that's what I thought when I watched the video and looked at the prices they wanted and the expected ship date. I've already been burned by two kickstarters for $300+.
May I ask which projects those were? Do we have any idea of the proportion of projects that get funded without any kind of result?
I know that technically you make a donation, but some of those "projects" feel like borderline scam. Can't the donors or even kickstarter themselves turn back on the project owners if they receive a huge amount of money and fail to deliver anything? Especially when they say they have working prototypes in the introduction video.
I'm really convinced that the average kickstarter donor sees their donation as a pre-order more than an "investment". I'm sure many of those who donated to a project that failed to deliver felt like they've been scammed, and that may hurt kickstarter in the long run.
I absolutely agree that instead of investing, it's really a pre-order system with zero liability. If I pre-order a product from a vendor and it doesn't get delivered, I can get my money back or contest the charges but here, because you're donating to a project, it's not really on commercial terms so there's nothing you can do but give negative feedback on the project.
The 2nd one I'm still hoping the backers will come through or at least refund the backers. So I'll hold that one for now.
I have backed 16 projects and the first was TikTok Nano watch band which funded Dec 2010. Out of the 16 only 2 have me very concerned.
I just backed two more projects one for $1,299 which is a 3D Printer and the other $99 for 3D printer software. I will continue to back things but I look carefully at their estimated ship date. It must be within 60 days, and I will dispute any charge from a project that doesn't deliver within that window.
I remember there was a website that indexed the kickstarter projects that didn't get funded. Maybe there should be one for the projects that were funded but didn't deliver.
The best thing Kickstarter could do to stop people from being disappointed by getting a much worse product that they were expecting when they thought they "paid for it", is to not allow the people behind the project to say stuff like "for $99 you can get the product, too".
Basically, they shouldn't mention on their page at all that they will be getting the product. So whether you're donating $1 or $100 or $1000, it's just that - a donation to the cause. You're not "buying" anything. That should make things a lot more clear, although I expect the project donations to drop, but probably better than for Kickstarter to get its reputation ruined forever because most projects "don't deliver" the products people were "expecting", when they thought they bought it or "pre-ordered" it.
I would rather have them display a standard warning sign saying that Kickstarter can't guarantee the successful delivery of products, and there is no money back policy. I quite like the pre-order style Kickstarters (like the recent Project Eternity by Obsidian), and as long as people are aware that you effectively donating money I don't see the problem with it.
They do this. When you click to donate you get this (in the top right):
Kickstarter does not investigate a creator's ability to complete their project. The claims and responsibilities of this project are solely its creator's.
Kickstarter would never do this, because this would virtually eliminate the largest incentives for donation. Many people would never reach the goals they need for production, and kickstarter themselves would be out millions as well.
It's worse than that. Kickstarter have explicitly said they have no clue what they'd do that day. The fact they're either ignoring the (admittedly complicated) issue or are so naive as to think it's fine to only handle failed projects when they happen is disturbing.
Kickstarter is an amazing concept but the coming wave of failed projects is going to mark the cumulative jumps of the shark.
From an earlier interview with Kickstarter's founder[1], "I don't know. I mean, no, I don't think that we would. But certainly, the kind of thing you're talking about is not a bridge that has been crossed yet. Someday it will. And you know, I think if something did go awry, it would be — it wouldn't be my favorite day."
Just make it clear that you only get the product if things pan out. The tricky bit is if the money is only there to deliver some of the products. Needs to be some protection as well on people taking the money and running, but apart from that users shouldn't feel like they didn't get what they paid for if it doesn't pan out.
But that's not what Kickstarter is about. Kickstarter is not a donation page, why would I donate to someone who's trying to start an enterprise or a product? I could imagine donating to an artist, but that's about it. Nobody donated for my company either.
So Kickstarter is a "It would be awesome if this product came to existence and I'm willing to buy the alpha version even if it doesn't exist yet and may never exist" kind of thing. It's the pledge that I buy one of those, unseen and unproven because it would be cool if I had one of those. You just need to be aware of the risk and you won't feel screwed over as badly. And don't go for kickstarters that just look too good.
It's a hard to solve problem, but I think the only thing that kickstarter can actually do is to better communicate the risk.
The key word you used is "alpha". As the OP of this thread said, you're not buying a product, you're donating to someone (probably not a very large company with lots of resources) to develop and make something you're interested in, and in return you may get the 1.0 (or perhaps earlier) version of what you're donating for.
I don't believe it's Kickstarter's fault in any way if people view it otherwise.
It's not donations. Donations are given without return to a cause you consider worthy. An exchange is promised, but the promise is not a sale, it's "We try and make this, and if we pull it of, you get one." It's more of a high-risk investment where you already consider the money lost, the moment you spend it.
And I'm on your side: It's not kickstarters fault, if people think otherwise - still they could make that point a little stronger.
Kickstarter supports the arts. Many, many people support artistic endeavors solely for the tshirt and the satisfaction. Its the larger part of their base.
I'm totally on your side. But then, if physical products or other services as reward were forbidden, the big Amanda Palmer campaign would probably not have happened. Most of the rewards were cds, an art book, entrance to more or less private gigs etc. So even though people liked it, all got something in return. And if Amanda Palmer would have flunked and not finished the recording in time or the tour would have fallen through or... they'd all be pissed off. She managed to pull that one off admirably and people are happy with what they got, but that's the same with products. If things go well, everybody is happy. Perhaps the problem is twofold: Artists may be forgiven by their fans for a failure. (Fans are fans in the end) And maybe physical products are much much harder than a T-Shirt.
I think Kickstarter could add a maximum cap in addition to the minimum funding requirements as some function of the minimum. This would minimize Kickstarter's risk of over-subscribed products (but would obviously make them less money in many cases) and push further sales into the regular retail world. This would keep Kickstarter closer to what I believe its true intention is - get products and art off the ground, not sell your first $10 million.
I the long term I also think this is better for the campaigns - a lot of hardware projects seem to struggle shipping if they get a significantly higher number of orders than predicted. I'm sure in the moment it's exciting to see how many orders you can pull in, but painful in the long run when it is difficult to deliver on your promise, especially if you're planning on building a long-term sustainable business.
The other side to this is that higher numbers give them the benefits of scale. Ordering 1000 rather than 100 of a particular part allows you much cheaper prices. Which means higher chance of success. Having to deal with a few million dollars worth of orders is a good problem to have. Much better than the same product, but only a few thousand.
That's actually a really important change that they need to make. If you are trying to raise $5,000 to make 200 widgets by hand, and suddenly your project takes off and you get $500,000 in pledges, then as much as everyone would like to say "that's a great problem to have!", well, it's not.
This point is counterintuitive but here it is: Assuming that there are relatively rigid time constraints, you might be able to make a profit at 200 units, and a profit at 200,000 units, but not at 20,000 units. This is because there are thresholds where you suddenly have to invest in infrastructure, and setting up infrastructure fast is particularly expensive.
If you're raising capital to produce your widgets, you can lay out a business plan and predict with reasonable certainty that you need to sell X widgets before you can break even. You present that to investors and they decide if they think you can sell X widgets.
On Kickstarter, you are implying a fantasy claim of arbitrary linear production scaling that says "I need $25/widget and I will make however many everyone wants!" And hell, that doesn't even work for selling commodities.
So what the model should be for people starting a business selling a tech product is that they say "We're developing a prototype, and if you pledge $X you can get a prototype". Then limit that to a small production run and raise enough money so everyone can involved can quit their job. Now they have time to look for investors, and a great proof of concept that the idea is marketable.
Well, that's actually possible. You can limit the number of backers for any pledge level. So you can have a maximum of 50 supporters backing you to receive a "foo" and another number of "bars" for a different price.
So the usual place where you see an unlimited number of backers is for digital products. See the Amanda Palmer or the Planetary Annihilation: They had limits on any backing that required a physical or personalized goods, but unlimited pledges for digital-only pledges - and there the assumption of "the more I sell, the more I gain" holds true.
>why would I donate to someone who's trying to start an enterprise or a product?
In order to bring to market a product you want that is not currently available and would not be feasible to bring to market without first knowing there is a sufficient market for it.
Kickstarter is the ultimate fail-fast, it cuts out a huge chunk of market-research when trying to build a business around something. If people don't want to kickstart it, others are unlikely to buy it.
Well, that's my point: I want that product on the market because I want to own it. So why would I donate first and then pay up again to buy it? I want to shell out money now, get the product in return at some point and run the risk of the whole transaction failing since the product cannot be produced at a reasonable price (at least not by that company). If that happens, I'm down the money I paid, that's my risk.
Agree that the main problem in Kickstarter is communication. You should NEVER put money if you don't understand that you are betting on the product and the team. It is a high risk decision, which hopefully most of the times goes reasonable good (I got last week headphones by a Kickstarter project and everything went just fine)
But removing the possibility of offering a product seems too much. I think that, after a little while and a few big "unfortunate" projects, the process (specially for deliverable goods) will be more understood and there will be more pressure in showing the team skills, previous products, etc. Right now that's not very clear (though you can research on your own, of course)
OK they may not ship it. If I give money to them it is because I would like to have this kind of light at home one day. Best scenario: they ship it! Worse scenario: the world will have more experience trying to build these things.
In the video, the guy literally says "For $69 dollars, you are essentially pre-ordering a LIFX smartbulb." (4:11) That's one of the major misconceptions people have about Kickstarter and these guys are playing right into it.
I think the problem is pretty clear ... Kickstarter optimizes reach so that the teams that are best at marketing win ... A team that's brilliant with engineering and design but can't produce slick photos and catchy videos doesn't stand a chance.
I tend to think that kickstarter is a fad and that if it survives at all, it will be in a much reduced and much more controlled form. How long will it be before the authorities decide they're complicit in a fraud?
EDIT: The ScanBox project looks like something I could make for $5 in parts and have fun doing over in an hour or so.
What scares me is that they are starting a new kickstarter project when they didn't even finish the first one. I was backing this project but just ask for refund.
This actually makes me wonder: If one would want to scam Kickstarters, one could just create new project and PR their way into millions of dollars without having to deliver a single thing.
I can well believe that the scanbox is at a stage where there's simply not that much left for the guys to do except wait for the manufacturing to turn around. Why not start another project if they've got the time for it?
Well, yes. That's the point. In a month's time, they might be snowed, but until then, they're kicking their heels. If they get the timing right, they can be dealing with the shipping for scanbox while waiting for Lifx to get funded.
Re your edit - I just saw this and it's the ideal thing for me to adapt for my camera to do document images. Here's me thinking of making it out of wood or metal wire ... why didn't I think of cardboard first. Silly me!
After backing two projects (MySaver cables and Elevation Dock), I've given up on Kickstarter:
== MySaver ==
- Project was delayed for over 5 months.
- When I got the product it wasn't the colour I had requested.
- When I contacted the project leader he told me that they didn't have any more products of that colour, so he chose the one he thought convenient.
- False statements: "The MySaver is the only cable protector that we know of and we fully-assemble it on a OEM quality replacement dock connector to USB cable". I can't insist how false this statement is. The cables I received where assembled using some kind of industrial glue gun - by no means "OEM quality" - and they are now falling apart.
- Contacted Kickstarter about this issue and said that "if the project gets fully funded it must be a legit business/product"
== Elevation Dock ==
- Backed in February 2012, still waiting for the product.
- I will be changing my iPhone 3GS to iPhone 5, but guess what? It's a different dock connector. Yes, partly my fault, but its been 8 months since funding closed and 9 months since everybody knew this project was already 100% funded.
== Conclusion ==
Many projects (primarily hardware) are very poorly managed. Project leaders, instead of being rational from a production capacity/constraint point of view, they simply want to "beat all records", and be at the top of the Kickstart funding list. This is just bad entrepreneurship and management skills. These guys are risking production, product quality and customer satisfaction over a "vanity" metric: How much is the maximum I can raise?
I've given up, I'm not backing any more projects, I'm not going to be anyone's guinea pig. I'd rather wait for the products to be available in stores at a higher retail price, where I can see their "quality" finish. I'll judge then.
I have many friends who backed and received their Elevation Docks. It's anything but vaporware. They asked for 75,000 and got 1,464,000. Scaling up that much and that fast is incredibly difficult and can't be done overnight. The system seems fine to me.
Products should really consider capping their number of backers, rather than just saying "as many as people want!" and possibly losing money on every one.
I totally disagree, sounds like you work in Wall Street. Your argument defeats the purpose of a minimum total pledged, and is pure internet speculation.
Companies and individuals go to Kickstarter to create great products - that can't be financed in no other way (bank debt, VC capital, etc.).
More capital (pledges) result in more orders, more inventory, higher working capital and a production/logistics nightmare. None of the hardware projects/companies I've seen to date on Kickstarter have the required infrastructure to handle "as much capital as possible" or as many orders as possible.
These businesses come to Kickstarter for the purpose of getting as much capital as possible to seed their projects.
Just because it is not implicitly stated doesn't mean that the business owners do not have that motive. Just because some business owners cannot scale effectively does not change their original motive. Just because you would personally run the businesses or the website different does not change the motive.
I'm not going to waste any more time having a speculative "internet argument" with you on this.
I just got my elevation dock last week. I've left it in the box until I figure out the iPhone 5 situation. Might just keep it as a paperweight. But I agree with you, it was ridiculously delayed
My elevation dock is finally shipping. I'll have it just in time to use it for a day, maybe, before I get my iPhone 5 on Friday. I had to send a nastygram email just to elicit a response from them about why my order was taking so long. All-in-all I'm pretty upset about it.
I love the Kickstarter model. I think it's an awesome way for the average Joe to fulfill his dreams of bringing something to the market. I don't think too many people are expecting to become millionaires on there. They just want to see their dream come true and the product they designed on screen sit on people's desks. That's what I love about it.
I have heard two arguments that I think need squashed quickly.
The first is the "You're not a customer... you're a backer" argument. It suggests that because I've contributed money to a project that I'm not due anything. I'm not due a response from the Project Starter, I'm not due sufficient updates on progress or delays and most of all I'm not allowed to complain about the project.
My Elevation Dock is 5 months delayed. I'm pissed about that. I understand that stuff happens. But when you release something that was supposed to be enjoyed for months before a new product comes out (iPhone 5) and makes it obsolete, you deserve to give everyone an apology. Or at the very least, a heavily discounted or free adapter. Something.
I understand that scaling isn't easy and that leads me into my second argument. The whole, "Scaling from 75,000 to 1,000,000 isn't easy." No kidding. Nor is going from running 1 mile a day to 26.2. BUT he could have seen these issues on the horizon. He could have capped his project to a reasonable amount. He didn't. The Pebble guys did. They realized they were hitting the threshold of not being able to make everyone happy in the timeframe they said they could. So they capped their project and sold out. Elevation Lab should have done the same. And BTW, the developer watches are already shipping to those backers for Pebble.
Perhaps I'm jaded by the Elevation experience. But I've backed other campaigns that have been very honest and open about their progress.
I see Kickstarter as more of a service to get well established businesses to focus on difficult, specialist, low margin projects, particularly computer games. Most of these design-focused hardware projects ring alarm bells in my head.
I have received my Elevation Dock. Also, the guys over at Elevation Dock have mentioned that once they get the new connector documentation that you will be able to swap out the current board with a new board that contains the new connector.
Having taken the elevation dock apart, it is entirely do-able.
I'm actually pretty happy with my MySaver cable. Granted, I didn't get the wrong color, but it rides around in my purse unprotected and has held up better than either the cable that came with my 3GS (frayed right where the cable meets the connector in under a month; it was a complete piece of crap), or the cheap monoprice cables I originally replaced my cable with (bought a 3-pack, good thing, only one held up past 3 months). I never took the MySaver off it to inspect the build quality of the actual cable, but it seems to be fairly well constructed to me. Better than the OEM one at least.
Now the very first Kickstarter I ever backed... it was to cover the editing and production costs of a documentary that was supposedly already completely filmed, it just needed to be put together. Funded in early Feb 2011 and not a single update on the project or comment from the creator since that day either. Still bummed about that one - I genuinely wanted to see the documentary, and my pledge was supposed to get me a copy of the DVD.
I spent some time a few months ago researching integrated smart technologies like this. (I've commented before on similar topics)[1]
I very skeptical it's possible to deliver these at those price points.
Just consider as a hacker the master bulb;
They gloss over how you actually connect it to your home wifi network; it either has to interface with your laptop or phone via a cable for the initial setup, or it has to be able to create it's own wireless network you can hook onto, to then in turn tell it which is your home network, so it can hook onto that, and then relay to all other bulbs. That's a hell of a lot of technology to pack inside a groundbreaking lightbulb that's going to be running at high temperatures, at a $70 price point.
The 'smart bulb' stuff aside, a decent plain white LED bulb sets you back around $30. Have you ever tried those colour-change LED light sets you get for garden decking or under the kitchen units? Even those cost more per unit that this, and they light they put out is harsh and well bellow 10 watts; hence why they're just used for ambient highlights.
In my opinion the companies best positioned to deliver these kind of technologies are the likes of NEST[2]. They already have a constantly powered, integrated master device, it has a zigbee chip (which makes much more sense than wifi), an API, large processing power, and lots of data on the household. All they need to do is update their firmware (which they can do automatically already) and publish an API. Then any licensed 3rd party vendor from China can now deliver 'slave bulbs' using whatever technology and price points they desire. A ground up solution proposed here is short sighted, and realistically in the long run more expensive.
Insteon is shipping $30 smart bulbs. They integrate with insteon's control stuff though, so the cost of using 1 of them is a minimum of ~$70-$80 (that's a bulb plus ~$45 for a simple switch pad).
They don't seem to have much interest in pushing for wide adoption (at least, they seem to want to sell $400 controllers, not $50 controllers).
They could've OEM'd the lamp, for example, from Phillips. And a tiny-factor WiFi gadgets is hardly a rocket science, products like EyeFi has been around for several years. There's really nothing in the project that screams what you say it does.
I reread their product description and I still stand by my opinion
And even the article says (and they agree it's an OEM lamp):
"The Lifx is priced at $49 per bulb, which means that you’re basically buying a basic WeMo switch and getting the LED bulb — and all the technology merging the two into one bulb-sized piece of hardware — for free. It just doesn’t seem likely."
They can prove me wrong, sure, by shipping the product.
Did you not see the earlier link of a full computer with wifi crammed into an SD card for less price? WeMo is not a good cheap benchmark. Heck, I could dissect a router and glue on a relay in a smaller package for under fifty.
The EyeFi? Yes, I saw it. Cheapest one is 39.99, let's take $5 for the 'SD' part, so it's $35
"Heck, I could dissect a router and glue on a relay in a smaller package for under fifty"
Cheapest WeMo is $50 so you're almost there already
You can try to have a homemade solution for less, sure
but you'll have a small price advantage and maybe not follow
all standards relating to switches (isolation, etc, it will work, though). Not counting the software work.
Now, for their lamp they would need 3 power channels, instead of one 'on-off' control, which is certainly more expensive and complex.
You're not going to take off anything for the overelaborate processor and the fact that it's smaller than we need for the light? And by under fifty I didn't mean barely. Here, look, miniature wifi for 8 dollars retail http://www.newegg.com/Product/Product.aspx?Item=N82E16833180... The wifi component of this is not the expensive part. LEDs, LED power supply, and heatsink are going to be most of the price.
This is not a fifty dollar wifi device with a free light. This is a thirty dollar light with a ten dollar wifi device slipped in.
I'm curious how their device might be configured. The eyefi includes a usb dongle that require you to use a computer to configure the wifi settings with. They could do something like the electric imp where you configure it via sending it data via light. I don't think this is as easy as you make it sound -- there are definitely engineering challenges to make it easy for the end user.
Many of these embeddeded wifi devices start in a mode where they act as a wifi hotspot/access point, with a pre-defined password. One connects to the hotspot with a smartphone and opens a web browser, which provides a simple web UI that offers a way to select a wifi network to use as well as the password. The device then reboots into the new wifi network. A bit cumbersome, but certainly doable. (Not necessarily something people would like to do for every lightbulb in their home though.)
Wifi is probably overkill on a lamp, but it's not completely without precedent. High-end LED aquarium lighting setups (the kind you need to grow exotic corals) often have wireless interfaces and/or dedicated controllers.
The problem here is that Kickstarter is complicity allowing this sort of scam-project* to run.
They're not stupid. They know this is happening, and they're _hoping_ that it'll all magically sort itself out; that people will be smart enough _not_ to believe in the $50-you-get-a-lamborghini pledges.
I mean, it's a great scam right? If you're a con artist, you make your money in one of two ways;
1) Steal someones money and make them too embarrassed to do anything about it (classic porn on the credit card)
2) Steal a little bit of money from a lot of people, all of whom can't be bothered to do anything about it. <--- Kickstarter.
Realistically, this is going to continue until someone sues Kickstarter for being complicit in mail fraud. That'll be a sad day, but you can already see it coming on the horizon.
* Actual project may not be a scam, but honestly there's not a huge difference between a poorly organised project that takes everyones money, tries to make something and fails, and an actual scam. If you're selling something, you're a merchant. There are laws around that.
Scam implies some sort of intent. There's actually a huge difference. When burned, you might call someone a dipshit. But to actually BE a dipshit, their intent matters.
While they "technically" receive a donation from you and send you a gift, I think most judges would see an exchange of money for an item and say that somebody definitely is selling something.
Partially. I'm pretty sure if you write-off that donation you need to subtract the fair market value of that mug. A real accountant could speak better to that though.
I see it as a donation to an entrepreneur, artist, or other innovator.
I sometimes turn down the rewards. And I'm always offered the option to do so. Which means it's definitely not a normal for-sale arrangement. Who would order something from Amazon and then check a box saying, "Oh, just charge my card; don't actually send anything"?
As others have pointed out they are selling something. Nothing indicates that you can get the "thing" simply by sending an entry to the address and there is no obligation to buy anything. As happens with contests that don't want to appear to be a lottery. In other words you can't have someone pay for a chance to win something (in many legal jurisdictions particularly in the US not sure about anywhere else). But you can have people both buy things and enter with a very clear "no obligation to buy" as we have all seen (once again in the US).
So it is very clear and obvious that in exchange for paying money you are expecting to receive something in return.
Now of course they could probably work around this with the proper wording somewhere.
"We hope to produce this lightbulb. There is no guarantee we will succeed. Here is a complete list of our qualifications. Be aware that if we fail to deliver you will loose your money. Here is our record with other projects. Etc."
In that case the "game" becomes a little different and it is apparent and visible that you stand to loose just like paying to enter a marathon you pay money and are not guaranteed to win. (Not a great example but anyway..)
Kickstarter is not in some bizzarro pocket universe where the normal protections against fraud don't apply.
If someone truly takes the money and runs, that's a criminal offense. Kickstarter doesn't need special policies to make it so, and I'm sure they'd cooperate with a criminal investigation. I think they've even said as much!
I'm not sure it's fraud per se. Kickstarter seems like a way of monetizing up-votes. They have various sized up-arrows that are tied to a bucket of electronic chits over a PayPal. I sometimes wonder if people back projects with the same forethought they bring to up voting a good story.
You present that like it's contrary to my point, but it's not.
If legal action had been attempted and failed, that would be interesting! But here there's no indication that the matter has been brought before a court.
Jason Scott is currently heading the project along with three other members "The Board". They are doing their best to get stuff out to backers, read more about this project here: http://ascii.textfiles.com/schuyler-towne-kickstarter
I do not think Kickstarter projects can be viewed under legal framework of merchants and consumer protection.
A project much more like an investment prospectus than it is a sales offering.
So I would be interested in knowing if the SEC has already had a look at the Kickstarter legal setup, and if not, it may well be the next step (ie not suing Kickstarter, but refering them to SEC)
The laws around prospectus and offerings are setup very explicitly to avoid your situaton 2) - so I would be very surprised if kickstarter projects are not somehow explicitly avoiding those regulations - or if they are in fact compliant
Kickstarter is not an investment. You're buying the rewards for the tier that you choose.
In the Kickstarter TOS, there is the following line:
Project Creators are required to fulfill all rewards of their successful fundraising campaigns or refund any Backer whose reward they do not or cannot fulfill.
Nope. Investments mean you own a piece of the business. Kickstarter doesn't allow that.
Legally, Kickstarter is just a channel for contributions. If you want, and if the project offers it, you can sometimes pre-order goods in exchange for your contributions. But you get no interest in the business beyond your pre-order, so it's not a security.
The worst case for kickstarter is that they fall under both consumer protection laws and investment regulations.
There is no question that they fall under consumer protection laws, products are being advertised and offered, and anyone can "buy" them. I'm sure the FTC already has an open investigation or investigations.
If you create a kickstarter project, pull in $1m+, spend it all legitimately and fail to deliver the project, you could end up being named in a civil suit. In the future there will be people who lose their houses over this. Just because you made the project in 2011 doesn't mean you won't get sued in 2014.
If you create a kickstarter project, pull in $1m+, spend it all illegitimately, on personal expenses, expect to go to jail. I predict this will happen to at least 1 person.
The larger question to me is what liability kickstarter themselves have. Whatever that amount ends up being, I think they can absorb it as a cost of doing business, as long as it remains on the civil side of the law.
I like kickstarter. So far I've stuck to using it for pen and paper RPGs, something I know can be delivered on. I think the core concept around kickstarter is going to radically change the world of consumer products. Its just too new to have much of a reputation system yet (but its coming.) May be kickstarter isn't the facebook/google of pre-funding projects. If they look like they are going to take a big hit, be ready to step up.
As someone who designs business projects the whole thing sounds like a personal nightmare to me. I know first hand how the simplest of projects on paper can take 5-10x longer than estimated to complete. Add in bells and whistles to make it look attractive to a bunch of people, ouch. Easier said than done applies very much here.
This comment stuck in my craw a bit, and I'm trying to disect the comment and why it bothered me.
I have backed several kickstarter project, received the results of a couple, funded a project via kickstarter and promoted several projects. You could say, I'm a fan of the kickstarter model.
On the other hand, I've been predicting that one of these high-profile (likely physical hardware) projects in going to dramatically fail, and then we'll see the fallout.
I guess what stuck in my craw is "complicity allowing this sort of scam-project". Mainly because this feels like an unwarranted accusation.
To try and reassess my feelings, I visited the Kickstarter page to read the copy and get a feel for how protective they are of the backers.
How it Works
"Every project is independently crafted, put to all-or-
nothing funding, and supported by friends, fans, and the
public in return for rewards."
(Ok, so, explicitly stating that the funding is in exchange for rewards.)
"The filmmakers, musicians, artists, and designers you see
on Kickstarter have complete control and responsibility
over their own projects."
(Ok, this suggests that kickstarter isn't guaranteeing success... but does feel more like ass-covering.)
"Rewards are things like a copy of what's being made, a
limited edition, or a custom experience related to the
project. This isn't Best Buy — rewards aren't shrink-
wrapped and ready to ship. Once the project is funded, the
journey to bring them to life begins."
(Another really... hedged statement. This just implies that it might take a while to get the rewards, not that they may not be delivered.)
Clicking "Back this Project" on Lifx
FREQUENTLY ASKED QUESTIONS
Who is responsible for fulfilling the promises of this project?
Kickstarter does not investigate a creator's ability to
complete their project. The claims and responsibilities of
this project are solely its creator's.
(This is interesting, and prominent on the backing page.)
Guidelines
Are creators legally obligated to fulfill the promises of
their projects?
Yes. Kickstarter's Terms of Use require creators to
fulfill all rewards of their project or refund any backer
whose reward they do not or cannot fulfill. (This[1] is what
creators see before they launch.) We crafted these terms
to create a legal requirement for creators to follow
through on their projects, and to give backers a recourse
if they don't. We hope that backers will consider using
this provision only in cases where they feel that a
creator has not made a good faith effort to complete the
project and fulfill.
(Now, that was really interesting to me, as I had never seen that. It's pretty explicit.)
So, basically, whether kickstarter is complicit comes down to a couple questions in my mind:
1) How much responsibility do they bear to vette each project for likeliness of funding?
2) Are they messaging backers well enough about everybody's responsibilities in these scenarios?
... And I don't know the answer to either. The information is there on the site, but a little hidden and the recourse for failed projects seems non-existant. Most of these larger projects are new LLCs set up for the project, and if all the money is gone, suing them is likely going to be fruitless.
(So... yeah, I've got no answers. Just some exploration.)
The only recourse would be through the courts and I am quite sure Kickstarter will not be paying anyone's legal bills. They do have this language so that they or their Backers could take legal recourse if required. They do not have this language because they promise to ever do such a thing.
For kickstarter, this isn't only a question of strict legality and having the right weasel-words in their small print. It's also a question of reputation.
There's already a bunch of stories in the press about projects failing to deliver, and the more backers get shafted the worse this will get. If no-one wants to invest in Kickstarter projects that'll be bad for kickstarter.
There's a whole bunch of different things Kickstarter could do about hardware projects failing to deliver. Why they aren't taking action yet is a mystery to me.
"There's a whole bunch of different things Kickstarter could do about hardware projects failing to deliver. "
Such as what? Like offering insurance for failed products? Doing due diligence into creators? Or?
Any solution you come up with (and I do really want to hear your suggestions) has problems. If they vet it puts more liability on them and legally that would place them in a different position. If they offer insurance then they have to vet and the risk shifts to them which isn't the idea of what they are trying to do. So your thoughts are specifically?
Kickstarter could change their fee model to better align their interests with backers. For example, they could choose to not take their fee until the project creator has delivered on their project. This gives the Kickstarter team more of an incentive to vet the quality of projects and their creators.
> Such as what? Like offering insurance for failed products?
In a perfect world, Kickstarter could do just this - or even better, set up a prediction market* on whether the stuff will (eg.) ship on time. Then users could check the market price and decide whether the risk is small enough for them, and even directly hedge against loss.
I don't see why vetting would put any more liability on Kickstarter - all the 'responsibility lies with the creator' legal mumbo-jumbo can remain in place.
If you browse this thread you'll find lots of suggestions from different people. Probably other people will have better ideas than mine, but for what it's worth: I'd require projects successfully raising a large amount (say, more than the price of a midsized car) for hardware to agree a series of milestones, releasing the funds to them in stages. The precise milestones would be agreed on a project-by-project basis, but could include: Some money up front, some money when they have a preliminary electrical schematic and prototype on breadboard, some money when they have a costed bill of materials and a final prototype, some money when they have a feature-complete mobile app, and some money as the products start shipping and the invoices from manufacturers start arriving.
To put it another way, creators can't have any pudding if they don't eat their meat.
"to agree a series of milestones, releasing the funds to them in stages. The precise milestones would be agreed on a project-by-project basis, but could include"
My first reaction is that that's a good idea. But on second thought this would create quite a burden and bureaucracy at kickstarter to monitor and make sure the right thing happened. I would imagine that for that reason alone they wouldn't go for that but I could be wrong.
Well, in the case of the 'LIFX' bulb mentioned in the article, they've made a 5% commission on the $870,447 raised and I can't imagine too much of that would go on administration.
I agree admin costs would be a problem for smaller projects; if Kickstarter was only making $2500 total on a project they couldn't afford a thorough technical design audit. Some costs could be kept down with technology, e.g. prototype demo youtube videos, which creators should be doing to keep their backers engaged anyway. You'd risk rigged demos, of course.
Crowd funding is still a developing industry at the moment, and it's mostly assumption on my part that makes me think creators failing to deliver is going to be a problem. It's going to be interesting seeing what develops.
You feel there are there are enough crowd-sourced hardware startup failures to warrant any action? I know the interest from this site is primarily tech products but it seems to have grown in proportion to the site which is still heavily arts/crafts saturated. I don't believe the sample size is really close to large enough to be come to the conclusion that that vaporware is as big a issue as the article claims. Providing failsafes for investors ruins the unique accessibility that Kickstartr provides for aspiring project managers.
Of course people want to see their projects realized but I believe that far more good will come from disappointing projects. The horror stories will serve to remind people that these are still investments and as such: it would be best to consider funding these projects with non-profit-esque expectations rather than some hipster product marketplace.
Ok,so there is a difference when the person making the pitch really believes (perhaps foolishly) that they can do what they say they can. Its one of those "That doesn't look to hard ..." kind of situations.
That said, investors do serious due diligence (usually) before investing and ask hard questions. We don't see those questions on Kickstarter so you cannot make a more reasoned choice about investing or not investing.
Do you think that it is possible that the kickstarter model leads to press-than-sufficient sure diligence by lowering the barriers to investment that have traditionally driven larger investors to do more sure diligence?
Is it possible that kickstarter might be predicated on lowering inhibitions to invest below the levels necessary to consistently make sound, rational judgments?
I think that the kickstarter model is below the legally viable laissez faire line, and the once the lawsuits start flying the party will be over. People will look back and say "What were they thinking would happen?"
But that is just my opinion of where its going, it may turn out to be as revolutionary as eBay was in the casual sale market.
I've got the same opinion. It's amazing how so many entrepreneurs love the idea of crowdfunding their next project. They don't see how their crazy startup idea is just another insanely risky investment alongside scammers and people who have no idea what they're doing.
The part about "your existing switches still work" strikes me as impossible. The switches here are on/off switches ... there is no current getting to the bulbs when in off position, so there is no way of controlling the LED-bulb.
If they require to leave all switches turned on for the remote control to work, than I'd have to always turn the light off with the smartphone app. That sounds a little bit complicated ;-)
One of the first thing I do in Hacker News or Reddit when seeing sensational headlines (cancer can be cured!) is checking the posts to find out what's wrong with the claim. In most cases it's the highest voted comment. I think Kickstarter would profit from a similar moderation system. Posts where users can add flags like "will work" "won't work" and some voting system so you can easily see the highest voted comment(s) with one of those flags. Or alternatively a normal forum to allow real discussions about projects would also be a major improvement. Although there needs to be a careful decision then who can cleanup spam as you wouldn't want project moderators to allow removing all critics without any consequences.
The currently used comment system there is just horribly insufficient - it's basically impossible to have any real discussion there.
> So my feeling is that both Kickstarter and the tech blogosphere should start being a lot more skeptical about the claims made in Kickstarter videos, where anybody can say pretty much anything.
Isn't the problem more along the lines of "amateur investors making amateur investments"? Is it Kickstarter's fault if people believe the "pretty much anything" that can be said in a video?
No, in this case it's actually the tech news journalists' fault for believing pretty much anything that can be said in a video. I didn't see anything asking Kickstarter to shape up; the call to action was for the reporters.
And he's right. This article should have been written by, say, GigaOm. I'd want a Wired article to go into more technical depth than this one does. I'd guess that, if I found the articles that pointed to the Kickstarter, they don't.
I generally agree with everything in the article, but there was a statement that caught me up, "I can’t believe that Lifx has managed to solve the enormous problems that many huge companies have spent hundreds of millions of dollars trying — and generally failing — to fix."
I don't believe that large companies with hundreds of millions of dollars are always the right people to find the solution. Isn't this something we tackle a lot of the time? Being the small fish in the big pond? I do think that we should be wary of the snakewater salesmen of the world, but don't discount someone just because they don't have a large, bureaucratic organization backing them.
That being said, it would be really nice for some sort of rating system to be put into place. Force these inventors to generate brand loyalty even if it is to them as a person.
Kickstarter could significantly improve things by imposing a cap on the amount of money taken above the original request.
This is similar to what Groupon have had to do, because it was killing their reputation. People are estimating "Well, we could make about 500 of these", then receiving orders (and the money) for 50,000 of them. Suddenly the predicted ship dates go out 2 or 3 times as long, and people get upset.
They could, but honestly they should just be more insistent that project founders make more use of the existing tools. They provide a way to say there's a limited number of awards available at a given tier; if you're not going to be able to scale past ten thousand quickly, then don't let more than ten thousand people sign up to receive the product - at least not from the first round.
It would perhaps also drive up orders early in the cycle, as people can't wait until the last few minutes when they see a project has been funded.
Personally I think the simplest option would be allowing a 10% "overshoot" fund, and beyond that the project automatically closes to new backers - this should ensure that despite the various reasons why the money wouldn't come through from individuals (credit card rejected, etc), a funded project would get it's full amount.
"'Kickstarter could significantly improve things by imposing a cap on the amount of money taken above the original request."
That is your opinion, in my opinion this would be bad for KS.
I don't know why some grow ups people need someone else to put limits on the money the can spend on something, like they are dependent children who need to be controlled what they do with their own money.
Or worse, they want to tell other people what they can spend. They are totalitarian in the inside.
99 Kickstarter Problems but getting the product isn't one: Problem #1: NOT getting the product. Problems #2-#99) 98 emails updating you on the product you will never receive.
I'm really surprised there haven't been any class action law suits against Kickstarter projects and/or Kickstarter. For most projects Kickstarter isn't a feel-good donation system, it's a way of pre-purchasing a product. If you promise to provide an item for someone's money and don't deliver you've broken the law.
These people aren’t just being seduced by a clever sales pitch: they’re being shepherded there by lots of very high-profile blogs, such as Wired and TechCrunch and Mashable and GigaOm.
Its funny that reuters is writing this, because, they were shepherding a lot of people on an inferior product too, The iPhone 5.
Some old fella I knew who was a young professional as woman joined the ranks in the 60s & 70s had this useful saying: "toilet excuses" which was the whole laundry list of nonsense reasons why women couldn't be building inspectors or firemen or whatnot. "Every building site would need another toilet block and the costs would be tremendous, all to allow one dipshit 21 year old to work for 1 year, get pregnant then leave."
There is something about Kickstarter that makes HN irritable, hoping for failure. I'm not sure what it is exactly and its out of character. I'd like to give the benefit of the doubt but I can smell toilet excuses.
I'm sure that kickstarter has issues and maybe its not a big thing in the long term. But, its a nice idea. It seems to be working. Why is this mob so cranky?
I agree. Something about Kickstarter seems to inspire a lot of negativity here on HN. Perhaps because it's an alternative to the VC funding model that's such a part of the HN identity?
Personally, I love Kickstarter. I've funded a project with it myself. It's has great potential for an individual or small team with "1000 true fans" to make a living, and I think we'll see a lot of success stories come out of it.
And some notable failures, of course. But I don't see that as an indictment of the Kickstarter model. Personally, I wouldn't back Lifx. It's expensive, I'm skeptical of its ability to ship, and I don't need color-changing light bulbs. But if someone wants to spend $70 to take a flyer on something cool, more power to them.
Entrepreneurs using Kickstarter are pitching an idea and often getting money before they've executed more than a video and description.
The typical entrepreneurs of Hacker News are consistently told that an idea has little value and that actual execution is so much more. You must almost always build out at least a basic product before you have a hope of money trickling in or gaining investment.
I think a web-of-trust-style reputation system would work well here, since "votes" cost money.
The reputation of a buyer is the mean of the reputations of the projects they've backed (times some confidence metric).
The reputation of a project six months after it started is 1 if they kept their promises (as measured by confirmation emails sent to the backers) and -1 otherwise.
The reputation of a project before six months is the mean of (the mean of the reputations of its backers (again times some confidence)) and the reputation of the person who started the project.
Seems as though the only thing one needs to earn money on the internet is to make a video with good cameras and be good at Computer generated 3D models of products that will never be completed.
I too think that the kickstarter should stop project starters from giving out material things.
I'm not sure why this is any sort of surprise. Ever since Kickstarter began there have been lots of great ideas, lots of awful ideas. Some of the great ideas have been clearly way too ambitious for small teams but people happily donate money. Given this isn't an investment and what you're doing is giving someone money to follow their dream, to my mind it's almost irrelevant if at the end you don't get your $30 lightbulb. You've lived vicariously through the Lifehacker in question and got to see something go to market or crash and burn.
Hardware development is hard, but if it's doable. Even on a budget.
A Ten years ago I started a hardware company that developed an advertising sign based on LED's. It was basically a motor with a stick of RGB LED's attached like a propeller. When you spun the stick and modulated the LED's just right you could paint full color disc shaped picture seemingly in free air. An FPGA would control and modulate the LED's (at the time it was the only affordable thing that could modulate a LED 400.000 times a second) The whole thing was online via an OEM phone module and would automatically update with ads, weather, etc. from a server where customers could buy campaigns online. Campaigns could of course be customised wo that you could get your ad only on the displays you wanted. I was in charge of getting this whole bandoogle from an idea to a product, and while it was hard I managed develop and bring it to market for around $200.000. Remember this was ten years ago where you had to tap directly into the a carriers network and hack around just to get an IP address, and five years before the iphone.
The point of the story is that sometimes small nimble companies that are set on doing something actually succeed. I'm not saying that these guys have solved all the problems, indeed it sounds from the article that there are some huge obstacles. I'm just saying that you should never underestimate the power of a small team whose only goal in life is to make something happen.
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[ 3.3 ms ] story [ 268 ms ] threadI know that technically you make a donation, but some of those "projects" feel like borderline scam. Can't the donors or even kickstarter themselves turn back on the project owners if they receive a huge amount of money and fail to deliver anything? Especially when they say they have working prototypes in the introduction video.
I'm really convinced that the average kickstarter donor sees their donation as a pre-order more than an "investment". I'm sure many of those who donated to a project that failed to deliver felt like they've been scammed, and that may hurt kickstarter in the long run.
http://news.ycombinator.com/item?id=4523753
The 2nd one I'm still hoping the backers will come through or at least refund the backers. So I'll hold that one for now.
I have backed 16 projects and the first was TikTok Nano watch band which funded Dec 2010. Out of the 16 only 2 have me very concerned.
I just backed two more projects one for $1,299 which is a 3D Printer and the other $99 for 3D printer software. I will continue to back things but I look carefully at their estimated ship date. It must be within 60 days, and I will dispute any charge from a project that doesn't deliver within that window.
That might get kickstarter's attention as well.
Basically, they shouldn't mention on their page at all that they will be getting the product. So whether you're donating $1 or $100 or $1000, it's just that - a donation to the cause. You're not "buying" anything. That should make things a lot more clear, although I expect the project donations to drop, but probably better than for Kickstarter to get its reputation ruined forever because most projects "don't deliver" the products people were "expecting", when they thought they bought it or "pre-ordered" it.
Kickstarter does not investigate a creator's ability to complete their project. The claims and responsibilities of this project are solely its creator's.
Kickstarter is an amazing concept but the coming wave of failed projects is going to mark the cumulative jumps of the shark.
From an earlier interview with Kickstarter's founder[1], "I don't know. I mean, no, I don't think that we would. But certainly, the kind of thing you're talking about is not a bridge that has been crossed yet. Someday it will. And you know, I think if something did go awry, it would be — it wouldn't be my favorite day."
[1]: http://news.ycombinator.com/item?id=4472776
So Kickstarter is a "It would be awesome if this product came to existence and I'm willing to buy the alpha version even if it doesn't exist yet and may never exist" kind of thing. It's the pledge that I buy one of those, unseen and unproven because it would be cool if I had one of those. You just need to be aware of the risk and you won't feel screwed over as badly. And don't go for kickstarters that just look too good.
It's a hard to solve problem, but I think the only thing that kickstarter can actually do is to better communicate the risk.
I don't believe it's Kickstarter's fault in any way if people view it otherwise.
And I'm on your side: It's not kickstarters fault, if people think otherwise - still they could make that point a little stronger.
I the long term I also think this is better for the campaigns - a lot of hardware projects seem to struggle shipping if they get a significantly higher number of orders than predicted. I'm sure in the moment it's exciting to see how many orders you can pull in, but painful in the long run when it is difficult to deliver on your promise, especially if you're planning on building a long-term sustainable business.
This point is counterintuitive but here it is: Assuming that there are relatively rigid time constraints, you might be able to make a profit at 200 units, and a profit at 200,000 units, but not at 20,000 units. This is because there are thresholds where you suddenly have to invest in infrastructure, and setting up infrastructure fast is particularly expensive.
If you're raising capital to produce your widgets, you can lay out a business plan and predict with reasonable certainty that you need to sell X widgets before you can break even. You present that to investors and they decide if they think you can sell X widgets.
On Kickstarter, you are implying a fantasy claim of arbitrary linear production scaling that says "I need $25/widget and I will make however many everyone wants!" And hell, that doesn't even work for selling commodities.
So what the model should be for people starting a business selling a tech product is that they say "We're developing a prototype, and if you pledge $X you can get a prototype". Then limit that to a small production run and raise enough money so everyone can involved can quit their job. Now they have time to look for investors, and a great proof of concept that the idea is marketable.
So the usual place where you see an unlimited number of backers is for digital products. See the Amanda Palmer or the Planetary Annihilation: They had limits on any backing that required a physical or personalized goods, but unlimited pledges for digital-only pledges - and there the assumption of "the more I sell, the more I gain" holds true.
In order to bring to market a product you want that is not currently available and would not be feasible to bring to market without first knowing there is a sufficient market for it.
Kickstarter is the ultimate fail-fast, it cuts out a huge chunk of market-research when trying to build a business around something. If people don't want to kickstart it, others are unlikely to buy it.
But removing the possibility of offering a product seems too much. I think that, after a little while and a few big "unfortunate" projects, the process (specially for deliverable goods) will be more understood and there will be more pressure in showing the team skills, previous products, etc. Right now that's not very clear (though you can research on your own, of course)
They will never ship the bulb and you cannot fund such project based on a video.
Some of my friends know these guys and by the sound of it this is a case of a "overnight sensation" that has been years in the making.
I tend to think that kickstarter is a fad and that if it survives at all, it will be in a much reduced and much more controlled form. How long will it be before the authorities decide they're complicit in a fraud?
EDIT: The ScanBox project looks like something I could make for $5 in parts and have fun doing over in an hour or so.
Edit: The shipping date is October 12[1].
[1]: http://www.kickstarter.com/projects/limemouse/scanbox-turn-y...
This actually makes me wonder: If one would want to scam Kickstarters, one could just create new project and PR their way into millions of dollars without having to deliver a single thing.
If the shipping was 50% done, I would agree but this isn't the case here
== MySaver ==
- Project was delayed for over 5 months.
- When I got the product it wasn't the colour I had requested.
- When I contacted the project leader he told me that they didn't have any more products of that colour, so he chose the one he thought convenient.
- False statements: "The MySaver is the only cable protector that we know of and we fully-assemble it on a OEM quality replacement dock connector to USB cable". I can't insist how false this statement is. The cables I received where assembled using some kind of industrial glue gun - by no means "OEM quality" - and they are now falling apart.
- Contacted Kickstarter about this issue and said that "if the project gets fully funded it must be a legit business/product"
== Elevation Dock ==
- Backed in February 2012, still waiting for the product.
- I will be changing my iPhone 3GS to iPhone 5, but guess what? It's a different dock connector. Yes, partly my fault, but its been 8 months since funding closed and 9 months since everybody knew this project was already 100% funded.
== Conclusion ==
Many projects (primarily hardware) are very poorly managed. Project leaders, instead of being rational from a production capacity/constraint point of view, they simply want to "beat all records", and be at the top of the Kickstart funding list. This is just bad entrepreneurship and management skills. These guys are risking production, product quality and customer satisfaction over a "vanity" metric: How much is the maximum I can raise?
I've given up, I'm not backing any more projects, I'm not going to be anyone's guinea pig. I'd rather wait for the products to be available in stores at a higher retail price, where I can see their "quality" finish. I'll judge then.
What purpose? The purpose of delivering an obsolete product by the time it reaches customers months after?
Companies and individuals go to Kickstarter to create great products - that can't be financed in no other way (bank debt, VC capital, etc.).
More capital (pledges) result in more orders, more inventory, higher working capital and a production/logistics nightmare. None of the hardware projects/companies I've seen to date on Kickstarter have the required infrastructure to handle "as much capital as possible" or as many orders as possible.
Just because it is not implicitly stated doesn't mean that the business owners do not have that motive. Just because some business owners cannot scale effectively does not change their original motive. Just because you would personally run the businesses or the website different does not change the motive.
I'm not going to waste any more time having a speculative "internet argument" with you on this.
I love the Kickstarter model. I think it's an awesome way for the average Joe to fulfill his dreams of bringing something to the market. I don't think too many people are expecting to become millionaires on there. They just want to see their dream come true and the product they designed on screen sit on people's desks. That's what I love about it.
I have heard two arguments that I think need squashed quickly.
The first is the "You're not a customer... you're a backer" argument. It suggests that because I've contributed money to a project that I'm not due anything. I'm not due a response from the Project Starter, I'm not due sufficient updates on progress or delays and most of all I'm not allowed to complain about the project.
My Elevation Dock is 5 months delayed. I'm pissed about that. I understand that stuff happens. But when you release something that was supposed to be enjoyed for months before a new product comes out (iPhone 5) and makes it obsolete, you deserve to give everyone an apology. Or at the very least, a heavily discounted or free adapter. Something.
I understand that scaling isn't easy and that leads me into my second argument. The whole, "Scaling from 75,000 to 1,000,000 isn't easy." No kidding. Nor is going from running 1 mile a day to 26.2. BUT he could have seen these issues on the horizon. He could have capped his project to a reasonable amount. He didn't. The Pebble guys did. They realized they were hitting the threshold of not being able to make everyone happy in the timeframe they said they could. So they capped their project and sold out. Elevation Lab should have done the same. And BTW, the developer watches are already shipping to those backers for Pebble.
Perhaps I'm jaded by the Elevation experience. But I've backed other campaigns that have been very honest and open about their progress.
Having taken the elevation dock apart, it is entirely do-able.
Now the very first Kickstarter I ever backed... it was to cover the editing and production costs of a documentary that was supposedly already completely filmed, it just needed to be put together. Funded in early Feb 2011 and not a single update on the project or comment from the creator since that day either. Still bummed about that one - I genuinely wanted to see the documentary, and my pledge was supposed to get me a copy of the DVD.
I very skeptical it's possible to deliver these at those price points.
Just consider as a hacker the master bulb;
They gloss over how you actually connect it to your home wifi network; it either has to interface with your laptop or phone via a cable for the initial setup, or it has to be able to create it's own wireless network you can hook onto, to then in turn tell it which is your home network, so it can hook onto that, and then relay to all other bulbs. That's a hell of a lot of technology to pack inside a groundbreaking lightbulb that's going to be running at high temperatures, at a $70 price point.
The 'smart bulb' stuff aside, a decent plain white LED bulb sets you back around $30. Have you ever tried those colour-change LED light sets you get for garden decking or under the kitchen units? Even those cost more per unit that this, and they light they put out is harsh and well bellow 10 watts; hence why they're just used for ambient highlights.
In my opinion the companies best positioned to deliver these kind of technologies are the likes of NEST[2]. They already have a constantly powered, integrated master device, it has a zigbee chip (which makes much more sense than wifi), an API, large processing power, and lots of data on the household. All they need to do is update their firmware (which they can do automatically already) and publish an API. Then any licensed 3rd party vendor from China can now deliver 'slave bulbs' using whatever technology and price points they desire. A ground up solution proposed here is short sighted, and realistically in the long run more expensive.
[1]http://news.ycombinator.com/item?id=3558304
[2]http://www.nest.com/
They don't seem to have much interest in pushing for wide adoption (at least, they seem to want to sell $400 controllers, not $50 controllers).
This screams "We have no idea what we are doing"
(And those buying into the project certainly don't know a lot about it as well)
This is like saying "We are building an electric car... with shiny paint", whereas the real problem is "building an electric car!"
They probably tried to fit a RaspberryPi inside first
[0] http://www.eye.fi
And even the article says (and they agree it's an OEM lamp):
"The Lifx is priced at $49 per bulb, which means that you’re basically buying a basic WeMo switch and getting the LED bulb — and all the technology merging the two into one bulb-sized piece of hardware — for free. It just doesn’t seem likely."
They can prove me wrong, sure, by shipping the product.
It is not overpriced if you factor the cost of electronic control of the lamp
"Heck, I could dissect a router and glue on a relay in a smaller package for under fifty"
Cheapest WeMo is $50 so you're almost there already
You can try to have a homemade solution for less, sure but you'll have a small price advantage and maybe not follow all standards relating to switches (isolation, etc, it will work, though). Not counting the software work.
Now, for their lamp they would need 3 power channels, instead of one 'on-off' control, which is certainly more expensive and complex.
This is not a fifty dollar wifi device with a free light. This is a thirty dollar light with a ten dollar wifi device slipped in.
Wifi is probably overkill on a lamp, but it's not completely without precedent. High-end LED aquarium lighting setups (the kind you need to grow exotic corals) often have wireless interfaces and/or dedicated controllers.
If money were no object, I would have these panels all over my house. http://ecotechmarine.com/products/radion/
They're not stupid. They know this is happening, and they're _hoping_ that it'll all magically sort itself out; that people will be smart enough _not_ to believe in the $50-you-get-a-lamborghini pledges.
I mean, it's a great scam right? If you're a con artist, you make your money in one of two ways;
1) Steal someones money and make them too embarrassed to do anything about it (classic porn on the credit card)
2) Steal a little bit of money from a lot of people, all of whom can't be bothered to do anything about it. <--- Kickstarter.
Realistically, this is going to continue until someone sues Kickstarter for being complicit in mail fraud. That'll be a sad day, but you can already see it coming on the horizon.
* Actual project may not be a scam, but honestly there's not a huge difference between a poorly organised project that takes everyones money, tries to make something and fails, and an actual scam. If you're selling something, you're a merchant. There are laws around that.
Money on the other hand, is very easy to measure. So are your legal obligation as a merchant.
If you sell something online, and the person on the other side never receives it, that's mail fraud. No matter what your intensions were.
caveat: As a merchant you also have legal protections in this case, which is where refunds, reshipping, etc. come in.
(accountant)
I sometimes turn down the rewards. And I'm always offered the option to do so. Which means it's definitely not a normal for-sale arrangement. Who would order something from Amazon and then check a box saying, "Oh, just charge my card; don't actually send anything"?
As others have pointed out they are selling something. Nothing indicates that you can get the "thing" simply by sending an entry to the address and there is no obligation to buy anything. As happens with contests that don't want to appear to be a lottery. In other words you can't have someone pay for a chance to win something (in many legal jurisdictions particularly in the US not sure about anywhere else). But you can have people both buy things and enter with a very clear "no obligation to buy" as we have all seen (once again in the US).
So it is very clear and obvious that in exchange for paying money you are expecting to receive something in return.
Now of course they could probably work around this with the proper wording somewhere.
"We hope to produce this lightbulb. There is no guarantee we will succeed. Here is a complete list of our qualifications. Be aware that if we fail to deliver you will loose your money. Here is our record with other projects. Etc."
In that case the "game" becomes a little different and it is apparent and visible that you stand to loose just like paying to enter a marathon you pay money and are not guaranteed to win. (Not a great example but anyway..)
If someone truly takes the money and runs, that's a criminal offense. Kickstarter doesn't need special policies to make it so, and I'm sure they'd cooperate with a criminal investigation. I think they've even said as much!
(http://www.kickstarter.com/projects/schuyler/lockpicks-by-op...)
Wanted $6,000; got $87,000; completed funding in sept 2010; backers still waiting. Cheapest pledge to get product was $20.
Someone else has taken on the project. A few people have got "practice sets", but that's not what they wanted. They wanted the picks.
If legal action had been attempted and failed, that would be interesting! But here there's no indication that the matter has been brought before a court.
A project much more like an investment prospectus than it is a sales offering.
So I would be interested in knowing if the SEC has already had a look at the Kickstarter legal setup, and if not, it may well be the next step (ie not suing Kickstarter, but refering them to SEC)
The laws around prospectus and offerings are setup very explicitly to avoid your situaton 2) - so I would be very surprised if kickstarter projects are not somehow explicitly avoiding those regulations - or if they are in fact compliant
In the Kickstarter TOS, there is the following line:
Legally, Kickstarter is just a channel for contributions. If you want, and if the project offers it, you can sometimes pre-order goods in exchange for your contributions. But you get no interest in the business beyond your pre-order, so it's not a security.
There is no question that they fall under consumer protection laws, products are being advertised and offered, and anyone can "buy" them. I'm sure the FTC already has an open investigation or investigations.
If you create a kickstarter project, pull in $1m+, spend it all legitimately and fail to deliver the project, you could end up being named in a civil suit. In the future there will be people who lose their houses over this. Just because you made the project in 2011 doesn't mean you won't get sued in 2014.
If you create a kickstarter project, pull in $1m+, spend it all illegitimately, on personal expenses, expect to go to jail. I predict this will happen to at least 1 person.
The larger question to me is what liability kickstarter themselves have. Whatever that amount ends up being, I think they can absorb it as a cost of doing business, as long as it remains on the civil side of the law.
I like kickstarter. So far I've stuck to using it for pen and paper RPGs, something I know can be delivered on. I think the core concept around kickstarter is going to radically change the world of consumer products. Its just too new to have much of a reputation system yet (but its coming.) May be kickstarter isn't the facebook/google of pre-funding projects. If they look like they are going to take a big hit, be ready to step up.
As someone who designs business projects the whole thing sounds like a personal nightmare to me. I know first hand how the simplest of projects on paper can take 5-10x longer than estimated to complete. Add in bells and whistles to make it look attractive to a bunch of people, ouch. Easier said than done applies very much here.
I have backed several kickstarter project, received the results of a couple, funded a project via kickstarter and promoted several projects. You could say, I'm a fan of the kickstarter model.
On the other hand, I've been predicting that one of these high-profile (likely physical hardware) projects in going to dramatically fail, and then we'll see the fallout.
I guess what stuck in my craw is "complicity allowing this sort of scam-project". Mainly because this feels like an unwarranted accusation.
To try and reassess my feelings, I visited the Kickstarter page to read the copy and get a feel for how protective they are of the backers.
How it Works "Every project is independently crafted, put to all-or- nothing funding, and supported by friends, fans, and the public in return for rewards." (Ok, so, explicitly stating that the funding is in exchange for rewards.)
(Ok, this suggests that kickstarter isn't guaranteeing success... but does feel more like ass-covering.) (Another really... hedged statement. This just implies that it might take a while to get the rewards, not that they may not be delivered.)Clicking "Back this Project" on Lifx
(This is interesting, and prominent on the backing page.)Guidelines
(Now, that was really interesting to me, as I had never seen that. It's pretty explicit.)So, basically, whether kickstarter is complicit comes down to a couple questions in my mind: 1) How much responsibility do they bear to vette each project for likeliness of funding? 2) Are they messaging backers well enough about everybody's responsibilities in these scenarios?
... And I don't know the answer to either. The information is there on the site, but a little hidden and the recourse for failed projects seems non-existant. Most of these larger projects are new LLCs set up for the project, and if all the money is gone, suing them is likely going to be fruitless.
(So... yeah, I've got no answers. Just some exploration.)
[1]https://ksr-assets.s3.amazonaws.com/creator-responsibility.p...
There's already a bunch of stories in the press about projects failing to deliver, and the more backers get shafted the worse this will get. If no-one wants to invest in Kickstarter projects that'll be bad for kickstarter.
There's a whole bunch of different things Kickstarter could do about hardware projects failing to deliver. Why they aren't taking action yet is a mystery to me.
Such as what? Like offering insurance for failed products? Doing due diligence into creators? Or?
Any solution you come up with (and I do really want to hear your suggestions) has problems. If they vet it puts more liability on them and legally that would place them in a different position. If they offer insurance then they have to vet and the risk shifts to them which isn't the idea of what they are trying to do. So your thoughts are specifically?
In a perfect world, Kickstarter could do just this - or even better, set up a prediction market* on whether the stuff will (eg.) ship on time. Then users could check the market price and decide whether the risk is small enough for them, and even directly hedge against loss.
* http://en.wikipedia.org/wiki/Prediction_market
If you browse this thread you'll find lots of suggestions from different people. Probably other people will have better ideas than mine, but for what it's worth: I'd require projects successfully raising a large amount (say, more than the price of a midsized car) for hardware to agree a series of milestones, releasing the funds to them in stages. The precise milestones would be agreed on a project-by-project basis, but could include: Some money up front, some money when they have a preliminary electrical schematic and prototype on breadboard, some money when they have a costed bill of materials and a final prototype, some money when they have a feature-complete mobile app, and some money as the products start shipping and the invoices from manufacturers start arriving.
To put it another way, creators can't have any pudding if they don't eat their meat.
My first reaction is that that's a good idea. But on second thought this would create quite a burden and bureaucracy at kickstarter to monitor and make sure the right thing happened. I would imagine that for that reason alone they wouldn't go for that but I could be wrong.
I agree admin costs would be a problem for smaller projects; if Kickstarter was only making $2500 total on a project they couldn't afford a thorough technical design audit. Some costs could be kept down with technology, e.g. prototype demo youtube videos, which creators should be doing to keep their backers engaged anyway. You'd risk rigged demos, of course.
Crowd funding is still a developing industry at the moment, and it's mostly assumption on my part that makes me think creators failing to deliver is going to be a problem. It's going to be interesting seeing what develops.
Of course people want to see their projects realized but I believe that far more good will come from disappointing projects. The horror stories will serve to remind people that these are still investments and as such: it would be best to consider funding these projects with non-profit-esque expectations rather than some hipster product marketplace.
That said, investors do serious due diligence (usually) before investing and ask hard questions. We don't see those questions on Kickstarter so you cannot make a more reasoned choice about investing or not investing.
Is it possible that kickstarter might be predicated on lowering inhibitions to invest below the levels necessary to consistently make sound, rational judgments?
But that is just my opinion of where its going, it may turn out to be as revolutionary as eBay was in the casual sale market.
If they require to leave all switches turned on for the remote control to work, than I'd have to always turn the light off with the smartphone app. That sounds a little bit complicated ;-)
The currently used comment system there is just horribly insufficient - it's basically impossible to have any real discussion there.
Isn't the problem more along the lines of "amateur investors making amateur investments"? Is it Kickstarter's fault if people believe the "pretty much anything" that can be said in a video?
And he's right. This article should have been written by, say, GigaOm. I'd want a Wired article to go into more technical depth than this one does. I'd guess that, if I found the articles that pointed to the Kickstarter, they don't.
I don't believe that large companies with hundreds of millions of dollars are always the right people to find the solution. Isn't this something we tackle a lot of the time? Being the small fish in the big pond? I do think that we should be wary of the snakewater salesmen of the world, but don't discount someone just because they don't have a large, bureaucratic organization backing them.
That being said, it would be really nice for some sort of rating system to be put into place. Force these inventors to generate brand loyalty even if it is to them as a person.
This is similar to what Groupon have had to do, because it was killing their reputation. People are estimating "Well, we could make about 500 of these", then receiving orders (and the money) for 50,000 of them. Suddenly the predicted ship dates go out 2 or 3 times as long, and people get upset.
It would perhaps also drive up orders early in the cycle, as people can't wait until the last few minutes when they see a project has been funded.
Personally I think the simplest option would be allowing a 10% "overshoot" fund, and beyond that the project automatically closes to new backers - this should ensure that despite the various reasons why the money wouldn't come through from individuals (credit card rejected, etc), a funded project would get it's full amount.
That is your opinion, in my opinion this would be bad for KS.
I don't know why some grow ups people need someone else to put limits on the money the can spend on something, like they are dependent children who need to be controlled what they do with their own money.
Or worse, they want to tell other people what they can spend. They are totalitarian in the inside.
This will perfectly enforce the realization that it's INVESTMENT with risk and not a purchase of the item.
Its funny that reuters is writing this, because, they were shepherding a lot of people on an inferior product too, The iPhone 5.
Flagged immediately for this statement. Troll journalism.
There is something about Kickstarter that makes HN irritable, hoping for failure. I'm not sure what it is exactly and its out of character. I'd like to give the benefit of the doubt but I can smell toilet excuses.
I'm sure that kickstarter has issues and maybe its not a big thing in the long term. But, its a nice idea. It seems to be working. Why is this mob so cranky?
Personally, I love Kickstarter. I've funded a project with it myself. It's has great potential for an individual or small team with "1000 true fans" to make a living, and I think we'll see a lot of success stories come out of it.
And some notable failures, of course. But I don't see that as an indictment of the Kickstarter model. Personally, I wouldn't back Lifx. It's expensive, I'm skeptical of its ability to ship, and I don't need color-changing light bulbs. But if someone wants to spend $70 to take a flyer on something cool, more power to them.
The typical entrepreneurs of Hacker News are consistently told that an idea has little value and that actual execution is so much more. You must almost always build out at least a basic product before you have a hope of money trickling in or gaining investment.
I think any crankiness might be related to that.
The reputation of a buyer is the mean of the reputations of the projects they've backed (times some confidence metric).
The reputation of a project six months after it started is 1 if they kept their promises (as measured by confirmation emails sent to the backers) and -1 otherwise.
The reputation of a project before six months is the mean of (the mean of the reputations of its backers (again times some confidence)) and the reputation of the person who started the project.
A Ten years ago I started a hardware company that developed an advertising sign based on LED's. It was basically a motor with a stick of RGB LED's attached like a propeller. When you spun the stick and modulated the LED's just right you could paint full color disc shaped picture seemingly in free air. An FPGA would control and modulate the LED's (at the time it was the only affordable thing that could modulate a LED 400.000 times a second) The whole thing was online via an OEM phone module and would automatically update with ads, weather, etc. from a server where customers could buy campaigns online. Campaigns could of course be customised wo that you could get your ad only on the displays you wanted. I was in charge of getting this whole bandoogle from an idea to a product, and while it was hard I managed develop and bring it to market for around $200.000. Remember this was ten years ago where you had to tap directly into the a carriers network and hack around just to get an IP address, and five years before the iphone.
The point of the story is that sometimes small nimble companies that are set on doing something actually succeed. I'm not saying that these guys have solved all the problems, indeed it sounds from the article that there are some huge obstacles. I'm just saying that you should never underestimate the power of a small team whose only goal in life is to make something happen.
Also it is a little too early to be calling this VaporWare. Give them a chance to prove themselves.