Kickstarter has become one of the most popular crowdfunding platforms in the world. Some ideas have end up with millions in backing. Others are tiny successes that otherwise wouldn't have existed. And then there’s potato salad.
There has been almost $6 billion pledged, with over 204,000 successfully funded projects.
Funds are increasing every day with more and more people flocking to Kickstarter each day. And their ideas don't have to be huge. In fact, most of the projects don't ask for more than $10,000.
But some of these projects are pretty crazy. And, you know us, we love a crazy story. So, in this episode of Company Forensics, we'll take a look at some epic Kickstarter fails.
Before we dive into epic fails, let's recap how the company was born. This is Perry Chen. In 2001, he was really into music and wanted to throw a concert. But he had no money. So, he asked people for it over the internet.
But, here's the catch: no one would have to dish out any money until he got the $20,000 he was looking for. So, people just had to pledge to give, which made it safe for them. Eventually, he threw the concert. But he liked the funding idea so much that he decided to make it a business.
He partnered with Yancey Strickler and Charles Adler in 2005 to create a platform that used the same principle but with people's artistic and entrepreneurial ideas. And that's how Kickstarter was born.
The first successfully funded Kickstarter project was "Drawing for Dollars," for $35. After that, the projects rapidly grew in size. By 2012, two campaigns crossed the $1 million thresholds, cementing the site's popularity.
Plus, projects are highly successful once they have the money. CNBC found that only 9% of funded projects fail to deliver.
Similar to Chen’s concert, Kickstarter works by pledging money. So, if one project needs $1,000, you can promise $100. But, you don't give the money until that campaign reaches $1,000. If the idea doesn't reach its goal, then you're fine. You don't lose any money.
But, once the project has funding, it has to deliver the promised goods. If it doesn't, it's the creator's responsibility to refund the money. Kickstarter doesn't handle money, so it's a bit of a gamble. And, sometimes, those gambles don't pay off.
Shaving takes time, there are nicks, cuts, and irritation, and you have to buy expensive blade replacements to save your skin. People have been yearning for a better razor for decades.
So, when a company promised laser razors, the world took notice. In theory, the Skarp Laser Razor was really cool. It had an elegant design, and the blade was actually a laser!
The media was so hyped, they called it "the future of shaving."
Its Kickstarter campaign asked for $160,000. But people were so pumped about the laser razor that 20,000 backers pledged over $4 million. That's 25 times more than what the company had initially asked for.
But, the first prototype doused the hype. It was sketchy. The blade may have cut hair but it wasn't efficient at all.
Then, there was the company itself. No documentation backed up Skarp's claims, the funding seemed too low, and Skarp didn't even fully explain the laser technology.
The media interviewed experts in laser dynamics, and they questioned the mere physics of it all. So, in no time, Skarp found itself in a hairy situation - pun intended.
It got so shady that Kickstarter suspended the project. Skarp was in violation of their rules requiring working prototypes of physical products offered as rewards. So, basically, the project wasn't real.
But Skarp wasn't done. Just hours after getting the boot from Kickstarter, Skarp appeared on Indiegogo! There, it raised $500,000, and was active as late as 2020. But, the campaign has since closed.
Let's jump from sketchy products to video games.
This adventure starts with Simon Lane and Lewis Brindley. They streamed videos of their Minecraft-based show, the Shadow of Israphel, on their Youtube channel called Yogscast.
They had garnered quite a following. So, why not create their own video game? Enter Yogventures. This was an open-world sandbox adventure game featuring their famous characters.
Back in 2012, they promised that Yogventures would be the game you've always wanted. It was a tall order, but they managed to raise $567,000 from avid followers.
Nine years later and no one has ever heard of Yogventures. So, what happened? Here's where it gets dark.
First of all, neither Brindley nor Lane were game developers. So, they partnered with a company called WinterKewl, a group of talented indie developers. That's great, right?
Well, not quite. This would be WinterKewl's first game. Yes, they were developers, but they had never made a game before.
So, randomly generated worlds, custom characters, new physics engines, and inexperienced developers. What could possibly go wrong?
The Kickstarter campaign began in April 2012. But, by March 2013, they had failed to deliver on their first deadlines.
And, by August 2013, Yogventures was in serious financial problems. Sure, the company had released Alpha and Beta versions, and backers had sent feedback. But, by 2014, the project ground to a halt, and all communication stopped, and backers wondered why.
Yogventures was just too challenging for the developer. After months of struggle, Winterkewl's founder, Kris Vale, shut down the operation. He handed all remaining work back to Yogscast.
But that's not to say Vale didn't believe in the idea, the total opposite. He was so invested in it that he put an additional $25,000 of his own money into making it work but couldn't. His wife even divorced him because of his obsession with the game.
So, Yogventures was done. But, where did all the money go? Winterkewl had burned through most of it. So, Yogscast negotiated to have Vale give him $150,000 to finish the project.
But, this money also disappeared. To this day, nobody knows what happened. All we know is that 13,000 backers are now empty-handed, no game ever existed, and, oh, there was a divorce. Yikes.
Hey, we have to give props to these guys. They were curious and creative, just like many of you out there. And, sometimes, we just need a boost in our creative confidence. That's where Skillshare comes in.
Skillshare is an online learning community for creatives, where millions come together to take the next step in their creative journey.
One of our biggest challenges is storytelling. Without a good story, there's no good video. So, if you want to improve your storytelling skills, I highly recommend Thomas Dajer's Storytelling through Film: How to Create Engaging Videos for Youtube.
Let's face it, we've all wanted a 3D printer. But, they can be expensive. That's why the Tiko 3D was promising. It was elegant, easy to use, and cheap.
The Tiko 3D printer housed all its components in a unibody. It worked similarly to a needle and thread, using three material strings to build the product. So, it made perfect sense and at just $179, it was too good to pass up. That's what 16,538 backers believed.
They pledged close to $3 million for the idea, making it the second most funded 3D printer on Kickstarter ever.
But Tiko actually produced the printers once it reached the funding goal. It managed to ship around 4,000 units. It was then that problems began. Users complained of the printing and build quality.
And the culprit was the unibody. Yes, it was beautiful to look at. But to make it, the company resorted to custom electronics and components, which were unreliable and made it expensive.
Plus, it wasn't like the Tiko was better at printing than the competition. In fact, experts criticized them for not using cheaper components to accomplish the same goal. And then there's the price.
They had lured buyers with cheap pricing, but sales weren't enough to make up for the expensive components. Even with $4 million in funding, the company was hemorrhaging money fast, and by 2016, the Tiko 3D Printer was dead, and the money was gone.
There wasn't enough to even repay the backers. So, what did those thousands of pledgers do? They turned to Kickstarter.
That's right. Many angry users created a Kickstarter campaign to raise money to start a lawsuit against Tiko, which hasn't gotten far.
So, 12,000 people have had to kiss the $179 goodbye. And, at least, there are 4,000 printers out there that work as doorstops.
A great idea is only that: a great idea. It needs a lot to make it work.
So, just like these stories, many great ideas out there turned into epic fails.