ZPM Espresso and the Rage of the Jilted Crowdfunder

http://www.nytimes.com/2015/05/03/magazine/zpm-espresso-and-the-rage-of-the-jilted-crowdfunder.html

by goatforce5 • 11 years ago

62 23 11 years ago

Adaptive2• 11 years ago

I'm an original backer. I backed at the machine level, so would have received a unit.

My full take away from the situation was simply that they had bad business sense and burned through cash on a several bad decisions, then hoped to pull success from the jaws (or more realistically, the stomach) of defeat, so made ridiculously upbeat postings in an attempt to hand wave over the cracks in the project.

It was a risk; I took it on. Not my most expensive bad investment by far. I checked out of monitoring the Kickstarter feed once it became clear that it was going no where. That was well before the final gasps from the ZPM people.

I'm glad that Kickstarter has pushed projects to post risks, avoid renders, etc. None of that would have mitigated the bad-businesspeople issue, however.

Edit: To make things clear, I really don't hold a grudge on this. I threw money at some clever ideas, but we all know making them happen at scale can be hard. They didn't handle things well but I felt that the hugely negative response was largely an overreaction.

paulftw3• 11 years ago

Very vocal minority makes all backers seem mad and aggressive, basically a couple of trolls set the tone. maybe if everyone who felt the other way would be as proactive in expressing their opinions to founders it would change at least the emotional outcome. It would silence the trolls, and it would also be more democratic.

The problem is people with more balanced views also have other things to focus on in their lives, so here you have it - even if most backers understood the risk they were taking and have no hard feelings, years later we only hear about that other small subset

batbomb• 11 years ago

So did you end up buying a Crossland CC1 in the end?

Adaptive2• 11 years ago

I bought an aeropress :)

jonah• 11 years ago

It seems Kickstarter should allow people to set a maximum number of donations and cut it off after that. It they could have handled building/wanted to build 50 machines, but not 5000, they should be able to set an upper limit on the number of backers to their project to prevent runaways like this.

lazerwalker• 11 years ago

Kickstarter does allow this. Rewards such as physical hardware are associated with specific reward tiers, and individual reward tiers are allowed to (and frequently do) have hard limits.

on_and_off3• 11 years ago

Kickstarter allows this (and allowed it when the campaign was created). They should definitely have limited the scope to what they had envisioned first. They would have still mismanaged the project, but problems would probably not have snowballed so far.

on_and_off3• 11 years ago

I am an original backer at the machine level as well.

I don't really hold a grudge on this project but I can understand (to a certain extend) the people who do. If my memory serves me well, throughout the project they never mentioned that the founding engineer had left the company or any other of their most serious issues. The last status update was that they only needed UL certification and would be ready to ship the machines and then suddenly they reveal that the project is pure vaporware. Even after that, they promised an update 'in the next month' on fulfillment possibilities and it never came. The failure is excusable and was always a risk but the dishonesty and almost total lack of transparence makes the rancor of some backers very understandable.

JacobAldridge3• 11 years ago

"As someone involved in the project from its beginning, he felt entitled to know everything."

As a business owner, and a fairly transparent one, that sickens me. In what world should customers feel "entitled to know everything" about a business.

Absolutely entitled to ask, to take their business elsewhere if they don't like the (lack of) answers, but entitled to know? No way.

This sounds to me like another group who confused Kickstarter with Amazon pre-ordering, or an investment fund where they became shareholders. You assessed the risks, took the risk to put some money down, and it didn't work out.

It's often said that Silicon Valley works, in part, because of its acceptance of failures. This is a witch hunt that says more about the hunters than those they are chasing. Good luck building the American Dream in a society where failing to deliver on a Kickstarter project means it's "entirely appropriate that he never work in technology, finance, consulting or the coffee fields (sorry, that kills the barista career) again.”

ra• 11 years ago

"In what world should customers feel "entitled to know everything" about a business"

Even you are confusing customers with backers. That's the point and the problem with KS. Even the wording in the pledge suggests it's not a matter of if, but when:

"For a $200 pledge, you’re pre-ordering one of our very first machines, a $400 retail value! It can be hard to be one of the first to brave new frontiers, but don’t worry - there’s no river-crossings or dysentery in store for you, just awesome home-brewed espresso."

"Estimated delivery: Mar 2012"

JacobAldridge3• 11 years ago

"Backers" is absolutely the right word in this case - I knew "customers" wasn't fully accurate in a Kickstarter context (though it does have wider application to other businesses). Thanks for that.

You're also right that the communication from the ZPM crew seems to have been poor from the very start - a lack of capability and experience, I suspect, not a presence of malice and fraud.

slavik81• 11 years ago

I don't agree with your characterization of Kickstarter. They've always been quite clear that there is a legal contract between backers and businesses that obligates the business to provide the goods and services they promised. [1]

The company in question broke the terms of their contract. As such, backers are legally entitled to their money back. If the company cannot pay, the company is insolvent and may need to declare bankruptcy. That's life as a business; you need to pay your debts.

[1] As mentioned in the article, that contract changed recently. Businesses can now be absolved from their obligations by being transparent. Basically, backers for new projects are entitled to know what happened if the project fails. https://www.kickstarter.com/terms-of-use#section4

JacobAldridge3• 11 years ago

You make a good point in regards to Kickstarter, and while I still feel some of the responses in the piece are naive the link you provided certainly supports some of their arguments in a way I didn't fully appreciate.

I still don't think it extends as far as the two quotes I used (the first one was the NYT paraphrasing; the second was direct).

Even in a direct customer situation, where far less "there's a chance something could happen that prevents the creator from being able to finish the project as promised" grey area exists than with KS backers, there's no entitlement to know everything about the company. And to suggest people who try, and risk, and fail aren't even eligible for barista work sickens me personally and would create enormous problems for society.

woah• 11 years ago

I think you've missed the central theme of this article. Kickstarter backers are not customers. If they were customers, they would receive merchandise. They're something between a customer and an investor and it's interesting to explore the details around that. Maybe full disclosure in return for funding an idea that may never come to fruition is a good compromise. I think that it would certainly have satisfied most of the people who were angry in this article.

If you are "sickened" by the prospect of exploring new business models, I suggest you stay away from crowd funding and avoid reading about it, for your own health.

paulftw3• 11 years ago

Did you notice how things went downhill once they entered the stealth mode? What kind of startup consultant would suggest that and for what reason?

FullyFunctional• 11 years ago

(I preordered one myself).

No, I don't think that's accurate. Things had gone bad long before that, but it wasn't obvious right away that the ship was sinking. That said, going stealth didn't help them one iota but caused a lot of ire.

My experience with ~ 25 KS has been mixed. ~ 4 failed to deliver, more than half delivered successfully. A couple delivered a lousy product. ~ 1/3 are still pending. Almost all of them are late or very very late, especially SW projects seems to drag on forever.

My appetite for KS has cooled a lot and frankly I'm surprised my experience hasn't been worse.

paulftw3• 11 years ago

didn't help them one iota but caused a lot of fire.

Yes, I was referring to the relationship with customers. The result would likely be the same, but it wouldn't end with personal attacks and attempts to uncover a fraud.

jkestner• 11 years ago

At the very least, your spidey sense should be better tuned to the markers of projects headed for failure, like lack of hard and technical details, too much optimism, etc. I still back hardware projects, but it takes a grown-up, passionate team to move me.

CodexArcanum• 11 years ago

I've had a few bad experiences with KS but as someone whose been using it since very early on, I'm generally pleased with it. KS launched in April 2009 and my first backing was in December 2009. Since then, I've backed 75 projects, 20 of which have yet to deliver, but only 2 which I think will probably fail completely. Most of my pledges are for board games, books, and small gadgets, all of which seem like pretty safe categories.

Around 2009, I had been thinking that the future of music and art might be a return to the patronage system, only with mass audiences funding artists instead of rich individuals. KS, Patreon, and other sites like them seem to have proven that theory out. And I'm happy to see them do so. I still strongly believe that distributed patronage is the best way for artists, musicians, game designers, and even film makers to be able to produce what they and their fans want.

on_and_off3• 11 years ago

Almost all of them are late or very very late

To be fair, I have always thought that for many projects the 'expected delivery date' was a joke. When a project explodes and gets 10x the required funding and has either very different logistics problems to solve for hw projects or grows its scope for sw ones, you can't expect the delivery date to be unaffected.

bobf• 11 years ago

I'm pretty unhappy with them, but for different reasons. I ordered more than a year after their Kickstarter -- as a pre-order through their Shopify site. At that point, they had indicated they were going to ship units "soon", so I felt the pre-order would be fulfilled in a timely manner.

I had intentionally avoided backing the Kickstarter because I didn't find the risk to be worth it at the time.

One thing I learned through the process, which everyone should be aware of: there is no consumer protection available with either Shopify or American Express Platinum (famous for it's high level of customer service, "return protection", extended warranty on purchases, etc) if more than 60-120 days passes after a purchase and you haven't received the item.

Lesson: file claims early.

Don't order pre-order goods with uncertain delivery dates (or if you do, don't let them slip past 60 days from the order date without filing a claim for a refund with the merchant provider or your credit card company).

johnbuckman• 11 years ago

This comment from one of the original consulting engineers is really interesting:

"Bio-Med Engineer Langhorne PA 13 hours ago I worked in an engineering design consultancy that was contracted early on to help productize the ZPM design, and as such am intimately familiar with their initial concepts. In my opinion, the founders were initially earnest and dedicated but also naive and lacking in engineering judgement. They confused the ability to raise money with the ability to make sound engineering and technical decisions. Falling in love with one's ideas is a trap into which many inventors fall, and ZPM fell hard.

Additionally, I believe that ZPM received a lot of questionable advice from people who did not have their best interests at heart, and were swayed by strong personalities.

But the early backers - particularly the engineers - should have had the sense to realize that open-source firmware that is intended to control a consumer product that delivers scalding hot water is a fundamentally BAD idea, and that using a PID loop to manage the process is totally unnecessary.

What this article highlights is that Mr. Polyakov's talent is in raising money and expectations. It is unfortunate that neither his ethics, nor his engineering abilities can match those talents."

ZPM Espresso and the Rage of the Jilted Crowdfunder

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