I’ve made it a rule to no longer write about crowdfunded products I haven’t at least had the chance to get my hands on. On its face I hate crowdfunding. It started as an interesting concept, startups without capital could show their proposed product to consumers and consumers could quasi-invest, the potential upside being getting the product at reduced cost, the downside the chance you’d lose your money. I still think actual investing is a much better use of time and money, but conceed the idea was at least interesting.
The idea, however, has been bastardized in every way imaginable.
These days on Kickstarter and Indiegogo you have companies with plenty of capital and established products using the platform as a method of free advertising. Often, when a Kickstarter does manage to deliver a product, it’s a flaming pile of garbage. In addition, you’ve got startups with zero engineers and 20 marketers on staff getting millions of dollars to never deliver a product. There is zero accountability. Yes, innovation is great, but too often crowdfunding campaigns are people who don’t need your money, people who don’t have a clue what they are doing or people flat out looking to scam you.
Just this week we’ve seen two very big name crowdfunded products fail to deliver.
Juicero, the magical juicer that was supposed to deliver fresh juice from a bag of prepared fruits and veggies turned out to be nothing more than a $400 ($700 for original backers) Caprisun squisher (of which you could get 640 for the price of this stupid machine). Now, I’ve got to say, I found this one pretty fucking stupid from the get go. A juicer is stupid easy to use and you can get a high quality masticating juicer for about half the price of the Juicero. That’s ignoring the fact that you shouldn’t even be juicing in the first place, grab a blender and eat the whole fruit/veggie not just the sugary part.
The other major league fail this week was Plastc. Plastc launched in 2014 promising to ship a single card that could digitally hold 20 credit or debit cards that a user could switch between. The company raised more than $9 million through preorders. After shipping nothing, the company today announced that it’s filing for bankruptcy. Just last week the company was still displaying ads on Facebook that were very deceptive, they were selling the card as a “pre-order”. What more would you expect from a company made of 90% “creatives” and “social media experts?”
Part of what really pisses me off about these “products” is the way big name blogs happily pimp their bullcrap for them for free. The likes of Gear Patrol and Uncrate, for example, happily sold the non-existent, at the time, device with loving words. Uncrate’s hilariously ass kissing write up was quickly erased just this morning, hence the Google cache. Are we bloggers really that desperate for content that we’ll just sell utter bullshit for scammy Silicon Vallery startups? Apparently, so.
I do think there are certain classes of products where crowdfunding makes sense. In sectors where products exist at an industrial or professional scale/price point but can be redesigned in a consumer product format, crowdfunding provides an efficient system for pooling resources. Allowing knowledgeable consumers to leverage economies of scale to lower their costs over their best alternative.
Additionally, in niche markets, it allows companies which are, by nature of their business, unlikely to exhibit the kind of growth worthy of investment to create a product for their target market. Board games are a great example of the later. It’s a niche product for sure, and the companies are unlikely to exhibit massive growth because of that. The risk of a project collapsing is low because it’s simply not that difficult to produce a board game.
I won’t, however, touch a tech-related crowd-funding project with a 10-foot pole.