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Kickstarting disaster: When crowdfunding backfires

Kickstarting disaster: When cr...
When crowdfunding fails, it can fail badly (Photo: Brian A Jackson/Shutterstock)
When crowdfunding fails, it can fail badly (Photo: Brian A Jackson/Shutterstock)
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When crowdfunding fails, it can fail badly (Photo: Brian A Jackson/Shutterstock)
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When crowdfunding fails, it can fail badly (Photo: Brian A Jackson/Shutterstock)

A Kickstarter pitch for an old school board game wouldn't ordinarily make it onto the pages of Gizmag. But despite its initial success, Erik Chevalier's campaign for The Doom That Came to Atlantic City has been such an unmitigated disaster that it serves as an essential reminder to those thinking of backing crowdfunding campaigns that they do so at their own risk.

The campaign, created by Chevalier's company, game publisher The Forking Path, ended early in June of 2012, smashing its US$35,000 target attracting $122,874 in funds. At that time, The Forking Path was aiming to deliver completed copies of the product ("a Lovecraftian game of urban destruction" clearly referencing Monopoly) by November 2012, then five months away.

Come June 2013, with the game seven months late, Erik posted a campaign update (the 26th) stating that the aim was to release the game in the third quarter of this year. However, by the 27th update published last Wednesday, that had all changed. "The project is over, the game is canceled," Chevalier wrote.

Why? "Every possible mistake was made, some due to my inexperience in board game publishing, others due to ego conflicts, legal issues and technical complications," Chevalier added. "No matter the cause though these could all have been avoided by someone more experienced and I apparently was not that person."

But where did the money actually go? Chevalier mentions "paying to form the company," miniature playing pieces, software licenses, artists and, most remarkably, "moving back to Portland." Though Chevalier claims to have tried to secure additional funds, he failed. He is now looking for work in order to pay back the money.

The update prompted a backlash from angry backers in the comments section of his update, some of whom have reported Chevalier to various authorities. Others have called for a full list of accounts to explain in detail where the money has gone.

Meanwhile, Keith Baker, who, along with Lee Moyer, is one of the game's designers, has taken to his blog to explain the situation from his perspective. "Lee Moyer and Keith Baker are not part of the Forking Path," he writes. "Neither one of us received any of the funds raised by the Kickstarter or presales. I haven't received any form of payment for this game. Lee and I were not involved in the decisions that brought about the end of this project, and we were misinformed about its progress and the state of the game." The pair have been working on the game for more than 10 years.

We cover a lot of Kickstarter and crowdfunding campaigns at Gizmag. Though some technology news outlets turn their noses up at crowdfunding sites as sources of news, there's no denying that such sites are hotbeds of creativity, even if genuine innovations are outnumbered by copycat products and unremarkable ideas.

But Chevalier gets one thing right in all this. In a second "clarifying" update published last Thursday, he writes "I see Kickstarter backers, myself included, as pre-order customers and not investors in a corporation." In fact, Kickstarter backers are exchanging something for nothing except a pledge that they will, at some estimated date in the future or very possibly after, receive what they paid for – something which very often will not even exist when one commits one's money. This isn't investment. It's not even purchasing. It's whatever comes before early adopter on the continuum of high-risk ways to rid oneself of cash.

We'll continue to cover crowdfunding campaigns at Gizmag, but remember, we can only look out for and report interesting ideas. Given the vast array of things that can conceivably go wrong on a product's road to launch, our coverage of a campaign shouldn't be interpreted as an endorsement or even a recommendation. Let the buyer beware … in spades.

Are you a frequent backer of crowdfunding campaigns? How do you work out where to pledge your hard-earned? Let us know in the comments.

Sources: Kickstarter, Keith Baker, via Penny Arcade

32 comments
Jarunik
There are various crowdfunding projects which do not deliver or deliver only partially. My biggest disapointement so far was Vanuatu on Indiegogo. The game was out on the retail market but I never got a copy as various other backers did not get it either. Even the project was delete from the website. Then there are delayed projects like BugASalt because of shipping problems or other ones running realy long like Robot Dragonfly - Micro Aerial Vehicle. But overall the success rate is still reasonable. You can't expect every project to be successful. What really annoys me are the one's like Vanuatu where they just grab the money and do not even try to deliver and still sell the product.
Flora Kan
I backed a couple of kickstarter projects and did receive an early version of the pre-launched products. I don't consider my payment a pre-order but instead, I view it as helping to bring about a product that I would like to exist in the market. To me, Kickstarter is like nano-scale venture capital investment. At BEST, your return is a finished working product and more likely than not, something that kind of work but need further refinement and at worst, no return whatsoever. The website made this quite clear. Sponsor at your own peril.
Ce D
I've backed 13 projects over the past year and a half. So far 4 of the projects have been delivered, probably only one was not delayed from the initial estimated delivery date. My criteria for deciding whether to fund a project starts with the pledge amount. If it is under $25, I don't do much due diligence. If it is over $100 I spend much more time reviewing the project and it's founders. Overall, I believe that the number one item to look at is the experience of the campaign founders. Have they had other successful Kickstarter campaigns? If not, do they have industry experience related to the project? A number of the video game campaigns that I have backed (none of which have delivered yet) have been started by people with decades of industry experience. The pledge amount is low and your dealing with people who have done it all before. A safe bet. A board game campaign that I backed (also small pledge amount) was started by a team that has a previous successful campaign. Another safe bet. A digital music campaign I backed where the team has no experience is now 3 months late and might not be delivered, but at $10, I can live with that. The next item to pay attention to is the scope of the project and what are the different skill disciplines required to make the project succeed? What I mean here is that an electronic hardware project needs software design, a software game project or board game project needs graphic design, a music project needs a sound engineer. Usually, if a project has a low funding target, and a large scope (requires a big team), you can expect that it will have trouble delivering.
Daishi
I view the things I fund through kickstarter as something between charity and pre-ordering. I've funded a couple of inexpensive games because I like what they are doing (Castle Story, Stomping Land etc.) but I don't have a lot of money invested so if they try and fail I am OK with it. If I invested in something expensive and felt like the developers took the money and ran I would be mad about it though for sure. I understand the money I invest in Kickstarter isn't guaranteed and even if the product never launches I may not get it back but IMHO they dev is obligated to try. I also find it hard to believe they were charging $75 for a monopoly clone and couldn't deliver for that price.
Kim Holder
Kudos for bar-raising responsible reporting Gizmag. I often enjoy your Kickstarter and Indiegogo reports, but now that you mention it, perhaps the disclaimer about at your own risk should appear at the end of every such article.
RodF
I have learned first hand this hard lesson with Levitatr ipad keyboard. Not quite the same total value ($67.5K) but about the same per user investment. The biggest disappointment in my case is that the creator does not seem to be very contrite about the situation plus he continued to sell the Levitatr on another site even when it was clear he was not going to deliver. I would like to see the crowdfunding sites take a more active roll in protecting the consumer. They are becoming brand names and people are trusting them with their money. Hiding behind the legalize saying "buyer beware" is not good enough. I understand some projects fail but aiding the final purchaser in getting an accounting of where the funds went would be very appreciated. That being said, I am still an active investor in kickstarter projects. I just tend to be more selective and look for small dollar investments or more established companies.
Emilio Reyes
I'm not a frequent backer, but I've backed some projects over the past four years, and I have to say that most of the times, the results of the campaigns have arrived somewhat on time. Granted, some of them (like the Jetsam line of wallets), are of superb quality, and arrive when promised. Others (like my pair of IronBUDS), arrive almost a full year after the promised date, riddled with stories of manufacturing errors, conflicts when acquiring contractors, and the like. Even then, I still believe in platforms such as Kickstarter. I love how fast ideas spread over there. My biggest beef has nothing to do with delivery, actually, but content. The amount of general stuff developed for iPhones is ridiculous. And it seems that since a couple of months ago, one out of 20 projects was a slim wallet of some sort. As to what projects to back, I would recommend to pay close attention to the "Risks and Challenges" section in every project. To my understanding, that section was enforced by Kickstarter themselves after some legal conundrums earlier this year. Also, I would advice to be wary of highly successful projects. If the pledged funding is tenfold what the project requires, then just by considering economies of scale, and depending also on the nature of the project, all of the manufacturing processes and the like get complicated very fast.
Jon Smith
Backed one project so far (musgaurd.com) and got the product just the way the Kickstarter campaign promised, I like it some much I'm going to order one for my other bike and one for my brother in law. It was a pretty low risk though as it was under $30 and a very simple product to produce.
mystixa
Most often I think these crowdfunding people go wrong when it comes to the manufacturing. Thats a kind of netherworld that can mean dealing with people in china, or even in the US that you've never seen before. They have slick websites now, access to all sorts of equipment (so they say) that regular people dont have, and a whole vocabulary all to themselves. Who gets to pay when that vocabulary is misunderstood? The one doing the ordering. Kscckstarter and IndieGoGo could do some major damage if they put together some assistance for projects once they became funded. Recomended manufacturers, some sort of legal vetting proceedures. Heck they could offer classes for like $1000 or something. Its not in their model for now. If there keep being highly visible failures though it would be a way for them to save some face, and popularity.
DonGateley
Please do continue to report on Kickstarter projects. If anything, increase it. I like Gizmag's filters and think they would be well applied there to give us interesting alerts.