I would argue the opposite—as a consumer I am considerably safer putting my presale funds into a product of an established company as they are more likely to honor the arrangement. They can’t just go belly up and move on to the next big thing.
If established companies were just a tiny bit better with the way they do presales, this might be okay. But I've bought too many products in the last five years that were literally broken (videogames are the prime example) after forking over $60. Some of those products have remained broken for months. That's unethical. What shocks me most is this has happened with flagship franchises, which tells me those companies simply don't give a damn. Why should they, when the pay now, deliver later business model works?
Companies need to prove that their product is valuable, you can't do that when you flip the relationship, the power dynamic is completely out of whack - we're the billion dollar company, but we want you, the consumer, to give us money now for a product which we promise will be good later.
As consumers, we should expect more.
It's fuzzy because of the definition of working, but I get to decide that.
Sure, compared to an unestablished company. But why would you ever want to do that when you can buy something that's out there and has been proven? You are much safer buying a product that's been put through it's paces no matter who's making it. You don't have to worry about honoring any type of arrangement because the product exists. You want a new Ford a year from now, then buy it a year from now. You've been told your model 3 will be delivered a year from now? Don't hold your breath. These companies are pre-selling little more than hype.
If Tesla goes bankrupt then what?
The whole purpose of crowdfunding is to hedge the financial risks of bringing a product to market. This is something that "3 college kids" should consider (and may even be necessary), but a business with hundreds of millions in revenue should be able to avoid for the consumer's sake.
Why should we, as the consumer, accept to pay for something before it's even made? If the product ends up being subpar, the company has nothing to lose, so what's their incentive to make a quality product?
I'm not coming from a legal standpoint, this is just my opinion, of course they can do whatever they want.
But one situation where crowd funding might be appropriate is where a product manager or developers can’t get budget to fund development. So unless a crowdfunding project is successful, the product will never get developed.
That may or may not be the case here, but in general I can see a few scenarios where crowdfunding in large companies might be appropriate as a way of seeing if a real market exists and gaining traction internally, prior to development.
But evidently, lots of people disagree with you and, and, for one reason or another, do want to pay for some products before they are made.
I'm sometimes one of them - I will pay for a prerelease. Sometimes it's to help (e.g. I'll buy books on preorder to help authors I like), sometimes it's to help get a product made, sometimes I get benefits (it costs less than it will later, at least supposedly).
That's an interesting thought. Assuming that the company is already worth millions/billions of dollars, I wonder if it can give extra assurance of a money back guarantee to unhappy consumer backers. Especially if the company primarily intends to use crowdsourcing as a form of product validation.
There's also the risk of unhappy but influential backers going public about what they think. Crowdsourcing for big companies must not be as fun as your typical Kickstarter campaign!
For example, in this article, we have a sentence pulled from the article and presented in a larger font with italics, a quote block and green text:
If this was three guys in college looking to try and get their prototype into the world, great. But this isn’t a start-up.
This seems like a poor sentence to use for two reasons:
1. That sentence literally appears immediately before the quote block in the article in a vertical layout, which means I read the same sentence twice, back to back.
2. The sentence itself doesn't seem...noteworthy?
It seems like this concept was cargo culted from the design zeitgeist of modern magazines, to the point that it's worked in as stylistic sugar where it doesn't really make sense.
| Pull quotes are likely a way to re-engage those users, thus increase their time spent on the page + ad impressions.
I agree though, execution is pretty hit or miss.
Why wouldn't you take advantage of that before committing possibly millions of dollars into a project?
That said if you're a successful company you really should execute perfectly on your crowd funded product, it should ship when you say it will and it should have all the fit and finish of a professional product. If, as a company, you consider crowd funded products to be somehow a 'cheaper' alternative to "real" products, then I have an issue with that.
I don't have a problem with this as it is really just an ad hoc focus group. I think they do have a responsibility to make sure there is more upside for the early adopter like early access or unique skin/badge, etc.
The article in question, however, is titled "It's not okay for..." and alludes to corporations who supposedly are violating the 'moral rights' by participating in crowdfunding practices. The parent post is merely extending the debate regarding the same moral rights but taking an opposite stance, claiming that the right(not legal, but moral) is not exclusive to the start-ups.
To me, crowdfunding is more about testing market fit, which is especially critical when building physical products that need manufacturing - so it's for everybody. Actually, the simple fact that refund is automatic when campaign goals are not met is probably better than any usual presale.
As the author pointed out, Indiegogo is supposed to focus on the "underdogs":
"Our mission is to empower people to unite around ideas that matter to them and together make those ideas come to life... We know building something from scratch is hard, so we’ve got your back."
In fact, large companies might bring some refreshing linguistic restraint into the game, as I would expect them to be much more cautious of claiming "best/first/only in the world" about products that are clearly not. I rarely see a product kickstarter that does not look like exactly how a highly polished parody of product kickstarters would. At least with a big company, you would know that they put more into the product than into the campaign.
What is currently ruining the platforms (well, at least ruining kickstarter) are campaigns were this is clearly reversed, e.g. campaigns trying to do a moneygrab with something as commoditized as USB power banks.
Personally, I like to go for the artsy projects because these can't be found elsewhere (except maybe Etsy) so I've learnt to filter out the "money-grabbing" spam. Inevitably you'll have noise in a system, like eBay's counterfeit problem, but I just don't think that you need large companies presence to deal with it.
Presales by established companies would not do that. Next are expected product features that turn out to be impossible/too difficult to deliver on time or budget. Happens all the time, there are entire software development processes built around this uncertainty. For presales, this is really solved by precise language clearly differentiating between the definite and the possible. With zero effect on customer enthusiasm and disappointment, because we all ignore them every single time. Just be careful to not "not-promise" too much.
Then there is the pre-sales rebate. The least suspecting of all pre-sale perks. But many products get cheaper over time. How long does the announced "post-presale price" have to stay valid so that the pre-sale rebate is not deceptive? Clearly it would be ok to slash prices when when the successor model is announced two years later. Clearly, it would be absolutely outrageous of they only sold one unit to a guy hired by marketing at the announced full price on release day, to then immediately go below pre-sales price. At what point between those extremes does a pre-sales rebate become deceptive?
Unless the work is highly modular and distributable. But it depends on the product being worked on, some things work well (open source software development), other things don't (design, hardware, physical stuff).
But we can ignore that when pre-ordering games... because they look fucking awesome!
Seriously, not an issue. Why would companies not crowdfund? If anything, they have a higher chance of delivering on their promises.
Crowfunding implies that you don't have enough money to start making and holding inventory for $something. And $something is usually small, under some hundred dollar device that the markets haven't figured out yet.
Like, the recent RISC cpu board - its new, novel, and really neat. But to make them costs a bit per board. $25 each, which in lots of 1000, is up to $25k capital. But the design and idea is awesome, and lots of others agree. So people put money in, and take a bit of risk, to see that this is made, and they get it, and prove there is a market to continue.
When big companies do this, they have plenty of capital and ability. The risk they're taking is that if the "market bears it". And using crowdfunding platforms, they also shunt the risk almost completely off since those platforms offer pretty much nothing in terms of guarantees.
Big companies using crowdfunding also short-circuits the idea for these - which is that big companies ignore many market segments because of their size. In the short and long of it, they are bad actors.
Read my previous comment history and tslug's comment about how capitalism reduces an infinite amount of dimensions of ethics, value, and liability down to a single scalar : money.
Of course bad actors (read: big companies) are going to hack and use it ways that aren't intended. They have no ethics(legally required, except for benefit corps), only governmental fines which are some percent of the damages they cause.
The ethics aren't what you say they are either. First, while if a startup crowd funds a product and fails, you're SOL. When a billion dollar company crowd funds a product, even if the platform makes no guarantees, if it fails do deliver then you have recourse against the company. Second, Why should only small players be able to address previously unaddressed markets? Isn't that one of the complaints about big companies, that they ignore small markets? And now that they've got the ability to actually test out a market - and serve it in the process! - that's a bad thing too?
[0] https://www.indiegogo.com/projects/capsule-the-world-s-most-...
[1] https://www.indiegogo.com/projects/opal-nugget-ice-maker/#/c...
I see these rules as:
1. The vendor is using the platform to sell a product that's not ready for market yet. They are not willing or able to develop the product without securing the funds to do so from willing buyers. Note that the distinction between "not willing" (a company swimming in cash that doesn't want to take a risk) and "not able" (a guy with no financial means whatsoever) is blurry in many real cases (e.g. three guys in a garage that could spend their whole life savings and mortgage the house but aren't quite willing to, as the in-between case).
2. The buyers are getting a product they can't get elsewhere, at a price they are willing to pay. This implies they feel adequately compensated for the risk they know they are taking on.
3. The platform earns a fee.
A giant corporation playing by these rules seems to me to be fairly contributing to the ecosystem just like a small player. If their proposition is not on terms that buyers accept, they'll simply fail.
There are some really cool ideas on Kickstarter and some things that seem incredibly well designed (they crop up on uncrate.com all the time). Execution seems to be the challenge - a good product isn't just the design of it, it needs to perform its task well, safely, and durably.
Would be nice to see colleges themselves forking over some of those sweet, sweet endowments into students ideas.
