My first encounter with crowd funding (sites like Kickstarter or Indiegogo) came when a friend posted that they had just invested in this cool new watch called a Pebble. It linked to your iPhone and allowed you to see incoming calls or text messages on your watch. I was immediately intrigued and linked to the site, and signed up to invest the amount asked for to receive one of the first watches off the line. When the initial investment deadline was reached, the money was withdrawn from my AMEX account.
If you’re not familiar with crowd funding, it’s a very exciting new means of raising money. Everbody from small startups with a new technology (such as a watch) to producers of a the movie (“Foreign Correspondents” raised the 20 thousand they needed to finish the film) to musical groups (I’ve heard that major labels won’t even consider a band that hasn’t raised money using crowd funding initially) haveused popular sites such as Kickstarter (http://www.kickstarter.com) or Indiegogo(http://www.indiegogo.com) to raise anywhere from $10,000 to millions in funds.
The way systems work is that you comitt to an “investment” of a certain amount that you get something in return for. For lower amounts, it’s often a thankyou or possibly being listed on their website. More, and it can get a copy of their product when it’s available.
For those interested in supporting the arts, this is a wonderful opportunity to literally “put their money where their mouth is”. For those of us who are admitted techno addicts, it’s a fantastic way to get the latest new tech before it reaches the general public.
Therein lies the rub. When you commit to a product, there is a ROUGH ESTIMATE on when it will be shipped to you. Realize that this date is ROUGH and can AND WILL slide by weeks, months, and even years depending on how well developed it was when the funding was originally sought.
Pebble is a perfect example. The original watch was promised to be shipped in the early fall of 2012. Unfortunately, they were a victim of their own success. They had originally asked for $100,000 in startup funding. They got over 10 million! The original production plan had been to produced enough watches for the 100 or possibly 200 thousand dollar funding level. All of a suddent, instead of having to build 1000 or so watches, they needed to manufacter NINTY THOUSAND! This, coupled with the usual delays that occur when you are creating a new product that really is the first of it’s kind, resulted in my getting my watch June of 2013.
That’s not to say I’m not happy with the watch. It’s wunderful. BUT, people often approach products they INVEST in on a crowdfunding site as something they are PURCHASING. There is a BIG difference. The end result is that many companies end up suffering an onslaught of angry investors when their product doesn’t appear in their mailbox on the date promised. Sometimes, there’s justification in this. One product I invested in in 2012 has hit snag after snag after snag it’s development. I was supposed get it in December of 2012. Now, I’m hoping it may arrive by AUGUST of this year. Sadly, it’s designed to fit the iPhone 5 I currently have and I plan to upgrade to the iPhone 6 in October and so it’ll basically be worhtless.
But, in most cases the problems encountered are just part of new product development. IF you decide you really must have that exciting new headset that communicates through the bones in your ears, understand that the date they provide for their product to be shipped is an ESTIMATE and WILL slip. You are NOT buying the product. You are INVESTING in the company and the copy you received is their THANKS for supporting them. If you that whizzy new gadget doesn’t appear on your doorstep on the “date they promised it”, to quote Samuel L. Jackson, “CHILL THE F&*% OUT!” They are doing their best.