My recent post about the Cole-Bar hammer multi-tool, which has failed to launch after a successful Kickstarter campaign, sparked a very polarized discussion about Kickstarter and other crowdfunding platforms.
In case you’re not familiar with Kickstarter and other sites like it, there are a few things that you need to know. Kickstarter is a place where project and campaign creators can seek funding to help make their products or ventures a reality. Everyone can be an investor, and there are various “rewards” that you are promised at different pledge levels.
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At Kickstarter and other crowdfunding sites, you’re not a customer, you’re technically an investor. The official term is backer. As such, and as recent happenings have shown, you are not guaranteed to receive the promised product, even if the campaign is fully funded.
See More: Check out some of out Kickstarter tool and project posts
Kickstarter serves as middleman, and collects a percentage of a project’s funding for themselves, and only if the campaign successfully meets their funding goals.
There have been very many successful Kickstarter-funded products, such as the Fix It Sticks that Benjamen posted about. Fix It Sticks, which are T-handle screwdriver bit handles that combine for use and separate for easier storage, were born from a Kickstarter campaign.
There have been many other small success stories, many big success stories, small failures, and massive failures. And this is just talking about projects that have surpassed their funding goals.
With Kickstarter, but not necessarily true at other crowdfunding sites, investors/backers aren’t charged the pledge amount until the funding threshold is reached.
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Here’s another Kickstarter project I recently posed about – a titanium screwdriver bit and key ring that, with still 33 hours to go, has received over $84,000 in pledges. Their funding goal was $2,500.
Yea, I don’t quite get it either, how people go gaga over titanium. Then again, say tungsten carbide and I’ll sit straight up and bat an eyebrow or two. Carbon fiber is known to make people go gaga too.
Anyway, so that’s Kickstarter. A lot of people have had good experiences backing projects there, some people have had bad experiences, and many people haven’t pledged a single dollar.
Kickstarter has implemented guidelines, such as how hardware campaigns must have working prototypes, but there’s still a lot of risk. With the Cole-Bar project, there’s a chance that backers won’t receive a refund, or if they do get money back it might be a partial refund. And since so much time has passed, most card companies won’t allow a dispute or chargeback.
Not all crowdfunding campaigns are for tools, electronic devices, or other physical products. The Smithsonian Institution recently launched a Reboot the Suit: Bring Back Neil Armstrong’s Spacesuit campaign, where they are asking backers to help fund a new spacesuit preservation and display program.
I have yet to back a project on Kickstarter, but mainly because I don’t like waiting for tools. That new thingamabob that is due to be released 6-10 months from now? I’m okay paying the retail price once it’s out. Also, a lot of first-time and experienced manufacturers do better with a product’s second revision.
I find myself feeling neutral if not somewhat positive towards Kickstarter and other sites. What I don’t like is when well-established companies with facilities, capital, and marketing budgets use Kickstarter and other sites as pre-order platforms. To me those campaigns just feel wrong.
Some campaigns just boggle my mind. Take the Coolbox Tool Box Indiegogo campaign, for instance. I find it both interesting and ridiculous. Not to rehash things, but that’s a tool box designed by folks who show Milwaukee’s M12 cordless jigsaw as a tool that can be plugged into am AC power outlet. I’m not surprised that they earned over $370K in funding from backers.
Back to the point.
Kickstarter is Awesome!
Kickstarter Sucks!
Discuss!!
If you ask me (because I can’t really ask myself), Kickstarter is Awesome! It gives everyday folks a platform by which to fund their projects and inventions independently. Everyone that starts a campaign should of course seek expert guidance before setting their product “reward” pledge amounts and funding goals.
Do you know many people email in about their tool inventions? A LOT. I post about the better ones, for two reasons. First, because some are cool enough and I want to share what I learned with you. Second, because there are tool buyers, product managers, and other types of folks in the manufacturing and retail industry. Maybe a post about a cool tool concept will be enough to help take it from the invention stage, and to where there’s a tool the public can actually buy.
It also benefits creative ventures as well. 5.7M in backers’ pledges led to a Veronica Mars movie years after the TV show was cancelled, and last year Levar Burton and Reading Rainbow raised $5.4M to revitalized the children’s educational show as a web-based program. Other, smaller, campaigns have also seen successful.
Are things better with Kickstarter and other crowdfunding campaigns? Despite the occasional scam, negative experience, or problematic campaign, I think that we’re better off having these types of project fund-raising platforms than not.
As always, buyer/investor/backer beware.
Again, what’s your take of it? Is Kickstarter awesome, or do they suck?
Brett
I’ve backed a couple of projects on Kickstarter and never been burned, but I don’t plan to back any more. I’m happy to preorder a cool thing but I want all the safety nets involved in being a customer vs. a backer.
I’m also increasingly uncomfortable with big companies turning to Kickstarter to raise funds for something they would traditionally just finance for themselves, or raise funds for part of a project and then silently kick in the other 90% of the budget. I don’t think this happens so much for tools but a few big name video games have gone this way recently and more are on the way I’m sure.
anthony
Kickstarter is crap, it sucks!
Mike
The best (and frankly, most amusing) explanation of these types of things I’ve ever heard:
“Crowd funding essentially relies on the non-sophisticated (in the technical/business/economic sense) investor not seeking a return on his investment. “
Jotham McMillan
Yes, however that is a negative version of this statement.
“Crowdfunding essentially relies on an investor seeking a return on their investment that may not be monetary”
When I sponsor a kickstarter campaign I’m either doing it because I believe in the charity aspect such as Reading Rainbow or I’m doing it to get a niche product that no mass manufacturer would touch.
Matt Roche
I think you miss the point of Kickstarter.
I invest because it brings me joy to see smart people make interesting things. I have waited over a year once for a delivery, but I don’t care. The products are usually very creative, and often over-reaching. They can be silly, and every once in a while they are awesome (my 3d printer is truly awesome).
But I am not “investing”, except in the sense of investing in talent. I am spending. Some people buy pumpkin spice lattes. I buy the happiness that comes from owning something that isn’t the same crap from Home Depot, and the joy of knowing some team worked their a**es off to actually make and ship something.
If you use tools, you know what I am talking about. If you are talking about return on investment, you probably don’t really use tools.
Tomas
Kickstarter is Awesome! – I’ve backed maybe 30 or so projects. 95% have delivered. Although the wait can often be much longer since these guys never seem to have a good grasp of overseas manufacturing and logistics. if I had to break it down I’d says perhaps 50% meet my expectations, 25% exceed my expectations and 25% don’t quite live up to the hype.
Also, not everything I back is a physical product. I was one of the first to back the Reading Rainbow Kickstarter, the swag was great, but more importantly I was absolutely thrilled to help out a project that I grew up with as a kid and helped shape my love of reading.
I’ve also backed 4 independent movies, where I’ll get the digital download. It’s neat to be part of something uniquely creative as well. With funding goals often as low as a few thousand dollars Kickstarter is a great way for people to experiment on a relatively small scale and for you to grab some niche item that otherwise wouldn’t exist.
Bill K
As “Buyers” Kickstater SUCKS: As a consumer, the product savings that one might obtain are very minimal if the project is a success after many months having ones money.
As “Investors” Kickstarter SUCKS: The dollar return and success ratio on Kickstarter project investments (saving on the product) would have to be the poorest one can make.
As “Backers” Kickstarter is possibly AWESOME. If one feels good about donating money, with no expectation other than to see if a project will succeed and say you were part of that success than it can be an unique awesome experience. IMHO I expect few backers have this attitude, as the Kickstarter projects are all about awards.
Kickstarter is very successful as the marketing arm for projects, taking a cut on their success, while accepting little to no risks and not holding the project creators to any reasonable business standards despite standing contractural requirements. When creators are allowed by Kickstarter to continually lie to backers without consequence, the whole crowd-funding environment should be deemed buyer beware!!! IMHO and experience Kickstarter sucks.
BJ Nicholls
What sucks is the way many sites treat news releases from crowd-funded ventures the same as actual product releases. And the way the platforms work, the downsides of choosing a backing reward are played way down. As someone who has backed a couple of products, the expected ship date is typically months short of reality and what get is likely to be disappointing (although a bit-driver is much less risky than something more complex).
Allen
I have funded projects from tools, clothing, music, razors and others. I have never been disappointed.
One gal wanted gas money to tour South Dakota and take photos of old prairie grain elevators. I got some post cards, no real return to me other than helping somebody. I’ve helped some Indy bands get money to do some professional recording sessions, I got some digital downloads. No gain for me really.
I consider it a donation, if I get something, fine. I feel the benifit is better than most charities. Help somebody fulfill a dream. One couple were trying to get equipment to start a local restaurant, they didn’t make the required amount, I wasn’t charged.
I backed a clothing company who were trying to make quality USA goods, I got the most expensive shirt to ever grace my closet. They are now a growing concern and sent backers letters offering stock sales. They employ folks here and use USA cotton.
It is voluntary so I don’t see why folks want to talk bad about it. Do it or don’t.
Nathan
like any tool there is the right way and wrong way of use.
crowdfunding can be awesome when used right and for the right reasons.
crowdfunding can be a complete and utter sham otherwise.
some of the sites are better than others and I suspect over the years we will see improvements for fraud protection and or money back guarantees.
I think there is still merit.
JG
I don’t buy stuff on kickstarter but I sometimes back projects – there’s a difference. And it’s pretty good for that.
Nathan York
As a customer, i finally ordered and received my uniburr but as an investor I declined to do the Kickstart thing and subsequently help beta test with their teething problems.
I want a finished product not a product in development.
patrick
ive backed about 5 projects. i think i donated the minimum to receive the finished game which was about 10-15$ the other one was the solar roadways in which i declined a reward because its something i believe will do some good. so if these projects never came to fruition……im out like 50$. who cares!!! people will donate 10$ to these projects then act like they own them. we have all lost 10$ on something at some point in our lives stop acting like its a lot of money. if however you paid 1000$+ or even a few hundred then yes id be pissed too.
Jerry
I consider Kickstarter to be ‘buyer beware’. It has lots of good ideas and new inventions, but also it’s share of duds.
Stan
If anyone read my comments on the Cole-bar article or the Knife edge bit, my stance is obvious. If not, I am not pro Kickstarter, but I DO give them credit for the USA made projects funded there.
However, my chief concern is the fact Kickstarter has stated explicitly written they are not responsible for being involved with the creators with requiring them to refund the backers. That being said, you could literally spend money and gain absolutely NOTHING in return. Kickstarter, in their own words is “all or nothing” and while that is great for them and the creator, as a backer you are gambling.
Oh sure, the backers could take legal action, but lawyers are expensive and you aren’t always dealing with just a independent white collar creator. Try going against a corporation and you’ll see what I am talking about.
This isn’t to say there isn’t honest creators, but given that these creators can take the cash and disappear, that doesn’t sit well with me. Truthfully, aside from supporting USA made creations (even then there is a risk), I am not sure why anyone would want to potentially lose EVERYTHING and have nothing to show for this.
Allen
I guess if you can’t stand to see 50 or 100 bucks go out the window you best not get involved.
Give the money to charity. I don’t, I think most of them are rat holes.
Stan
Allen, I won’t apologize for not wanting to be ripped from inventors that aren’t technically forced to give money back should the project fail and I certainly don’t think this right that Kickstarter won’t have any involvement either. Except of course taking their 3-5% percent and making sure only their back is covered.
As for charities, there are some decent charities and some that are not great. At least with the charities that actually help people the money is going to good use.
Granted, I do applaud creators if they are creating jobs in America, but those creators are minority sadly. I just don’t want to be sucker that has taken for a fool and the creator is long gone and is free from any responsibility.
I doubt Kickstarter will ever change as the people that made this site have made a great deal of money and continue to do so.
Allen
I understand, and agree no one wants to be ripped off. My point is I have just not seen the behavior you must have. Granted, I do only small levels, something I wouldn’t miss if things turned out like you describe.
It’s just something I enjoy, hearing about the successes, and thinking I may have been a small part of it. I imagine that feeling would change if I participated in something that left a bad taste in my mouth.
Like I say about a lot of things, I’m glad everyone doesn’t enjoy what I do, ’cause then I couldn’t afford it.
Cheers.
Matt Roche
Have you ever backed a project?
I have backed 10, and all but one have been awesome. The tenth was $10, and was just silly. But they delivered.
I suspect many of the naysayers are reading articles, not backing projects. Jump in, the water is fine.
tajparis
Crowd funding is awesome. Sure there are some big flops, and some lesser flops. But I have seen some really cool successes come out of crowd funding that would never see the light of day under the old/traditional model. That makes it a very valuable tool for innovation, in my book.
I’ve only been able to back a couple projects, but I definitely will back more in the future. Also, I don’t mind being somewhat of a “beta tester” for items that really spark my interest. It’s up to the individual to decide if the risk:benefit ratio is worth it in their case.
tajparis
I’d also like to point out that some of the objections to crowd funding apply to any form of investing. People get burned on all different types of investments, and often have no choice but to eat the loss. The key is to know what you’re getting into before climbing aboard.
If you need a finished product and you need it now, crow funding is not a good idea. But if you can afford to be a little more adventurous, or you are more interested in less tangible forms of reward, then why not?
Yadda
…meh… I’ve never been inspired enough to participate.
firefly
I like the idea and I think it’s awesome. But I can see how some people can get frustrated about it. I agree that most project give us the impression that it’s a finish and polish product ready for it prime time. Anyone who is backing a project with the “buyer” mindset is going to get upset sooner or later.
In the end it all come down to managing expectation. So yes there is a lot of hype but that’s part of marketing. That’s part of being an inventor. You must get people to get excited to buy in into your ideas… But I guess there should be a guide written somewhere in Kickstarter that explain that you are going in as a “backer/investor” and not a “buyer”.
Brian Buehler
I’ve had very good luck with some items on Kickstarter (such as Rickshaw Bags) and have been badly burned by the ZPM Espresso Machine. I’m far more careful now and count it more as gambling than something based in fact (sad that it has to be that way).
Nick HD
Kickstarter for me has been a complete Non-Starter – and not through lack of trying. Whilst working for several years in Hong Kong, I tried to back a couple of tool projects on KS, but could not get their system to accept my PayPal contribution. As it turned out, that was lucky for me…
I also persevered via direct dealing and bought a few “Fix-It Sticks” (excellent), plus other items – but also heard that other inventions I’d been interested in hadn’t made it – with associated losses to potential backers.
Bottom line – deep suspicion about the whole Kickstarter thing – so I’m actually glad that I wasn’t sucked into something that may have cost a lot up front, but didn’t deliver in the end.