Here’s the latest one I’ve seen, reported with no hint of skepticism by online media and currently over $120,000 pledged,and I’m sure to go waay higher.
The video just gets better and better as it goes on. Full-color flexible e-ink animation, fully waterproof up to 5 meters, machine washable, chargeable by walking, etc. etc. etc.
They have no prototype, no nothing, just “a team of entrepreneurs, futurists and engineers who dream of disrupting the fashion and technology industries” who “have great ideas and determined to push ahead on our goal to make these sneakers a reality.”
Mostly I blame the online media. Even companies like The Verge refer to this as only a “slight financial risk,” where as most of these others describe all the shoe’s features like they actually exist.
Why do you consider people accepting such risks as “falling for” anything? People can fund farfetched ideas, sometimes perhaps they should. What I dislike is the perceptual shift of people generally assuming these campaigns are some sort of marketplace, rather than what they say they are - funding. Unfortunately, this shift seems to happen in the “crowds” themselves, rather than the services. I think people are too strongly conditioned to perceive culture through the lens of assuming a producer/consumer dichotomy.
Yes, people should know they aren’t actually buying anything, but clearly they don’t. They aren’t accepting that there’s a risk it won’t deliver, or they wouldn’t be upset.
See the disappointed punters for these (and many others):
Because I sincerely do not believe that the 500 people so far who have pledged an average of $250 each have an honest understanding of what the actual risk is, which, quite frankly, is 0% that these shoes are going to get made as described.
The technology simply doesn’t exist, and a team of 6 “entrepreneurs and futurists” who happen to be able to make a slick video, and have no record of making anything before, aren’t going to make it happen.
Anyone can make a video and put it on Indiegogo and promise something in return, with only minimal hedging (in their “risks” statement they mention only that the “might not be able to select the right factories”).
The problem is that the Indiegogo platform does not encourage serious stock-taking of the risk, and the online media just gobbles up whatever hyped headline they see.
We have laws in the books restricting access to certain kinds of risky investments, because we understand that the majority of people are ill-equipped to assess risk. That’s what I’m saying is going on here, due to the enabling nature of the platform and media.
Only way you get shoes like that is to paint 'em green and do the animation in post-production
They don’t list any hardware / physical product experience for any of their team members. This is either recklessly optimistic or a scam, and their backers will have a roughly similar experience either way
Isn’t that the real problem, then? It sounds like a more practical thing to address. The majority of people are the ones in charge. If they need to be protected by “a select few”, they are likely to be taken advantage of.
Right, and that’s exactly what I’m saying. We know that people are ill-equipped to assess risk, and yet the platform and the news media are enabling the hucksters and scammers by not seriously talking about risk, and not giving their readers information about risk.
Ok, sure, we could re-work education from preschool on to better teach kids about risk. In the meantime, we should be highlighting information to bring necessary information to the forefront, to better enable real people to make an informed decision.
In this case, the media almost without exception in the link I gave at top, and for every wacky crowdfunded campaign out there, is just rah-rah-rah and “reports” the “technology” as if it really exists. This is not giving helping people make an informed decision, it’s doing exactly the opposite: it’s making people feel like the “bet” is a pretty good one, even if not certain, so it’s worth dropping a 250 bucks on.
The people I’m calling out is the GizModods, GizMags, CNETs, and Slates for not doing their jobs, and Kickstarter and Indiegogo (the latter most of all) for not forcing projects to be more honest with the actual risks involved.
An example of how IG actively discourages skeptical discussion of risk:
You must pay to comment. If you’re skeptical you’re not going to pay to comment. So no real discussion of risk encouraged, you have to go outside the site for that.
The problem with the Coolest Cooler wasn’t that they failed to manufacture any. It was that they put them on sale on Amazon before sending the promised coolers to backers. I don’t think I’d consider that a failure to produce, more like a PR issue.
It sounds like they didn’t have enough supply chain management knowledge, it all got out of hand, and now they don’t have any money and they’re having to sell via normal retail to raise the cash to fulfill their pledges late.
I do wonder if Kickstarter should let/force people to set an upper limit, so a pair of design students don’t end up trying to manage a multi million production run which is way beyond them.
I’m certain that I’ve seen a few Kickstarter projects where the only reward tier that got you anything was limited to how many they thought they could feasibly produce. I mainly remember as I recall being impressed by the planning that obviously went into it.
Unfortunately, most project creators seem to assume that they can easily handle a runaway success. (Or assume they’ll never be one, which is admittedly probably more likely.)
Nothing scares me away from the idea of backing faster than the phrase “Flexible funding”. It’s like a giant sign with the phrase “So long, suckers!” in flashing lights.
They thought they could do this in a couple of months, they were looking for funding for 50 pens. They got ‘orders’ for > 5000 after it ended up on Uncrate, Cool Material etc.
They absolutely couldn’t cope, had to manufacture in China, got ripped off by their partner, took them 18 months to eventually get everything shipped.
I remember that one! I backed it initially and then cancelled my pledge midway through once it started getting thousands of backers—something I’ve admittedly done more than a few times.
(Of course, I’ve still managed to be burnt on a few projects. Cases where, despite having a good track record, the creators got a little too enthusiastic about the success and started piling stretch goal after stretch goal on top of things.)
Reminds me of those bracelets on Indigogo that were supposed to be able to somehow know what you were eating.
Some people lack a healthy sense of skepticism- or, rather, they get blinded by their optimism. That shoe, for example, is so far outside the realm of possible as to be laughable. The more frustrating ones (for me, anyway) are the ideas that are totally possible and via lack of experience or ineptness fail to come through after taking all the money.
Where a group is with their development is the first thing I look at now- do they have a prototype? Do they have tooling made yet? Do they have experience with tooling? With supply chain management? With working with Chinese plants? Etc etc.
They do, at every reward level you can set a maximum. So you can set a maximum for every single one of your “product” levels, if you like.
I have never seen any project do this, except at the early-bird reward levels: everyone assumes that if you can produce 100 widgets, it must be cheaper/easier to produce 6 million.
I think that everyone always assumes that if they ever hit such runaway success, they’ll have the funds to hire all sorts of product managers and people, essentially make a whole company, forgetting that at the prices they’re asking people to contribute, they don’t actually project any profit to afford that kind of thing.
It’s the same with “stretch goals”, in particular these damn shoes: they’re telling people that if they hit $3 million, the shoes will have HD color screens, walk-to-charge technology, and touch sensitive screens, among other wet dreams, and yet the shoes will still be the same price. Because somehow, economies of scale will allow them to put that all into a $150 package.
There was a sub-plot on the US version of The Office where Michael makes his own competing paper company- and he’s underselling Dunder Mifflin and stealing all their customers.
But as he expands, he hasn’t taken into account that his costs don’t increase in a linear fashion- and as a result, as he gets bigger, he gets less profitable.
Is it sad that some of my meager knowledge of business comes from a TV show?
The point remains- people think that from 100 widgets to 10,000 widgets will scale in a linear way- and that’s essentially never true. By wildly over-funding some of these things, we’re paying to teach the creators a fairly basic business lesson I learned from The Office.
But how/why is this? What equipment do people really need, apart from thinking about it?
This may happen to an extent, but every campaign I have seen (admittedly, not too many) has had enough information to allow for critical consideration, mixed in with the hype. Who would invest in anybody without doing a modicum of homework?
As for news media, unfortunately their model of “responsibility” has increasingly shifted towards “whatever generates more economic activity”. But this makes them disreputable sources generally, not only with regards to crowdfunding. If they aren’t a reliable source of information about politics, science, and economics generally - why would what they say about crowdfunded projects somehow become credible?
I agree that it doesn’t help. But does it really make people do anything? Doesn’t this deny personal responsibility?
I agree that there is a lot of formal reasoning fail happening here. My biggest problem with business is the notion that it somehow matters how much business you have. No, nobody needs to use your service. It should be the most obvious thing ever. But the structure of society deliberately makes money into a game, which makes more funding and more customers appear as automatically being “the right thing to do”. So setting real goals instead of “as much as possible” is quite strongly discouraged.
It sounds like your metrics of risk are more reputation-based, which I don’t agree with. A technology not existing yet is hardly sound reason to avoid investing in it - nothing new would ever get made. So an obvious remedy might be to assume that some certain people could pull it off, while some others could not. But I think this undermines the whole purpose of crowdfunding. If it wasn’t long odds, chances are it would have been funded through more traditional means.
Where I do agree with you is that the most beneficial approach is to avoid hype. But mostly because it injects lots of personal problems into both science and business which are better off not being there. Still, how much hype there may be does not directly affect people’s critical thinking skills.
Then again, I tend to be so cynical that I assume that every transaction is really an insane risk to be avoided, so YMMV
