Kickstarter leaving backers to the fire burns everyone
Kickstarter needs to rethink its role as a crowdfunding platform or face its own demise.
opinion There's a problem with the way people are looking at Kickstarter, and the company needs to do something about it.
Kickstarter is one of those great Internet success stories. Like eBay, it is fundamentally a facilitator that brings people with mutual interests together. Unlike eBay, which is founded on the trading of real goods for money, Kickstarter offers you the opportunity to put your money towards the creation of the goods you want. It's a crowdfunding service, and we need to stop looking at Kickstarter like it's a shop.
Kickstarter states that “traditional funding systems are risk-averse and profit-focused, and tons of great ideas never get a chance.” This is part of Kickstarter's success — stuffy loan officers aren't easily convinced making replica NES cartridge hip flasks is a good idea, but the customer base definitely exists and is willing to fork out for the geeky and nerdy. (This author and his colleagues are expecting five flasks to turn up over the next month.)
But what about the less successful projects, or even the outright failures?
Successful campaigns still get talked about, but interest is shifting to the other end of the spectrum. There are Tumblrs out there poking fun at bad Kickstarter projects, and even the odd Buzzfeed article.
The trouble with having the Kickstarter name synonymous with the activity itself is that it's all too easy to blame the brand. Every failure to deliver, every possible and actual scam comes at the expense of the Kickstarter brand. It should be concerned about the obvious money-grabs, the projects that have reappropriated IP without permission, or that look as though they've been put together by a Nigerian prince in need.
We've seen one project that lifted video and stills from Microsoft, claiming it was original work. Yet another is a Flappy Bird clone, and there's no shortage of projects promising sequels to games using IP that doesn't belong to the project creator.
An account called fowlers finance was asking for £10,000 for to fund a short film starring Benedict Cumberbatch. A quick search shows Fowlers Finance to be an existing business, yet the account isn't linked to any official Facebook page or website. Trouble is the film has already been made and is available in iTunes. But if you wanted to report this project for fraud there's no option to unless you're the filmmaker.
Kickstarter is unwilling to police its platform or even acknowledge this as a potential issue. When CNET Australia asked about projects that didn't adhere to Kickstarter's own guidelines, a spokesperson had this to say:
It's easy to criticize someone for not meeting your expectations of what's creative, it's harder try to create something new yourself. The act of trying to bring something new to life is an inspiration. Launching a Kickstarter project takes courage.
And we completely agree — but we found the answer evaded the issue. What about project creators that blatantly mislead backers?
As the company grows and similar services continue to become available, Kickstarter needs to address the ways in which it allows the use and, sometimes, abuse of its platform. From what we've seen, Kickstarter is happy to approve projects that explicitly contravene its own rules, including using funds to purchase real estate. The apparent lack of interest in enforcing these rules, which are designed to protect everyone, hurts backers and IP holders in the short-term and Kickstarter itself in the long-term.
Unfortunately, backers carry all the risk on this platform with no means of redress. eBay uses feedback as a measure of the reliability of users and disputes can be opened against involved parties, should the experience go south — Kickstarter has neither. But the security eBay offers is a core strength of its platform — one which it has improved with time. The feedback system played no small part in its early success. The addition of PayPal and buyer protection ultimately encourages spending.
Recent disputes with Apple and over 'in-app purchases' has shown that users believe a platform should do what it can to protect customers from potential deception. Apple iTunes and Google Play have both changed rules regarding IAPs to protect customers from deceptive practises on the part of app-makers.
A recent story involves John Campbell, an artist who funded his comic book through Kickstarter only to burn over 100 copies instead of mailing them.
I shipped about 75% of Kickstarter rewards to backers. I will not be shipping any more. I will not be issuing any refunds. For every message I receive about this book through e-mail, social media or any other means, I will burn another book.
When asked about whether people were abusing the platform as a means of making a quick buck Kickstarter had this to say:
Kickstarter's mission is to help bring creative projects to life. There's always a value exchange on Kickstarter — in exchange for pledges, backers enjoy rewards, one-of-a-kind experiences, a behind the scenes look at the creative process, and the agency to voice the kind of culture they want to see exist in the world.
The reality is sometimes a 'value exchange' doesn't occur even for successfully backed projects.
In June 2013 a project called Kobe Red, received pledges totalling US$120,309. The fraud was exposed completely by chance by a group making a documentary about Kickstarter. Kickstarter's fee percentage would have meant over $6000 profit due to not verifying a project creator. Its official policy is "At the end of the day use your internet street smarts". This would have been small comfort for the 193 backers who pledged $100 or more. It is astounding there isn't a minimally secure verification process in place to improve creator accountability.
Indiegogo, an alternative crowdfunding platform, takes a proactive approach to dealing with deceptive campaigns. All projects go through a 'fraud review' before going online, and projects deemed a high fraud-risk must provide additional information that satisfies Indiegogo. Successful campaigns then go through a final check before funds are paid. Like Kickstarter, Indiegogo takes no responsibility for the success or failure of backed projects. Yet this hasn't stopped it from tackling the number of deceptive campaigns on its platform, and where possible, preventing backers from being burned.
Close calls and failures to deliver happen, but they're easier to forgive if the right checks are in place. A platform that relies on the goodwill and financial backing of the community, but refuses to protect them with basic safeguards will suffer. Every backer that loses money to projects that fail to deliver will no doubt share their experiences through Facebook, blog posts, Tumblr, word-of-mouth. But that's not the real cost. What it loses is a member of the community. And Kickstarter cannot afford to burn those bridges with current and future users whose pledges ultimately fund its business.