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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.
...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.
Yes, people should never ever try something never done before!!!
Or, maybe⦠you know⦠crowfund it just because traditional investors are too scared to do new things; but add a disclaimer about it not being a traditional buy but comes with some risks. You know, just like it's being done on sites like Kickstarter!
The rewards offered on kickstarter are pitiful given the risk to the capital, and complete lack of upside if the product is successful.
Just look at Oculus Rift. Sure the backers got "goodies" such as, ooh... prototype oculus rifts, but did they get any of the $2b Facebook bought the company for? No! If Kickstarter were a real investment platform backers should benefit from the success of the company just as easily as they can lose their money when it fails.
j'ai découvert une démonstration vraiment admirable (de ce théorème général) que cette si
It's not an investment platform, it's a begging platform with door prizes. Investors get ownership for their money and can demand accountability *during* the life of the project.
Play Command HQ online
Venture Capatalists expect to see a profit on their investment. On Kickstarter, you might get something slightly earlier at a reduced price. It's not an investment. It's more like group patronage.
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