Kickstarter Introduces New Rules To Try To Limit Disappointment

from the some-good,-some-bad dept

There have been a few stories of late about the possibility of backlash over failed Kickstarter projects. After all, for all the cool things about Kickstarter, anyone investing in a project there is taking a risk, and some of that risk leads to dashed expectations. Kickstarter has apparently been taking those concerns quite seriously, and issued some rule changes directed at hopefully limiting the disappointment factor for supporters of physical products, mainly by doing more to highlight the risks and current state of the offerings.

New projects will be required to detail what the risks and challenges of the project are, and how they intend to overcome them. It should be pretty interesting to see how those sections turn out. To be honest, I could actually see that being really useful for people behind these projects, as it's not uncommon for enthusiastic creators to not even want to confront the risks and challenges they're facing. Forcing them to do so will hopefully lead to more realistic assessments of what can be done.

The other rule changes seem a bit strange to me, and I'm not sure they'll be as effective. The first is to ban renderings or simulations of products:
  • Product simulations are prohibited. Projects cannot simulate events to demonstrate what a product might do in the future. Products can only be shown performing actions that they’re able to perform in their current state of development.
  • Product renderings are prohibited. Product images must be photos of the prototype as it currently exists.
  • I can certainly understand why they're doing this, as it will clearly give a much more realistic picture of where things are at the moment. But it seems like requiring renderings and simulations to be clearly marked as such might be a more effective solution -- along with showing what the actual current state of the technology is. Since many of these projects need money to finalize development, it seems fair to show what they intend the final product to look like.

    The other ban is on offering multiple quantities of a reward, unless it really only makes sense that way (like where you need a pair of devices to make something work). That's to reinforce the idea that this isn't a "store" for pre-buying things, but to really get people to invest in the project itself. While it does often feel that projects got a bit lazy with upper tiers that were little more than "5 of x," I'm also not sure that this one really makes that much sense. Kickstarter defends the decision this way:
    The development of new products can be especially complex for creators and offering multiple quantities feels premature, and can imply that products are shrink-wrapped and ready to ship.
    I understand the line of thinking... but I could see that taking away value from potential buyers who are willing to take the risk and buy in on a product early, where they'd like multiple quantities.

    Either way, it's fascinating to watch how Kickstarter continues to evolve -- and to note that the company (as it has for a long time) seems very keen on listening to what people are saying, and figuring out reasonable ways to avoid any problems.


    Reader Comments (rss)

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    1.  
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      Chronno S. Trigger (profile), Sep 21st, 2012 @ 2:54pm

      I can understand Kickstarter's desire to require people to show exactly where the project is at the moment. But banning the concept art or mock-ups will be more damaging to getting funding then only having concept art or mock-ups.

      I agree with Mike, have two different clearly marked sections; "This is where we are" and "This is where we're going".

       

      reply to this | link to this | view in thread ]

    2.  
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      Tim K (profile), Sep 21st, 2012 @ 2:55pm

      I would have to agree with you, I think the first one is good, the others, maybe not so much. If a product is in the early stages, where a lot are, they might not have a working prototype just yet. This is an investment, and being able to see what it is your actually investing in is rather helpful. Saying that it is going to do xyz is not always equivalent of showing xyz. I understand where they are coming from, but as you said, I definitely think it would be much better for them to just make them clearly label it as a mockup or rendering. As for the multiple quantities. As for the multiple quantities, I do not see the harm in people doing that, even if it's not a store, by allowing people to get more than one you can help decrease the overall cost.

       

      reply to this | link to this | view in thread ]

    3.  
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      Gemmy, Sep 21st, 2012 @ 3:08pm

      Some of it only applies to Hardware and Product Design

      Important to note that the more restrictive requirements (no rendering, no simulations, no multiples) only apply to Hardware and Product Design projects, not to every project.

       

      reply to this | link to this | view in thread ]

    4.  
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      Anonymous Coward, Sep 21st, 2012 @ 4:18pm

      The risks and challenges section is a great addition, but the other changes seem poorly thought out and likely to backfire, and in fact, plain grate. Blah.

      Probably someone else will just build a new platform.

       

      reply to this | link to this | view in thread ]

    5.  
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      Anonymous Coward, Sep 21st, 2012 @ 4:32pm

      Re: Some of it only applies to Hardware and Product Design

      Even so, CAD renderings can be useful to display mechanisms and prototypes. Multiple products are useful because investors only return from the investment is usually only the future product, good karma, or some gimmick advertizing products.
      It's the screening process that's important, and I think the public has stepped up to the plate in researching prospective businesses. I'm sure there are some horror stories, but a lot of good has come from the platform as well.

       

      reply to this | link to this | view in thread ]

    6.  
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      Anonymous Coward, Sep 21st, 2012 @ 5:39pm

      This isn't necessary. I know a lot of jerks in real life, but I don't know anyone who is a jerk online.

       

      reply to this | link to this | view in thread ]

    7.  
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      Anonymous Coward, Sep 21st, 2012 @ 6:27pm

      Re:

      Or they'll revert the bad changes after the backlash.

       

      reply to this | link to this | view in thread ]

    8.  
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      kimberly, Sep 21st, 2012 @ 7:25pm

      regarding the RIDICULOUS new RULES for kickstarter.

      this is a bunch of bullshit I don't understand why they would make people come out of pocket to make a functioning "anything"... the whole point to kick starter is to get funding for these projects. Some people don't have the money to even bring any part of their project to fruition. Basically this means they would have had received some type of funding before kickstarting.. isnt it the whole point of kickstart to give thou your kickstart??? getting prototypes of anything could cost an arm and a leg. if I were for helping fund a kick start project I would be more than glad to donate to somebody who has a 3 D rendering, or artist rendition, ok cool hand drawn blueprint if you will. and kick starters response to multiple products being shipped to funders, is ludicrous. we being funders already know what state the project is in at the time we donate. in the projects that I have helped fund they all clearly state that if they don't get appropriate funding we don't get a product. kickstart Representatives need to come up with a better answer than this, that's bullshit too. I appreciate the opportunity to donate for multiple products. usually I wouldn't be able to get multiple products after the project was funded. if I have made multiple purchases, it was to give family and friends. it would be way too expensive for me to purchase these gifts after the project is funded... if this really happens, people who are interested in donating and want multiple products they can simply request multiple products and say hey, I'll give you 80 bucks if you give me 5 instead of there being option of giving 25 bucks and only getting 1..... just sayin... but in reality the big picture is this, these ridiculous notions are just going to keep alot of potential kick starters away from Kickstarting. these people are going to lose their ability to fulfill a dream, help the economy in a small way, to help their families and futures in a big way. am I wrong in my thoughts on this?if I am please tell me... and I apologize for the poor grammar and capitalization, I'm using my voice text on my phone.

       

      reply to this | link to this | view in thread ]

    9.  
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      Tobias Harms (profile), Sep 22nd, 2012 @ 12:19am

      Bad for Europeans

      Since there usually is an extra 15$ to ship to Europe it made sense for us to get together and support a project as a group. I hope they will revoce these new rules and implement more moderate ones.

       

      reply to this | link to this | view in thread ]

    10.  
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      Anonymous Coward, Sep 22nd, 2012 @ 5:50am

      "it's fascinating to watch how Kickstarter continues to evolve"

      They aren't evolving, they are trying to cover their ass after realizing that scammers are measuring up the system and starting to come on thick and fast.

      They had to take action, before the FTC starts to take an interest in them and starts cracking down for them.

       

      reply to this | link to this | view in thread ]

    11.  
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      Anonymous Coward, Sep 22nd, 2012 @ 2:58pm

      Ridiculous!

      I've backed at least 3 or 4 projects for multiple quantities to give as gifts, and 2 I've backed multiples in order to take advantage of buying in bulk to resell.

      I don't see anything wrong with that, at all, I'm taking the risk of pledging funds for something that doesn't exist, with the potential of making some money back - exactly what venture capitalists do all the time.

      This seems like a case of the 'cure' being worse than the 'disease'

      They'll either have to revert these changes extremely quickly, or they'll find they're left behind.

       

      reply to this | link to this | view in thread ]

    12.  
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      Anonymous Coward, Sep 22nd, 2012 @ 8:10pm

      So... we need a kickstarter for kickstarter. Real, working prototypes cost a lot of money.

       

      reply to this | link to this | view in thread ]

    13.  
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      Anonymous Coward, Sep 23rd, 2012 @ 4:51am

      It's a business plan.. just like what a bank requires

      thats right, just a business plan, anyone who has started an actual REAL business knows all about them.. it simply details what you are intending to do, how you intend to do it, and a carefull analysis of potential issues that may stop you from acheiving those goals.

      Masnick claims to be an amazing business expert, im sure he has worked on many, or at least several buisness plans...

      Masnick, you might want to try to inform your readers about the formal and content of a 'standard' business plan..
      and why you find it amusing that investors would not require this information before they are prepared to invest.

      so what is the difference between Kickstarter and a bank ??

      If you want finance for a 'plan' it makes sense to detail your 'plan' to those who may be willing to invest in you..

      if you cannot write a clear and accurate business plan that 'looks right', then you most certainly are not ready to run an actual business.

      until you get the basics of business 'design' down you might as well not play with the real thing..

      but reading Masnicks 'analysis' of certain industries it is clear masnick has never written a business plan, let alone turned one into a reality..

      your business plan is a blue print of what your business is to be, it explains how it will work, and how it may not work, it defines direct and indirect competition etc, it is also dynamic, HAS to be written (not just an idea in your head), and is quite often the determinator of the success or not of a new business. It also usually requires considerable research, something masnick does not seem to take into consideration when stating his 'analysis' of certain industries.. industries he's never worked for or in, he has also never seen to apply standard business concepts to his analysis.. all opinion no facts.. a good reason why he has never and will never work in the industry he professes to know so much about... :) (but does not)...

       

      reply to this | link to this | view in thread ]

    14.  
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      Anonymous Coward, Sep 23rd, 2012 @ 4:59am

      Re:

      it's a comparison of playing lotto and making a sound financial investment,

      sure it's fine to have a 'flutter' on a project, with the hope that your horse just might win. but if you believe venture capatilists GAMBLE with their investment money you dont have a clue..

      lots of people have a bet with a hope, but very few get rich from it.. (most loose their shirts). Investors want assurance that if they give you money YOU KNOW what to do with it to make an acceptable return on the investment.

      Kickstarter does not want to be a gambling house, so they have an expectation that the person seeking funds has a clear idea in their heads (AND ON PAPER) what they intend to do, and how they intend to provide a return on their investment.

      if you gamble expect to lose your money, if you invest expect to be able to trust the competance of the person you are investing in..

      otherwise you might as well flush your money down the toilet for what good it will do, in terms of return upon your investment.

      what is wrong with expecting the person you give money too, to explain what they will do with that money to ensure they can give it back,, plus some ?

       

      reply to this | link to this | view in thread ]

    15.  
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      Anonymous Coward, Sep 23rd, 2012 @ 5:01am

      so Kickstarted is just starting to 'catch up' with what the rest of the world has been doing well forever !!!

      way to innovate, 3000 years behind the rest of civilisation. LOL

       

      reply to this | link to this | view in thread ]

    16.  
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      Anonymous Coward, Sep 23rd, 2012 @ 5:04am

      Re:

      real working business plans require time and some thought, a business plan is a "working prototype" of your proposed business, requires a pen and some paper !!!..

       

      reply to this | link to this | view in thread ]

    17.  
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      WysiWyg (profile), Sep 23rd, 2012 @ 5:12am

      Re: It's a business plan.. just like what a bank requires

      Let me guess; you didn't bother to actually read what he wrote, did you?

      'Cause if you had, you would have noticed that he had no problem with the rules about having to lay out the dangers and solutions. It was the ban on renderings and allowing multiples of the same reward that he didn't agree with.

       

      reply to this | link to this | view in thread ]

    18.  
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      Michael, Sep 23rd, 2012 @ 9:44am

      Hey, I want to see what the final product is intended to look like and how it's expected to function. Simulations and renderings are an important part of the pitching process.

      Also, many manufacturing partners require a sizable order before production will commence. By removing the possibility of offering multiple quantities as perks, Kickstarter's going to make it all the more difficult for projects to succeed. For some of the projects I've supported, being able to receive more than one of some product was the deciding factor in my support. Many of the more creative perks simply don't appeal to me.

       

      reply to this | link to this | view in thread ]

    19.  
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      Anonymous Coward, Sep 23rd, 2012 @ 11:10am

      Re: Re:

      I was referring to a prototype of the final manufactured item. Like a new bicycle, for example.

      The new restrictions will not allow a person to just provide 3D picture renderings and sketches of what the bicycle will look like. Instead, a working prototype of the bicycle will now have to be manufactured.

      Which means hiring an engineer and a factory to make molds and what not.

       

      reply to this | link to this | view in thread ]

    20.  
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      Anonymous Coward, Sep 23rd, 2012 @ 5:25pm

      Re: Re: Re:

      that is simply a way to seperate fantisy from reality, if you are not capable of building ONE freaking prototype of your 'idea', why would you expect someone to invest in you to build many of them..

       

      reply to this | link to this | view in thread ]

    21.  
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      Anonymous Coward, Sep 23rd, 2012 @ 8:21pm

      Re: Re: Re: Re:

      Yes, let's only help rich people.

       

      reply to this | link to this | view in thread ]

    22.  
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      Tobias Harms (profile), Sep 23rd, 2012 @ 9:31pm

      Bad for Europeans

      Since there usually is an extra 15$ to ship to Europe it made sense for us to get together and support a project as a group. I hope they will revoce these new rules and implement more moderate ones.

       

      reply to this | link to this | view in thread ]

    23.  
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      Anonymous Coward, Sep 24th, 2012 @ 8:37am

      I don't like the limitation on quantities. I funded a documentary last year, and one reason I donated the amount I did was because I get 10x free digital copies for my friends.
      What's so wrong with that option?

       

      reply to this | link to this | view in thread ]

    24.  
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      Tobias Harms (profile), Sep 24th, 2012 @ 1:44pm

      Bad for Europeans

      Since there usually is an extra 15$ to ship to Europe it made sense for us to get together and support a project as a group. I hope they will revoce these new rules and implement more moderate ones.

       

      reply to this | link to this | view in thread ]

    25.  
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      Anonymous Coward, Sep 24th, 2012 @ 5:40pm

      Re: Re: Re:

      That's actually a good example, but not for the reasons you stated.

      Personally, I own a Dahon folding bike, MU P24. The bike is great, but the Brompton bikes fold up much better for traveling. I think that the Dahon's win out though in replaceable parts so that was my choice.

      So if I was going to create another folding bicycle, I would want to show not just the prototype folding up and some luggage bags storing the bike, but also CAD drawings of the folding mechanism so that people would be able to see how structurally sound the design is. It's a major weak point in folding bikes, so a general concern to most people that purchase them.

      Basically, this is a major decision point that would have to be proven out to the buyer. And it can also become a major selling point especially when you are doing a 20" wheel design meant for off road use.

       

      reply to this | link to this | view in thread ]

    26.  
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      Tobias Harms (profile), Oct 22nd, 2012 @ 12:05am

      Bad for Europeans

      Since there usually is an extra 15$ to ship to Europe it made sense for us to get together and support a project as a group. I hope they will revoce these new rules and implement more moderate ones.

       

      reply to this | link to this | view in thread ]

    27.  
      identicon
      Anonymous Coward, Oct 22nd, 2012 @ 12:40am

      Bad for Europeans

      Since there usually is an extra 15$ to ship to Europe it made sense for us to get together and support a project as a group. I hope they will revoce these new rules and implement more moderate ones.

       

      reply to this | link to this | view in thread ]

    28.  
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      Olif M, Nov 25th, 2012 @ 10:11pm

      Clueless

      Kickstarter is clearly ran by hipsters who just don't understand the first thing about hardware manufacturing or liabilities in regard to it. Obviously their legal counsel got freaked, spoke with the children in management and came up with this solution. Morons like Felix Salmon at Reuters freaked them out when products such as LIFX got large quantities of buyers.

      First, and take it from someone in the hardware industry for many years... Nothing - i mean *nothing* you see in marketing videos ever works at launch. Across the board - consumer to enterprise. NONE of it work in the marketing videos. At best its close - worst its totally staged. Way of life in hardware. The rule of no prototypes, product simulations, etc - is not only impossible - but also is impossible to enforce. They have no idea whether a product is really working or not. And by giving their buyers any kind of 'assurance' it is - they are just increasing their liability - not decreasing it.

      Second, Quantity limits are pointless. You have liability irregardless of the number an individual person orders. The risk for Kickstarter is in the size of the funding - not the quantity per buyer. It makes *no difference* if an individual ordered 1 or 10. If a project fails a law firm is going to come hunting for a class action if the amount of the funding is high enough. In fact, more customers, with smaller sums is better for them as it gives them way more control over their plaintiffs.

      If anything, Kickstarter should be doing everything possible to:
      #1 - ensure larger sums on hardware projects to help ensure success - or at least delivery of semi-working product.
      #2 - require transparency, not discourage it with limits on what you can advertise. By letting hardware show exactly what their product *should do* and where they are currently in the development process

      Clueless.

       

      reply to this | link to this | view in thread ]


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