Avoiding Crowdfunding Fizzles: A Checklist

By on February 15th, 2017 in learning

Tags: , ,

 Pondering a Kickstarter campaign
Pondering a Kickstarter campaign

Recently there have been numerous and spectacular 3D printing failures. Can they be avoided? 

I think there are several steps anyone can take to minimize the risk of losing your investment in a Kickstarter or Indiegogo campaign. 

The problem facing most casual backers is that it’s hard to know what’s really going on inside of a startup company. Will they succeed? Is the product truly feasible? Can they actually deliver as promised? 

Someone inside the company would (or should) know such things, but the best someone from the outside can do is examine the available information and make an assessment based on what is found. The primary source of information would be from the campaign page itself, of course, but you can also derive information from related sources, like the company’s website (assuming they have one), LinkedIn profiles of associated personnel, AngelList and others. 

Really, what you’re trying to do is assess the company’s likelihood of success in delivering a quality product on schedule. In any project, this requires the following: 

  • Competent and sufficient engineering skills
  • Competent and sufficient project management skills
  • Competent and sufficient marketing skills
  • Competent and sufficient manufacturing capacity
  • Sufficient funding to produce and support product and withstand issues
  • Feasible project proposition
  • Trustworthiness and honesty

Another way to look at this, is that if a project has all of the above, then it’s reasonable to expect they may succeed. However, there are always unforeseen issues that could sink any company at any time, particularly smaller operations. 

As you can imagine, these will be hard to assess completely. However, if you look closely there could be clues available for all of the above. Let’s go through each of them. 

Competent and sufficient engineering skills: 

  • Does the company list the names of the engineering team? What is their experience and professional credentials? (Check LinkedIn profiles)
  • Has the company produced previously successful equipment of similar complexity? 
  • How many engineers are listed? 
  • Does the engineering team have expertise in all required areas (hardware, software, UX, etc.)?

Competent and sufficient project management skills: 

  • Does the campaign page have a specific execution plan with dates?
  • Does the company indicate precisely what the funding will be used for?
  • Does the team include someone with project management skills and certifications? 
  • Has the company executed previous campaigns? Were they delivered on time? 

Support plan:

  • Does the company indicate how they intend on supporting customers? 
  • Does their web page offer a “support” contact?
  • Is there a forum for users to discuss issues?

Competent and sufficient marketing skills: 

  • Does the company’s team include someone assigned to marketing and sales?
  • Is the campaign page (and web pages) written in coherent language? Are there multiple spelling and grammatical errors?
  • Does the campaign video appear professionally made? 
  • Does the campaign video tell you what you need to know, or does it avoid or hide information?
  • Is the product and its features & benefits full explained in a manner that’s understandable? Do they make sense?
  • Does the campaign page run on endlessly, showing too much or repeated information?

Competent and sufficient manufacturing capacity: 

  • How many units are expected to be built? (You might not have an idea of this until the campaign is well underway)
  • If the number is more than hundreds, particularly on a complex product, does the company indicate how they intend on producing them?
  • Does the company (or its team members) have a history of successfully producing and delivering manufactured products?
  • Do they have a manufacturing partner? (This could be good or bad, as small companies often don’t know how to engage with an contract manufacturer)
  • Does the expected delivery date jive with the complexity of the machine and expected number of units to produce? (Plenty of time should be available to produce many units and handle any unexpected issues along the way)
  • Does the machine design suggest use of any unusual materials or complex components that might be challenging to source in quantity? (Such as a custom made projector, for example)

Sufficient funding to produce and support product and withstand issues: 

  • Is the company actually a larger firm that has separate sources of revenue (e.g. from other successful products or services)? 
  • Is the campaign video simply a shot of the owner talking? This can indicate poor funding or inability to recognize the need to spend on marketing
  • Has the company received any substantial amount of external investment? (You may wish to consult an external database such as CrunchBase or Angellist)
  • Is the expected number of units to be sold multiplied by the sale price, then divided by the number of team members less than an annual salary? If so, that’s not good

Feasible project proposition: 

  • Are images of the product shown, or just renderings?
  • Does the company show detailed images of the machine’s output? Do the images of sample prints jive with the announced machine capabilities? 
  • Do any of the sample prints exhibit irregularities, such as poor surface quality, misaligned layers or other effects?
  • Is their a video of the machine, or at least a prototype, actually working and producing output?
  • Is the price of the machine too low? Is it too good to believe? 
  • Does the company suggest their low price will be due to the efficiencies of volume purchasing? If so, they likely do not understand how to manufacture and support large numbers of units
  • How complex is the machine? Does it involve unusually advanced features? Do you feel this team is able to handle such advances? 
  • Does the product appear professionally designed? Or is it something that’s been thrown together by someone in a garage?
  • Can you visually identify any machine components and are they known to be of good quality?

Trustworthiness and honesty: 

  • Has the company previously launched campaigns? What do the comments on those projects say?
  • What do the comments from backers on the current project say? 
  • Does the company have any notable endorsements or partnerships with other trustworthy entities? 
  • Is the company responding promptly and honestly to comments received during the campaign? 
  • Has the company provided updates to the project? If bad things have occurred, have they stepped up by describing them and indicating how they will overcome them? 

Whew, that list was a bit longer than I imagined when I began writing it. And even so, I’m sure there are additional questions that may be asked. If you think of some, please add them in the comments. 

Nevertheless, if you were to ask yourself each of these questions when examining a crowdfunding project, I believe you’d be in a reasonably good position to make an assessment. 

The key thing is to realize that a project is a failure if they cannot properly execute their plan, regardless of the technical wizardry portrayed. Too many projects highlight tech specs and don’t show much about whether they’re actually able to deliver. You have to figure that out yourself by reading between the lines. 

Good luck! 

By Kerry Stevenson

Kerry Stevenson, aka "General Fabb" has written over 8,000 stories on 3D printing at Fabbaloo since he launched the venture in 2007, with an intention to promote and grow the incredible technology of 3D printing across the world. So far, it seems to be working!