Do crowdfunding sites do enough due diligence on the advertised products to ensure that backers aren’t seeing fake Kickstarter projects? The situation might surprise you. We also give some examples of how some backers try to bend the rules and show products that might not be all that they seem.
Kickstarter’s demands regarding prototypes
Kickstarter makes it clear that a real prototype needs to be presented and the features should work as stated.
Kickstarter says here:
When it comes to projects that involve manufacturing and distributing hardware, gadgets, and other physical products, you’re required to also show a prototype. Any features you’re promising to deliver to backers must be included in your prototype documentation.
[Do] Present your prototype functionality clearly, in its current state.
[Don’t] Falsely demonstrate functionality that doesn’t exist yet, even if it’s a core component of the product.
But is there enough protection against fake Kickstarter projects?
Although Kickstarter is understandably keen for ‘creators’ to represent reality, you can see from this statement that they don’t police this very much:
It’s Kickstarter’s responsibility to provide a safe and reliable platform for all of our users.
It’s the creator’s responsibility to bring a project to life and deliver the rewards they’ve promised to backers.
It’s the backer’s responsibility to determine whether to support a project. When they do, it’s their responsibility to deliver that support, regardless of the project’s outcome.
We do not assess the viability of a creator’s project, monitor how they use funds, or reimburse backers if creators violate their agreement with backers, or are unable to fulfill rewards as planned.
It’s clear that Kickstarter wants the campaigns to show at least 1 look-like and work-like prototype, and the features should work reliably as they are presented. However, they don’t actually test the prototype and confirm it works as claimed, so the amount of due diligence is very low.
How some startups bend the rules
Unsurprisingly given the lack of oversight, some startups stretch reality during their crowdfunding efforts and there is even evidence of fake Kickstarter projects. One can distinguish several levels:
1. Being overly enthusiastic, but honest
This is typically where the startup reaches the point where a prototype truly is functional but fails to ensure it can be manufactured in large quantities at the target price point. The lesson here is that crowdfunding should not take place before an in-depth DFM review…
Here are a few examples of where enthusiasm scuppered the project:
- The Coolest Cooler is a legendary example. This cooler was wildly popular, but it wasn’t possible to get it into production with the advertised features at the planned price.
- The Tiko 3D printer chose a very immature technology, among other mistakes.
- Amabrush failed because it wasn’t possible to make it at the target price as it required quite complex and costly parts.
2. Faking it ’til they make it
The “fake it until you make it” approach has often worked very well, particularly in Silicon Valley. Demo’ing a prototype in a way that claims it achieves more than it can is much easier than actually doing all the necessary engineering work.
A good example of this:
- Zano swarming nano drone: some of its claimed functions never actually worked and it seems that the creator was stalling and hoping that they’d get it right. They didn’t.
3. Scamming backers
Downright scamming backers by promising an amazing product, possibly without even planning to work on it properly. This is where we might see fake Kickstarter projects.
Examples:
- The Dragonfly Futurefon there wasn’t even a proof of concept prototype for this integrated phone and computer.
- The Triton Artificial Gills promised the wearer the ability to breathe underwater but the technology is not possible and goes against the laws of nature. This raised over $100k in one day, but it’s hard to believe people feel for it.
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If you would like to learn about why the Coolest Cooler, Dragonfly, Tiko, and Zano failed in far more detail, read this post.
A note on Indiegogo
The above two are great examples of very questionable products, although please note in the case of the Dragonfly phone this was only on Indiegogo which takes even fewer precautions to police entries than Kickstarter.
Indiegogo says here:
A prototype is not required to use Indiegogo; however, it is highly encouraged. Many contributors will be skeptical of your idea and with no prototype to back up your claims and demonstrate your commitment to the product, contributors may not trust your ability to complete the project. Be sure you showcase your prototype in your campaign video, as this can help build trust with your contributors.
What you can learn from this
First, even if the crowdfunding platform isn’t checking, your backers will, especially when you start announcing long delays or when you stop posting updates. The examples above are littered with bankruptcies, lawsuits, and creators with their reputations in tatters. Is that how you want to be remembered?
Second, the importance of following a structured NPI process and ensuring that you do a feasibility study (can the product even work as intended?) early on, and having a DFM review (can all this be achieved in mass production, and how?) done on on your product design before you plan for a crowdfunding campaign, is critical for avoiding failure.
Third, backers are getting more sceptical over time. Many of them have been burned at least once. They expect to see a third-party validation of your amazing claims or at least an in-depth and convincing explanation of how they work.
And one last note. Some campaigns fail to deliver a product for reasons not mentioned above. Some ran out of funds too early because they mis-planned their financials, some were relying on a manufacturing partner that let them down, and so on and so forth. Not all failed campaigns are due to dishonesty!
Next, read this…
We followed up this blog post with: Kickstarter EVOTRAIL Self-Following e-Wagon: To Good To Be True?
In this post, our engineer examines a real Kickstarter project that, we believe, has some classic hallmarks of a product that can’t make it to market as promised, and we’ll explain how and why we think that…
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