Kickstarter introduces new guidelines, requires project creators to mention risks
Crowd-funding website Kickstarter revealed new rules that require project creators to reinforce to the world that Kickstarter is “not a store.” On Thursday, Kickstarter fired off a memo to project creators requiring them to stress the “risks and challenges” of their projects.
For those who know Kickstarter's history, this may seem like the company is just pointing out the obvious, and are wondering why the Kickstarter team didn’t think of this a long time ago. Since Kickstarter has become popular as a funding platform for intrepid independent creators, it's suffered its fair share of scams and, more often, failed (or seemingly-failed) projects.
Now, to make sure there is no funny business, Kickstarter says project creators must now answer the following questions when they build their Kickstarter page:
"What are the risks and challenges this project faces, and what qualifies you to overcome them?"
By introducing this new question about risks and challenges, project creators will have to take a second to seriously assess whether their project is doable. The Kickstarter team hopes that the answers will give funders—average people who see something cool on Kickstarter and think, "I'd pay money for that"—some information about the creator of the project, and whether they're qualified to undertake whatever they say they're going to build.
"Before backing the project, people can judge both the creator's ability to complete their project as promised and whether they feel the creator is being open and honest about the risks and challenges they face," Perry Chen, Yancey Strickler, and Charles Adler wrote on Kickstarter's blog on Thursday.
Along these same lines, Kickstarter will also require product designers to "under-promise and over-deliver." Project creators are no longer allowed to show product simulations or product renderings on their Kickstarter pages—they can only show the products as they currently exist in prototype form (or, not at all). Basically, Kickstarter doesn't want the backers to start getting their hopes up over something that, well, doesn't yet exist.
Kickstarter is a crowd-funding platform that lets just about anyone with an idea create a project, to be funded by a crowd of backers. The project creator is required to set a funding goal, and the project will come to fruition only if that goal is reached. Typically, each level of funding is supplemented with a "reward," such as the actual product (if it's a physical consumer product), or something related to the product (such as an honorable mention in a movie or TV show).
As a platform, Kickstarter does seem a little too-good-to-be-true for project creators. After all, it lets just about anyone ask for money, and doesn't exactly promise anything. Some of the projects on Kickstarter—such as this $50,000 self-sufficient floating island—seem a little over-ambitious. So I'm surprised that Kickstarter hasn't required creators to include risk assessment from the beginning.
Earlier this year, the Kickstarter-funded project Cam Crate ran into a snag, and backers were left seething. The project, which proposed a durable DSLR case, was fully funded in February 2012, but nobody heard much from the project creator until June 2012.
The Cam Crate case may have inspired Kickstarter's new guidelines, since Cam Crate creator Matthew Geyster told BusinessWeek that one of his frustrations with Kickstarter was that "some people think of this as a window-shopping thing, which it's not. You are investing in someone's idea instead of going to a store and paying to get it in a month."
Geyster also told BusinessWeek that, if he ever did another Kickstarter project, he'd try to be more transparent with his investors. Kickstarter's new guidelines are a way of forcing project creators to be more open with their investors, to ensure that investors do not falsely believe that the project is further along than it is.
At the end of the day, the reality is this: projects, even cool-sounding, crowd-funded ones, will sometimes fail. And projects that are "in development" may not ship for weeks, or months, or years.
Kickstarter doesn't guarantee that both parties will be satisfied , or even that project creators will be able to complete their projects (though the company will assist prosecutors if investors get law enforcement involved), but at least Kickstarter is making the effort to ensure both parties are in the know.