Guest Post by Derek Whitney

Kickstarter has raised over $679 million for creative projects to date as the world’s largest crowdfunding site. It has been a part of launching hundreds of new products, has funded television series, movies, and environmental projects. Unfortunately, some kickstarted projects have gone wrong due to poor planning or outright malice. Business owners looking to launch a product should pay attention to these three campaigns that went bad.

Glory to Rome: A board game

Glory to Rome was at first a huge success story. Ed Carter, the mastermind behind the board game, asked for $21,000 to create a deluxe version of his game. He received nearly triple that amount from enthusiastic fans. Because of the huge success of the campaign, Carter threw in free shipping for the game.

A year later, Carter’s dreams were crushed. Carter failed to label the games as fragile, causing them to be destroyed in transit. Even worse, a large shipment of the games to Australia cost him more to ship than was charged for the entire game.

Soon Carter was producing and shipping the games for a loss. This was compounded when he lost his regular 9-5 job, which forced him to pay for the games from his own savings. When that ran out, he lost his home and went bankrupt. A business can go bad even with a great product that sells well. With mistakes that caused Carter to lose an entire shipment of games, this designer went bankrupt instead.

Vere flip-flop: An eco-friendly sandal

Two childhood friends got together to create a new type of sandal. John Eades and Michael Ferreri asked for a mere $12,000 to build a facility in New York. The campaign ended in February, and they received over $52,000 in orders. Soon they got to work making sandals.

Delays and setbacks pushed back production, so that by December they finally began to ship out sandals. They cited a variety of issues in their updates on Kickstarter, including mechanical issues and materials that arrived late. According to Eades and Ferreri, they would have limited the number of sandals available for purchase if they were to do another campaign. While they potentially could have fulfilled $12,000 worth of sales on time, $52,000 was far out of reach.

Eyez: Video recording glasses

While the previous two campaigns stumbled due to external setbacks, Eyez was the exact opposite. The campaign by a company named ZionEyes was a complete scam. It raised a total of $343,415 by the end of their campaign selling the glasses for $150 each. Two years later the glasses hadn’t been delivered and the creators had only posted a single notice saying that production was behind schedule.

Furious customers are threating a class action lawsuit, using Kickstarter’s own Terms of Use as leverage against ZionEyes. According to the Terms of Use, ZionEyes must make a ‘good faith’ effort to complete the project.

In the end, Kickstarter is a great site that helps companies to get connected directly with customers, but must be used with caution. Companies need to do their due diligence in assessing costs, keeping the project on schedule, and communicating with their customers.

Author Bio

Derek is currently blogging for Startup Valley, an equity crowdfunding platform. Derek likes to stay active in the crowdfunding community by constantly blogging about new trends and topics that are circulating around the industry.