How will the Doom Kickstarter fraud scandal affect future Kickstarters?

[ShadowDenizen]

. A week or a month from now, nobody will remember this. Specifically, they won't remember it when they next look at a cool-sounding kickstarter.

Well, that's a sad, (but probably accurate) assessment of the situation.

 

[Umbran]

Projects should have milestones as well as rewards, these are accountabilities that the project is not being mis-managed.

In a regular company, you have people who know the business decide to do a project, they assign a project manager who also knows the business, and can make realistic plans. The PM is then accountable to the upper management.

Kickstarter is *not* normal business. Having pitched in $20 does not give you expertise to judge if the original plan was sound, much less if blowing a particular milestone is really an issue.

I repeat that Kickstarter is not, in general, normal business. It isn't *intended* to be normal business. It is not for those who are risk-averse, and trying to remove the risk will likely ruin the value of the thing. Do not try to make the tool do what it isn't intended to - accept it for what it is.

 

[Fetfreak]

I think one of the main issues in this case is that the project was 300% over the needed budget and yet nothing will be produced.

When a project reaches only a 100% it should be expected that they still might fail, but 300%? That for me spells immediate project success and more.

 

[Samurai]

Kickstarter has also been a big opportunity to people designing and printing new playing card decks. At first, it was very easy to succeed, but after several of them fell through and never got printed, it has become harder and harder. Decks that would have made it a while ago struggle very hard and sometimes don't succeed now as collectors are becoming more leery of KS. It now appears that a rather high profile one may have failed (or maybe it was fraud from the start), and many people are upset, so it's only going to get harder from now on. I think that KS will become a place for more reputable companies to promote their latest project and get funding up front, like the Reaper minis or Fate Core, rather than a place for complete unknowns to get their stuff to print... there is a sense that a reputable company is a safer bet and that it's "just a pre-order", rather than taking a chance on an unknown person who might not have everything figured in (at best), or might be a thief (at worst). As more and more people get taken now and then, even by just a few people, it'll make them more risk-adverse and cause them to only back more reputable, established companies rather than independent folks.

 

[Umbran]

When a project reaches only a 100% it should be expected that they still might fail, but 300%? That for me spells immediate project success and more.

Budget alone does not mean a project will succeed. There are problems you cannot fix by throwing money at them. Creative differences, or having a key individual die, or go into rehab, or something, can kill a project even if you have tons of money.

 

[Fetfreak]

Budget alone does not mean a project will succeed. There are problems you cannot fix by throwing money at them. Creative differences, or having a key individual die, or go into rehab, or something, can kill a project even if you have tons of money.

I understand that, but the project with bigger budget is still more likely to succeed than fail.

 

[billd91]

I understand that, but the project with bigger budget is still more likely to succeed than fail.

At the very least, it should be less vulnerable to an unexpected (yet probably inevitable) cost overrun on one or two components because it has a buffer.

 

[billd91]

By requiring the project to refund money for failed projects, this means that the project basically must NOT spend the KS money, in case the project fails.

That kind of defeats the point of going to somebody else to help fund the project.

Now some may think that what I just described is a good thing, but the side effect wouldn't just hit failed projects. It impacts how a successful project (that is one that "would" have succeeded). If my project requires $20,000 to print and ship, and I don't personally have $20,000, and I effectively can't spend the KS money until I ship the product, then I don't have the money to do the project. KS has neutralized itself out of the business of funding projects.

Instead, the only people who would be safe to use KS, are people who already have money to pay for the project themselves, but want to secure buyers (backers) before they start the project. As this Amy Palmer has apparently done with an album, despite her having the ability to record it herself without KS.

This is my primary concern about KS's current terms. If the project is on the hook for all contributions, then it kind of kills the idea of crowdfunding research and development projects that may never pan out and that's where venture capital is needed most.

 

[Umbran]

I understand that, but the project with bigger budget is still more likely to succeed than fail.

Not as true as you might think.

One thing (that doesn't apply to most Kickstarter work, but does to projects in general) that can kill a project is time constraints. If, for example, in order to succeed you need to get your product out for the winter holiday rush, and you don't make it, you fail. You cannot buy days on the calendar with money.

Another thing - having more money, in fact, can lead to the demise of a project. Having more money makes you think you have more resources. Having more resources makes you think, "Well, then I can *do* more!" so that you make the project bigger. In the land of Kickstarter, this is called a "stretch goal", and is seen as good. In the land of project management, this is called "scope creep", and it is bad.

Let me give you an example to illustrate. You own a chunk of land. So, you get some money together to build a house. You do your homework, plan your house, and realize you have money left over. Enough to do a garage! So, you plan out the garage too, and all looks great. You get the cement guys in to pour the foundation of the house and the slab of concrete for the garage - it is cheapest to have them come in and do both at once, after all - and they come in on time and on budget. Everything is still good. You get carpenters in, and they do the walls for both, and everything is still good. You get the electricians in and... whoops, there are some problems, and so that part costs more than expected. Then the plumbers come in and that, too, goes a little over budget, but gets done.

Then, you have the roofers come in and... big problem. The cost of shingles, tar paper, and other materials has risen due to some weirdness in the market. You now cannot afford to put a roof on your house. You could roof the garage, but it isn't useful without the house! The house sits over the winter unfinished, and storms cause damage to what you've already done, and the whole thing ends up ruined...

As opposed to, "I have more money - I'll leave it in reserve, just in case." When was the last time you saw a Kickstarter with a stretch goal, "We'll use this money to be extra-sure we actually finish"?

 

[Fetfreak]

Well that's poor management, isn't it?