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When Kickstarters Fail

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wraith808:

A great article (courtesy of MakeUseOf.com) about why Kickstarter's fail.  This isn't just about not getting funded, but also failure to deliver in a timely fashion, which is a problem of many successful kickstarters, especially the mega-successful ones, and other problems with estimation and expectations, which cause some kickstarters to under-deliver as they don't actually have the funds to deliver the entire product.

TL;DR summation from the article itself (and a great quote included before the conclusion)

These changes seem sensible, yet the title of the blog post (“Kickstarter is not a store”) misses the point. The real issue is not contributor expectations but instead the burden of success. Project creators are beginning to understand that realizing a dream is sometimes more frightening than failure, which may be why there’s been a noticeable upward trend in the funding projects are asking for. Kickstarter could solve this by implementing a funding cap that allowed creators to keep projects manageable, but that would cut in to the company’s profits.

Conclusion

In talking with Tyler, Dylan and Georgia it became clear that Kickstarter, though potentially an incredible platform, is no magic bullet. The effort required to put up a good project is substantial and many projects have no reasonable chance of success without weeks of work by the project’s creators.

Talking with these individuals has also given me a sense that Kickstarter is a force of both creation and destruction. An extremely successful project can be life-changing for its creator, but failure implies the world has found the project worthless. This chaos allows for incredible creativity and success but also can take a toll on the people involved.

As the flood of money into crowd-funding continues both contributors and creators are at risk of forgetting that this movement is about people, not products. The people we fund, the platforms we support and the rewards we demand will shape the future crowd-funding, and perhaps even our economy.

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40hz:
Excellent article and a must read for anybody thinking of seeking or contributing cash through a Kickstarter project.

I was a little surprised and disappointed when I read this in the article:

Kickstarter intentionally makes failure a hard thought to stumble on. Its website does not show failed projects unless they’re specifically asked for and the company directs search engine crawlers away from them. Estimating the number of failed projects is difficult because of these tactics, but most independent attempts to pinpoint the figure have landed at 50% or more.
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That's a bit disingenuous on Kickstarter's part. And considering they may be considered in the business of publicizing and facilitating investment opportunities, they're skating on thin ice with state and federal laws and regulators.

So it goes.

wraith808:
That's a bit disingenuous on Kickstarter's part. And considering they may be considered in the business of publicizing and facilitating investment opportunities, they're skating on thin ice with state and federal laws and regulators.
-40hz (November 02, 2012, 01:25 PM)
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Is that true though?  It's a failure of the project in terms of a failure to get funding.  That's not a consideration for investors- but rather a consideration for those listing their KS there, right?

40hz:
That's a bit disingenuous on Kickstarter's part. And considering they may be considered in the business of publicizing and facilitating investment opportunities, they're skating on thin ice with state and federal laws and regulators.
-40hz (November 02, 2012, 01:25 PM)
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Is that true though?  It's a failure of the project in terms of a failure to get funding.  That's not a consideration for investors- but rather a consideration for those listing their KS there, right?
-wraith808 (November 02, 2012, 01:36 PM)
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Um. No. Previous track record is important. Both for the individual and the venue soliciting investments or contributions - or whatever you want to call a Kickstarter "pledge." Angel investors and VCs are very interested in industry trends, failure rates, key ratios, and the personal track record of the individual soliciting startup funding. As are most non-amateur investors.

A business is a failure if you can't secure funding for it. If regular business startups can't secure sufficient seed capital or later round financing it's counted as a business failure. Many new businesses never even get off the ground. A bunch of cash goes into the startup and it never opens its doors before it runs out of money. It's a net loss to the investors who are usually friends and family. How is something like that (which has always been considered a "failure" in any business circle I've ever been in) different if Kickstarter was involved. Same thing to me unless I'm missing something. (Always a good possibility with me.)
 ;D

wraith808:
But Kickstarter isn't really involved, other than being a forum for submissions.  It's like if I posted something on DC regarding wanting funding for something- sure DC is place where I can put things, but how does the success or failure of that venture reflect on DC?  Or on any future posts?  That failure reflects on the business posting the proposition- not the forum where it's posted, other than this is a good or bad place to post my venture, right?

It's a little bit different with places like YCombinator that actually invest in the startups and groom them.  They are putting a certain amount of their own reputation and resources behind any that they accept.  But Kickstarter actively separates themselves from those that ask for funding.  The success or failure of any posting is a reflection on that business only, IMO.

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