The Darker Side of Crowdsourcing – 3D Printer Company Threatens Backer With Legal Action

We're huge fans of crowdsourcing and have backed numerous projects on both Kickstarter and Indiegogo in the past. That being said, our results have been mixed at best. In general, our results have been better with Kickstarter projects, though both platforms have served up duds from time to time. As we pointed out in a previous post, the buyer should definitely beware. Choose the projects you back carefully, and make sure that you can afford to lose the money should the product fail to materialize.

What we didn't expect, probably no one expected, was that a crowdfunding project team would accuse funders of defamation and refuse to ship their product – even though the product was over half a year late and the funder's claims seem to be somewhat justified. This appears to have happened after Cobblebot LLC failed to deliver 3D printers to their backers long after the due dates.

One can certainly debate whether or not the original project description was credible or not. After all, Cobblebot (the company name might have been a red flag) offered a state of the art 3D printer with performance claims that rival commercial printers at 10 times the price for less than USD$300. Be that as it may, the company had the balls to take aggressive action against one of the project backers, including quoting sections from Texas law regarding defamation of character.

To make things even more interesting, the company stated that the backer's actions were being “…reviewed by the legal department for inclusion in our fourth round of upcoming legal actions being filed to protect our company's reputation from the illegal act of defamation.” Did you pick up on that? Apparently this is the fourth round of legal actions for the company.

To put it in context, Cobblebot raised well over USD$300k for the initial project, and now has a second active Kickstarter project that has already raised USD$108k. For obvious reasons, we're not going to link to that project in this post.

We're certainly not trying to take a position on who is right, or wrong, in this dispute. That's a problem for the courts, assuming that things devolve to that state eventually. All we're trying to do is to raise awareness of the potential risks and pitfalls involved in crowdfunding. There are no guarantees. Backing a crowdfunding project is very different from buying a commercial product from a well known manufacturer or retail shop.

Be careful. It's a jungle out there. Exploring jungles can be fun, but only as long as you understand the risks involved and plan accordingly.

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CrowdFunding – “Buyer” Beware

I'm a huge fan of Crowdfunding and see it as one of the most exciting and interesting innovations that is taken place over the past five years or so. It has tremendous potential, and can bring products and services to reality in a way that was never possible before.

It's definitely a boon to small entrepreneurial creators without a proven track record that wouldn't stand a chance of attracting investment in other ways, and certainly wouldn't be able to get banks or traditional financial institutions to loan them money.

And, more important, Crowdfunding directly connects creators with customers that share their interests and passions. The people that are willing to back crowd funding projects on popular sites like Kickstarter and Indiegogo, are already pre sold on the product or service to the point that they are willing to back it knowing that the product doesn't exist yet and won't for some period of time.

The problem is that too many "customers" tend to confuse backing a crowd funding project with purchasing an item at a retail store. They are two totally different animals.

 Here's a breakdown of the Crowdfunding projects that I backed over the past couple of years:

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In total, I have backed 21 projects – 17 on Kickstarter and 4 on Indiegogo.  Out of that total, 12 successfully reached their funding goal, eight failed to fund, and one is still in the planning process.

Looking at the 12 funded projects, four of them have promised delivery dates in the future, but eight of them have already passed the delivery dates that were originally promised.

How many actually delivered anything? Sadly, the answer is only three. Two of them delivered within two months of the promised delivery date, but in only one case did the product match what was originally promised. In the other case the product was delivered but had significant problems.

One project delivered 15 months after the original promise date, and I have to admit that the products performance was exactly as outlined in the original project. Unfortunately it is Apple iPhone based and the interface was made obsolete when Apple changed to the Lightning connector. The only reason that I'm able to use the product at all at this point is that I hung on to my old iPhone.

 There were also three projects that funded but it never delivered. The project sponsors got their money, did their projects, but failed to deliver anything on their promises and were non responsive to follow-up requests.

 All that being said, I'm still very positive about Crowdfunding and will continue to back projects that interest me. I understand the odds quite well and I'm not naïve. The operative word is "caveat emptor"....

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