The Crowd Funding Phenomena
Crowd funding certainly has a purpose, and its intentions are generally good ones. The majority of campaigns launched on Kickstarter also have good intentions, but over the past couple of years, there are certainly lessons that can be learned from successful and failed campaigns, some of which I will share for those who want to launch crowd-funded campaigns. After Bonaverde and ZPM Espresso, crowd funding for coffee makers just got harder.
- Be realistic. Campaigns are often run by overly optimistic individuals with little manufacturing experience. Manufacturing a compact disc (CD) of music is not the same as manufacturing a complex machine for which tooling doesn’t exist. If you have little manufacturing experience, you shouldn’t make promises or optimistic statements until you have the facts at hand or previous experience to support your claims. Every crowd-funded idea is not the same, but there are basic principles that apply to all, and being realistic is one of them. Understand the market and consumer you’re pitching.
- Be honest. Don’t present your campaign as “all figured out – give us money to make it happen” when the reality is the opposite. In the case of the Bonaverde machine, they presented their history of prototypes (18 months, 130+ units) and made claim that they were ready for manufacturing. The reality is nothing could be further from the truth. To get funding and then completely walk away from what was promised only to reinvent the wheel again is grossly dishonest, unethical and negligent use of supporters’ money.
- Reward carefully. Here’s where I say crowd-funding campaigns have gotten carried away, angering backers while putting project owners and crowd-funding sites at risk. Many have reward levels that are aimed squarely at offering the project item for which funding is being solicited. As a result, you have a dichotomy with supporters who treat crowd-funding campaigns as a ‘store,’ to buy the things of interest; the crowd-funding sites struggling to remind people they aren’t “buying” a product, but supporting a vision; and project leaders treating crowd-funding sites as interest free loan, with little recourse if the project fails to deliver. Crowd-funding sites should vet their project more carefully, or at the very least prohibit expensive one-off projects from offering the actual product as a reward. As stated previously, trying to manufacture an album on CD or printing a book isn’t the same as building a complex coffee maker. Rewards could be treated more like buying your place in line (with a credit towards the item once it’s available), which limits the exposure from supporters, and limits the exposure of the project at hand. I think many Bonaverde supporters would be less irate at having contributed say, $50 to being first in line to be a Beta tester vs. the $250-$500 spread for a machine.
- Update Frequently. Here’s where Bonaverde, in one respect, did something properly: they engaged in frequent updates to their supporters. Quite often, especially when a project runs into trouble post-funding, the updates stop. However, the updates Bonaverde gave continued to alienate their supporters. Statements made in the initial funding story were coming to light in the updates as being patently false. They claimed that not only had they done tooling and production line set-up prior (ironic given no one on the Bonaverde team had any true manufacturing experience previously), but made multiple claims over the next 12 months that “tooling has started” even though that didn’t appear to be the case. Fourteen months later, not one coffee machine had been delivered. Their updates for the 12 month period would not only contradict previous updates (see #2: Be honest), but would continue to include information that wasn’t relevant to supporters or even changed the terms of what supporters backed (read: RFID tags would be required to brew coffee, meaning you had to buy your coffee from Bonaverde exclusively – this has been rescinded after backlash from supporters).
- Stay True to your campaign. If one thing is obvious from the list of the first 4 items, it’s that Bonaverde changed their terms multiple times, angering supporters who feel they’ve been cheated, misled, or taken advantage of. The campaign for Bonaverde started out to raise money for an all-in-one coffee machine that was apparently ready to go. 135 prototypes, and yet Bonaverde suddenly had to build an all-new unit? The second change from the campaign was that this was supposed to be all about a coffee maker. Not buying coffee from Bonaverde. They were offering a platform to connect buyers to farmers. This bit receives exactly 1 and ½ sentences in their campaign story. 6 months into the project updates, it was announced that only coffee purchased through Bonaverde (with a single use RFID tag) will work in the coffee maker. This was never described in the original project campaign. It wasn’t even hinted at. Less than two months later, Bonaverde partially backtracked saying that RFID tags for various roasting states with unlimited use will be supplied to early backers only. A series of stretch goals (hitting financial targets) offered color choices, timers, and other improvements. Those have all since been rescinded. It’s understandable that things can change, but when they change considerably, even after financial targets have been exceeded, it brings into question the ethics surrounding the campaign.
Crowd funding has its place and a lot of great things have come out of crowd funding, be they products or even simple financial support for those struggling with life changing ailments. At the same time, crowd funding for new and exciting products (from games to gadgets) has gotten reckless, and the crowd funding sites themselves have to shoulder a large part of the responsibility. It’s their platform that connects supporters and believers with the dreamers trying to turn their dreams into reality.
In the end, there doesn’t seem to be a light at the end of the tunnel for early supporters of the Bonaverde all-in-one coffee brewer. However, there does seem to be a never-ending supply of start-up capital for their quest to change the way we drink coffee. But will any of us ever get a taste of this supposedly wonderful coffee?