11 ms·

"unless the Project Creator is unable or unwilling to fulfill the reward." Read that again. If they haven't fulfilled their explicit promises, a refund is re

by TillE 14y ago

"unless the Project Creator is unable or unwilling to fulfill the reward." Read that again. If they haven't fulfilled their explicit promises, a refund is required.

dljsjr 14y ago
I think my statement was poorly worded. "These folks" = the project people. In other words, they're obligated to refund $170k that they don't have anymore. I've edited to reflect that.
- guiambros 14y ago
  Don't forget Kickstarter and Amazon already took their 5% each, so the authors never saw the full amount, more like $150K. So now they'll have to refund more than they received. But agree with your original comment: if this goes through till the end (with lawsuits and all the drama), it'll be great for Kickstarter. It'll improve the quality and create a much healthier ecosystem. Another project that got really close to a class action was OpenVizsla USB Sniffer. The conversation moved out of Kickstarter into the discussion list that was created by/for backers, but the authors finally showed up and recognized (somewhat) the problems, and are trying to fix it.
  - marshray 14y ago
    if this goes through till the end (with lawsuits and all the drama), it'll improve the quality and create a much healthier ecosystem. I disagree. I think we really need a funding solution where $150k - $170k projects can fail due to poor execution (rather than fraud) without involving lawsuits. As long as everyone is clear about what their money's doing at the outset.
    - Firehed 14y ago
      Isn't that a seed round? I don't see why crowdfunding should be any different than more formal investors here.
      - guiambros 14y ago
        Not at all. Founders (usually) give updates to their investors. They report the progress, ask for help, explain the issues. When things go wrong, usually investors are the first ones to offer help - providing experience, contacts, or sometimes more money. It's their money that is at stake, after all. That's exactly the opposite of failed projects on Kickstarter. Usually (and I'm generalizing here; just using my own sample of 60-70 projects I sponsored, with 5% failure rate or so) the authors simply stop providing updates. They realize they were overly ambitious, or underestimated the costs, or had issues with the team, or simply don't have the competence needed to execute within the time/budget available. Updates become more sparse, and eventually stops. The crowd starts to smell blood and gets angry, digs personal information about the founder, and things get nasty really quick. Just like it happened with the OP, or OpenVizla, or several other pseudo-failed projects. I still think we need one good public failure, with all the drama associated, to clarify to everybody - authors & backers - some very wrong misconceptions about crowdsourcing. Yes, projects CAN fail, and as a backer you have to accept that risk, or wait to buy the product at Amazon. But no, authors cannot simply disappear, run ashamed of their own failure. It doesn't matter if you underestimated the effort, or worked really hard over the weekends, or lost your day job, or life got in the way. Nothing will matter, unless you explain, clearly, to your backers. They may get pissed off, but it's better than the alternative. Authors have to understand that if the ship sinks, you'll have to man up and stay till the end. So be prepared; this is not a free ride, with zero risks. Another thing that would be very positive is to have public financial disclosure. Authors should be required to submit a financial plan explaining how the money will be used - and another one mid-project explain how the money was spent. I'm sure it'd be eye opening, in both ways (people would see how expensive it is to make, say, a game, and authors would think twice before spending every penny).
        Firehed 14y ago
        Ok... but what you described about how traditional investment works is how Kickstarter tells their project-runners to operate. My point was that KS and traditional investment should operate in more or less the same way, especially regarding issues - whether that's simply letting people know they've hit a snag and are working on it, or are asking for advice on the best way to proceed. I realize it's difficult to scale the concept of a seed round to hundreds or thousands of backers, but an email blast to 5-10 is just as easy (or hard) to write as one going to 5000. You just need much better filters on the responses.
    - dragonwriter 14y ago
      A Kickstarter project can fail without lawsuits if the project creator doesn't offer rewards that are dependent on the project succeeding. The problem isn't backers treating Kickstarter as pre-order for the product being developed by the project, its project creators doing that by setting rewards that depend on project success.
      - marshray 14y ago
        But often the rewards seem incidental to the project. For example, "Backers at the $1000 level will get a T-shirt signed by the development staff". The T-shirt and signatures are completely incidental to the project being kick-started, yet the arguments here are as if someone had purchased a T-shirt on Ebay for $1000 and the seller failed to ship.
        dragonwriter 14y ago
        In the case of purely incidental rewards, the project creator ought to provide the rewards independently of the success of the project, and so as close as practical to the date originally estimated: otherwise, given the KS terms of service -- which require fulfillment or a refund, and require a good faith effort to meet the estimated date -- the situation is pretty much exactly analogous, from a legal perspective, to purchasing a T-shirt for $1000 and the seller failing to ship.
        marshray 14y ago
        Yeah, I'm saying that's suboptimal and maybe kinda perverse.
eli 14y ago
So when backing something on Kickstarter you are guaranteed to get either the reward or your money back? I didn't know that.
- callahad 14y ago
  Well, there is a difference between getting your money back and being entitled to your money back...
  - eli 14y ago
    Agreed, but I find that clause surprising. That means that if I'm a recording artist, I would be a fool to make the reward a copy of the finished album because that means that if the album is never completed, the reward cannot be delivered and I would therefore have to refund money I already spent.
    - timbre 14y ago
      No more a fool than an artist who took out a loan to make an album. Business often involves accepting a risk that you won't be able to meet your obligations.
      - ghaff 14y ago
        Except that I've never heard of Kickstarter etc. funds being referred to as a "loan." Which puts a much different complexion on them.
    - timv 14y ago
      Despite how some projects use Kickstarter, if it's done well the risk for your hypothetical is pretty low. If it's a case of "I've written an albums worth of music, but I need $ for studio time, post-production and pressing CDs", then it should be low risk for the artist. You should know how much those things cost, and set your goal accordingly. However, if you want the money to take X months off work and write the music, then go to the studio ..., that will create risk for you. What if you don't get a CD worth of music written in those X months? (Short answer: Just record random crap, nothing says people have to enjoy your rewards) The risks for the producer are: 1) If the project is something that is difficult to cost up-front (like all these games that get funded on KS) 2) Your rewards are things you're inventing just for KS (like T-Shirts). Those things cost you money, that money comes out of your total pool, so you need to put extract capacity into the pool to pay for the production of the extras. Getting that right can be harder than people think. All those KS projects that amount to fund my (team's) time to develop stuff are high risk for both the backers and the producer (if it goes wrong, the producer will owe money, but the backers won't ever get what they're owed) The projects that are about funding the production phase of a project after the producer has poured their own time into the design phase are much more in line with what KS's ToS actually expect.
kayge 14y ago
Unfortunately, I think that statement is written too loosely to hold up in court. It will be too easy for a lawyer to say "my client is both willing and able to fulfill these rewards, he just needs more time/money/etc". Unless there are more specific constraints in the full TOS (which I haven't looked at), this statement won't offer much protection to the backers.
- dllthomas 14y ago
  "He is able, he's just not able"?
  - DigitalJack 14y ago
    I am able to get a degree from a college. I just need more money and time.
    - dllthomas 14y ago
      When talking about abstract capability, sure, but that's never what it means in a legal sense...
- dragonwriter 14y ago
  <blockquote>Unfortunately, I think that statement is written too loosely to hold up in court.</blockquote> I don't think its too loose to hold up at all, but I do think there is some question about how courts will construe timing requirements. Certainly, there is no obligation sooner than the estimated delivery date, but its not entirely clear when a deliver-or-refund demand becomes enforceable. <blockquote>It will be too easy for a lawyer to say "my client is both willing and able to fulfill these rewards, he just needs more time/money/etc". </blockquote> Saying that you need resources (e.g., money) you do not have to meet an obligation is equivalent to saying that you are unable to meet the obligation. Given the way the time conditions are written, demonstrating that more time was needed, and that that time was reasonable in light of the circumstances, and that the creator did not need other resources they didn't have might work.

by TillE 14y ago

"unless the Project Creator is unable or unwilling to fulfill the reward." Read that again. If they haven't fulfilled their explicit promises, a refund is required.

dljsjr 14y ago

I think my statement was poorly worded. "These folks" = the project people. In other words, they're obligated to refund $170k that they don't have anymore. I've edited to reflect that.

guiambros 14y ago
Don't forget Kickstarter and Amazon already took their 5% each, so the authors never saw the full amount, more like $150K. So now they'll have to refund more than they received. But agree with your original comment: if this goes through till the end (with lawsuits and all the drama), it'll be great for Kickstarter. It'll improve the quality and create a much healthier ecosystem. Another project that got really close to a class action was OpenVizsla USB Sniffer. The conversation moved out of Kickstarter into the discussion list that was created by/for backers, but the authors finally showed up and recognized (somewhat) the problems, and are trying to fix it.
- marshray 14y ago
  if this goes through till the end (with lawsuits and all the drama), it'll improve the quality and create a much healthier ecosystem. I disagree. I think we really need a funding solution where $150k - $170k projects can fail due to poor execution (rather than fraud) without involving lawsuits. As long as everyone is clear about what their money's doing at the outset.
  - Firehed 14y ago
    Isn't that a seed round? I don't see why crowdfunding should be any different than more formal investors here.
    - guiambros 14y ago
      Not at all. Founders (usually) give updates to their investors. They report the progress, ask for help, explain the issues. When things go wrong, usually investors are the first ones to offer help - providing experience, contacts, or sometimes more money. It's their money that is at stake, after all. That's exactly the opposite of failed projects on Kickstarter. Usually (and I'm generalizing here; just using my own sample of 60-70 projects I sponsored, with 5% failure rate or so) the authors simply stop providing updates. They realize they were overly ambitious, or underestimated the costs, or had issues with the team, or simply don't have the competence needed to execute within the time/budget available. Updates become more sparse, and eventually stops. The crowd starts to smell blood and gets angry, digs personal information about the founder, and things get nasty really quick. Just like it happened with the OP, or OpenVizla, or several other pseudo-failed projects. I still think we need one good public failure, with all the drama associated, to clarify to everybody - authors & backers - some very wrong misconceptions about crowdsourcing. Yes, projects CAN fail, and as a backer you have to accept that risk, or wait to buy the product at Amazon. But no, authors cannot simply disappear, run ashamed of their own failure. It doesn't matter if you underestimated the effort, or worked really hard over the weekends, or lost your day job, or life got in the way. Nothing will matter, unless you explain, clearly, to your backers. They may get pissed off, but it's better than the alternative. Authors have to understand that if the ship sinks, you'll have to man up and stay till the end. So be prepared; this is not a free ride, with zero risks. Another thing that would be very positive is to have public financial disclosure. Authors should be required to submit a financial plan explaining how the money will be used - and another one mid-project explain how the money was spent. I'm sure it'd be eye opening, in both ways (people would see how expensive it is to make, say, a game, and authors would think twice before spending every penny).
      - Firehed 14y ago
        Ok... but what you described about how traditional investment works is how Kickstarter tells their project-runners to operate. My point was that KS and traditional investment should operate in more or less the same way, especially regarding issues - whether that's simply letting people know they've hit a snag and are working on it, or are asking for advice on the best way to proceed. I realize it's difficult to scale the concept of a seed round to hundreds or thousands of backers, but an email blast to 5-10 is just as easy (or hard) to write as one going to 5000. You just need much better filters on the responses.
  - dragonwriter 14y ago
    A Kickstarter project can fail without lawsuits if the project creator doesn't offer rewards that are dependent on the project succeeding. The problem isn't backers treating Kickstarter as pre-order for the product being developed by the project, its project creators doing that by setting rewards that depend on project success.
    - marshray 14y ago
      But often the rewards seem incidental to the project. For example, "Backers at the $1000 level will get a T-shirt signed by the development staff". The T-shirt and signatures are completely incidental to the project being kick-started, yet the arguments here are as if someone had purchased a T-shirt on Ebay for $1000 and the seller failed to ship.
      - dragonwriter 14y ago
        In the case of purely incidental rewards, the project creator ought to provide the rewards independently of the success of the project, and so as close as practical to the date originally estimated: otherwise, given the KS terms of service -- which require fulfillment or a refund, and require a good faith effort to meet the estimated date -- the situation is pretty much exactly analogous, from a legal perspective, to purchasing a T-shirt for $1000 and the seller failing to ship.
        marshray 14y ago
        Yeah, I'm saying that's suboptimal and maybe kinda perverse.

eli 14y ago

So when backing something on Kickstarter you are guaranteed to get either the reward or your money back? I didn't know that.

callahad 14y ago
Well, there is a difference between getting your money back and being entitled to your money back...
- eli 14y ago
  Agreed, but I find that clause surprising. That means that if I'm a recording artist, I would be a fool to make the reward a copy of the finished album because that means that if the album is never completed, the reward cannot be delivered and I would therefore have to refund money I already spent.
  - timbre 14y ago
    No more a fool than an artist who took out a loan to make an album. Business often involves accepting a risk that you won't be able to meet your obligations.
    - ghaff 14y ago
      Except that I've never heard of Kickstarter etc. funds being referred to as a "loan." Which puts a much different complexion on them.
  - timv 14y ago
    Despite how some projects use Kickstarter, if it's done well the risk for your hypothetical is pretty low. If it's a case of "I've written an albums worth of music, but I need $ for studio time, post-production and pressing CDs", then it should be low risk for the artist. You should know how much those things cost, and set your goal accordingly. However, if you want the money to take X months off work and write the music, then go to the studio ..., that will create risk for you. What if you don't get a CD worth of music written in those X months? (Short answer: Just record random crap, nothing says people have to enjoy your rewards) The risks for the producer are: 1) If the project is something that is difficult to cost up-front (like all these games that get funded on KS) 2) Your rewards are things you're inventing just for KS (like T-Shirts). Those things cost you money, that money comes out of your total pool, so you need to put extract capacity into the pool to pay for the production of the extras. Getting that right can be harder than people think. All those KS projects that amount to fund my (team's) time to develop stuff are high risk for both the backers and the producer (if it goes wrong, the producer will owe money, but the backers won't ever get what they're owed) The projects that are about funding the production phase of a project after the producer has poured their own time into the design phase are much more in line with what KS's ToS actually expect.

kayge 14y ago

Unfortunately, I think that statement is written too loosely to hold up in court. It will be too easy for a lawyer to say "my client is both willing and able to fulfill these rewards, he just needs more time/money/etc". Unless there are more specific constraints in the full TOS (which I haven't looked at), this statement won't offer much protection to the backers.

dllthomas 14y ago
"He is able, he's just not able"?
- DigitalJack 14y ago
  I am able to get a degree from a college. I just need more money and time.
  - dllthomas 14y ago
    When talking about abstract capability, sure, but that's never what it means in a legal sense...
dragonwriter 14y ago
<blockquote>Unfortunately, I think that statement is written too loosely to hold up in court.</blockquote> I don't think its too loose to hold up at all, but I do think there is some question about how courts will construe timing requirements. Certainly, there is no obligation sooner than the estimated delivery date, but its not entirely clear when a deliver-or-refund demand becomes enforceable. <blockquote>It will be too easy for a lawyer to say "my client is both willing and able to fulfill these rewards, he just needs more time/money/etc". </blockquote> Saying that you need resources (e.g., money) you do not have to meet an obligation is equivalent to saying that you are unable to meet the obligation. Given the way the time conditions are written, demonstrating that more time was needed, and that that time was reasonable in light of the circumstances, and that the creator did not need other resources they didn't have might work.