Kickstarter Introduces New Rules To Try To Limit Disappointment
from the some-good,-some-bad dept
There have been a few stories of late about the possibility of backlash over failed Kickstarter projects. After all, for all the cool things about Kickstarter, anyone investing in a project there is taking a risk, and some of that risk leads to dashed expectations. Kickstarter has apparently been taking those concerns quite seriously, and issued some rule changes directed at hopefully limiting the disappointment factor for supporters of physical products, mainly by doing more to highlight the risks and current state of the offerings.New projects will be required to detail what the risks and challenges of the project are, and how they intend to overcome them. It should be pretty interesting to see how those sections turn out. To be honest, I could actually see that being really useful for people behind these projects, as it's not uncommon for enthusiastic creators to not even want to confront the risks and challenges they're facing. Forcing them to do so will hopefully lead to more realistic assessments of what can be done.
The other rule changes seem a bit strange to me, and I'm not sure they'll be as effective. The first is to ban renderings or simulations of products:
I can certainly understand why they're doing this, as it will clearly give a much more realistic picture of where things are at the moment. But it seems like requiring renderings and simulations to be clearly marked as such might be a more effective solution -- along with showing what the actual current state of the technology is. Since many of these projects need money to finalize development, it seems fair to show what they intend the final product to look like.Product simulations are prohibited. Projects cannot simulate events to demonstrate what a product might do in the future. Products can only be shown performing actions that they’re able to perform in their current state of development. Product renderings are prohibited. Product images must be photos of the prototype as it currently exists.
The other ban is on offering multiple quantities of a reward, unless it really only makes sense that way (like where you need a pair of devices to make something work). That's to reinforce the idea that this isn't a "store" for pre-buying things, but to really get people to invest in the project itself. While it does often feel that projects got a bit lazy with upper tiers that were little more than "5 of x," I'm also not sure that this one really makes that much sense. Kickstarter defends the decision this way:
The development of new products can be especially complex for creators and offering multiple quantities feels premature, and can imply that products are shrink-wrapped and ready to ship.I understand the line of thinking... but I could see that taking away value from potential buyers who are willing to take the risk and buy in on a product early, where they'd like multiple quantities.
Either way, it's fascinating to watch how Kickstarter continues to evolve -- and to note that the company (as it has for a long time) seems very keen on listening to what people are saying, and figuring out reasonable ways to avoid any problems.
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Filed Under: crowdfunding, products, rules
Companies: kickstarter
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I agree with Mike, have two different clearly marked sections; "This is where we are" and "This is where we're going".
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Some of it only applies to Hardware and Product Design
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Probably someone else will just build a new platform.
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Re: Some of it only applies to Hardware and Product Design
It's the screening process that's important, and I think the public has stepped up to the plate in researching prospective businesses. I'm sure there are some horror stories, but a lot of good has come from the platform as well.
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regarding the RIDICULOUS new RULES for kickstarter.
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Bad for Europeans
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They aren't evolving, they are trying to cover their ass after realizing that scammers are measuring up the system and starting to come on thick and fast.
They had to take action, before the FTC starts to take an interest in them and starts cracking down for them.
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I've backed at least 3 or 4 projects for multiple quantities to give as gifts, and 2 I've backed multiples in order to take advantage of buying in bulk to resell.
I don't see anything wrong with that, at all, I'm taking the risk of pledging funds for something that doesn't exist, with the potential of making some money back - exactly what venture capitalists do all the time.
This seems like a case of the 'cure' being worse than the 'disease'
They'll either have to revert these changes extremely quickly, or they'll find they're left behind.
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It's a business plan.. just like what a bank requires
Masnick claims to be an amazing business expert, im sure he has worked on many, or at least several buisness plans...
Masnick, you might want to try to inform your readers about the formal and content of a 'standard' business plan..
and why you find it amusing that investors would not require this information before they are prepared to invest.
so what is the difference between Kickstarter and a bank ??
If you want finance for a 'plan' it makes sense to detail your 'plan' to those who may be willing to invest in you..
if you cannot write a clear and accurate business plan that 'looks right', then you most certainly are not ready to run an actual business.
until you get the basics of business 'design' down you might as well not play with the real thing..
but reading Masnicks 'analysis' of certain industries it is clear masnick has never written a business plan, let alone turned one into a reality..
your business plan is a blue print of what your business is to be, it explains how it will work, and how it may not work, it defines direct and indirect competition etc, it is also dynamic, HAS to be written (not just an idea in your head), and is quite often the determinator of the success or not of a new business. It also usually requires considerable research, something masnick does not seem to take into consideration when stating his 'analysis' of certain industries.. industries he's never worked for or in, he has also never seen to apply standard business concepts to his analysis.. all opinion no facts.. a good reason why he has never and will never work in the industry he professes to know so much about... :) (but does not)...
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sure it's fine to have a 'flutter' on a project, with the hope that your horse just might win. but if you believe venture capatilists GAMBLE with their investment money you dont have a clue..
lots of people have a bet with a hope, but very few get rich from it.. (most loose their shirts). Investors want assurance that if they give you money YOU KNOW what to do with it to make an acceptable return on the investment.
Kickstarter does not want to be a gambling house, so they have an expectation that the person seeking funds has a clear idea in their heads (AND ON PAPER) what they intend to do, and how they intend to provide a return on their investment.
if you gamble expect to lose your money, if you invest expect to be able to trust the competance of the person you are investing in..
otherwise you might as well flush your money down the toilet for what good it will do, in terms of return upon your investment.
what is wrong with expecting the person you give money too, to explain what they will do with that money to ensure they can give it back,, plus some ?
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way to innovate, 3000 years behind the rest of civilisation. LOL
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Re: It's a business plan.. just like what a bank requires
'Cause if you had, you would have noticed that he had no problem with the rules about having to lay out the dangers and solutions. It was the ban on renderings and allowing multiples of the same reward that he didn't agree with.
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Also, many manufacturing partners require a sizable order before production will commence. By removing the possibility of offering multiple quantities as perks, Kickstarter's going to make it all the more difficult for projects to succeed. For some of the projects I've supported, being able to receive more than one of some product was the deciding factor in my support. Many of the more creative perks simply don't appeal to me.
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The new restrictions will not allow a person to just provide 3D picture renderings and sketches of what the bicycle will look like. Instead, a working prototype of the bicycle will now have to be manufactured.
Which means hiring an engineer and a factory to make molds and what not.
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Bad for Europeans
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What's so wrong with that option?
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Bad for Europeans
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Personally, I own a Dahon folding bike, MU P24. The bike is great, but the Brompton bikes fold up much better for traveling. I think that the Dahon's win out though in replaceable parts so that was my choice.
So if I was going to create another folding bicycle, I would want to show not just the prototype folding up and some luggage bags storing the bike, but also CAD drawings of the folding mechanism so that people would be able to see how structurally sound the design is. It's a major weak point in folding bikes, so a general concern to most people that purchase them.
Basically, this is a major decision point that would have to be proven out to the buyer. And it can also become a major selling point especially when you are doing a 20" wheel design meant for off road use.
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Bad for Europeans
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Bad for Europeans
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Clueless
First, and take it from someone in the hardware industry for many years... Nothing - i mean *nothing* you see in marketing videos ever works at launch. Across the board - consumer to enterprise. NONE of it work in the marketing videos. At best its close - worst its totally staged. Way of life in hardware. The rule of no prototypes, product simulations, etc - is not only impossible - but also is impossible to enforce. They have no idea whether a product is really working or not. And by giving their buyers any kind of 'assurance' it is - they are just increasing their liability - not decreasing it.
Second, Quantity limits are pointless. You have liability irregardless of the number an individual person orders. The risk for Kickstarter is in the size of the funding - not the quantity per buyer. It makes *no difference* if an individual ordered 1 or 10. If a project fails a law firm is going to come hunting for a class action if the amount of the funding is high enough. In fact, more customers, with smaller sums is better for them as it gives them way more control over their plaintiffs.
If anything, Kickstarter should be doing everything possible to:
#1 - ensure larger sums on hardware projects to help ensure success - or at least delivery of semi-working product.
#2 - require transparency, not discourage it with limits on what you can advertise. By letting hardware show exactly what their product *should do* and where they are currently in the development process
Clueless.
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