Crowd Funding Does Not Always Deliver

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Most of us love the idea of getting in on the ground floor of some new tech and being one of the first to show off the newest and shiniest gadget. Participating in crowd-funding campaigns like those run by Indiegogo and Kickstarter is a great way to do that but they don't always deliver.

Over the weekend another crowd-funded project pulled up stumps. Kanoa was planning to ship their US$300 wireless headphones. They launched the project back in 2015 but then Apple, and a host of others, put their own competitors on the market. Now, after collecting all that money, Kanoa has run out of money without shipping a single product.

As a story in the Mercury News points out, another company promised 3,000 customers high-tech motorcycle helmets at a lazy $1,500 a piece.

I was stung a while ago when I pitched in about $US200 for a fitness wearable that promised a lot but never shipped.

The lesson for us - crowd funding sounds great and I'm sure the vast majority of creators who use this medium for raising capital and bringing their ideas to fruition have the best intentions. But it is still speculative investment on the part of those who pitch in their hard-earned cash.

So, what you're really buying is a chance you'll get to play with some new tech, not a guarantee.

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Comments

    The added risk is with anything that requires a back-to-server relationship, or up-to-date apps is that you're reliant on the company keeping the servers on and keeping software current.
    LG Band, Jawbone and Pebble users can no doubt attest to this.

    Think of crowdfunding as 'investment' or 'support'. It isn't 'shopping'.

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