Lessons we can all learn from a crowdfunding cock-up

20 minutes late is fashionably late; 1 hour is plain rude. Being a year behind schedule, however, is disastrously tardy. But that kind of cock-up is increasingly common as entrepreneurs take to crowdfunding platforms like Kickstarter and Indiegogo with gadgets, but end up letting down their backers very badly. Their videos are slick, the promises are grand, but the capability to deliver is sheer slapstick.

A case in point is the Smarty Ring. In December 2013, we wrote about the crowdfunding campaign for this teensy trinket that promises to zap your smartphone notifications onto a ring with a tiny, curved LED display. At that time, despite the Indian startup not having a working prototype (its demo video and promo images used computer-generated visuals), it was promising delivery to early buyers by April this year. That time has long since come and gone.

Now, the Smarty Ring team is still scrambling to put together a working prototype, let alone actually begin manufacturing or shipping. And that’s despite a grand total of nearly US$300,000 raised, way past the initial goal of US$40,000. The latest update from Smarty Ring, on its Indiegogo campaign’s ‘updates’ section, is that it’s currently at the “final stage of completing [a] working prototype” – which will be ready by December. That’s December 2014, a full year after the campaign was launched.

When the Indiegogo fundraising began in December 2013, the team stated that it had already spent eight months on “technical research” so that they had “finalised the feasible prototype model” that supposedly corresponds with the visuals given to consumers on the crowdfunding site. Either that initial prototype was totally unworkable, or that was deliberately misleading. We contacted the Smarty Ring team earlier this month, but have not had a response.

Here’s how little progress there has been in nearly a year – and note how much bulkier the ring could be compared to the first CGI images:

The startup team has repeatedly promised, however, that it will deliver the goods, and has provided 26 status updates on Indiegogo. But those are outweighed by over 1,140 comments that exhibit growing frustration and anger with the tardiness of this product – a gadget for which people paid US$175 for the model with all the features. “Refund, please. Do what is right by your backers,” says one comment from a buyer; “This takes the piss!” exclaims another. Another points out: “Kickstarter has just updated its rules to prevent this kind of dramatic experiences [sic] for the backers. Indiegogo should do the same.”

A recent update from the Smarty Ring crew points out that their updates show they’re still working on the project and have not absconded with the money. “[Y]ou people gave us good opportunity by believing the project description, without any working product, we respect that and doing things [sic] to complete this at any cost.”

So what can we all learn from this mess-up?

Lessons for consumers

As much as we love buying shiny new things, we need to remember that hardware is hard, and inexperienced entrepreneurs and startups are likely to over-promise and make massive mistakes.

The biggest red flag is a lack of a working prototype. If the team seeking your cash cannot yet show you an actual working product, even one at a fairly early stage, then put your money back in your pocket and walk away from the snake oil salesman.

Even where there is a prototype, be aware that the design, ergonomics, or feature-set could evolve a great deal in the handful of months before it ships, which could leave the gadget you bought missing something you really wanted. Or the inexperienced gadget-maker could pile on new features, swayed by the crowdfunding feedback, and render the gadget bloated or compromised.

Lessons for the media

Lessons for startups