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How a Kickstarter Project Can Massively Exceed Its Funding Goals and Still Fail
An anonymous reader writes: In November, 2013, a Kickstarter project for a software-defined camera trigger scored £290,386 (~$450,000) in funding after asking for a mere £50,000. After almost a year of delays, they've now announced the project is dead. Their CEO has published a lengthy article about how such a successful funding round can still turn into a failed product. In short: budgeting. To get their software into a workable state, they ended up spending 940% of the amount they'd originally allocated to software development. Their protoyping went over budget, too, and they had to spend a fair bit in legal fees to fend off a major camera manufacturer complaining about their product's name.
Still, they had more funding than they expected, and would have been able to deal with these costs. Unfortunately, the bill of materials for their final product clocked in way higher than they expected. They would have had to sell the device at about $350 each, when they were originally targeting a $99 price point. (And that figure assumes good sales — with a smaller production run, price per unit goes even higher.) The company is now going to refund the remaining money left over from its Kickstarter campaign — about 20% of the total. They're also open sourcing the software and sharing the PCB designs and schematics.
Still, they had more funding than they expected, and would have been able to deal with these costs. Unfortunately, the bill of materials for their final product clocked in way higher than they expected. They would have had to sell the device at about $350 each, when they were originally targeting a $99 price point. (And that figure assumes good sales — with a smaller production run, price per unit goes even higher.) The company is now going to refund the remaining money left over from its Kickstarter campaign — about 20% of the total. They're also open sourcing the software and sharing the PCB designs and schematics.
Don't Kickstart something that seems like a good idea but has never been done before. If it's really a good idea then people have either tried and failed multiple times before, and/or people with more money that Kickstarter can provide will agree it's a good idea and invest.
Crowd funding is good for known quantities from reliable sources. Printing out a book for that webcomic you like, where the pricing is a fixed and known quantity before hand, or funding a game from a known and reliable developer like Broken Age from Double Fine or Project Cars from Slightly Mad studios.
If you make the wrong asumtions with your budget, you will fail financially? Who would have thought this?
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If you think it's going to be easy to put together a real techy product with software and circuits and PCBs and enclosures and EM certification and patent minefields and manufacturing and packaging and distributors and competition, you might want to examine why you think that.
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...and are still delivering value. The Suez canal is a prime example, but if you do some research, you will come up with others.
The most important thing is that the achievements not be thrown away, and in software, there's a very nice way of doing it (no: it's not "some Intellectual Property Vulture feeds on the remnants"). So kudos for releasing the software and the hardware blueprints.
So yay for the visionaries of triggertrap (those who worked hard at it and those who risked their money). May you survive the crash and be richer after that. May the explosion disperse seeds far and wide for new things to grow.
Considering the amount of successful projects kickstarter has, I think they should offer an insurance for x% of the price of good (optional), where you get a full refund if the item is not delivered within 3 - 6 months. They'd probably even end up making money of the insurance, and for some things (like a $700 bike I was considering) it would help a lot.
Rather than spend all the money, 20% will be refunded. And a software source and PCB will be offered. It is a failed kickstarter, but not as bad as those which went home with the money breaking all promised delivery. Like moulyneux and godus for example.
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But!
That doesn't mean you should never contribute to hardware kick starters. It's a good idea to carefully examine what they have done before to see if they can handle making the new thing...
But!
Sometimes, it's just plain good to kickstart something even if it looks unlikely they will reach the goal. I would argue that is what happened in this case, because they found out a LOT about making this thing a lot of people want, and are sharing what they found. Eventually the thing people really wanted may well get made. If I had contributed to this Kickstarter (I did not) I wouldn't be mad, just a bit sad it didn't go through.
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so did they or did they not have a running prototype? it seems they did but then they wanted to develop another more expensive product.
the story reads like they started r&d after getting the money. _all_ r&d including case manufacturing options(yes there are other options than injection molding and 3d printing, which are all pretty much cheaper in their unit range) and all code for the micro and choosing another micro..
I mean, how the fuck can you spend so much more on your r&d that you were supposed to already have been done?
furthermore, they didn't design the product to the means they had available - for example, if you're a low run and injection molding tooling is too expensive(and you know that because you've done a cursory google search beforehand, right, right???) you can get of the shelf aluminium cases and such quite cheaply. sure it's 5-10 times more expensive per unit than injection moulding but still would be under 10% of the 99 bucks. lasercutting etc would all be options - they would just have had to compromise on the overall shape of the frigging device. like, fuck, http://www.alibaba.com/product... here's a box 3 dollars + cheap ass shipping. or a bunch of other similar boxes, extrusion they could have cut etc. then the cheap ass method of pcb for the ends( cheap cheap in low run too) to hold the display, buttons etc.
fuck you could even source them as 3d printed pieces nowadays cheaper than the quoted 25$ per case due to the tooling.
really, the whole story reads like they didn't do the development beforehand and promised stuff out of their asses. they wanted to change the product to a more expensive one and do the r&d again after the kickstarter while the kickstarter should only have had to pay for the production of what they already demonstrated.
whats even worse? they're using this as a publiciy stunt for their smartphone apps! that is they have a revenue source, they're an existing company, they just blew a lot of customers money on paychecks to themselves and didn't deliver.
world was created 5 seconds before this post as it is.
From what I read the dongle is merely the interface from the camera (USB) to the smartphone (USB). That should be trivial. (For my setup a USB OTG cable + adapter to mini USB is sufficient, there are tons of apps to control cameras).
The article states that they had to use a beefier micro controller etc., but I wonder: why not do all the processing on the smart phone? These days our phones have so much processing power AND sensors, there should be no need to do any kind of non-trivial logic outside, especially when you're just trying to launch your first product.
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Refunding the remaining money and making the work they managed to get done available to the community is a decent way to act here. In a bankruptcy case your remaining assets would go to your creditors.
In this case they are giving those assets back to the people who paid for them.
That means the product could still come into existence or form the beginnings of other even better designs.
All in all, that was actually quite decent of them.
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"It's like they just spent the money without having a clue what they were doing."
Why would they? There's nothing in how Kickstaters work to make responsible action likely, even for projects run with good intention. Kickstarter is just another means to separate fools from their money.
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Only if you completely, and entirely, miss what it's used for. If someone wants to set up a kickstarter equivalent where projects must be independently audited, project plans validated, and investors have some legally watertight form of ownership as well as power to intervene then they are welcome to set it up.
Here's one of the projects highlighted on Kickstarter's frontpage: Help send The Kinsey Sicks to the Edinburgh Fringe Festival! They want ~$24,500 to go to and perform at a Festival. They aren't trying to sell a product, they are asking fans to help them. Some of the higher pledges include getting a CD or some such. Why on earth does a project like this need drowning in bureaucracy (the lack of which is what you claim is Kickstarter's weakness) because some other people naively think Kickstarter is a zero risk pre-order store?
* Really: they had a "team happiness person"?
* Featuritis: Why not start with a single sensor (if possible itegrated in the basic product), but try to develop everything once
* Idiotic presumptions everywhere like asssuming that the non-availability of a specifi part for V1 is best cured by a completely revised V2. Or that the resolution of the display matters
* Senseless Perfectionism: Hoho, the company they hired was "not able to use github". Yes, then take the source and put it there yourself (no need to delay, and no excuse for delivering late)
* Lack of a preexisting SW concept (they really had to have a running prototype where a backer looked at the source to tell them that the MC could be put to low-power mode. (If you select a MC, the first thing you do should be to determing if the state transitions between the sleep modes support what you want to do *on the high level*)
* Complete lack of technical understanding about MCs (they complained that thet had no "arduino expert"). MCs are great tools. You dont select the MCs by the SW you have, or by how conevnient and popular they are in the "maker" circles. You select them by the IOs they have, and by the power consumption. For most things you actually dont end up with anything close to an arnduino (e.g. for low power: look at the MSP430, for raw IO features: look at the M16C series)
* A broken assumtion from the very start: That this needs to be modular. I am pretty convinced that (lets exclude the laser module) most of the sensors could have been integrated right away, for less money than the box you put them in.
That being said, this should have been a 2-4 man project for 6 months, with focus on solving the technical problems first. A more or less working prototype electronics design (2man months for the most important sensors) should have been done before promising anything on Kickstarter.
I believe that is what seals the deal on these things raising large sums of money!!
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