This one’s a cautionary tale about the risks of Kickstarter. As awesome as it is to be able to “kickstart” new projects and businesses, it’s a sad fact that some projects won’t succeed no matter how hard you kick them. (How’s that for an over-extended metaphor?)
The idea here is pretty straightforward. The Hanfree is a really tall and really flexible iPad stand.
The Kickstarter campaign was a success! They raised $35,004, and were rated one of the Top Ten Kickstarter Projects of 2011 by TomsGuide.com and a couple of other blogs.
So what went wrong?
Poor math, poor management, and poor money handling.
Basically, the creator, who has the superhero name “Seth Quest”, completely misjudged how much money would be needed to manufacture the item by a factor of about 10x. So when the money ran out he sold his car, and when that money ran out he asked his employees to work for free. Believe it or not, his employees didn’t refuse outright, but they asked for partial ownership of his company in exchange for their free work. He refused, and that was that. Project over. Company bankrupt.
As you can imagine, many of his backers pitched a fit. Imagining Kickstarter to be some sort of store or skymall-like catalog, they were astonished and infuriated that the start-up business that they had invested in had failed. (To be fair, Seth Quest did encourage this way of thinking by repeatedly describing the pledges as “pre-orders“.) Check out this classy blog by an angry backer.
Unfortunately, Seth Quest responded to these angry comments in a very sleazy, unprofessional, and possibly even illegal way : By trying to hide! That’s right, he deleted all his email accounts, and even tried to remove his awesome-sounding name from the Kickstarter page!
To make a long story short, (Too late!) several of the Kickstarter backers are now suing Mr Seth Quest, but don’t expect to get much money out of him, since he doesn’t actually have any money.
This story is an import lesson for everyone involved in Kickstarter. Some people just aren’t prepared for the reality of manufacturing a product. If you’re thinking about backing a project, don’t be fooled by a slick prototype, do your research and decide if you trust these people to actually be able to do what they’re claiming! (Or just treat it like a gamble.)
If you’re thinking about starting a project, please do a lot of research, and figure out exactly how much money you’re going to need. Talk to people who have done similar projects and find out about all those expenses you haven’t thought of. It’s good to be confident, but be realistic too. The last thing you want is to spend the next few years hiding from hundreds or even thousands of angry people.