In the wake of my post on Tuesday about the Kickstarter campaign for Lifx lightbulbs, there were two very welcome developments yesterday.
First, Lifx announced that, having passed the $1 million mark, they were going to cap the amount of money they are raising via Kickstarter. They’re over $1,200,000 as I write; they’ll cap out at just about $1,300,000.
“We want to put all our energy into developing the product, rather than building a large company (at this stage)”, they write. “We’ve raised more than enough to execute on what we’ve proposed to do so now we are going to get down to the business of creating a full production run of LIFX smartbulbs fit for homes across the world.”
On top of that, if you look at the Lifx product page, you’ll see that the $5,000 option for ordering 25 packs of 4 bulbs has disappeared: that’s partly because such wholesale offers weren’t allowed even when the Lifx project was announced.
Still, the Lifx team got in just under the wire, because Kickstarter yesterday announced new rules which would disqualify their campaign in its current form. In a post headlined “Kickstarter Is Not a Store”, they lay them out: all Kickstarter projects are now required to have a “risks and challenges” section, allowing backers to judge whether “the creator is being open and honest about the risks and challenges they face.”
On top of that, if you’re trying to fund a project designed to make things and ship them out — if you’re in the Hardware or Project Design sections — then product simulations are forbidden, as are product renderings like the picture of a perfect lightbulb which currently graces the Lifx page. “Products should be presented as they are,” write the Kickstarter crew. “Over-promising leads to higher expectations for backers. The best rule of thumb: under-promise and over-deliver.”
Finally, you can’t offer multiple quantities of a product at all. The famous Pebble watch, for instance, persuaded more than 10,000 people to order two or more watches; between them those backers contributed some $3.3 million, and are expecting to receive more than 30,000 watches. (Initial estimated delivery: this month. Actual delivery: your guess is as good as mine; the company’s not talking.)
Given that Pebble wound up taking in more than $10 million in all, they would have been fine without those multiple-quantity presales. And the Kickstarter people are right: selling many of a thing — up to and including Pebble’s $10,000 “MEGA DISTRIBUTOR PACK” — sends a clear message that you actual have many of these things to sell. Once you’re up and distributing, then you can sell as many of your widgets as you like. But before your widget exists, by all means offer a future widget in return for people helping out with development costs. But don’t turn your Kickstarter page into an e-commerce shopping site.
“It’s hard to know how many people feel like they’re shopping at a store when they’re backing projects on Kickstarter,” the new rules say, “but we want to make sure that it’s no one.”
Yesterday’s new rules are an important step in that direction. Kickstarter is a wonderful way of crowdfunding projects; if the public were to start thinking of it as SkyMall for vaporware, that would be just as horrible for creators as it would be for Kickstarter themselves.
What’s more, now that projects like Lifx are going to be forced to be upfront about their risks and challenges — including the probability that backers will not receive any products at all — those backers are likely to be much less upset if and when things do go wrong. As ever, transparency is a good thing. And these new rules will make it much harder to hide serious weaknesses behind video-editing cleverness.