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Kickstarter Updates Terms of Use Section Related to Failed Projects

prawn 12y ago
Instead of just trying to remove themselves from the process for legal reasons, surely they're at the size where they could entertain providing project managers to help coach entrepreneurs through their venture? It's not like YC steps back and abandons each batch to see who survive, they coach them through to maximise success. If a Kickstarted project is tackling manufacturing of a physical product for the first time, they risk making the same mistakes as others before them. YC in a case like that would put entrepreneurs in touch with advisers or others who've gone before them who learnt from their experience. Or is this something they already do? Kickstarter hasn't been opened up to Australian projects until recently, so I'm not sure.
- delecti 12y ago
  As far as I've heard, projects have the option to receive coaching/review of their campaign before it goes live. Essentially you can click a box that says "don't worry, I've got this", and just go live with what you've got, or you can opt to receive coaching similar to what you've described. In that case, someone from Kickstarter will review your campaign, and offer suggestions to get the best results. I don't believe there's any post-campaign coaching though, and in that regard you're right that it might be in their best interest to do so.
- subdane 12y ago
  KS currently is just a platform to match backers to projects - more like Ebay than YC. But, you're onto something here. Maybe they start a guidebook? Or a certification program? Or a community (like HN)? Or a school?
- janetic 12y ago
  Kickstarter does a quick review of projects to make sure they meet their project guidelines/rules, and provides a Creator Handbook, but is otherwise pretty hands-off. I think from Kickstarter’s perspective, it doesn’t make a ton of sense to move into what would effectively be the management consulting space with projects - it would represent a huge expense on their end for no real reward (YC operates by investing in their companies and then giving them various tools to succeed; Kickstarter is a platform with no investment in whether or not projects are ultimately successful). Obviously they have some interest in projects being successful to maintain the credibility of the platform, but that seems to have largely self-regulated (a few bad apples get lots of press, but a foray into the unsuccessful projects reveals the power of group vetting). IMO, expanding post-campaign creator support is something that would greatly enhance the ‘Kickstarter community,’ and somewhere they currently fall down, especially for tech and gaming projects that tend to be some of their highest earners, and also most susceptible to problems in delivery. That sort of service might find a home at Indiegogo, which is far more company/startup-friendly. The new guidelines are definitely a step in the right direction, and represent a clearer understanding on the part of KS with regard to what’s possible for creators who truly try, and simply fail. Shifting the focus to reparative measures like providing expense breakdowns, alternate plans, explanations, etc. seems more inline with the idea(l) that creators and backers are all part of the project, sharing in the risk and reward.
drawkbox 12y ago
The key section: https://www.kickstarter.com/terms-of-use#section4 https://www.kickstarter.com/terms-of-use#section4 "The creator is solely responsible for fulfilling the promises made in their project. If they’re unable to satisfy the terms of this agreement, they may be subject to legal action by backers."
ghaff 12y ago
These new terms of use seem more realistic in one area. The prior terms stated: "Project Creators are required to fulfill all rewards of their successful fundraising campaigns or refund any Backer whose reward they do not or cannot fulfill." The new terms state: "If the problems are severe enough that the creator can't fulfill their project, creators need to find a resolution. Steps should include offering refunds, detailing exactly how funds were used, and other actions to satisfy backers." In my book, this is more in keeping with the reality of a project that (honestly) failed. If the money's gone and things just didn't work out for whatever reason, it's just not realistic to expect all funds to be returned. If the person or persons doing the project had this kind of financial reserve, why would they even use Kickstarter, other than as a marketing tool? I'm not sure how much difference the new terms will make in practice but they do soften a black and white rule that, frankly, shaded Kickstarters more toward pre-orders than speculative project backing. Edit: As noted elsewhere, the new terms also explicitly further remove Kickstarter from imposing any specific requirements if projects fail--and therefore any implications of a role in enforcing said requirements.
- janetic 12y ago
  Totally agree - both that the new terms are more closely aligned with the idea of a Kickstarter project (and the creator-backer relationship) and that their real effect will probably be pretty minimal. What I find compelling is the softening of the ‘refund’ language - I think that the notion of refunds is sort of at odds with the idea of a project being sort of a joint effort between creators and backers for the reason you mentioned. Emphasizing the communication/accountability reinforces the collaborative creator/backer relationship that exists elsewhere in the site (like in their deliberate naming of ‘backers,’ ‘creators,’ ‘rewards,’ etc.). It encourages backers to think of themselves of investors taking a risk because the believe in something, rather than consumers. To me that’s definitely more compelling and a huge part of the value of crowdfunding platforms as a funding mechanism that is changing the relationship between consumers and the things (products, games, artwork, etc.) we consume. In reality, most people will only be perusing the ToS as it pertains to refunds once they’re already agitated and are looking for their legal recourse. If the relationship between a project and its backers has already eroded, I’m skeptical of the impact of wording changes in the ToS that don’t concretely impact anyone’s obligations. For those interested in the space, though, it does let us speculate about what Kickstarter is thinking about, and what pains it perceives.
ChuckMcM 12y ago
This is a good update, I know that if I were running a Kickstarted package I'd create a fully auditable expense ledger so that in the event it was impossible to complete I could provide a complete record of all expenses. Scanning everything is pretty trivial these days, something like Evernote can organize it, although a think a sort of "Evernote - Kickstarter Edition" would actually be a really interesting project. Basically a tool that captures everything into a repository that can be burned on to a self contained DVD at the completion of the project, even if it was successful the resulting database would be an epic way of figuring out a better way to do it next time.
- reboog711 12y ago
  If you want to use Evernote to keep track of the financial records of a business; you may want to reconsider starting a business. At least until you learn a bit more...
  - ChuckMcM 12y ago
    One of the things I like about Evernote is that its "notebooks" databases are just sqlite DB files. You can take them apart with a variety of tools, and they are easy to back up and move around. What I don't like about QuickBooks (which I've also got) is that its data bases are rather opaque. You can copy them and back them up but the format changes more often than I like and I don't have any third party tools that can open them. That said, lots of businesses trust their business to Quickbooks (I mostly use it to track expenses so they are easy to import into TurboTax) What is it about Evernote that makes it a problem in your mind? (other than perhaps it doesn't really have any sort of ledger function like Quickbooks does)
    - typicalrunt 12y ago
      You should try Ledger [1] if you want transparent data formats and ease of use. I've been using it for years to track both personal and corporate expenses. [1] http://www.ledger-cli.org http://www.ledger-cli.org
btown 12y ago
The new FTC rule the article links may be of interest to others in the e-commerce space, especially those with drop-shipping or custom-made products: http://www.business.ftc.gov/documents/bus02-business-guide-mail-and-telephone-order-merchandise-rule http://www.business.ftc.gov/documents/bus02-business-guide-m... > The Rule requires that when you advertise merchandise, you must have a reasonable basis for stating or implying that you can ship within a certain time. If you make no shipment statement, you must have a reasonable basis for believing that you can ship within 30 days. That is why direct marketers sometimes call this the "30-day Rule." > If, after taking the customer’s order, you learn that you cannot ship within the time you stated or within 30 days, you must seek the customer’s consent to the delayed shipment. If you cannot obtain the customer’s consent to the delay -- either because it is not a situation in which you are permitted to treat the customer’s silence as consent and the customer has not expressly consented to the delay, or because the customer has expressly refused to consent -- you must, without being asked, promptly refund all the money the customer paid you for the unshipped merchandise. It's worth reading over the document in its entirety - lots of interesting points and details.

prawn 12y ago

Instead of just trying to remove themselves from the process for legal reasons, surely they're at the size where they could entertain providing project managers to help coach entrepreneurs through their venture? It's not like YC steps back and abandons each batch to see who survive, they coach them through to maximise success. If a Kickstarted project is tackling manufacturing of a physical product for the first time, they risk making the same mistakes as others before them. YC in a case like that would put entrepreneurs in touch with advisers or others who've gone before them who learnt from their experience. Or is this something they already do? Kickstarter hasn't been opened up to Australian projects until recently, so I'm not sure.

delecti 12y ago
As far as I've heard, projects have the option to receive coaching/review of their campaign before it goes live. Essentially you can click a box that says "don't worry, I've got this", and just go live with what you've got, or you can opt to receive coaching similar to what you've described. In that case, someone from Kickstarter will review your campaign, and offer suggestions to get the best results. I don't believe there's any post-campaign coaching though, and in that regard you're right that it might be in their best interest to do so.
subdane 12y ago
KS currently is just a platform to match backers to projects - more like Ebay than YC. But, you're onto something here. Maybe they start a guidebook? Or a certification program? Or a community (like HN)? Or a school?
janetic 12y ago
Kickstarter does a quick review of projects to make sure they meet their project guidelines/rules, and provides a Creator Handbook, but is otherwise pretty hands-off. I think from Kickstarter’s perspective, it doesn’t make a ton of sense to move into what would effectively be the management consulting space with projects - it would represent a huge expense on their end for no real reward (YC operates by investing in their companies and then giving them various tools to succeed; Kickstarter is a platform with no investment in whether or not projects are ultimately successful). Obviously they have some interest in projects being successful to maintain the credibility of the platform, but that seems to have largely self-regulated (a few bad apples get lots of press, but a foray into the unsuccessful projects reveals the power of group vetting). IMO, expanding post-campaign creator support is something that would greatly enhance the ‘Kickstarter community,’ and somewhere they currently fall down, especially for tech and gaming projects that tend to be some of their highest earners, and also most susceptible to problems in delivery. That sort of service might find a home at Indiegogo, which is far more company/startup-friendly. The new guidelines are definitely a step in the right direction, and represent a clearer understanding on the part of KS with regard to what’s possible for creators who truly try, and simply fail. Shifting the focus to reparative measures like providing expense breakdowns, alternate plans, explanations, etc. seems more inline with the idea(l) that creators and backers are all part of the project, sharing in the risk and reward.

drawkbox 12y ago

The key section: https://www.kickstarter.com/terms-of-use#section4 https://www.kickstarter.com/terms-of-use#section4 "The creator is solely responsible for fulfilling the promises made in their project. If they’re unable to satisfy the terms of this agreement, they may be subject to legal action by backers."

ghaff 12y ago

These new terms of use seem more realistic in one area. The prior terms stated: "Project Creators are required to fulfill all rewards of their successful fundraising campaigns or refund any Backer whose reward they do not or cannot fulfill." The new terms state: "If the problems are severe enough that the creator can't fulfill their project, creators need to find a resolution. Steps should include offering refunds, detailing exactly how funds were used, and other actions to satisfy backers." In my book, this is more in keeping with the reality of a project that (honestly) failed. If the money's gone and things just didn't work out for whatever reason, it's just not realistic to expect all funds to be returned. If the person or persons doing the project had this kind of financial reserve, why would they even use Kickstarter, other than as a marketing tool? I'm not sure how much difference the new terms will make in practice but they do soften a black and white rule that, frankly, shaded Kickstarters more toward pre-orders than speculative project backing. Edit: As noted elsewhere, the new terms also explicitly further remove Kickstarter from imposing any specific requirements if projects fail--and therefore any implications of a role in enforcing said requirements.

janetic 12y ago
Totally agree - both that the new terms are more closely aligned with the idea of a Kickstarter project (and the creator-backer relationship) and that their real effect will probably be pretty minimal. What I find compelling is the softening of the ‘refund’ language - I think that the notion of refunds is sort of at odds with the idea of a project being sort of a joint effort between creators and backers for the reason you mentioned. Emphasizing the communication/accountability reinforces the collaborative creator/backer relationship that exists elsewhere in the site (like in their deliberate naming of ‘backers,’ ‘creators,’ ‘rewards,’ etc.). It encourages backers to think of themselves of investors taking a risk because the believe in something, rather than consumers. To me that’s definitely more compelling and a huge part of the value of crowdfunding platforms as a funding mechanism that is changing the relationship between consumers and the things (products, games, artwork, etc.) we consume. In reality, most people will only be perusing the ToS as it pertains to refunds once they’re already agitated and are looking for their legal recourse. If the relationship between a project and its backers has already eroded, I’m skeptical of the impact of wording changes in the ToS that don’t concretely impact anyone’s obligations. For those interested in the space, though, it does let us speculate about what Kickstarter is thinking about, and what pains it perceives.

ChuckMcM 12y ago

This is a good update, I know that if I were running a Kickstarted package I'd create a fully auditable expense ledger so that in the event it was impossible to complete I could provide a complete record of all expenses. Scanning everything is pretty trivial these days, something like Evernote can organize it, although a think a sort of "Evernote - Kickstarter Edition" would actually be a really interesting project. Basically a tool that captures everything into a repository that can be burned on to a self contained DVD at the completion of the project, even if it was successful the resulting database would be an epic way of figuring out a better way to do it next time.

reboog711 12y ago
If you want to use Evernote to keep track of the financial records of a business; you may want to reconsider starting a business. At least until you learn a bit more...
- ChuckMcM 12y ago
  One of the things I like about Evernote is that its "notebooks" databases are just sqlite DB files. You can take them apart with a variety of tools, and they are easy to back up and move around. What I don't like about QuickBooks (which I've also got) is that its data bases are rather opaque. You can copy them and back them up but the format changes more often than I like and I don't have any third party tools that can open them. That said, lots of businesses trust their business to Quickbooks (I mostly use it to track expenses so they are easy to import into TurboTax) What is it about Evernote that makes it a problem in your mind? (other than perhaps it doesn't really have any sort of ledger function like Quickbooks does)
  - typicalrunt 12y ago
    You should try Ledger [1] if you want transparent data formats and ease of use. I've been using it for years to track both personal and corporate expenses. [1] http://www.ledger-cli.org http://www.ledger-cli.org

btown 12y ago

The new FTC rule the article links may be of interest to others in the e-commerce space, especially those with drop-shipping or custom-made products: http://www.business.ftc.gov/documents/bus02-business-guide-mail-and-telephone-order-merchandise-rule http://www.business.ftc.gov/documents/bus02-business-guide-m... > The Rule requires that when you advertise merchandise, you must have a reasonable basis for stating or implying that you can ship within a certain time. If you make no shipment statement, you must have a reasonable basis for believing that you can ship within 30 days. That is why direct marketers sometimes call this the "30-day Rule." > If, after taking the customer’s order, you learn that you cannot ship within the time you stated or within 30 days, you must seek the customer’s consent to the delayed shipment. If you cannot obtain the customer’s consent to the delay -- either because it is not a situation in which you are permitted to treat the customer’s silence as consent and the customer has not expressly consented to the delay, or because the customer has expressly refused to consent -- you must, without being asked, promptly refund all the money the customer paid you for the unshipped merchandise. It's worth reading over the document in its entirety - lots of interesting points and details.