Misaligned incentives just don't work and create bad outcomes.
I'm not that wild about crowd-funding. I just don't think there is enough responsibility conveyed through the mechanism. Particularly if you compare it to someone who say borrows money from their family and friends. That's pressure in a way that 1,000 people's credit card charges just isn't.
I've funded two things, a 3D printer and a Pizza Oven, on two different platforms. But basically both went the same way. They took way longer than promised. And then neither worked as advertised.
So much so that I wanted my money back on both. But you can't charge back something when the delivery takes years from the charge!
I'm a big believer in incentives. I just think the incentives here aren't lined up properly. They are the opposite of everything we've talked about elsewhere on this blog.
First, the very idea that you are paying for a finished product isn't reality. You are paying for a product development process. In our process we encourage experimentation and partial product delivery. Everything I've seen from crowdfunded founders is trying to get it perfect before they release. The number one reason for late delivery was "we want it to be a quality product".
And then second the complete lack of options to get your money back. Or even to cancel an undelivered order. Once you give them the money, they have all the leverage. I wouldn't be surprised if some of them are schemes like Mel Brook's The Producers. After all, one of today's startup mantras is "Fail Fast". If you fail fast enough you just keep all the left over money!
