How has Crowdfunding Ever Worked?

Lately, there have been a few stories that have surfaced about crowd-funded projects with particularly ugly outcomes. This isn’t a reference to the outright scammers (though all crowdfunding sites have plenty of those as well); as best I can tell, these have been stories about people who honestly did intend to deliver a product to their backers.

One such story involves an effort to get Orson Welles’ final film made. The project has somehow stalled, and the Guardian reported on this and took a stab at guessing the reason. There have been “unconfirmed reports” that the only existing prints for this film are still being held by Welles’ mistress, Oja Kodar. So your first thought might be “why did anyone even begin this campaign if they didn’t know whether they could get the film?” Apparently, Oja was ready to hand it over when the project started. From two years ago:

Kodar, 73, is to provide the work print, which she has been storing at her home in Primosten, on the Adriatic coast in Croatia, since Welles smuggled it out of Paris in 1975 and had it shipped to California. “I am going to sign the contract,” the actor, who also appears in the film, told the Times.

I don’t have any speculation about what’s really going on with the film, and I’m not a backer of the project, but if I were, I apparently wouldn’t get much help. From Indiegogo’s terms:

All Contributions are made voluntarily and at the sole discretion and risk of the Contributor. Indiegogo does not guarantee that Contributions will be used as promised, that Campaign Owners will deliver Perks, or that the Campaign will achieve its goals. Indiegogo does not endorse, guarantee, make representations, or provide warranties for or about the quality, safety, morality or legality of any Campaign, Perk or Contribution, or the truth or accuracy of User Content posted on the Services.

This all sounds pretty bad, but it’s way, way worse over in the world of hardware creation.

The most recent high-profile project to be revealed as a complete dumpster fire, the Coolest Cooler, looks to be in even more trouble— the Oregonian reports that the founders need a staggering $15 million on top of what they’ve already raised. Motherboard tells the full story of this thing, in case you missed it.

So I was thinking about how so many of these hardware projects end up failing so catastrophically. Disregarding that…

  1. This particular product, like many other crowdfunded hardware projects, was ill-advised to begin with. Even if the best possible version of this thing had got made, it’s still a garish, awful, low-taste gimmick for low-taste people. Think The Sharper Image meets the As Seen on TV store.
  2. The creator, along with many other creators of hardware products on Kickstarter, had no experience ever developing hardware. No one involved, especially not the backers, but also often times including the people requesting money, have any idea what it’s like to set up a supply chain.

…which I think sort of goes without saying, there are some other interesting aspects to these projects. Most people should know by now that Kickstarter/Indiegogo/etc are not stores. To back something on Kickstarter does not mean you are pre-ordering it. Their terms of service even try to make this clear:

At the same time, backers must understand that when they back a project, they’re helping to create something new — not ordering something that already exists. There may be changes or delays, and there’s a chance something could happen that prevents the creator from being able to finish the project as promised.

This is not being helped, though, by the companies who overtly are using Kickstarter as a mechanism to sign people up for preorders, the most well-known of which being Pebble’s campaign for the Pebble Time. Did anyone honestly believe that if this Kickstarter did not get funded, that this product wouldn’t get made? It’s pretty clear, to my eye anyway, that this thing had already been in their pipeline for months before it ever hit Kickstarter.

Crowdfunding projects for physical goods also seem to have another common pitfall: there is always a combination of “for backing us on Kickstarter, you get a deep discount on the product” and the fact that getting the supply chain set up is the most expensive part of the entire project. So some backers have received a discounted rate on this product which would probably be unsustainable even if the supply chain already existed, and the creators have to take this and attempt to build the product without even having the supply chain yet. It’s no wonder so many things never get delivered.

I don’t think it’s all bad, though— if you can live with not ever sending money expecting that you will receive a product. At best, your money is a vote that “yes, I would like this product to exist in the world” (this is why I say it’s not all bad. Those votes for “yes” actually matter, and some products do need to exist in the world) and at worst, it’s no different than going to the casino to gamble some of your money away. If your $200 or whatever means a lot to you, you shouldn’t give it to a crowdfunding campaign any more than you should spend it at the blackjack tables. There isn’t anything wrong with crowdfunding something or going to the casino, just know going in that the odds are against you.

The Next Software Gold Rush

I am currently working on an as-yet-unannounced side-project/product, and I decided that I wanted to be able to do some server admin stuff from Slack. They have APIs that make this really easy, and if you haven’t tried this yet I do suggest it. You can create a Slack robot, then from your own Slack account (on the phone or desktop or wherever) send it commands to do things to your server. Some ideas that crossed my mind: restart a Passenger instance that fell over, copy the production database to staging, back up the entire site and send it to your Dropbox, issue a refund to a customer; really the only limit is how much time you have.

This is all fine, but that’s made for programmmers. Facebook seems to have some bigger ideas about this, though. Earlier this week at F8, they announced that Facebook Messenger is becoming a platform. The idea is that companies will build robots that you can interact with from Messenger. Facebook shows examples of people ordering food by texting the robot and other such things.

I would love to be wrong, but I predict this will be huge. If it does get huge, it will only be a matter of time before Google and the others create something similar, and I think that will be another tech gold rush. It will be on the level of the iOS App Store, the first self-serve ads, or Facebook’s own App Platform in 2007. If you are a developer, you should familiarize yourself with how to make the robots for Messenger. If you’re a small company, start working on your robot now– your competitors are too big and slow to know to move on something like this; it’s early enough days that there’s a competitive advantage to be had.

Personally I think this is all ridiculous and that no one should be using Facebook for anything, but the people have spoken and Facebook is here to stay. Nothing wrong with trying to make some money on it while you can.

The Expert Beginner

Erik Dietrich, at his site DaedTech:

When you consider the Dreyfus model, you’ll notice that there is a trend over time from being heavily rules-oriented and having no understanding of the big picture to being extremely intuitive and fully grasping the big picture. The Advanced Beginner stage is the last one in which the skill acquirer has no understanding of the big picture. As such, it’s the last phase in which the acquirer might confuse himself with an Expert. A Competent has too much of a handle on the big picture to confuse himself with an Expert: he knows what he doesn’t know. This isn’t true during the Advanced Beginner phase, since Advanced Beginners are on the “unskilled” end of the Dunning Kruger Effect and tend to epitomize the notion that, “if I don’t understand it, it must be easy.”

Nice piece of writing. The Expert Beginner is like the FedEx arrow: now that it has been pointed out, I notice it all over the place. Dietrich also touches on the “do you have 5 years experience or the same year of experience 5 times” thing, which I think is a major way people become Expert Beginners. The terrifying part is that it seems impossible to tell whether you, yourself are an expert beginner. If your company hires average people, and you’re in the top 10%, others might look to you thinking you’re the expert.

Maybe this is all a really long way of saying “if you’re the smartest person in the room, you’re in the wrong room.”

An Election Year

This is not a post about politics. Promise.

Even though it’s way too early in the campaign season, the Presidential election is already shaping up to be really nasty. I completely understand why this is. I also understand that there is a huge chunk of people, including every journalist and news reader, who sees the world through either ‘red lenses’ or ‘blue lenses.’ There are plenty of legitimate reasons for this, many of them having to do with selling advertising.

But “a huge chunk” does not mean “everyone” — why is there no coverage of the election by people who can be completely emotionless and write about the election from the strategy point of view?

For example, the Trump campaign is the most innovation that the American political system has seen in a long time. Whether Trump wins or loses, and whether or not you like Trump’s politics, you have to admit that he may have figured out how to “Moneyball” the American electorate. That is, every campaign from here on out will be styled like Trump’s. He gets more votes for less money than anyone has in a very long time. I want some journalist to cover this from a strictly strategic point of view. Let go of the “Trump is Hitler” / “Trump is our only hope” narratives and analyze, with no emotion how this primary is playing out. Under what circumstances would the convention be brokered? What are the delegate rules for when a candidate drops out, then endorses another candidate? If the convention is brokered, what exactly are the rules on that? And it isn’t just about Trump. The Carson and Jeb! campaigns played out in such a strange way that professors of campaign finance will probably study them for years to come.

The same goes for the Democrats. One recent example that I haven’t seen anyone offer a real explanation for: Bernie’s huge upset in Michigan. There are two possible reasons it happened: Either A) Bernie surged 20 points for a victory in the eleventh hour or B) polls are garbage. Again, I understand why it is in the interest of news readers and internet pundits to try and tell us the reason is (A), but (B) seems a lot more likely. Is there not one single news person who can explain all the reasons it’s (B) and dismantle the media’s narrative that “the black vote” is some monolith that always goes the same direction in every state? There are plenty of other things about this that can be really interesting without dragging your emotions into it. Then there are the party’s superdelegates, which are a big interesting story all by themselves.

These are all things that could still be interesting even with very little emotion involved. When I ask whether anyone is covering the election in this way, I am legitimately asking. Send me links to specific writers or outlets who are good at this. Some people think Nate Silver is good at this, but I don’t agree — not only did he completely blow it on Michigan, but he also didn’t predict the rise of Trump, which in my opinion was one of the easiest predictions of all time. One of the closest things I’ve found to what I’m describing is Scott Adams’ Master Persuader Series but it’s a little Trump-centric for my taste.