It seems every week we report on Kickstarter campaigns that fail in extraordinary fashion. And yet there are templates for their failure; stories that are told and retold. These stereotypical faceplants can be avoided. And they are of course not limited to Kickstarter, but apply to all Crowd Funding platforms. Let me list the many failure modes of crowdfunding a product. Learn from these tropes and maybe we can break out of this cycle of despair.
Failure Out of the Gate
You don’t hear about these failures, and that’s the point. These are crowd funded projects that launch into the abyss and don’t get any wings through printed word or exposure. They may have a stellar product, an impressive engineering team, and a 100% likelihood of being able to deliver, but the project doesn’t get noticed and it dies. Coolest Cooler, the project that raised $13 million, failed miserably the first time they ran a campaign. It was the second attempt that got traction.
The solution is to have a mailing list of interested people are ready to purchase the moment you launch, and share to everyone they know. Reach out to blogs and news organizations a month early with a press package and a pitch catered to their specific audience. Press releases get tossed. Have a good reason why this thing is relevant to their audience. Offer an exclusive to a big news site that is your target market.
Failure to Raise the Goal
Ok, you’ve launched, gotten a few blog mentions, got a few shares on Facebook, and you’re shy of your goal. Shoot. Now you need to do some analysis. Why did you fail? People will have told you if you listened. Maybe the prices were too high. Maybe the product just wasn’t as appealing as you thought. Maybe you just didn’t get enough eyeballs but for the eyeballs you did get, the interest was there.
Remember you picked your goal for a reason. It’s the minimum you can get away with to make the project successful. If you don’t raise your goal, don’t try to make the product anyway, because you already know you won’t have enough money or customers to make it work.
Failure Through Poor Estimation
Many crowdfunding campaigns are run by people who have never built a product before. This is dangerous because they often take the cost of materials for their prototype and assume they’ll be able to get the cost down in high volumes. This is very wrong. Check out the Dragon Innovation Standard BOM for a much more detailed tool to help estimate actual costs of manufacturing.
Cost of Goods
This is frequently underestimated. The wrong way is to take the cost of the prototype components, figure out their 1k volume costs, add a few cents for a box and enclosure, and make that your goal. Yes, components cost less in high volume, but a product that’s manufactured in large quantities frequently has extra parts that the prototype doesn’t, more safety and robustness features, and expensive parts (like cable assemblies) that were ignored in the prototype. Another thing that gets ignored is the cost of failed components. You will pay for failed products somehow. Whether it’s an injection molded part with extremely tight tolerances that leads to lots of parts being thrown away because they don’t meet the tolerance, or crappy electronic components that were cheaper but fail more often. The worst case is completely assembled products that make it to the customer but weren’t tested first and just don’t work. These will need to be replaced at your expense.
Cost of Assembly
This is related to the Cost of Goods, but is more about human costs and engineering one time parts like assembly jigs. Setting up an assembly line isn’t cheap or easy, and every step in the assembly process take time, which translates to money. That’s why it’s important to design assembly jigs to make the process go faster and more consistently. Every step should be simple and fast, because you will need to hire the cheapest labor possible to make it happen, and you need that cheap labor to get it right every time or else they become expensive quickly. Some think that going to China right away is the best step. Remember that not only will you pay to travel and live there, probably for months longer than you expect, but you’ll also be paying people who don’t understand your product or your language to assemble something they will never use, and there are no repercussions if they do it wrong. Cheaper on paper, but more expensive when the hidden costs are considered.
Cost of Design for Manufacture
The previous two steps are why this step is so important. Designing the test and assembly jigs, refining the product so the parts can be sourced (with backup suppliers), so that assembly is efficient, and so that the product is robust and common failure modes are eliminated. These things take time and expertise from people who do this for a living and aren’t cheap. In high volumes this is critical because a 10% failure rate in the tens of thousands of units means dealing with thousands of unhappy and very vocal customers.
Cost of Certifications, Shipping, and Duties/Customs/Taxes
Once the product is designed, there are lots of regulations in lots of countries for how the product can be imported and how it must work in order to be legal. If it has a circuit board, chances are it will need FCC approval in the US and CE in Europe. This testing can vary from a few thousand to tens of thousands. UL testing is another big (though not required) expense for devices that plug in. Shipping by air from China can wipe out all margins, but shipping by boat takes a month, so that delay must be considered. Import duties often come in between 3%-10%, so that eats a chunk of margin. Then there’s tax. Kickstarter funds are probably treated as income, and for a lot of projects sales tax may need to be collected. Don’t forget Kickstarter’s cut, too, or the cost of making and shipping all the shirts and stickers you promised (this effort doesn’t contribute much to your goal or minimum orders).
Everybody wants a slice of the cake, and in most cases you can’t avoid giving them their slice. It’s essential to plan for it or else you end up with nothing left for you.
Failure Through Quality Control
You used the cheapest components possible, you have sloppy tolerances, your assembly team is unskilled and inconsistent, and while the product is getting made, it really sucks. The recipients get unhappy because it breaks when they breathe on it wrong. Now at the end of the campaign, having delivered the product, you have nothing but a bunch of bad reviews, a bad reputation, and a bad product that you won’t be able to convince people to buy because they can see all the other people who regretted it. This is the story of Zano, a tiny drone that pretty much never got off the ground.
Failure Through Size
You expected to sell a few hundred units, which you could probably make in your kitchen over the course of a few weeks and deliver on schedule, but you instead have to make and deliver tens of thousands of units. Now the expectations on quality are way higher, and there’s no possible way to spend the next year at your kitchen table slowly trickling out units. This means spending money on assembly jigs, design for manufacture, and all the other things you hadn’t planned for when you were tiny. Look to the Pebble Watch for an example of extreme success that caused problems. Granted, they didn’t go out of business, but they were delayed for a long time because of the issues they had scaling production to the size they needed.
Failure Through Fraud
This happens all the time. The founders put out a wild and crazy idea that doesn’t work, it gets a lot of traction because it’s cool, raises a boatload of money, and then the founders post some vague updates for a few months before going dark. Or maybe the public discovers their fraud and halts the campaign or gets Kickstarter to shut it down. This is one of the reasons Kickstarter instituted a policy requiring working demos for products, but it still gets abused, and with a higher level of sophistication that fools more people.
The trick to not getting outed is to not be a fraud. People should never wonder for a minute if your product (and the concepts behind it) is legitimate. Extraordinary claims require extraordinary proof, so if your project defies thermodynamics, you need to have a lot of convincing evidence and corroboration from experts.
Lately there was the Triton, the underwater breather, and another one was RITOT a projector watch.
Failure After Success
You raised your goal, you made your product, you shipped it, customers are happy, and now… what? Some companies don’t plan for what happens after their Kickstarter, and sadly end up out of business because of it.
Selling your product on Kickstarter means selling it at an enormous discount, so your margins are already thin. That leaves very little money left after the campaign is done, so you can’t purchase more stock. Then you’ve got the marketing dip; you won’t get as much publicity ever as you did with your campaign launch, so you have to work ten times as hard to get a fraction of the publicity and can’t expect sales levels to maintain their Kickstarter rates.
Many companies go after Angel or VC money, but sometimes their Kickstarter success can be a problem because mediocre success gives the investor an idea of the actual size of the market, and that number is usually way smaller than they want. With no stock, no money, and less publicity, the business has nowhere to go, and despite the years of effort to design, build, and deliver, it still gets trapped and dies.
Despite the Pessimism
Many Kickstarters have made it work. They leveraged their assets, powered through their problems with only minor delays or cost problems, they grew to be sustainable after crowdfunding, and they are continuing on. Going through it is certainly not the rosy picture that is painted, it’s not right for everyone, and it’s not a guarantee of success by any means. But it is an option that has opened up possibilities for thousands of small businesses who would otherwise not even get to the point of being able to mass produce something. It’s because of crowdfunding that all these companies were able to push the rock a little further up the hill and get a little closer to true success.
Author’s note: While Kickstarter is used extensively throughout this article, not all of these projects were on the Kickstarter platform. Some of them, like the Ritot and Triton, were on Indiegogo.
68 thoughts on “Why Kickstarter Products Fail”
“It seems every week we report on Kickstarter campaigns that fail…”
Well then, it sounds like HaD needs to start a “Crowd Source Fail of the Week” series…
“You don’t hear about these failures, and that’s the point…”
Research journals are beginning to see the wisdom in printing the results of failed research projects, to inform others what has failed and maybe uncover the reasons for the failure.
Not a criticism here, but…… It seems like the ONLY crowd-funding campaigns we hear about on HAD are the failures… as if the editors have some kind of… [sigh]…. agenda against crowd-funding. It just feels somewhat biased considering all the good crowd-funding happening out there; receiving disproportional attention, if you will.
Or successful ones that they have some relations with before the kickstarter campaign were ever started.
Well odds are that with most crowd funding campaigns, if they are a success they are pretty well known or aren’t earth shattering enough to warrant an article however if they are a failure, they either serve well as warnings or have critical problems that people should know about as to not fall into their trap.(i.e. Bad products or Just outright fraud.)
And you also have to remember that the reason why failures tend to be more common is partly psychological, the negative has a proportionally higher weight mentally than the positive. That way a success may be OK however an equivalent level of failure appears to be much more important.
You forgot failure through bad partnership: http://www.peachyprinter.com/ (a highly recommended read!)
I’m glad we (the Mooltipass team) don’t fall in any of the above categories. In related news, we’ll launch the Mooltipass Mini through another crowdfunding campaign in 2 months or so, for an early bird price of ~$40 : https://hackaday.io/project/86-mooltipass-offline-password-keeper/log/33836-prototypes-for-the-mini-beta-testers
You may keep in touch through our official group: https://groups.google.com/forum/#!forum/mooltipass
But HaD did cover the Peachy failure a week ago…
I’m looking forward to the MooltiMini!
Right, just thought it’d still be nice to mention it :)
Thanks for your support! We’re really looking forward to offering a device which is “normally” priced while having a solid user base and a strong software platform.
Thanks for bringing it up. That article was actually the reason I wrote this one. When I got to the end of writing it, though, I realized that it was all bummers and sad stories and I wanted to end on a positive note. I guess I could have mentioned it towards the beginning.
Great article nonetheless!
What is it with these people? With the Mu Optics Thermal Camera on IGG, John McGrath did the exact same thing. He spent the money on rehabbing his recently purchased 105-year house in Hyde Park, Chicago. Then flipped it for even more profit and still didn’t deliver any refunds or product. SCUM.
Crowd funding companies should somehow “require” that potential clients read this article or have one of their own to “help” them in their plan for a successful launch. However, I’m not sure if this applies to GoFundMe.
Dragon Innovation has a certification service (https://www.dragoninnovation.com/services/certification). They’ll look over everything and if it’s all good then they’ll give you a Dragon Certified logo you can use on your crowdfunding to show that the project has been vetted by industry experts.
Do they offer a bonding service or other money-back guarantees to project backers? If the project fails, can I sue them to recover my money, because I believed their logo assured me the project would be successful? I don’t even see a chart on their site showing the success rate of the projects they certify.
That said, they look like a stellar bunch and if I were creating my first project, I’d sign on with them in a heartbeat. But what I’m looking for as a backer is financial security, and that’s not the service they provide.
Further down the site they show a list of “certified” projects that never made it to target…
That’s going to suffer from the same problem that plagued the housing bubble. Where do their fees come from? That tells you who they’re beholding to. It’s got conflict of interest written all over it.
Only one problem with that – if you could get a fat paycheck as a fixed cut from all the projects that get funded (entirely unrelated to actually delivering anything), without basically ever even needing to show up to work (well the servers probably have to be given a good kick now and then, but there’s nothing else you need to do), would you give a f### about what exactly gets funded, as long as lots of things do? Well, maybe you’re a person with an actual spine and you would, but most crowd-funding companies I’ve seen show no sign of any such concern. Indeed, they seem to actively discourage anything unrelated to funding drives – “chip in and shut up, peon – don’t rock the boat!” seems to be the prevalent stance. And since they can obviously get away with that, anything else would be nothing short of a miracle. Until someone notices the opportunity and eats all their lunches of course, assuming it isn’t already too late to enter this particular game…
and dont forget failure through embezzlement and fraud like take for example the “Cthulhu + Monopoly = The Doom That Came To Atlantic City” board game where (i think) the kick starter user raised the money and ran leaving the all the investors hanging and eventually the game was rescued by another company.
I was a bit wary of what I didn’t know, so I launched a Kickstarter on my simplest project to get a taste of what could go wrong. Several minor things did go wrong, but I met the funding goal and I will be ordering boards this week. I expect more to go wrong, but that’s the point of this round.
It’s good that you have your feet on the ground, Thumps up, and good luck.
A former boss told me his son made little devices for Mercedes owners, I’m not sure what they were, but they were basically a switch, box, and wires (IIRC) that he sold on That Auction Site for a nice markup. It wasn’t a full time endeavor, but it was supplemental income.
Do you think that there is a opening in the market for a small paste extruder 3d printer, it has~ 12cm/5inch diameter bed and 6cm/2.5inch height, the cost will be about 50€ and it will be able to print chocolate, plaster and stuff like that. The power source is a dual usb cable that can conect to two usb ports of a pc or to the computer and a phone charger. And it will be slow, very slow
I’m in! But only if it does has a dual extruder stretch goal so I can print chocolate and plaster at the same time.
It will use teacup and i will sell extruders (and publish them on thingsverse) so you can do the upgrade yourself. The main problem with that is that you will probably need to upgrade the stepper controller boards.
I don’t think he was serious about that dual extruder, can’t really see the point of mixing chocolate and plaster together.
haha I was focusing on the dual extruder part, this printer is going to be build on the cheap so being hackable is a requirement to have someone buying it :)
I think the teacup will be made out of the extruded plaster and the hot chocolate will be poured into it. B^)
Sry Teacup Firmware
“Goddamn Liar” f_ck, now I get it… For educational purposes here is a theoretical part of the BOM to the “crappyprinter”
Arduino Nano Clone: http://www.ebay.com/itm/MINI-USB-Nano-V3-0-ATmega328P-CH340G-5V-16M-Micro-controller-board-Arduino-T1-/181846906547?hash=item2a56eb96b3:g:Ir8AAOSwBahVL6BH US $2.21
Chinese manufactured PCB with components(H-bridges only with NPN transistors and firmware delay):~US $3
2* Screw Steppers for X and Z Axis: http://www.aliexpress.com/item/B-04E-drive-stepper-motor-screw-a-nut-slider-small-Stages-DIY/32452260069.html?spm=2114.01010208.3.9.i1awE6&ws_ab_test=searchweb201556_7,searchweb201602_1_10017_10021_507_10022_10020_10009_10008_10018_10019,searchweb201603_7&btsid=1e24e6ea-faab-4d59-9d80-2f28348578a6 2*US $2.82=US $5.64
2*Steppers for extruder and bed rotation: http://www.ebay.com/itm/step-motor-reduction-dc-5v-4-phase-28byj-48-valve-gear-stepper-motor-for-ardu-x9-/231915810035?hash=item35ff426cf3:g:-qwAAOSw14xXEr7~ 2*US $1.52=US $3.04
Total:US $13.81+10cm PTFE tube(1.2$)+plastic geared bed(2$)+frame(if in soft plywood about 5$+ some 3d printed parts)+3d printed nozzle and Moineau pump extruder and gear for the motor that drives the rotation of the bed.
All of this plus our profit and the 23% to maintain our Socialist government
so 56.5925 US$/1.23, the cost and our profit must be about 46$. Some feedback please :)
You’ve done exactly what the article is complaining about. You’ve added up the BOM and nothing else. You’ve left off assembly, testing, packaging and shipping. I’m quite skeptical about some of the BOM pricing too – “custom PCB assembled $3” and “plywood $5” and “3d printed == free”!
No you got it wrong, the 3d printed parts i don’t know how much they will cost, the bom is just to prove that it might be possible to do under 50€ and there is no prototype nor i have most of this parts, I was just asking If you think that there is an general interest in the product. If it is worth to be developed as a comercial project and kickstart it. I might kickstart it when I have at least one fully working prototype and the awereness of all the costs involved
€ 50 is cheap, even for just the extruder.
Its not going to be like that, it will be made with a few 3d printed parts(at least in the prototype) and a large diameter ptfe to the bowden thing, just google ” Moineau pump” to know how it works
The objective of this printer is to be as cheap as possible and hackable, so you can forget the 300mm/s or even the 100mm/s. You shouldn’t expect much quality or endstops or anything heated or current reflow protection on the board or power supply (made by 2 usb cables). You will have to put x and z axis on their 0’s manualy before start printing, you might want to disassemble the extruder and wash it after the print, and it is small
Kickstarter products are essentially high risk startup without the scrutiny of the money guy(s) or any sanity checks because of limited risks to the people that runs the operation. So it follows that they can fail as often if not worst than a startup.
1 – 46 % – Incompetence
2 – 30 % – Unbalanced Experience or Lack of Managerial Experience
3 – 11 % -Lack of Experiences in line of goods or services
5 – 1 % – Neglect, fraud, disaster
Not sure why they don’t list #4. #5 is a lot more often in Kickstarter.
Not sure if the no follow up count as a failure in a product orientated kickstarter or simply a business (without a plan) failure.
I don’t for a second believe that “Fraud” is only causing 1% of the failures given that “Looting” (and direct Fraud) by executives and insiders is kinda becoming the dominant business model these days in most industries.
Success today means having lots of Money.
Now, one *could* snuffle around looking for business opportunities and gaps in the market, but that sounds hard, and it might take a while. It’s easier to just ask for funding money and then grab it. From a distance, fraud looks so much like incompetence that one has to be pretty blatant (like Martin Shkreli- blatant) to ever get nailed (or *actually* incompetent).
Crowd-funding have even more lenient rules that those 0.1 EUR IVS’s (Entrepreneurial Limited Company) the Danish Government are selling to compete with the British LLP-model; *Of Course* all manners of fraudsters will be all over Crowd-funding about 1.2 ns after “Crowd-funding is a Thing” hits those free magazines in the airport lounge. It’s like a law of nature.
Based on instinct and (too) long experience i’d take 16% from “1” and 14% from “2”, making category “5” into a more realistic “31%” – with about 5% out of that being “Neglect” & “Disaster”.
Failure After Success is a good inclusion and it bears repeating. Your demand and sales and hype is at its peak during your crowdfunding campaign. If you’re only just making it during THAT, then you need a different plan to kick in as soon as fulfillment is done.
Failure through perfectionism? I backed the CastAR headset almost three years ago, it hasn’t arrived yet. I believe the major hold up is through redesigning the original product to be better as they iteratively develop, better hardware became available once they started talking to component manufacturers and so it was incorporated. New investment was received and so a final redesign was initiated to make the consumer version as good as it could be. Product is now several years late and is due later this year.
To their credit, Technical Illusions refunded everybody who had invested with the full amount and also promised to ship a complete kit to all backers above a certain level.
Some comments assume that the APOC PRO radiation detector (https://www.kickstarter.com/projects/aerosplice/apoc-pro-radiation-detector) has failed because of chasing perfection. I don’t think so. The officially published achievements of the project are enough for me and for many others to be a useful product.
Since both project owners Marshall Meng and Matt Chapman do not comment anymore, it smells like fraud, especially when they upload new videos, showing that they work on a completely different topic (https://www.youtube.com/watch?v=6TOC2MeuzMo). That is sad.
Why do people think they need a gimmick sales channel like Kickstarter…?
One could argue the website theoretically provided:
1. Escrow services:
Nope, people still get scammed regularly as Kickstarter services aren’t and can’t be operated by ethical business strategists or even engineers. Fundamentally, there is an economic incentive to see the campaigns succeed even if the product will fail.
Nope, if only 0.000001% of people are interested in your product it is unlikely going to work as a business.
Once the initial illusion of scarcity from Spam style Marketing wears off, people just won’t continue to care about your fancy paperweights.
Nope, basic business management skills are rarely of interest to technically inclined people. The funniest phenomena we still witness, is the 6 other debt-financed start-ups that do the same failed product launch like somehow their mental problems will make a failed business model work.
4. Verification of Integrity:
Nope, the corporation doesn’t protect anyone except their own cut of the cash flow.
Sociopaths often can’t fathom the real reasons they continually fail or succeed, and by their nature don’t learn from their mistakes. However, their disease usually makes them irrationally persistent, and they will viscously defend that their shit cures cancer (as disgusting as it may sound, its a literal product). Generally, this common inability to empathize with customers blinds these people to obvious faults, and they often instead tend to focus on manipulating the public.
(example: member clubs / spam / astroturf / viral marketing )
5. The illusion of control via proxy:
Bingo, the idea that a marketing company can somehow make a shitty product idea succeed due to their own success.
Its like Uber for poor people who can’t do the variable cost math – just like Uber drivers.
the disfavour Dragon Innovation does for clients is negotiating a bigger debt-financed product run they couldn’t afford in the first place. A contract manufacturer shouldn’t have an interest in a client’s business practices, and if a company is small they should avoid such services.
I’ll concede that Labour costs can be a real issue, but only if the people you hire are self-entitled kids who don’t understand how capital grows from corporate productivity. Outsourcing is often the rhetoric of short term exit strategists, and is indicative of serious skilled labour problems. Sometimes, I pity the China based manufacturers who have to deal with our ill-behaved domestic businesses like Apple.
One doesn’t need to use Dragon’s other services to be certified by them. My impression was that they saw a need for a certification process and created one. Granted it would mean more if there was a truly unbiased organization doing it, but I was just pointing out to the parent commenter that others have recognized the need and are doing what they can.
I do agree with many of your points about crowd funding sites. I’ve talked to a lot of people who think that all they need to do is create a basic campaign and the money will come pouring in.
I suggest that everyone who intends to turn an idea into a business should read something about value-added / non-value added steps in a production chain. The value added steps are usually in the range of a few %. Therefore there’s much more money spent for things which the customer doesn’t pay for (e.g. rework, storage etc.).
In a nutshell: You usually waste a lot of money for things which are required for a project but are not directly raising the value of the end product.
If they’re required, then surely it’s not wasted money? That sounds like an old project manager of mine’s view of design…
Nope, a dumb example for demonstration:
Someone designs a device, (let’s say a wireless weather station or whatever) which uses a powerful processor for a purpose which would only require a weaker, passively cooled one. Now a fan must be added for cooling.
The customer however only wants the actual output (in this case providing temperature, humidity and wind speed).
Due to the chosen design (or processes) you’ll need to add a fan which is necessary for this design but actually waste (the customer wants weather data, not a heater unit).
The point is thinking out of the box to find solutions which are easier and cheaper.
Btw, I work for a tech corporation; checking for non- value added processes / parts is standard in industry.
Reminds me of the MBA would said “manufacturing doesn’t add value to a product”.
Well, there are some MBA’s and finance controlling folks where I’m (as an engineer) also quite skeptical. But I’ve seen products where during re-design parts were kicked out of the BoM and the products worked even better.
With regard to my weather station example: A temperature sensor adds value, (some) auxiliary parts don’t which could have been avoided if a smarter design was chosen in the first place.
It’s an interesting read, but it’s really distracting and makes it hard to take any of it for real that the examples seem to have no connection to reality. Coolest Cooler is example of resounding success, Pebble in an example of utter failure, SKARP is a fraud? (careful with that brush, I hear you can get hit by slander for that). An overambitious gadget that may actually be just a bad idea, yes. How many useful must-have gadgets do you even have, though? But malice remains yet to be shown. However not here to defend SKARP, just pointing out there are other permutations of even THOSE projects which make more sense as examples. (Though perhaps this raises another issue that doesn’t seem to get coverage in popular press, ie. how do you define and measure crowdfunding success).
Put it this way, if SKARP isn’t a fraud by malice, it’s a fraud by stupidity (and calling it mere stupidity is being excessively charitable). If that many people can get together and work on a project of such a supposed technologically advanced nature while being so utterly devoid of a working knowledge of physics without it being a fraud (and the phony/doctored video they posted suggests it is), then we’re all screwed.
And Coolest Cooler may be a resounding success on paper, but not at all in any meaningful metric around producing a quality product or creating an ethical transaction. It’s the functional equivalent of your 5 year old little brother setting up an ice cream stand that only serves wads of copier paper affixed atop ice cream cones and then selling them to schmucks at full “real ice cream in a cone” pricing. Marginally edible, sure (moreso if you’re a goat)… suitable for their intended functions, not so much.
The first car didn’t make horses obsolete, and the first airplane didn’t replace boats… much less the first prototype. However, I’m not here to defend SKARP, especially since crowdfunding is known cause of holy wars. However I’ll just leave this here: http://www.cnet.com/products/skarp-laser-razor/ – not only expert testimony that it’s indeed physically possible, but actual “working” prototype. Of course the ultimate test will be whether they’ll actually deliver anything, right now they’re a couple of months late, but if that’s all they’ll be it’d still beat perhaps most crowdfunding project. But the point is as others have echoed by now, Coolest Cooler would be at least as good example of a scam – you can get a better product for half the price, and majority of backers have yet to see theirs. But don’t fret, you can now pay even more to get on top of the waiting queue :)
Coolest Cooler ran into problems by failing to second source critical components, in particular the blender motor.
That’s why most military aircraft have been designed to use engines from more than one manufacturer. While they may be different in details, the different engines will fit in and have pretty close to the same performance. That’s another knock against the F-35 – the congresscritters shot down second sourcing the engine on grounds of expense. But if anything happens to the sole supplier’s ability to produce the engines, that’s it. No engines, no F-35’s flying.
Always expect that there may be supply problems with any component. Either put delivery dates far enough in the future for a supplier to be able to manufacture the part, or have two (or more) sources ready to order from.
If it’s a custom designed part, and you have two suppliers contracted to manufacture, make certain to get *production quality* samples in-hand to test. Don’t let a company hand you a carefully hand built prototype and claim that it’s representative of their production quality when their real production could be full of cut corners and slipshod quality.
SKARP is transparently, obviously a fraud. Pop quiz: how powerful a laser does it take to burn hair? How much battery does it take to run long enough to shave an average face (let alone legs, or an entire body)? How big are both components together, and can they fit in the supposedly working prototype?
Those are valid points. It’s important to define what is considered “success”. To most of us, success means you got the money, you shipped a good product, and you’re in business selling and developing more. But when you’re dissecting What Happened To Them, “success” can be sliced up in a variety of different ways, and nothing is a success all the way through (e.g. Pebble – they ended “successful” but their huge fundraising and huge demand caused them problems. When you ask for 10,000 orders but get 100,000 you suddenly have a lot more and different problems that you never expected to have to solve.)
As another example, the Coolest Cooler was a absolutely a *fundraising* success. People saw it, and wanted to BUY it, and put their money down for it. It raised some $13 million. That’s a success! But much of the rest was failure. When you’re picking something apart into pieces and examining them, you need to get specific because stuff is rarely one thing all the way through.
Decades ago, I remember seeing so many gadgets pitched on TV, this was even before infomercials. (gasp!) Those gadgets were (usually) based on a great idea… e.g. the screwball screwdriver, the dog bone style box wrench with 4 wrenches on each end, the self adjusting vise-like pliers or self adjusting open end wrenches. This list goes on and on, but when you finally got one in your hands… it was nearly worthless because of the low quality of the item. e.g. the wrenches didn’t “lock” into the desired position/size and would slip. Dozens (hundreds?) of kitchen tools were likewise marketed and in a similar way failed to live up to the hype/expectations. Those gadgets were marketing successes, not practical items.
TV Shop etc. still exist. Actually I thought that was the DEFINITION of gadget, but I googled it and looks like “ingenious” is in the definition somewhere. But $99 is smack-dabbit right there in the “I don’t really need it and it doesn’t do anything better than the existing ones, but according to the advertisement it’s best thing since sliced beard and helps me get all the chicks” impulse-buy section. Practicality and doing something better are optional. In fact, I’d say that if you don’t have a closet or at least a desk drawer full of “gadgets” you’ve used once and then tossed in the pile because it’s inconvenient, obsolete, broke or you don’t actually need it, you need to turn in your geek card right now.
Aside, the CNET link, their expert contact as well as even physics calculations by HackADay users on the previous articles about SKARP here show that AAA battery CAN deliver the power needed for SKARP, the power density is definitely there. In fact you can buy battery-powered hair removal systems for women right now which essentially bathe large area with laser-right instead of the localized power output of SKARP. What did remain in question is whether manufacture costs can be brought under their selling price. What also remains in question is whether it would, even in theory, do anything better than your plain old batter-free disposable safety razor. Besides look and sound cool, of course.
I’m not sure why Coolest cooler is a win. Yes, they are producing. But it seems to me like a pretty useless product. I’m not sure why it needs a blender… The wheels and internal lighting are pretty smart. Also I’m not sure why you would want to risk of accepting $13milion in funds. If you fail to deliver you’ll never be able to payoff this debt. Who (legally) has the risk in a crowdfunding campaign?
I’ve backed game development once, never played it…
I know someone who actually has one of these and it truely is the most worthless POS I have ever seen in my life. the quality of it is about as bad as you can get, like cheaper than chinese coolers you would get at walmart but slightly better than a plain old foam only cooler. the blender is absolutely worthless, like can barely mix tea or lemonade no idea what would happen if you added ice. the rest of the items were equally if not worse I just felt bad for the guy who purchased it. There is a reason for it’s failure and future failure.
I think we have to remember that Kickstarter is little more than a large “focus group” with spare money, and just because your a success with the focus group doesn’t mean your product will succeed in the general market even if you do everything right. A fool and is money are soon parted and if your Kickstarted by fools, well I wish you luck.
I think there’s definitely something to be said about the impact an investor (VC fund, Angel investor, whatever) can have in determining the success of a start-up. It’s two-fold; obviously, an investor is incentivized to help the founders in an effort to protect their investment whether it’s a fund or what have you. And then also, investors aren’t going to invest (typically, hindsight is 20/20) in a sinking ship or in founders that don’t have their you-know-what together.
#1 reason Kickstarters fail…
… Brian Benchoff didn’t advertise for them hard enough on Hackaday!
The first time I saw a crowd funding site I thought, “Gawd this going to be like the blind leading the blind down a rabbit hole.” In many cases I was right. But there have been rare examples of great success. As for the level of fraud: I’m surprised at how many obviously fraudulent crowd funding schemes are allowed to live. There’s obviously a problem with site management in this case.
Much bad stuff could be avoid if High School students where actually taught some business. However the business and merchant elite don’t want that, because keeping the consumer ignorant is in the merchant’s best interest. Here’s your diploma go run along and be the next generation of clueless consumers. Aye the commentators at Hackaday using perfectly fine word out of context to use them in a pejorative manner; thank you for that good clue to doubt the remainder of your comments if not reject them outright.
The people who launch them have no idea about the tech plain and simple.. Every take-the-money-and-run horror story I’ve heard of was for things with abstract descriptions involving guys with no solid background in any tech. After that you have some what credible people who find out after manufacturing there isn’t as big a profit margin and just dump the entire project..
Crooks? Assholes? Nah….
Great article! Quite informative
“Selling your product on Kickstarter means selling it at an enormous discount,”
Absolutely nothing in Kickstarter forces you to sell anything at discount. A recent boardgame kickstarter I took part in funded at over 1000% and they had retailer prices on everything.
Wow, typo. Retail prices, not retailer prices.
“Greater population surprised when most investment projects fail. Venture Capitalists remain nonplussed.”
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