Is Kickstarter Limiting Hardware Projects Because of the Pebble’s Unprecedented Success?

We love Kickstarter; Dan and I (along with others on the Gear Diary team) have backed many projects, and we are always on the look out for new ones. That is, of course, why we started Kickstart This! We love the way that Kickstarter helps inventors and artists get funding so that their products and projects will be available to the public.

As anyone who has backed a project on Kickstarter likely knows, “every project is independently crafted, put to all-or-nothing funding,and supported by friends, fans, and the public in return for rewards.” While Kickstarter gives these projects a place to gain exposure, Kickstarter ultimately has no control over the actual project itself once funding is reached, and they are not responsible for whether you’ll like the product you backed or if you’ll even receive it. That makes sense, right? And it is all laid out clearly in their Terms of Use.

So what would you think if I told you we’d heard that because of the recent explosion of funding for a single project and its possible backlash, the Pebble ePaper Watch for iPhone and Android, Kickstarter had — at least for now — stopped approving pure hardware products for funding?

As a refresher, the Pebble Watch (which Dan and I both backed) project started with a goal of $100,000 in backing but, by the time their funding period was over, $10,266,845 had been pledged — which translates to just under 69 thousand pre-orders. We’ve been told to expect a September 2012 fulfillment date, but I have no doubt there will be at least one delay; hopefully we’ll have it by Christmas.

And as a side note: Kickstarter charges 5% of the take on successfully funded projects, and assuming that everyone who committed to buy a Pebble did just that, Kickstarter made $513,342 on that one project alone. Think about that for a moment.

Yesterday I received an email from Jack Campbell, hoping to drum up backing for a hardware project he is beginning.

Hi All,

Here is the moment I emailed about earlier. The crowdfunding project for the weeSteady product is now live.

It is not on Kickstarter. Apparently, because of enormous backlash (fears) created by the huge $10 million Pebble watch campaign, Kickstarter has at least for now stopped approving pure hardware products for funding projects.

So, we’ve launched the project on IndieGoGo, the #2 crowdfunding site.

See it here:

I am sincerely asking you to go there now, as soon as you read this, and pledge to get one weeSteady product for $25. If for some reason that’s a stretch, at least do the $1 level support.

More than this, please now hit your Facebook and Twitter and Google+ accounts and post about the cool camera gadget your friend has on IndieGoGo. The more eyes on this project, the more success it will have.

Finally, I have project pages set up on Facebook and Twitter. Please go there and like the project on Facebook and follow the project on Twitter.

And, if you have friends or family who use a little camera or phone for videos… well, hit the 3-pack special and get some cool Christmas gifts for them!

Those familiar with this product and project all believe this could become the highest funded project ever on IndieGoGo.

You helping jump it off to a fast start is a big, big part of making that happen!

Thank you so much!

Jack Campbell, Founder

As highlighted in red, it was noted that Jack isn’t using Kickstarter to fund his new product, the weeSteady: Tiny Stabilizer For iPhones & Compact Cameras’s GoGoWidget. His reason was that because of backlash fears from the Pebble, “Kickstarter has at least for now stopped approving hardware products for funding projects.”

Curious about his reference to backlash, I e-mailed back and asked Jack to clarify. This was his reply:

There has been a wave of fast-growing online chatter raising [a] question of safety with these huge hardware projects that promise a product, collect a big amount of cash, and then have a tiny band of inexperienced dreamers left to actually bring the promised product to quality mass production. While a few earlier projects had flirted with the million dollar mark or close thereto, this $10 million project seems to have broken through some psychological hurdle that’s resulted in all of the grumbly, Chicken Little types across the web to start making it a heavy talking point in blogs, boards, articles.

A staffer I know within KS told me that [it has] really caused a concern about the PR image within KS management, and has chilled their willingness to flood KS with more and more hardware products — at least for the moment. I understand it’s in heavy discussion, seeking a decision.

I did a bit of research, and I’ve learned that the next largest funded Kickstarter project was Double Fine Adventures video game project, which raised $3.3 million and closed on March 13. The comments left for the project are overwhelmingly positive, and there is a promised date of 6 – 8 months for final fulfilment. Surely this isn’t a cause for concern for anyone at Kickstarter.

So then I checked for hardware specific projects, and I found the next highest was the Elevation Dock at $1,464,706 (which Dan backed); it closed on February 11 with 12,551 backers, and it had an estimated delivery date of April 12. That date has come and gone, and judging by the grumbling in the comments, backers are becoming restless. Five days ago, a revised shipping date of June 5th was posted. Considering the amount of time both Dan and I have waited for previous projects, this still seems to fall under a reasonable turn-around; however the creator did miss the date, and some of the backers are disappointed.

But is that a good enough reason to halt all hardware projects? Or is that even what’s happening?

I sent the following inquiry to Kickstarter through their contact form:

I’ve been told that Kickstarter has at least temporarily halted approval on pure hardware products for funding projects, due [to] fears regarding fulfillment of the Pebble Watch?

I’ve been told that there is concern about the PR image within Kickstarter management, and that it has chilled their willingness to flood Kickstarter with more hardware products — at least for the moment. I’ve also been told that it’s in heavy discussion, seeking a decision.

Is this true? And if so, do you have a comment? I am running an article on this later today, and would like a statement from Kickstarter.

Thank you and best regards,

Their response was:

We’re going to decline to comment or participate in an interview. Regarding that rumor: you should note we have projects launch every day that are hardware:

It’s true that going to the Hardware page link will return quite a few products that are currently open, but clicking the Recently Launched sidebar link returns a list of the “newest and freshest” items that is surprisingly short on hardware.

I reached out one more time and asked if they had a comment about that; I’m still waiting for a response, and I’m not very hopeful that I will get one.

So what does this all mean, exactly?

Perhaps nothing much in the grand scheme of things, but we do find it interesting. The tech community watched with wonder as the Pebble juggernaut continued to gather supporters and orders. The idea that future Kickstarter hardware projects might be impacted by the Pebble’s performance never really occurred to us, but we had already noticed that there seemed to be fewer and fewer hardware projects popping up lately.

I don’t think that either of us would have thought to connect the two, but Jack’s email definitely puts a different spin on things. Couple that with Kickstarter’s unwillingness to issue a solid denial leaves us wondering if it’s true: Has Kickstarter, at least for now, stopped approving hardware products for funding projects?

If you have tried to list a hardware product on Kickstarter recently, only to be turned down, we would like to hear about it.

For the rest of us, does this mean that we can expect to see less hardware being offered until at least the last two huge hardware items’ orders have been fulfilled?

Categories: Crowdfunding, Editorials

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7 replies

  1. I’m trying to put the shoe on the other foot, and see things from Kickstarter’s POV. They’re kind of new, as is the idea of crowd-funding as a way of getting new businesses off the ground. I guess I can see why they would be skittish in this circumstance. There have been some flops, and people get mad, even when their money is refunded. It could look really bad for them if something that generated as much buzz and traffic as the Pebble tanked. It also seems like the entire tech world is scope-locked on the Pebble project. And if I were Kickstarter, I could see being quite nervous knowing there are that many eyes out there watching them, for good things or for bad things.

    But, knowing how many eyes are on them, I can actually understand a bit, with them wanting to hold off a bit on new hardware projects. Think about it for a second. How many shady people out there can produce a slick video, and put up a new project with no actual intention of putting out a product? If I were them, I wouldn’t exactly be calling a moratorium on new hardware projects. But, what I would be doing is examining every project that came in. Background checking the people submitting them, checking the market for similar projects and a whole host of other things before I let them go live for funding, especially with so many eyes on them right now. No one could have predicted the exponential success of the Pebble, but I would bet every penny of my next paycheck that someone out there right now is thinking of a way to steal money via a fake project because of the Pebble’s astounding success.

    If I were them, I would have understandable concern that projects that raised over a million dollars, or even over 10 million in Pebble’s case, go as well as can be expected. But, they have gotten SO much press over the Pebble, that people who aren’t even into tech have heard about it. And, unfortunately, we know there are some very unscrupulous people out there, who would love nothing more than to put together a cool video and get a million dollars in 30 days, and then be able to claim some sort of failure and take off to Costa Rica with the money. So, I’m guessing that it isn’t so much that they want to see if highly funded projects go well (although I’m sure that is a portion of it) as much as making sure that any new projects are thoroughly checked out to be sure they are legit before they get put up on the site. That would certainly explain why new hardware projects are slower to come.

    Or, it could be something else entirely…time will tell I suppose.

    • All good points. Here’s mine… Kickstarter adds a level of transparency to the initial funding of a project. If… And it is just an if at this point… They are shifting policy it old be nice for THEM to be transparent.
      They CAN make any policy change they want. It is their company. But be clear about it.
      Sent from my iPad

  2. The editors and I have been talking about Kickstarter’s concerns/actions since last night, and there may be another point to consider:

    While it isn’t the same business model, Kickstarter has come out of the Groupon/Facebook/Zynga world and has certainly benefited heavily from social media. But in the wake of increased scrutiny over how “social” companies make money, they may be extra reluctant to take on the risk of (possibly) scammy hardware projects.

    I don’t know what Kickstarter’s current or future funding looks like (other than that they make 5% off every funded project), but I am willing to guess they probably don’t want to scare off venture capital, and there’s always the long shot that they eventually choose to go public or even become an acquisition target for another company.

    But now that Groupon, Zynga, Facebook, etc have all indicated there’s some sort of slow leak in the social media tech space, Kickstarter may be on high alert because any negativity there is going to spread to them as well.

    It might also explain why they are being so tight lipped, as they may be trying to work on better security protection, or seeing if the dust settles and the spotlight moves off their circle of the Internet.

  3. As the project founder mentioned in the story, I’ll add that it would be WONDERFUL if Kickstarter would implement an additional layer of scrutiny for hardware projects. I would have happily cooperated with anything they wished to pursue in the way of investigation, if it resulted in my project going live there.

    Traditional funding is basically non-existent for smallish hardware ventures, as VC firms aren;t interested in ventures this tiny, and angel investors (as well as VC’s) are nervous about if a product will actually sell, and if the founders can actually deliver it. So, Kickstarter fills a massively important role in the hardware startup sector.

    I would have even been willing to have paid a reasonable due diligence fee, if it resulted in eventually seeing my project on Kickstarter.


  4. As an example of a product that’s missed its date, the HexBright light on Kickstarter was funded last July ($259k of the $31k goal), and originally claimed a ship date of October 2011. It’s now June of 2012, and the HexBright still hasn’t shipped… and some backers have been a little grumbly about it.


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