The Kickstarter Plague: Why You Should Stop Paying for Crowdfunded Photography Gear

The Kickstarter Plague: Why You Should Stop Paying for Crowdfunded Photography Gear

In theory, crowdfunding seems like one of the beautiful perks of the Internet: any entrepreneur with an idea and the will to bring it to fruition can receive the financial support of interested patrons from all around the world, and in return, those patrons get early and/or discounted access to an exciting new product. The reality is rarely so rosy, and as a consumer, you need to be aware of that. 

The Idea

It's not easy getting your idea off the ground as an entrepreneur, and if you need funds to complete it, getting it in front of the right people is a difficult task by itself. And so, the idea of a platform on which you can broadcast it to the world, where anyone can happen upon your idea and support it, is certainly enticing. And on the purest level, I think it's great: give the little person a chance to step on the same stage as everyone else. Isn't that one of the Internet's greatest attributes? But, like all things in life, when you mix in money, things get complicated really quickly. 

Entrepreneurial pursuits are incredibly difficult, even more so when it's a one-person show (or close to it). There's budgeting, reporting to investors, public relations, product development, manufacturing, research, advertising, logistics — a veritable multitude of aspects, the failure of any one of which can doom a project. It's a lot for any person or small company to handle. What makes it even more difficult is that the leveled playing field of the Internet has a negative consequence: it lets unqualified people sit at the same table. And even if they have the best of intentions, that's a real problem.

The Scam (or the Miscalculation)

Do you remember the Coolest Cooler? It was supposed to be the the cooler of the future, with features like a built-in blender, Bluetooth speaker, and more. It broke the Kickstarter record, raising a whopping $13 million. Then, the story took a turn we've all likely heard before: first, the company issued a message saying "nothing ever goes exactly as planned," but promising backers that they would receive their units. Next, the delivery date was delayed. Then delayed again. And again. Then, a strike at the blender motor factory delayed it again. Somehow though, the cooler appeared on Amazon, with those who bought it there receiving units before the original backers. When backers were understandably incensed by this, the company justified by saying the hiked price on Amazon was being used to fund production for the original backers. Then, there was an additional delay.

Then, in March 2016, there was the seemingly inevitable announcement, followed by a proposition insulting in its ludicrousness: the company was out of money and needed an additional $15 million. If backers paid an extra $97, they could ensure the delivery of their device by July 4, 2016. Over 10,000 backers paid the amount. The company claimed to have shipped to the 10,000 backers who paid extra, but there were still tens of thousands who were with nothing to show.

That's when something rare in the crowdfunding world happened: the Oregon Department of Justice got involved, setting a deadline for the 873 Oregonian backers to receive their units, and requiring profits from future sales to be set aside for the other 19,000 customers. As if a proverbial middle finger to those who had the alleged audacity to complain about the company's handling of the situation, a recent comment from Ryan Grepper, the creator of the campaign, reads: "...we’re not happy that some folks pushed to the front of the line," referring to those who went to the DOJ. Strange sentiment from a company that failed to deliver what they committed to. In a since-removed video for an investment platform, Grepper referred to crowdfunding as a "pledge drive" of "money that never has to be paid back." Does the whole thing seem shady yet?

Now, in fairness, I'm not saying every failed crowdfunding campaign is a scam. In 2014, I backed a photography Kickstarter for a photography accessory I thought would be interesting. I saw email and email of the typical nature: delays, setbacks, and finally, silence. I shrugged it off, knowing I had assumed the risk and I hadn't spent a huge amount, so I wasn't horribly upset. Imagine my surprise when I saw a review of that very product right here on Fstoppers three years later, with a link to it being sold on Amazon and the maker's site. Disappointment tempered by benefit of the doubt quickly turned to anger. The creator told me things were "crazy" during the Kickstarter phase. No offense, but maybe you shouldn't be taking people's money then.

Whether I was scammed or overlooked, I don't know. I've seen projects on crowdfunding sites that show a creator unknowingly way over their head, asking for way too little funding for way too complex a project. Some failures aren't out of shady intentions, merely out of biting off more than one can chew. Either way, the result is the same for the backers. 

Photography equipment is really complicated stuff that takes huge teams of specialists to bring to the market. (Image by Pexels user Math, used under Creative Commons.)

And my experience (specifically when it comes to photography-related crowdfunding projects) is far from unique. A quick Google search will bring up story after story of projects that raised multiple times their monetary goals and never delivered a product or delivered it literally years late, rendering it obsolete by the time it hit the backers' doorsteps. At the end of the day, I'm not concerned about my $55; I'm concerned about a sub-culture of high risk and low accountability becoming normalized within the photography industry.

I spoke to Fstoppers Co-Founder Patrick Hall about when he and fellow Co-Founder Lee Morris developed the Fstoppers Flash Disc. It took two years of prototypes and patents, all done with their own money, highlighting just how difficult it is to bring a product from idea to market, though they were successful. I think this is where other well-meaning entrepreneurs get in over their head. The human mind tends to oversimplify things it doesn't understand well or has little experience in, so when that amazing idea strikes the entrepreneur, the path from the mind to the product on the shelf can often seem much shorter and straighter than it actually is. The problem with crowdfunding is that it removes a lot of the chances for feedback that says: "You're biting off more than you can chew. You need to modify this plan. You need someone to assist you." And it's not just first-timers who have failed. Well-known companies with established histories have gone the crowdfunding route and failed, sometimes with the entire company going under in the process.

Recourse (If Any)

Ok, so what recourse do backers have when a project goes south? Let's use Kickstarter as an example. Navigating their site, you'll come across the following tidbits:

  • "Some projects won't go as planned. Even with a creator's best efforts, a project may not work out the way everyone hopes. Kickstarter creators have a remarkable track record, but nothing's guaranteed." (Note: what exact percentage constitutes "remarkable" is unknown.)
  • "Is a creator legally obligated to fulfill the promises of their project? Yes. Kickstarter's Terms of Use require creators to fulfill all rewards of their project or refund any backer whose reward they do not or cannot fulfill... We hope that backers will consider using this provision only in cases where they feel that a creator has not made a good faith effort to complete the project and fulfill." 
  • "Can Kickstarter refund the money if a project is unable to fulfill? No. Kickstarter doesn't issue refunds, as transactions are between backers and the creator. "

So, what does all this boil down to in plain language? To me, it basically reads like this (feel free to call me a cynic):

Yes, things don't always go well on Kickstarter. Technically, creators are legally obliged to fulfill their commitments, but we hope you won't resort to legal action unless you've legitimately been scammed, as it makes us look bad. Also, we're just here to take a cut for providing a platform; if you have issues, file a civil suit against the project's creator.

Why It's Different Online

So far, I haven't really said anything that distinguishes online crowdfunding from the more traditional route: yes, ideas sometimes fail. Sometimes, people are scam artists. Sometimes, they're just in over their heads. Why am I singling out the Internet? 

Well, because as much as the Internet acts as a platform for enabling entrepreneurs, it acts as a buffer for recourse. If someone in my city comes to me and wants me to invest in the sports bar they're building, I have a chance to ask for more materials before I make a decision. I can get a feel for the person and if I think they really understand what they're undertaking. I can sign a contract specific to that project. I can visit the site and see the progress. I can (hopefully) get them on the phone or see them in person. I can see how the money is being spent more easily. There is a stronger and more immediate network of accountability. And that increased pressure of accountability not only ensures that funds are being used wisely, it enables easier and more powerful recourse if things go awry.

On the other hand, online, I'm stuck only with a video persona (if that even) and the sort of loose accountability practices I outlined above, along with a greatly increased difficulty and inconvenience in enforcing my rights. Am I going to track down the creator of that accessory I paid $55 for because I never received mine despite the company now making profits on it? No, that would be way more time and money than my initial investment justifies. The same goes for those who backed those $185 coolers, I suspect. And because the Internet connects us worldwide, it becomes an even greater issue if things go badly with international borders between the creators and backers — enough so to make it so the vast majority of projects can get away with not delivering, whether that be because of nefarious actions or simply failing despite the best intentions. And even if those intentions were good, it's hard to really evaluate how qualified a person is from a few paragraphs and perhaps a flashy video.

It's easy to hide behind a screen – too easy. (Image by Pixabay user 27707, used under Creative Commons.)

Simply put, the gamble is much, much bigger online, and I think that's becoming clearer as we see more and more entrepreneurs flock to crowdfunding when in all honesty, even if they mean well, they might not be qualified to undertake the projects they're putting out there. And yes, it all comes back to two simple words: Buyer beware. But even if we accept the risk as individuals, we're helping to fund a burgeoning culture of increased risk and decreased accountability, and that stagnates good business practice and proper customer relations. Because of that, I've stopped supporting crowdfunding, at least until more stringent mechanisms are put in place.

Lead image by Peter Heeling, used under Creative Commons.

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31 Comments

Michael Aubrey's picture

I'm sympathetic, but I've also had several excellent projects go through and end up being even better than expected.

In the coffee world, Handground, while delayed, ended up producing a coffee grinder than is competitive with much more expensive electric burr grinders above and beyond anything I've seen from any other hand grinder.

Chad D's picture

and there is OE or Orphan Espresso hand grinders :)
beat the pants off anything else in the hand grind world :)

Michael Aubrey's picture

Those are mythical creatures for my budget! But I'll continue dreaming!

Chad D's picture

YUP

I just sold my Elektra A3 machine I slowed way down on coffee use my aeropress these days and thought about getting another good moka pot of some kind
do plan on selling my mazzer and using the funds for a nice hand grinder

but also the reality is for things like the aeropress or pour over one can go overkill on grinding and do think there is a bit of the I put $4000 wheels on my $10,000 car scenario in the espresso coffee world :) folks get just a touch into the OH 16.5 grams is better than 16 :) me I just dump what looks good and go for it I tried to get caught up a bit for fun but my reality was in the end does not matter as much as some make it out :)

kinda funny how I am going backwards now that I was on top and found its more about the morning ritutal of a drink I make in the end :)

my hand grinder is one of the Hario and it leaves a lot to be desired but works OK for camping but do want a nicer one when I sell the mazzer

Michael Comeau's picture

The problem with many of these Kickstarters is simple: the people coming up with these great ideas typically don't have any experience manufacturing physical products.

These so-called "partners" that actually produce the goods will promise the world up front to get the contract... and I'm sure you can guess what happens next.

I bought a photo backpack off a Kickstarter. The product quality was fine, but the marketing was deceptive and it definitely didn't function as described.

Never again.

If you want me to fund your startup, give me a piece of your company.

I agree. The only exception I make is if it is an iteration of a previous product like when I pledged to Font Awesome's kickstarter for v5. They hit some bumps in the road but we were along for the ride since we had access to the Github for it.

Rob Wolsky's picture

"If you want me to fund your startup, give me a piece of your company."

That says it all doesn't it! I think it is wonderful that the internet has created real "communities" for creatives and entrepreneurs and an inclusive and trusting culture. But that all means a hill of beans when millions of dollars are changing hands. I frankly do not understand the allure of pre-ordering a product that does not exist from a manufacturer that either has no experience actually manufacturing anything or could simply bring the product to market in a business-as-usual manner.

Chad D's picture

never bought off and never will

I think also many see it when it goes viral and thinks OH WOW next best thing and in reality when you look around and research there is already a product that beats the pants off this and has a proven track record and most likely also went through many revisions to get better and better along the way

very very very few products come out of the gate perfect and often the 2nd or 3rd gen is where they get good

Nic Hilton's picture

This is so true. I've seen things go viral that exceeded their kickstarter goals, and the product already exists from another company??

Joel Cleare's picture

Agreed. I wont buy anything unless ive seen a few reviews of the product. I would rather pay full price than get a discount on an untested and unavailable product.

Fegelah Boychic's picture

Going the route of your States DOJ or consumer advocate or attorney general is the way to go to have them charged with fraud in your blender case.

BTW, a very well written article, in fact the best I've seen on this subject.

It will vary from state to state though. Usually when something like this happens I contact both my state's AG and the AG of the state the company is in. Unless they've changed their laws recently, California'a AG is not empowered to act based on consumer complaints and such. They still want you to report the stuff to them because it helps them in other ways, but a report to them won't result in direct action versus another state like Michigan.

Fritz Asuro's picture

I still think Kickstarter is just another way of investing to a company. It's just the "old" ways were just tried and tested. Just give it a little time and it would be more safer and reliable.
And with any business investment, direct or vice versa, risk is always a part of it.

I have recently pledged on a camera backpack. It's their second iteration of the product and that gave me the confidence to proceed on backing them up.

*I don't have a business degree. Took architecture, please don't judge me by my opinion.

Anonymous's picture

It's not investment. It's basically the equivalent a charitable donation (minus that tax write-off). If you invest in a company, you either get part of the company itself in exchange or you have a legal recourse for recouping your investment if the company balks at paying you back. In the event that everything goes wrong, you can still get back some of your investment from liquidation. With crowdfunding, you don't have any of these. It's literally giving free money to a company more often than not in exchange for the promise of purchasing a product below retail price in the form of a "reward".

Companies on Kickstarter are basically pan handling in order to get their product off the ground, putting 100% of the financial risk on the backers while assuming all of the financial benefits if the project is successful. What kind of "investment" is that?

A lot of times, it can be worth it, tho. I backed Laowa to produce their 12mm lens and the shift adapter, and even thought it took a while, I'm very happy with what they came up with and it cost me less than buying it upfront. Some projects go wrong, but being careful what project you fund, you can get things that would not be available otherwise, and for a decent price.

Anonymous's picture

Not all Kickstarter projects are created equal. I think that the author is primarily talking about one-off projects started by relatively unknown entities.

For instance, when a company like Lomography does a Kickstarter, it's generally just an avenue for marketing research (checking demand), advertising and pre-sales rather than an actual attempt to get funding to develop the product. Lomography is a known entity and has been successfully operating a business beyond whatever Kickstarter project that they have going on at any given point. A company like that has much more on the line to lose by not delivering on campaign promises than the average company whose sole business is the project that they're trying to fund and can easily disappear. So while, technically, you could still get screwed by a Lomography Kickstarter project, it's a lot less likely to happen.

Yeah, that's part of what I meant by being careful which projects you choose to endorse. One that I'm pretty excited about is Arsenal, mostly because I'd love to have something like a Camranger for my Sony camera (in camera wifi doesn't have a very good range).

Spy Black's picture

Unfortunately Kickstarter is a crap shoot. If you're gamblin' man (or gal) you might find it exciting and enticing.

cameramanDop Shanghai Hong Kong's picture

The irony
How many articles on this blog are Kickstarter product announcement and contribute to found these? (and got people losing their money at the end)?
-I have found more 600 of these links articles here]

Alex Cooke's picture

Not an irony. We changed our policy because of this exact issue and no longer allow writers to submit articles about crowdfunding projects unless approved by an editor, which almost never happens.

cameramanDop Shanghai Hong Kong's picture

I wish more website could follow this rule.

Jonathan Brady's picture

Kickstarter is an odd concept for me. Either, you're an first-timer in the world of product creation/marketing/selling, in which case I highly doubt you're going to be able to do what you say, or you're an established business, in which case I'm skeptical of why you're not pursuing a more traditional method to delivering a product to market (you want an interest-free loan). In either case, I'm not interested in backing you.

I've only ever backed one thing on Kickstater... Font Awesome 5. I did it a) to get a Pro license at 50% of the cost, and b) because I knew the crew over at FA were legit since the previous versions are just about everywhere on the web. With over $1,000,000 pledged, it was the largest software kickstarter ever funded. Not to mention their promotional video for it was all over the web.

They were late in releasing the product but that actually was because of some technical difficulties that they ran into but we actually could see it. Backers had access to the private repository where it was being developed and could test and offer feedback as it progressed. And speaking from experience, I would much rather have a product that's delayed for quality reasons than have something rushed out just to meet a deadline. And some of the features are not quite ready such as the CDN access, customizer, and some of the additional icon packs, but I'm patient.

Quinn Wilson's picture

The only time I'm really willing to put my money on the line is if it's a fellow student's work that I know and care for. I don't have a lot of money to just 'give away and hope something great will happen', so entrepreneurs and photogs that I see online won't get my attention. (They probably don't care, as my donation amount is minuscule anyways.) I remember a lot of my friends getting disappointed time and time again by Kickstarting various video games. This seems like a rehash of that. It's a shame people and companies keep to their word! Hence why I stick with friends and family. I'd rather GoFund a fellow student to shoot in France than someone I don't know...so long as I like their work, that is.

Manfred Mueller's picture

Carefully said, I have looked at a number of Kickstarter projects and have found that I would not invest in the idea for three reasons (i) the people who were planning to produce something had no track record or (ii) the ones that had a track record were not making something I would be interested in owning or (iii) they were working on a product that was a "me too" product and were going up against well established competitors (nicely said the product was already out there at a reasonable price for me to want to take a chance on a new product).

I remember looking at a couple of products and commenting on what I saw as serious to "fatal" flaws in the ideas. In one case the group listened to my comments and actually ended up producing the product and in another case I was told I didn't know what I was writing about and the last time I checked, the product is still not on the market (which is a good thing as it cannot work as designed).

Purely the design, prototyping and productionalization of a design takes a lot longer and a lot more resources than most people can imagine. It requires an integrated team (with the right types of skills) to pull it off and to get it out the door as a final product. First-off designs (which most Kickstarter projects end up being) are rarely "optimized" and cost more to make and don't work as well as hoped for. Hint: I would not recommend buying a first generation product unless it comes from a very well established group that have done this type of work before. Working with a supply chain that one cannot control (not everything can be done in-house and there is a great reliance on third party suppliers who may or may not be able to pull of their part of the project).

How do I know this? I'm a mechanical engineer that worked in / lead design teams as well as the production teams doing exactly this type of work for 35 years. Most of what I see on Kickstarter scares me because the groups don't seem to understand the complexity of moving from high-level concept to a shipable product that can be supported once it has been released out into the wild (hint - just getting it out the door isn't enough; customer support, repairs, returns, etc, are all part of what the customer expects).

michael buehrle's picture

what i don't understand is why well established companies need to do this (well i know the reason, they don't wanna pay to develop the product). never mind...............

Jonathan Brady's picture

It's an interest-free loan with no requirement to repay and comes with few-to-zero repercussions if it fails.

Joel Cleare's picture

Invest in yourself and retire comfortable. Quit spending money on B.S. and put that money into a retirement account.

Dan Marchant's picture

Drives me mad when I read "we are determined to produce the best XYZ ever"
As if the guys who spent 5 years learning how to actually make stuff weren't/aren't determined, dedicated AND experienced.

Oliver Scheffer's picture

I've backed two successful campaigns. The first one was a camera hand strap and the second a colorimeter. That one was scheduled for release in 2016, alas it got delayed for about a year. But in the end I've got the product for half the price. Furthermore I participated in a prize competion of that company and won another colorimeter. Since that also happened over a year ago, I had to remind them of my prize, though.
Altogether I backed these campaigns because I really wanted to have the products. But because of the risks involved I'd only invest small sums, the colorimeter was already borderline.

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