Pando

Which is worse for crowdfunders, naiveté or honesty?

By Nathaniel Mott , written on July 3, 2013

From The News Desk

Contributing to a crowdfunding campaign is risky business. Sometimes projects don't meet their deadline; sometimes the finished product doesn't live up to the promise of all those demo videos, wishful descriptions, and promotional images; sometimes you think you're backing the production of some delicious beef jerky and you're really just pledging money to a scammer's bank account. Murphy's Law comes out in full force as soon as someone parts with their cash in exchange for a promise.

This principle is especially noticeable among hardware projects, which have a tendency of falling behind deadline or failing to meet backers' expectations. That's why Kickstarter flatly stated that it is not a store, required that hardware project creators disclose why their project might fail even if it meets its fundraising goal, and banned the use of product simulations and renderings.

It's also why Cardboard Technologies is telling people who back its Cardboard Bike project on Indiegogo that they probably won't receive their bicycle until 2015. The company recognizes that shit happens when you're making hardware and doesn't want to fail to meet its deadlines as the Pebble smartwatch, the GameStick videogame console, and the Oculus Rift virtual reality glasses have. 

During a conference call with the press yesterday, which Cardboard Technologies had organized to announce that it had cut the cost of its bike from $290 to $95, one reporter expressed concern about the delay between a backer parting with their money and receiving the product they are ostensibly paying for. A representative for the company explained its reasoning -- that unforeseen issues might pop up during production, which could force the product's release date beyond the company's own estimates -- but the problem remains: Does the average person understand that they're spending $95 ($135 after shipping) on a product that might not reach their doorstep for another two years?

That's a helluva question. Platforms like Kickstarter have tried to protect consumers by making it clear that projects are not guaranteed to succeed -- and, as mentioned above, saying that its service is not a store -- and encouraging artistic projects instead of technology products. The media (PandoDaily included) has repeated the risks of pledging money to a company with basically no accountability ad nauseum. Anyone with a passing interest in the concept of crowdfunding itself, the platforms on which many projects are backed, and technology in general should know of the risks by now.

But that doesn't mean that people who click on a link shared to Facebook or Twitter, or who see a project page offering certain rewards based on how much they pledge to the cause, aren't going to expect that the project's creator will stick to its deadlines, fulfill all of their promises, and do right by its backers. Many of these creators have a vested interest in hiding the difficulties they might face along the way, largely because they're using crowdfunding platforms as marketing tools and distribution centers, not a place to simply fund their projects. People don't want to watch as a project they backed is delayed or inferior to what they had expected, but that doesn't mean that they'd rather be told that it will be two years before they'll receive any kind of reward, either.

Crowdfunded projects fail, at least in some form, all the time. Asking whether or not backers are aware of those risks is the wrong question. The right question is whether it's better to be upfront about the issues a project might face and adjust the release schedule accordingly or to accept money from people who are expecting a project to meet certain milestones at certain times and keeping your fingers crossed in the hope that nothing goes wrong.

[Illustration by Hallie Bateman]