Kickstarter Hires Reporter To Investigate Failed $3.4M Project

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I do believe this is the first time I have ever seen something like this. I would have expected the authorities to launch an investigation, or maybe even a private detective, but a journalist? That's a first.

This time, however, I’ve been commissioned by Kickstarter itself. The company wants to help the backers of this failed project get the information they are entitled to under their agreement with the project creator. They would like to uncover the story of Zano, from its inception to the present, and decided that the best way to do that was to hire a journalist. The primary audience for the story is the 12,000+ backers of the project, although I will also make the story publicly available once I’ve completed it, most likely in the middle of January.
 
Steve said:
I do believe this is the first time I have ever seen something like this. I would have expected the authorities to launch an investigation, or maybe even a private detective, but a journalist? That's a first.

This time, however, I’ve been commissioned by Kickstarter itself. The company wants to help the backers of this failed project get the information they are entitled to under their agreement with the project creator. They would like to uncover the story of Zano, from its inception to the present, and decided that the best way to do that was to hire a journalist. The primary audience for the story is the 12,000+ backers of the project, although I will also make the story publicly available once I’ve completed it, most likely in the middle of January.
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I'd trust the detective work of a fedora wearing twitch streamer before some journalist to investigate this. Seems more of a publicity stunt than actually helpful.
 
Darunion said:
I'd trust the detective work of a fedora wearing twitch streamer before some journalist to investigate this. Seems more of a publicity stunt than actually helpful.
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It's not really meant to be "helpful" in the sense that anyone will get their money back. It's more informational. The company hasn't really given any details about why they imploded or what happened to all the money the backers put in. Kickstarter, in particular, has a vested interest in learning that kind of information. It will help them from a PR standpoint but it will also help other companies that may be thinking of going the Kickstarter route for similar projects. It's kind of like the aftermath stories you see all the time in Bloomberg and Forbes, "What went wrong?!?!"
 
The main thing Kickstarter has proved beyond doubt is that most people with a good idea unfortunately, know jack about project management...or reality.
 
First up the reporter travels to the Kickstarter starter's new $3M home to ask the starter what he thinks went wrong with his kickstarter campaign
 
Damn, Kickstarter can't do anything right in the eyes of some of you...

First, some projects fail, people yell "Kickstarter sucks, they don't do anything to help!"

Now, some project fails, Kickstarter investigates, people yell "Kickstarter sucks, they hired some cheap investigator, they're not doing enough!"

They don't HAVE to do anything based on their ToS. If anyone failed to read that before dropping money on Kickstarter then that's your own damn fault.
 
Darunion said:
I'd trust the detective work of a fedora wearing twitch streamer before some journalist to investigate this. Seems more of a publicity stunt than actually helpful.
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Not necessarily ... they don't seem to consider this a criminal failure and of course KS is under no legal obligation to do anything ... this seems to be equivalent to a company performing a Post Mortem on a failed project for future learning ... perhaps, depending on what he discovers, the researcher will recommend that KS have more project management assistance and tools for higher risk projects (in the future) ... I don't see any functional reason why a decent reporter couldn't write up a decent Post Mortem on this
 
kbrickley said:
Not necessarily ... they don't seem to consider this a criminal failure and of course KS is under no legal obligation to do anything ... this seems to be equivalent to a company performing a Post Mortem on a failed project for future learning ... perhaps, depending on what he discovers, the researcher will recommend that KS have more project management assistance and tools for higher risk projects (in the future) ... I don't see any functional reason why a decent reporter couldn't write up a decent Post Mortem on this
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But that isn't their place or their area of business. They would have to hire in people to do that type of stuff, which means more cost to them, in turns means they need to take a larger cut.

When you donate money to somebody through kickstarter, indigogo or any site like that it is a gamble.

Think of it like this. lets say last week I decided to buy stock in Chipotle. Now after yesterday my stock has dropped. Do I turn around and sue or go after the stock broker because after all they allowed me to buy stock that decreased in value. They should have done everything they could in their power to make sure that Chipotle's stock prices only went up and didn't cause anyone to lose a cent. How silly does that sound?

Same here, it is up to you (the backer) to do your own risk analysis on anything that you back. Do you feel safe backing a person? Do you feel 100% sure that you will get something for your money? If not are you going to be ok that you lost money? If you answer no to any of those then you probably shouldn't back a person.

Kickstarter is nothing more than a platform to post and collect money. They have no part in the project.
 
Kickstarter's cut of this project was $170,000. For that amount of money, they should have had a community manager to keep track of what was going on. They are only hurting their brand long-term if they claim no responsibility for these projects. Maybe have part of their fee go toward an insurance fund where backers can get refunds from Kickstarter themselves.
 
Exavior said:
When you donate money to somebody through kickstarter, indigogo or any site like that it is a gamble.
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No, no, no, no! Your pledge does NOT constitute a "donation". I wish people would stop spreading this Godawful myth. It also isn't the equivalent of a stock share or a casino bet. You are not "gambling" in the traditional sense nor investing in a startup, but are contributing money IN EXCHANGE FOR a physical product.

People need to quit obfuscating what a pledge represents, much less what it actually is. People also need to stop absolving Kickstarter of any responsibility in their creation and continued cultivation of their Wild Wild West system where backers shoulder 100% of the risk while Kickstarter enjoys 0% liability (and 100% return). Numerous reforms have been advanced to decrease backer exposure to potential deadbeat project creators, but Kickstarter has stubbornly refused to enact any of them. They've actually doubled down and gone the opposite route by lowering vetting standards and changing their ToS to be even more project creator friendly.

However, this Zano disaster might spur Kickstarter into doing something FOR backers instead of continually dismissing them, as several people have successfully petitioned chargebacks, which is virtually unheard of in the realm of crowdfunding.
 
Although it isn't KS's direct responsibility to make sure people manage their projects effectively, they do benefit from successful projects and happy sponsors (repeat business) ... they could easily have some of their most successful patrons provide some feedback on effective marketing (to achieve successful project launch) and effective project management (to achieve successful project delivery) ... it wouldn't cost them much and the benefits could be exponentially greater ... but that is their choice
 
fleggett said:
but are contributing money IN EXCHANGE FOR a physical product.
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Not quite, you're contributing money to the promise of a product. It isn't that the Kickstarter had 1,000 widgets on a shelf and failed to deliver them. Said widget hadn't been invented yet, and people plunked down money in the hope it would pan out.


Perhaps not gambling, but it isn't a direct exchange of money for product.
 
fleggett said:
No, no, no, no! Your pledge does NOT constitute a "donation". I wish people would stop spreading this Godawful myth. It also isn't the equivalent of a stock share or a casino bet. You are not "gambling" in the traditional sense nor investing in a startup, but are contributing money IN EXCHANGE FOR a physical product.

People need to quit obfuscating what a pledge represents, much less what it actually is. People also need to stop absolving Kickstarter of any responsibility in their creation and continued cultivation of their Wild Wild West system where backers shoulder 100% of the risk while Kickstarter enjoys 0% liability (and 100% return). Numerous reforms have been advanced to decrease backer exposure to potential deadbeat project creators, but Kickstarter has stubbornly refused to enact any of them. They've actually doubled down and gone the opposite route by lowering vetting standards and changing their ToS to be even more project creator friendly.

However, this Zano disaster might spur Kickstarter into doing something FOR backers instead of continually dismissing them, as several people have successfully petitioned chargebacks, which is virtually unheard of in the realm of crowdfunding.
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You are giving money in hopes of getting a tangible item. There is and never can be a promise that anything will actually come to light or come to light in the way somebody hopes. I could think it will cost $100,000 to make a game and tell you you give me $20 and I give you a copy with X features. Then say 3/4 of the way through I realize I was too far off on my thought and can only give you half of what i thought for $100,000 so need to either get more money or cut out features. By your logic that shouldn't be allowed as you were promised X features for Y amount no matter what. There is also going to be projects that might have every intention of happening but then falling apart or having something happen that brings it to a halt. In those cases the people are supposed to give back the money and say they will when they sign up.

There is only so much that any of these sites can do. They don't have the man power or knowledge to look at every project and know if the person can really do what they say. If people report projects they can look into them.
 
fleggett said:
No, no, no, no! Your pledge does NOT constitute a "donation". I wish people would stop spreading this Godawful myth. It also isn't the equivalent of a stock share or a casino bet. You are not "gambling" in the traditional sense nor investing in a startup, but are contributing money IN EXCHANGE FOR a physical product.

People need to quit obfuscating what a pledge represents, much less what it actually is. People also need to stop absolving Kickstarter of any responsibility in their creation and continued cultivation of their Wild Wild West system where backers shoulder 100% of the risk while Kickstarter enjoys 0% liability (and 100% return). Numerous reforms have been advanced to decrease backer exposure to potential deadbeat project creators, but Kickstarter has stubbornly refused to enact any of them. They've actually doubled down and gone the opposite route by lowering vetting standards and changing their ToS to be even more project creator friendly.

However, this Zano disaster might spur Kickstarter into doing something FOR backers instead of continually dismissing them, as several people have successfully petitioned chargebacks, which is virtually unheard of in the realm of crowdfunding.
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The only way Kickstarter works is because there is nearly zero accountability, and people know they can shoot for the moon because they won't get sued out the ass when they fall on their face. Of course, if it continues going down this path eventually the money will dry up, but you gotta milk while the milking's good.
 
What I want to know is this - how does this Zano Titanic differ from any other campaign where the project creator has shafted his or her backer base? What is the threshold? The amount of pledge theft should be immaterial and there should be a mechanism that backers can access when a drive goes south.

Where is the line drawn? If this journalist discovers that the people behind the Zano campaign moved to a sandy beach somewhere and are having a jolly old time, what about the numerous other campaigns that failed to deliver? How can those backers get even a sliver of justice?
 
Can't wait to hear who will be investigating the Star Citizen scam (yes, yes, not on KS) when it finally collapses onto itself. The $3M for the Zano pale in comparison.
 
fleggett said:
What I want to know is this - how does this Zano Titanic differ from any other campaign where the project creator has shafted his or her backer base? What is the threshold? The amount of pledge theft should be immaterial and there should be a mechanism that backers can access when a drive goes south.

Where is the line drawn? If this journalist discovers that the people behind the Zano campaign moved to a sandy beach somewhere and are having a jolly old time, what about the numerous other campaigns that failed to deliver? How can those backers get even a sliver of justice?
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I don't think this is done to provide any justice to the affected backers of Zano. This is Kickstarter trying to understand why these projects fail, and they happen to pick Zano as a case study. Although the company offered an explanation, of course we wouldn't know if they were telling the truth or something else happened, and that is what Kickstarter wants to know.

Maybe the investigation will uncover the truth, and from that they are able to learn something to help reduce the chances of such failure in the future. Million dollar failures like this are very bad for Kickstarter, so it's not surprising that they now investigate the failure rather than just claiming they are not responsible for any project failing.
 
The problem is the lack of transparency and communication.

Many Kickstarter projects start off with loads of fanfare three times a day updates, promises of wonder and amazement. Projects asks for $50000 and on the final day it hits an amazing $2000000!

It can't fail! This is incredible. I can't wait for my super item!

Then the day after funding finishes....nothing.

The updates stop. No more communication. A month later a notice goes up saying some difficulty has happened. No updates again. Two months later another vague notice. Another two months later they've folded. No explanation given.

Basically two guys have run off with $2000000 and nothing anyone can do about it.

License to scam.

Kickstarter need to implement more rules and possibly drip feed the funding. Say they get the initial amount they asked for and the over funding gets spread over the following 12 months. Subject to further obligations to get it.
 
I can also imagine a lot of these projects getting the money and the first two weeks are spent buying the swanky office, the dart board, fussball table, massive coffee machine, leather sofas, a few parties, new suits, a car etc. etc.

"Hold on! Weren't we supposed to be doing something else with this money?"
 
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