Thanks to a handful of high profile projects, US crowdfunding website Kickstarter has had one hell of a year. Whether it is the Ouya android console, a sequel to the iconic RPG Wasteland or one of a number of smart watches there are many tales of companies pulling in millions of dollars in funds to turn their nascent ideas into reality.
More and more people are throwing money behind Kickstarter projects, which has brought the question of just what guarantees they have to the fore. At its core Kickstarter is a test of faith, a gamble of sorts where you drop an often substantial amount of money on the promise that you’ll get something out of it in the end.
The thing is though, is that the site isn’t designed as an alternative pre-order route, even though it is rapidly becoming that. This means that when products don’t appear as scheduled there isn’t any real avenue for supporters to get their money back. This conundrum was the source of a recent show on National Public Radio in the States, which has led to a response from Kickstarter over the whole issue of non-delivery.
In a nutshell Kickstarter has guidelines in place to facilitate communication between backers and creators, but these are just guidelines. If any Kickstarter deftly avoids getting stuck in the middle of disputes, which our inner cynics would say is a direct result of Kickstarter’s business model focusing on getting products funded, not getting them completed.
This is because Kickstarter gets its money when a project is funded, not completed. It is, of course, in Kickstarter’s best interests to ensure that projects come to completion, thus vindicating the business model. But there is very little oversight of the projects themselves, especially once they move to funded status.
Just look at the answer to the question of legal recourse from Kickstarter’s blog
Is a creator legally obligated to fulfill the promises of their project?
Yes. Kickstarter's Terms of Use require creators to fulfill all rewards of their project or refund any backer whose reward they do not or cannot fulfill. (This is what creators see before they launch.) We crafted these terms to create a legal requirement for creators to follow through on their projects, and to give backers a recourse if they don't. We hope that backers will consider using this provision only in cases where they feel that a creator has not made a good faith effort to complete the project and fulfill.
Notice that it makes the situation quite clear that any action is between backers and creators – this isn’t Kickstarter’s problem.
What is important to note is that the issue may be coming to the forefront now, but it is nothing new. Our best advice when dabbling in Kickstarter donations is to treat it as a gamble, and not to spend money you don’t have on a product that may never exist. If you do your research you can work out the inherent risks in dropping cash on such a project, and everything from the existing state of development, existence of prototypes and the sorts of third parties giving endorsements should be factored in before you drop cash on what is ultimately just a promise made over the internet.
