any project from a small creator or company with at least one previous successful project. Any new project from an untested creator with no history, with a modest financial goal (under $25,000)
(3 - Low risk) Any project from a large established player

To be fair to Kickstarter, this may be a liability issue, where if they pass a risk judgement on something they will be liable. But I'm not sure if that would be true if the categories were broad, simple, and applied by basic rules (as in my example above), rather than an individual doing analysis.

[Too Bo Coo]

It worth pointing out that this is Kickstarter - these people are often amateurs, with experience of business plans or other such professional things. I find it harder to come down on folks like that because they really did have no idea what they were getting themselves into.

That's where a backer needs to understand that they are backing a high risk project. Caveat Emptor! Amateurs are pretty easy to spot, the biggest flag being no previously completed project.

As far as refunds go, if the money's gone, it's usually gone. Been paid out as salaries, or blown on an overseas manufacturer who dicked them around (oh the nightmares I've heard from folks thinking "... and we'll just get a factory in China to produce it cheaply!"), or frittered away in any of the thousand ways a business neophyte can lose their shirt.

If the project was actually conducted in good faith (i.e. salaries and suppliers were actually paid and the money wasn't just embezzled), I find it hard to justify punitive action. I mean, this is the whole original idea behind Kickstarter - amateur, crowd-sourced, venture capital. That's risky stuff!

The confusion comes in where people think that projects on Kickstarter are guaranteed, which has become a problem due to established companies using Kickstarter as a lazy preorder system. In my mind, it's much more that Kickstarter is to blame for this state of affairs than any individual creator, since they are obscuring the risk involved in a project by taking a hands-off approach to risk assessment, by letting large established players muddy the waters, and refusing to provide any sort of ranking for risk, which gives investors a false sense of security.

I think that what Kickstarter should be doing is assigning a two, three, or even five-tier risk category. Example:

(1 - Greatest Risk) A new project from an untested creator with no history, with a large or ambitious financial goal (say anything over $25,000)
(2 - Moderate risk) Any project from a small creator or company with at least one previous successful project. Any new project from an untested creator with no history, with a modest financial goal (under $25,000)
(3 - Low risk) Any project from a large established player

To be fair to Kickstarter, this may be a liability issue, where if they pass a risk judgement on something they will be liable. But I'm not sure if that would be true if the categories were broad, simple, and applied by basic rules (as in my example above), rather than an individual doing analysis.

The only problem I have with this analysis is that this is not VC money, there is no 'investment' per say, as there is no equity for pledgers.  If KS was an equity program, then yes I see a 'risk in investing', but KS is more a preorder system. At the end of the day, the owners have all the equity, so I see absolutely no reason not to litigate if someone feels they have been defrauded.  Otherwise it's just too easy for the owners not to practice due diligence.  This may sound harsh, but I've made the comment before on other KSs and 'small businesses', a KS or small business still has a duty and really don't deserve extra slack.

That written, pledgers should also practice due diligence, if only to save themselves a potential headache or mitigated loss.

[FramFramson]

I think that it's a bit of a grey area. Not all VC's or investments result in straight equity - some takes the form of bonds, etc. (especially when an established company is trying to raise funds), so the expectation is of a profit and not equity. In KS's case, the bond analogy loosely fits because you expect a return (your loot), but not direct equity.

At the risk of repeating myself, Kickstarter's original sales pitch was (and still is, to some extent) essentially crowd-sourced investing. This may not be particularly truthful, but I suspect that the waters being so muddy is very much the way Kickstarter wants things.

[Too Bo Coo]

I think that it's a bit of a grey area. Not all VC's or investments result in straight equity - some takes the form of bonds, etc. (especially when an established company is trying to raise funds), so the expectation is of a profit and not equity. In KS's case, the bond analogy loosely fits because you expect a return (your loot), but not direct equity.

At the risk of repeating myself, Kickstarter's original sales pitch was (and still is, to some extent) essentially crowd-sourced investing. This may not be particularly truthful, but I suspect that the waters being so muddy is very much the way Kickstarter wants things.

I do TOTALLY agree with you that they need to assume more responsibility, even if its just ratings, to weed out or evaluate KS projects.  I think that if people are not held, or at least potentially held liable for their KS project, we'll have more of the Cthulu/Monopoly fiasco, or the latest one with the video game.

[Conquistador]

Cubs,

I grant you that this case was pure amatuer disaster in the making (epic business failure ruining a relationship) and not a case of the personal disaster causing the business failure.  Not a lot of sympathy or empathy (other than "There but for the grace of God go I...") for these KS owners.  I always approach thes KS with a great deal of dread/concern unless it is an established company using KS.  This is just a textbook case about how not to succeed at business...

Gracias,

Glenn