New Kickstarter Guidelines Address Crowdfunding Credibility Issues

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In the wake of Pebble, Ministry of Supply, Zion Eyez, and other Kickstarter projects running months behind their projected schedules for initial product deliveries to backers, Kickstarter announced on September 20, 2012 that they are implementing new Hardware and Product Design Project Guidelines.

These new guidelines forbid the use of product renderings and simulations of what the product might do in the future – “products can only be shown performing actions that they’re able to perform in their current state of development.” Multiple rewards are also now prohibited unless the item is designed as a “kit” or “pair”.

Kickstarter has always urged creators to be transparent and have a goal and estimated delivery date planned before launching campaigns, but with more and more project creators overpromising and underdelivering, Kickstarter is receiving much of the backlash.

Current campaigns are grandfathered in under the old rules. Still one company, Martian Watches, used working prototypes in their original Kickstarter video, and has been diligently offering progress updates, production photographs, and videos that use engineering samples throughout their campaign.

Their company biography notes that they had previously developed and marketed an award-winning wireless product, which may be what is giving them an edge over some other creators. Their familiarity with lead times, production costs, component sourcing, and other development processes give them an edge over first-timers who may not fully understand the importance of these procedures, leading them to believe that they can begin their campaigns before they are certain their product can be produced within the time frame they provide to their backers. Martian Watches can be seen at http://www.kickstarter.com/projects/martianwatches/martian-the-worlds-first-voice-command-watches.

Creating a balance between the encouragement of creativity and the need for realistic delivery goals is a difficult tightrope for Kickstarter to walk, so it will be interesting to see how these new guidelines play out over the coming months.

According to Wikipedia, the center of the Kickstarter business model revolves around gathering monetary resources from the general public, a model which circumvents many traditional avenues of investment. Projects must meet Kickstarter’s guidelines to launch – charity, cause, “fund-my-life” projects and open-ended fundraising are not permitted. Project creators choose a deadline and a goal minimum of funds to raise. If the chosen goal is not gathered by the deadline, no funds are collected. Money pledged by donors is collected using Amazon Payments. The platform is open to backers from anywhere in the world and to creators who are permanent US residents of 18 years of age or older, with a US address, US bank account, a US state-issued driver’s license, and a major US credit or debit card.

Kickstarter takes 5% of the funds raised. Amazon charges an additional 3-5%. Unlike many forums for fundraising or investment, Kickstarter claims no ownership over the projects and the work they produce. However, projects launched on the site are permanently archived and accessible to the public. After funding is completed, projects and uploaded media cannot be edited or removed from the site.

There is no guarantee that people that post projects on Kickstarter will deliver on their projects, use the money to implement their projects, or that the completed projects will meet backers expectations.

Kickstarter warns project leaders that they could be liable for legal damages from sponsors for failure to deliver on promises. Projects can also fail even after a successful campaign when creators underestimate the total costs required or technical difficulties to be overcome.



Source by Steve S Anderson

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