The dark side of crowdfunding

Crowdfunding gives gadget makers the power to launch their own companies, but sometimes their dream dies not long after launch. In this episode of In the Making, reporter Ashley Carman looks at how crowdfunding platforms Kickstarter and Indiegogo are changing their business to prevent creators from never shipping their product.

[TheVerge]

Have you ever backed a crowdfunded gadget, and did you receive it?

[MrGeneration]

I just went back to check my kickstarter history. I have supported 60 projects and it is only four of these projects that didn’t deliver. Only one of them have been the developer taking the money and runing. The other two where game developers that had underetimated time and price and a hardware project where just about everything that could go wrong for the entrepreneur did go wrong. I might have been lucky. I don’t know.

I think that the big problem here is not the crowdfunding platforms or the crowdfunding idea, but that some people see this as normal shopping. It isn’t normal shopping. There is a risk. Your helping bringing an idea to life. Don’t invest more money, than you are willing to lose. You almost always have the option to not support the campaign and then come back a few months or a year latter and then buy the product if it get made.

[philamonhemstreet]

Once again Verge, amazing video, misleading title.

[ZoraTheberge]

I think it goes both ways. Backers have to understand that the product may never come to market. And that can be part of the fun. But also innovators need to understand that manufacturing is a whole different skill set than inventing or software coding.

[MortyMortyMorty]

12 mins summed: Crowdfunded things are often delayed or just scammers.

[rousseau]

Anyone shopping on crowdfunding funding sites need to think like an investor before contributing their hard earned money into any of these projects. Is it just the idea of a cool product that you like, or are you actually confident in the people behind it, and the preparation they've put into the project for it to actually take off and sustain?

[arodic]

It baffles me that the issue of accountability is getting attention this late. It was an obvious problem from the start of crowdfunding.

[DrewLakebrink]

You should never pledge money you aren't comfortable with losing.

[joonasfi]

The very least the crowdfunding companies should do is return their commissio to the backers once a project fails. It would also bring incentives to the platforms to do everything they can to see that a project goes through. Currently they get paid for failed projects as well and that actually incentivizes them to host failing projects as well.

[imhatepie]

Did you not even mention what cut of the funding the crowd-funding websites take from each project?

[rachelgreer]

The crowd funding websites could create a template that will help developers set up their strategic plan. A good strategic plan will set benchmarks that make it easy for stakeholders to follow along. An established plan will also heighten consumer confidence in the product, making it more likely to succeed.

[arbazsayed]

This is a really really great series ...

[friskeg]

Is it really the creator of platform's fault. Why is the "investor" spared from any responsibility? You're investing in something that doesn't exist from a company that has no experience (in most cases). When you invest in a known company there is a possibility of losing money. When you invest in an unknown company who has no history of delivering new "innovative" products you should do so knowing there is absolutely a chance you will lose money and get nothing from it. You want a guaranteed something for your money go to a brick and mortar store and pick something up off of the shelf. Taking all responsibility out of the hands of those who recklessly give money to someone they don't know on the internet because of some cool pics feeds into the current state of our society where as nobody is responsible for anything they do, itsy always someone else's fault.

[djhakase]

Power Laces. October 2010. It got a fair amount of media at the time.

At least I got a t-shirt.

[p]

I always thought that people were donating the money... Without getting a return.

[nobody.]

*Hold the* *_"shareholders"_* *responsible.*
You're investing in a product that does not yet exist, you accept the risk for it's failure to an extent. That does not include fraud, or remaining funds that the manufacturer agreed to refund in the licensing agreement, but both of those examples are legal liabilities that have already existed outside of crowd funding anyway.

[CaptSumTingWong]

I lost $300 on Kickstarter for a damn 3D printer...

[BrilliantDesignOnline]

Very educational, very well edited and produced, glad to hear the FlowHive was a success story, as well as Mousr. And Ashley is a great host.

[itslogical]

one thing I learned working with startup involved in crowed funding that " Hardware is Hard "

[KunalM-ecpm]

When you're funding a project, you're not buying a product, you're investing in the possible development of one.