Kickstarter is Great, Crowdfunding is Awesome, but the Best Idea is Full Transparency & Communication for Funding Crowdfunding Campaigns

I must admit that I have been an addict of Kickstarter for eight years now, and counting.  Kickstarter is a significant model for bringing creative projects to life. Crowdfunding has become one of the most successful ways that Creators  can find backing for their ideas. Compared with other funding models there are fewer barriers to enter, and a greater opportunity to take risks on new ideas.  It’s a powerful industry that raised billions of dollars through pledges and 40,000+ of successfully produced projects. Here is a link to live stats for the crowdfunding industry:  LIVE GLOBAL CROWDFUNDING STATS  

But how many projects fall short of delivering what was promised? It’s a question many have speculated on, but we want to know for sure. Nonetheless, looking through the cracks, you will find a small but important flaw.  Kickstarter reports that 9% of fully funded campaigns fail to deliver their promised reward to the people that invested and backed the campaign.  Other sources quote the number in the crowdfunding industry is around 20% (source: statista.com). Whatever the percentage is, one fact remains, backers of crowdfunding campaigns get left in the dark without anyway to communicate to other backers and the project owners. In this blog I will demonstrate few articles and screenshots of people posting projects that miscommunication or no communication is a problem in the crowdfunding world.   Here is a recent screenshot from https://news.ycombinator.com.  A company called Kanoa earphones didn't ship to it's customers.  The campaign is from Kickstarter.  When you read all the comments, everyone says that they wish there was more communication and understanding the status of the order they placed.

Hacker News new | comments | show | ask | jobs | submit login

Kanoa won’t ship its $300 earphones to customers who pre-ordered them (mercurynews.com)   74 points by prostoalex 9 days ago

  Article by http://kotaku.com titled "12 Successful Kickstarters That Never Delivered" states that the creators didn't respond to a request for comment.  When you go to the comment section of Kickstarter, all you see is backers asking questions, without getting an answer.   Okay, here is few more screenshots of backers comments asking about the status of a certain campaign; Even-tough the date is from 2014, there are plenty more examples.  All you have to do is read the Comment section on Kickstarter campaigns. Kickstarter themselves posted that keeping lines of communication open and explaining how the money was spent, is extremely important for a successful campaign.

"Since failure can happen to anyone, creators need to consider, and plan for, the ways in which they will work with backers in the event a project fails, keeping lines of communication open and explaining how the money was spent. Ultimately, there does not seem to be a systematic problem associated with failure (or fraud) on Kickstarter, and the vast majority of projects do seem to deliver.  As Professor Mollick notes, the results of this study apply to Kickstarter — not crowdfunding more generally: “[I]t is important to realize that these results apply only to Kickstarter, and other crowdfunding methods (such as equity crowdfunding) and platforms that have different policies or approaches may have higher failure rates.”

(Source: The Kickstarter Fulfillment Report)

A most recent article from http://fortune.com titled:  "Crowdfunded Headphone Startup Kanoa Shuts Down After One Brutal YouTube Review" says that;

Kanoa, a crowdfunded company promising its backers a pair of innovative wireless headphones, has announced that it will shut down without delivering products to most of them.  

Crouch’s review video is like a horrific car crash — hard to watch, but impossible to turn away from. It chronicles his Sisyphean struggle to get the headphones, which were planned to retail for $300, to perform basic functions like connecting to his phone. Kanoa’s promised pass-through feature produced unlistenable feedback, and they didn’t reliably connect when Crouch had his phone in his rear pocket. The fancy charging case, stunningly, wouldn't charge the headphones while plugged in.  

[embedyt] https://www.youtube.com/watch?v=36Gw3tErUSM[/embedyt]

Crouch says he was in communication with the Kanoa team through all of these struggles, and offered to review an improved version of the product if they sent him one. But he eventually concluded that he had been sent a production unit and decided to go ahead with an honest review.

That, according to Crouch, is when things got really dark. He claims that a Kanoa representative sent him a long email detailing the headphone’s features, which concluded with: “I know that you’re busy and your time is valuable, so if you can get a good review, or a good video, out by Sunday, we’ll give you $500.”

Visibly incensed by the offer of a bribe, Crouch offered a pointed summary of Kanoa and its product:

“This is trash. You don’t want to have these. This is not a company that you want to deal with.”

Within four days, Kanoa was finished. The company even alluded to the review in its shutdown announcement, saying that “reviews of non-shippable beta units” led to customer complaints and, more dramatically, the loss of promised investments.

The true fact is that all of this could be avoided.  At LOCODOR, we understand that Crowdfunding should be more social and open, and we sure hope that others agree.  Users should be able to communicate openly about any project they want to back, and founders should be responsible to answer back the important questions.  Backers should be able to reach one anther.  Just like any social media platform, for example;  Facebook, LinkedIn, Twitter, Instagram, etc.

Crowdfunding platforms are too close-off to it's users, period!

A backer (or a campaigner) should be able to add a user-profile, add friends to his profile, be able to comment and be reachable, and each campaign should have a social feed speaking about the current status and future plans.

I hope that you agree with our message.  If you do, join us and register to our beta platform here.

And, here is a little tip for creators that have projects that could not

What is a creator supposed to do if their project can’t be completed? If a creator realizes they’re unable to bring their project to life as promised, they have to be open about it with their backers. Here’s what they need to do:

• Explain to backers what work’s been done, how funds were used, and what stopped them from finishing;
• Demonstrate that they’ve used funds appropriately, and have made every reasonable effort to complete the project as promised;
• If there’s money left over, offer to return any remaining funds to backers who have not received their reward, or explain how those funds will be used to complete the project in some alternate form.