crowdfunding hardware projects

[Dave]

As some of you probably know, two days ago Kickstarter posted something on their blog about some changes to their terms of service pertaining to hardware projects:

http://www.kickstarter.com/blog/kickstarter-is-not-a-store

Apparently they're trying to make it more clear to people that it's not a store where you go to just pre-order finished products, but I am having a really hard time seeing how their specific approach can be taken as a good thing. Requiring that every creator fill out a section describing the risks and mitigation strategy makes perfect sense, but the others just seem like they will make it harder for innovative ideas to get funded. No simulations or demonstrations of not-currently-existing functionality, including renderings of the products? I could see requiring a disclaimer that it's not the real thing, but prohibiting it altogether seems drastic. They are also prohibiting multiple quantities of rewards. This seems like a terrible thing for hardware products because most of the time you can't get the costs down low enough to be affordable until you get very high volumes, so it is usually in the creators' best interests to try to get as many units as possible signed up for in order to get competitive pricing.

I am having a hard time believing that this is really how they will leave it. I am hoping that they snap out of it and come to their senses, in part so that when I'm ready to release my own hardware project it won't be a completely uphill battle. But for the first time I am seriously considering looking at other venues, like Indiegogo. Reading through the comments on that blog entry it is clear that many people have similar feelings about these Kickstarter changes, so there's not too much sense in just whining.. but what can we do? Will this be a problem? What is our best course of action in getting our own hardware products funded?

[Jordan Miller]

adding more bureaucracy to exclude a few bad actors is always bad for a community as it removes freedom. but with people abusing their vision (and perhaps kickstarter not succinctly describing that vision) I don't think they have a choice.

It now seems their goal is to have you first make a WORKING prototype. The prototype is what you are selling. Then do a kickstarter to pay for scale-up costs. Anything left over goes into R&D to start a company based off of that.

jordan

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[Sean McBeth]

It is very strange, these things they are saying. I am equally confused and kind of think this is going to end up a net bad for everyone involved. But attempting a favorable understanding of these changes makes me think there are two issues that are trying to be addressed here that they didn't explain very well. I think they are trying to say that they at trying to prevent both under-prepared and over-prepared projects. 

One, they don't want people who haven't built a physical prototype yet. Say I wanted to create a modular synthesizer based on children's blocks. I should be able to scrape enough money together on my own to get the basic prototype done. If all I had were renderings, that means I really haven't done due diligence on the project yet, I'm just throw stuff against the internets and seeing what goes viral. I know I personally would like to see more action and less talk out of people and their projects (and I am guilty too), so that is one thing.

Two, they don't want people who are just looking for VC to buy their first factory timeshare in China. If you are that far along, that you have the board completely figured out, all of the design files are ready to go, then what you actually, really need is investors or credit.

Kickstarter is trying very, very hard to avoid the possibility of appearing as an investment system or a lending system. If the lines get too grey and the "average public" starts to think of them as either of those things, they are going to get a LOT of regulatory scrutiny from the FTC. so they promote this notion of patronage. They are essentially trying to democratize the system of business that most of the great artists of antiquity worked under. Hence the emphasis on "projects", not "products", or "events". The money your are receiving is supposed to pay to feed you, house you, warm you, while you pour all of your time into this project.

Now, that doesn't seem to really jibe with the "no concept renderings" rule. The linguistics kiosk was nearly identical to the original concept rendering I made in Blender, that was a significant factor in getting the client excited about using us for the project. I think renderings can be very practical and there should not be any more risk in promising features in a rendering than promising features without a rendering. Also, sometimes you need a bunch of time to finish that prototype. It just doesn't always work to build things in your spare time.

So perhaps the idea is that, if you are in prototyping stage, you should be able to sell yourself, not the product, because you are selling your use of time, not a product. Remember that this site was conceived first for artists recording albums and making statues and the like, not for engineers to get investments. It is a malleable system, so they are trying to make sure such projects fit that model, so as to not drown out the "aht".

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[Jordan Miller]

really interesting points.

jordan

[Louis Gerbarg]

I'll say that these changes would have very negatively impacted Hone.
Something like half our backers wanted multiple units, and it probably
would have been hard to drive enough volume through if we only had
single units available.

Also, technically speaking the Hone we showed in the video was not
functional. We had two functional units, but we had planned to tweak
the firmware and LEDs in them a bit to make them show up better on
camera. Instead we just rigged the LEDs off a button as it made
filming much easier (reduced the odds of odd pauses due to latency
with the sleep timer, etc).

Ultimately I think this is going to push hardware projects on
kickstarter towards more expensive devices by groups that have enough
enough funding to get past prototyping but not into production.

Louis

[Jack Zylkin]

When I first read that blog post, I was sweating bullets, because it would mean I'd have to go back and re-shoot half of my Kickstarter video, which took months in the first place.  Luckily, their changes only apply to tech/design projects, whereas mine is in the games category.  Still, how unfair to all those makers out there about to publish their projects only to have the rug pulled out overnight without warning!  They could at least have instituted a one month grace period so people could plan their project around the changes. This move seems so drastic.

I don't think it has to do with the FTC, especially after Obama's crowdfunding initiative goes into effect.  Instead, I think Kickstarter is predicting some kind of popular backlash if and when one of their recent multi-million dollar projects cuts and runs.  It will make outrageous headlines when one of these 10 million dollar projects folds.  If that happens, Kickstarter really has no legal recourse to make sure backers get refunded -- it is basically all on the honor system.  The backlash is inevitable, but this way they can do better damage control PR by saying they have since updated their policy.  It seems like a stop-gap solution to the real problem of unaccountability, which is a legal problem, not a problem with the projects themselves, by and large.  I also don't know why they have singled out design/tech projects for this scrutiny -- for example my project is in the games category but I use 3D renderings up the wazoo.  Would I have had to hire an illustrator to sketch my ideas instead?  Would that have made my claims any more realistic?

There is a real problem here -- I'm thinking specifically about that VR helmet that was on kickstarter a few months ago, the Oculus.  It looked like a great product, and I hope/believe it will be successful in the long run, but they pretty much never showed the actual prototype at all, which is after all what the backers would be receiving instead of the super-slick 3D rendered version. That was a bit dishonest.  That said, Kickstarter insults our intelligence if they don't think we know the difference between an artist's conception and a finished product.  If you have gone through the trouble of designing a cool look for your product, but your prototype does not convey that look, why shouldn't you be able show people your concept side by side with the actual prototype? I mean, the Ouya probably got half its funding from the cool design of the controller, which seems like the major thing that differentiates game consoles nowadays -- should they have 3D-printed one that looked exactly like their rendering?  Would that have been more acceptable?  A better rule would have been: "You must feature the prototype prominently, and you must use a disclaimer when showing 3D models."

Also, for those projects especially, it would have been completely counterproductive if they couldn't sell more than one of their "developer kits" -- if your game company was designing a game for the Oculus or Ouya, wouldn't you want more than one dev kit to demo your game on?  What if it was a two-player game?

Man, between this and makerbot, there are some cynical decisions going on in the world of crowdsourcing this week.

[Kyle Yankanich]

I just funded the new game console - OUYA, which apparently wouldn't meet the new specifications. They didn't have a working prototype, they offered multiple quantities.However, they had a great idea, and a great team to figure it out. Even more compelling is that they are one of the highest (if not the highest) funded kick starter to date @ 8.5 million. However, without the capital boost to do an open-source gaming console, I don't think it would of ever came to production. They needed to show interest to game developers, they needed to have a *large* amount of capital to order the android boards the console is based off of, and they needed more time to finish a design and layout of the game controller.

However, a project I funded which I'm kind of annoyed with is the HexBright. If I'm not mistaken, it met most of the new requirements (except multiple qty) It was funded sometime in July..... of 2011. The initial ship estimate were ~2 months. 14 months later, and they're still working on the design of the PCB. They keep ordering small runs of the boards, and finding glitches, fixing and repeat. I don't know if they're just extremely unlucky, or if they're not sure what they're doing. Either way, if Kickstarter wants to start leaning on people, how about these folks?



On Sunday, September 23, 2012 5:11:22 PM UTC-4, Jack Zylkin wrote:

When I first read that blog post, I was sweating bullets, because it would mean I'd have to go back and re-shoot half of my Kickstarter video, which took months in the first place.  Luckily, their changes only apply to tech/design proje,cts, whereas mine is in the games category.  Still, how unfair to all those makers out there about to publish their projects only to have the rug pulled out overnight without warning!  They could at least have instituted a one month grace period so people could plan their project around the changes. This move seems so drastic.

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[Sean McBeth]

I bought in to the OUYA, too, fully expecting them to fail spectacularly, especially in the long term. They might, maybe, one day release hardware, but their market is almost certainly doomed. 

This is interesting:

http://www.kickstarter.com/projects/formlabs/form-1-an-affordable-professional-3d-printer 

Launched today, so it has gotten through the new standards. You can see the Risks and Challenges section. They have a working prototype that looks damn complete and are looking for money to scale up production. So at the very least, there is a bit of social proof there: if you have a production-ready prototype, you're looking to build production out, then Kickstarter is still going to take you.