Confessions of a disgraced crowdfunder
Two years ago Savannah Peterson worked as the head of marketing for a design firm in Silicon Valley. She was introduced to a company making a newfangled photo device. The gadget, called Instacube, streamed Instagram's feeds onto a physical, sleek-looking frame-like object. Impressed, she signed on to head the crowdfunding campaign, although she'd never run one before.
Instacube launched a Kickstarter campaign in August of 2012 with the promise of a March 2013 ship date. The Internet fell in love with Instacube, and the device raised nearly three times what it sought. Cut to March of 2014 and not one Instacube has been shipped. Today, at a one-on-one interview at South by Southwest, Peterson told her story.
The conversation, facilitated by Tom Miale, founder and CEO of TV viewing startup Funnler.tv, was presented mostly as a chronological rundown of what transpired. After meeting the company behind the product, D2M, she signed on to lead their marketing. This meant she had to create a Kickstarter page, produce one professional video (the only piece of paid marketing the campaign actually used), then rally as much interest as she could muster. As she put, "I leveraged every amount of social capital I had."
It worked. Peterson was able to wrangle an article by Engadget, and from there the dominoes fell. Instacube was on CNET, Mashable, and TechCrunch. The campaign had intended to raise $250,000. Within the first 24 hours it had secured more than $100,000. By campaign's end D2M had raked in $621,049.
Then D2M had to build it. This is where things begin to fall apart. The March 2013 deadline came and went and zero devices had been shipped. Backers, understandably, became impatient.
"Early adopters are just as smart as they are savvy," Peterson said about the Kickstarter mob that formed. If they decide to put money into the product, they sure as hell are going to track its progress. And when that progress doesn't, well, progress, they get pissed. "There was a lot of rage," she said.
Much of it was hurled at her. She was person behind the marketing and had devised the entire scheme, so she was the face of D2M. Backers found out her name, posted her cellphone number and email address on the Kickstarter page and began calling and emailing with questions.
"There was a real point when I wanted to crawl in a hole and hide," she said. And, given that D2M wasn't her company and she too invested in the Instacube, she had the same questions.
What happened? That is pretty much why anyone would come to this event. Sadly, that remains unclear. All Peterson would divulge is, "The product hasn't shipped yet because the reality of hardware development is that hardware is hard."
Yeah, that's true, but what precisely is holding it up? Will there even be an Instacube shipped to backers, albeit a year and a half later? Peterson maintained that hardware was the problem and that no one can foresee the impediments ahead when developing a new product. "[There were] software changes, hardware changes, different screen sizes… Everything you can think of gets modified."
Peterson is no longer affiliated with D2M, so she can't answer questions about its future, nor would she go on record to say what happened (which is a pretty big let down). While she suffered harassment (people were calling, tweeting at her, issuing threats) she landed on her feet, and is now considered a crowdfunding expert. In fact, she's seen by some as one of the best advisers to find with $4.5 million of successful crowdfunds secured through her aid.
As for Instacube, the company issued an update saying it will start shipping devices in April. We'll see.