Matchstick to refund everyone's money

https://www.kickstarter.com/projects/matchstick/matchstick-the-streaming-stick-built-on-firefox-os/posts/1266549

by ChuckMcM • 11 years ago

105 99 11 years ago

ChuckMcM• 11 years ago

Ok, on the one hand as a backer of the project I'm thinking "So DRM is hard, why not ship without it? Why not give people the choice?"

Another possibility is this : http://www.faqs.org/patents/app/20120243158 although I don't see that it has been allowed yet so perhaps not a "real" patent?

I'm one of the people who would have settled for working hardware and just a basic Linux port with graphics support.

JoshTriplett• 11 years ago

I agree; this would be useful even if it only played local content. I wouldn't expect a "Firefox OS" device to play Netflix or similar.

pbreit• 11 years ago

I would expect Netflix over time but agreeing with both of you that an open source TV stick without such a thing still has quite a bit of value.

And, really, they couldn't find someone to continue working on it with all those proceeds?

mcphage• 11 years ago

It might be useful, but it isn't what they promised their backers. That would lead to a lot of angry people.

zz110• 11 years ago

Also: DRM-reading capabilities is a software feature, right? Couldn't they deliver it through a software update and just send me a frigging Matchstick not reading DRMs like I wanted it!?

Avshalom• 11 years ago

Where are they getting the money for the refunds?

_delirium• 11 years ago

One of the executives' pages on LinkedIn says he manages 30 employees at the company. If true, it must have gotten some kind of venture funding, since the $500k they raised on Kickstarter is nowhere near enough to run a company that size for over a year.

javert5• 11 years ago

If I were a VC and my money were being used to repay kickstarter backers instead of me, I would be pretty pissed.

I wonder if there is more to the story. Maybe the company is pivoting.

coderjames3• 11 years ago

As a backer now apparently getting a refund, I'm extremely disappointed with the way this project was managed.

The DRM that apparently blew up the project wasn't in scope when I backed it. This was supposed to be an open source, No-DRM stick. After they had everyone's money, they decided to build a Chromecast clone instead. Classic bait-n-switch.

hermanmerman• 11 years ago

I am completely out of the loop and hove no idea what the project is about, but apparently every one on the KS page is basically saying that they couldn't care less about this feature. I'm curious now at what really happened and why they shut it down, if their biggest hurdle is something so few people want.

justonepost• 11 years ago

No, classic bait n switch doesn't involve refunding money...

zach• 11 years ago

Sigh, yes. "Bait and switch" is the "begging the question" of product forums. It has an actual meaning that nobody cares about and by now just means "I feel disappointed". This is one of the least unfair outcomes for what is a barely a purchase and it is still a "Classic bait-n-switch".

javert5• 11 years ago

His point is that it was an attempted bait and switch. The fact that they failed and refunded the money doesn't change that. They purportedly promised one product and worked on a different one.

coderjames3• 11 years ago

I wrote up a response to this, but accidentally did it under the wrong comment (see my response to thieving_magpie).

In that reply I explain what I felt I was baited with and what it was switched for. Maybe you could explain how you feel the term should be used, since you feel my usage was incorrect?

thieving_magpie• 11 years ago

The old "Take their money then give it back to them 11 months later" con. Great theory ya got there.

javert5• 11 years ago

I'm pretty sure I could make money if I had $470K to hold on to for 11 months. Of course, I could just get a job, that would be easier.

nkozyra• 11 years ago

Well as is mentioned elsewhere, being a successful Kickstarter campaign is amazing P.R. You can take that kind of hype to VCs and get some very real Series A from that if the proposed product is good.

So what could be happening here is that a big company was the target audience all along. Raise a bunch of money with a "disruptive" piece of hardware, garner hype, get some venture money, return the Kickstarter cash.

That seems totally plausible to me. To the VCs these guys look like semi-sure bets to get gobbled by MS or Sony or Netflix or, hell, anyone looking to enter this space.

coderjames3• 11 years ago

I recognize that Kickstarter funds are donations, but the product I donated to is not the product that was being developed.

I was baited with this: "The product is fully functional today, with the hardware design final, tooling complete, and manufacturing ready to ramp up in the next 30-60 days. We also have fully functional sender apps for Firefox, Chrome, iOS, and Android - you can Fling from any of these platforms on almost any laptop or mobile device." [1] And this: "Hardware is done! It was actually previewed in June-" [1]

That expectation was switched for this: "After struggling with the DRM development based on Firefox OS for most of this year, we realize continued development of DRM, though showing early signs of promise, will be a long and difficult road. We have come to the conclusion that we will not be able to reliably predict the completion date of the DRM development without significantly more research, development and integration." [2]

So I donated to a project that was 30-60 days away from start of manufacturing and instead found my donation being used to fund development of something else. Why is this not a bait-n-switch? If I'd known what they were going to build, I would have just bought a Chromecast back in October of 2014.

[1] https://www.kickstarter.com/projects/matchstick/matchstick-t...

[2] https://www.kickstarter.com/projects/matchstick/matchstick-t...

zz110• 11 years ago

Agree! I even sent them e-mail telling them I didn't care about DRM, and, even though I got why, and I didn't wanted to oppose them, I DIDN'T WANTED THEM TO WASTE TIME ON DRM!

And I am sooo deceived now: they can't handle DRM? NO PROBLEM! They are running late? NO PROBLEM! Just get me what you promised me whenever you get there! I wish I was offered a choice, here, instead of being forced to take my money back.

Sanddancer3• 11 years ago

Given a half million dollars doesn't fund a hardware company with a few dozen employees, it sounds like they have other investors, with deeper pockets, that do want DRM. At that point, the KS money becomes more a liability than an asset, and refunding the money is a wise business decision. This frees them to make potentially necessary design decisions that would upset their kickstarter backers, like migrating from Firefox OS and adding DRM features, that would please their other backers.

qopp• 11 years ago

Doesn't this go against what Kickstarter is about? Will other projects feel pressure to refund if they don't pan out?

itafroma2• 11 years ago

Will other projects feel pressure to refund if they don't pan out?

They should as it's one of the remedies Kickstarter requires projects to pursue should they be unable to complete the project and fulfill the rewards:[1]

If a creator is unable to complete their project and fulfill rewards, they’ve failed to live up to the basic obligations of this agreement. To right this, they must make every reasonable effort to find another way of bringing the project to the best possible conclusion for backers. A creator in this position has only remedied the situation and met their obligations to backers if:
[other required remedies]
* they offer to return any remaining funds to backers who have not received their reward (in proportion to the amounts pledged), or else explain how those funds will be used to complete the project in some alternate form.

[1] https://www.kickstarter.com/terms-of-use#backer-creator

derefr• 11 years ago

Well, obviously, if you still have the money, it's nice to refund the money. I think the parent meant more "will this create an expectation in Kickstarter backers that they'll always get either the product or their money back, thus creating some sort of reputational debt-slavery for the project creators who genuinely just use up the money and fail? And doesn't that defeat the purpose of Kickstarter?"

code_chimp• 11 years ago

Maybe it's more PR on their side? If they ever want to run another KS campaign it helps to not have already created a lot of bad will with the target audience.

blhack• 11 years ago

Huh...

I've always thought that "this thing might totally fail" was something that people understood when backing a kickstarter project.

The idea that if they fail, they have to refund everybody's contribution kindof stinks, since I've always thought kickstarter was for people trying new things (which is obviously going to have a lot of stories about failure)

Maybe there is more to the story here.

zz110• 11 years ago

Maybe you should actually read the story: they decided they aren't going to build the product and they decided they are going to refund backers. The "stinking idea" is their own.

dang• 11 years ago

This comment breaks the HN guidelines, which say:

Please don't insinuate that someone hasn't read an article. "Did you even read the article? It mentions that" can be shortened to "The article mentions that."

This comment can similarly be improved by removing "Maybe you should actually read the story". Since it's merely a trope by which forum users take jabs at each other, HN can do without it.

geofft• 11 years ago

Whether or not it was their idea to do so, it's interesting that there's a cultural norm that they refund all of the pledges. I don't see any claim in the article that they invented this concept on their own for fun.

TillE• 11 years ago

There's been a lot of persistent misinformation floating around about Kickstarter, and I don't really understand why. It's not complicated.

Yes, Kickstarter projects are legally obligated to fulfill their promised rewards, or else provide refunds. It has always been this way. Really, the only difference between Kickstarter and a preorder is that the schedule is a lot looser.

ghaff3• 11 years ago

That is no longer the case in the current ToS. Among the current verbiage: "they offer to return any remaining [emphasis mine] funds to backers who have not received their reward (in proportion to the amounts pledged), or else explain how those funds will be used to complete the project in some alternate form."

As you say, the older ToS looked a lot like a pre-order which wasn't really the intention and didn't frankly make a lot of sense for a project that had some material probability of failing. After all, if the money is gone, it's not there any longer to issue refunds.

sago• 11 years ago

The KS Terms are a little more nuanced. The 'refund' stipulation, for example, only says that they must refund any 'remaining' money, not that they must provide a full refund. And there are several criteria that a project creator has to meet, in the absence of completion, to meet their obligations.

The effect is that KS can be used for projects that may fail. And quite right too, since that was its original aim (before it got saturated with companies using it as pre-sales / marketing / investment credentials / etc.

burnte2• 11 years ago

What bothers me is the bad reaction the backers are expressing. The builders, for whatever reason, have decided a refund is in order. You are entitled to be disappointed, but not upset considering you have lost nothing. The insults and such are completely out of line considering the honesty of the project creators. I never thought I 'd see the day when people were UPSET about getting a full refund. Talk about entitled attitudes.

corobo2• 11 years ago

A full refund implies either they've spent nothing or have got way more money from elsewhere (i.e. used the kickstarter to back an outside investment push)

As far as I'm aware kickstarter isn't really supposed to be used as an interest free loan, which is the problem. That's not what people were funding.

idlewords• 11 years ago

I pity the people who have to run 17K refunds by hand.

downandout• 11 years ago

I don't know why they are actually shutting down, but this explanation doesn't ring true. They're blaming DRM complications - a part of the project that no one cares about - as the lynchpin that has taken down the whole thing.

To be honest, I would be quite surprised if anyone receives any money back. The "everyone should have their money back by the end of September" thing seems quite long. Having seen some other, very similar scenarios play out, to me it sounds like they did something else with the money and are trying to stave off the consequences of it or are trying to buy time hoping for a miracle that will allow them to replace it.

eclipxe3• 11 years ago

They need DRM to support most Chromecast apps (that people care about)

joshstrange2• 11 years ago

I'm a plex user (Local media server) and I've found after trying Chromecast, AppleTV+PlexConnect, and FireTV Box I've found that using a Raspberry Pi 2 running RasPlex (total of around $85 w/ media center remote, I don't use it but it got the USB->IR so I could use my universal) provides the best experience of all (by which I mean sub $100 sticks/boxes). Similar results can probably be experienced with XBMC.

icelancer• 11 years ago

Yeah, I repurposed a Lenovo T420 that has a broken keyboard into a media center. Grabbed a DisplayPort to HDMI adapter, installed Ubuntu + KBMC (Kodi, now) on it, and it works pretty good. You can use various plugins to get a lot of features minus Netflix, of course, which will never work properly with third-party software under Linux because.... well, whatever.

natrius• 11 years ago

I'm a heavy Chromecast + Plex user. What do you prefer about the Raspberry Pi setup?

joshstrange2• 11 years ago

Direct play for everything. Way less stressful on the server and you can skip around in the video without hardly any delay (this is something I've never experienced with any other clients). I also quite enjoy being able to browse my collection on the TV instead of just on my phone.

luma• 11 years ago

I've been through just about every Plex client possible and in my experience the Roku offers the best combination of easy setup and reliable operation at a low price. It doesn't rock the flashiest interface, but it's the one I can run in my living room or park at my parent's place with zero further maintenance required.

olympus• 11 years ago

Really bummed that the team came to this conclusion. I am a backer and found them at CES 2015 since they said they would be there with a demo. They had screencasting working and controlled it with an app on their phone. It was a little buggy and froze once, but totally worth the amount I backed them for. Around this time they decided to redesign the sticks with more processing power. I figured respinning the boards would take a while, but the software looked so good in January that I never thought it would be what brought the project to a halt.

Personally I'd be fine with transcoding videos on the fly from another machine to remove the DRM, but I suppose that defeats the purpose of a small hdmi stick if you have a full powered desktop running in the next room over. But really most of the stuff on my local netowrk doesn't have DRM and I don't do a whole lot of online streaming beyond Amazon Prime and I have an app on my TV for that. I suppose all I really wanted was screencasting without having to pay $100 for a WiDi adapter. Oh well.

But at least I'm getting a refund, so I don't suppose I have any ill will for the team. I have backed projects before that did a magic trick with my money - one shoe KS took $130 for a pair of boots and kept up a sham for almost a year, even claiming that production had started and we would see our boots in a few weeks (it was always just a few weeks away), and then abruptly vanished. So I hope whatever project the Matchstick team works on next pans out better for them.

TD-Linux• 11 years ago

Personally I'd be fine with transcoding videos on the fly from another machine to remove the DRM

That would probably be either illegal or against the ToS of the streaming service they were trying to add.

braythwayt2• 11 years ago

The old reality, with companies like Google, was that if you aren’t paying money, you aren’t the customer, you’re the product.

Then Kickstarter came along, and the premise was, “Gives us $X0,000 and we’ll do our best to give you product Y as a so-called-reward. But this is not a store.”

So now you’re giving them money, but you still aren’t a customer!

Because people are now using this as astro-turf marketing campaigns for products that are already funded by other investors, or as market research, or as a line item on their pitch deck to raise money from investors.

In this egregious case, the company seems to have had no intention of really entering into a “deal” with the backers of its kickstarter campaign, it was entering into a deal with its other investors, in accordance with a business plan its backers have never seen. Thus, they struggled to build DRM into the product, although DRM had nothing to do with the product they promised their backers, and everything to do with their other business dealings and plans. And now their backers are discarded like a one-night stand, but hey, here’s your own money back.

Frankly, this stinks.

If you go on Kickstarter and say you’re going to build product Y, that’s what you should do. If your business plan requires raising Kickstarter backing and then going after investors, you should say so up front and not pretend you are off to start work as soon as the project is funded.

And as for the investors, shame on you. If you invest in a company that has entered into an agreement with backers to build product Y, you should actually make them do that, or not invest in the first place.

Whatever pivot the go on to do, everyone has been forewarned that simply giving them money and receiving promises in return means very little to them, their attitude seems to be, “well, if we change our minds, we just give you your money back and do whatever we like.”

That is not a principled way to run a business. If they couldn’t build this thing with the funds raised on Kickstarter, then they shouldn’t have been on Kickstarter.

blantonl• 11 years ago

That is not a principled way to run a business. If they couldn’t build this thing with the funds raised on Kickstarter, then they shouldn’t have been on Kickstarter.

Sounds like they tried to take something to market with an investment, and returned those investments because they couldn't make it work.

Just because they didn't go to a series C and waste a ton more money doesn't make them any less "principled"

braythwayt2• 11 years ago

Except the “something” they couldn’t make work is not the something they promised to the backers making an investment. That’s the problem here: The Kickstarter gives the appearance of a simple proposition: Give us $X and we build $Y.

If you always needed $X+W money, and always planned to build product Y+Z, and Z sinks the whole thing, then you have misled the original backers.

I agree that if they couldn’t make the original Matchstick--the one they promised to their backers--work, they should return what they can. But if the thing that doesn’t work is a business that is a lot more complicated than the thing they put on the Kickstarter, they shouldn’t have been on Kickstarter to begin with.

Eliezer2• 11 years ago

They gave the money back. Regardless of surrounding events or further stories, you do not get to call them unprincipled.

hluska• 11 years ago

First, he did not call the founders unprincipled, he said that this is not a principled way to run a business. I know that's splitting hairs, but I think the distinction is important. Granted, I just told a doctor about a grammatical error in her Emergency Department's mission statement, so this may just be a symptom... :)

Second, the surrounding events do matter. They claimed to be raising money to build a product. Then, their efforts bogged down because they tried to build an entirely different product than they originally promised.

Where I'm from, we call that lying. But, for fun, let's check out their own words:

Q: Why did Matchstick select Microsoft PlayReady ?

A: Matchstick intends to offer DRM on its platform and bring premium content to its users in the quickest timeframe possible. Microsoft PlayReady offers a mature technology, has relationship with premium content providers and is quick to deploy on the Firefox OS platform.

Funny how a solution that is so 'quick to deploy' could sink the whole ship, hey?

jlarocco• 11 years ago

I disagree.

If they were principled, they would have followed through with the original product. Instead they used the money to start building something slightly different. It was a bait and switch.

Giving people's money back is saving face to avoid a huge backlash.

singulaire• 11 years ago

In addition to what other commenters said, even once the money is given back, this still amounts to a loan without interest. I would call that unprincipled.

makomk3• 11 years ago

No, they promised to give the money back within the next 60 days. In the past, Kickstarter projects have had a very mixed record when it comes to actually making the refunds they promised.

bsder• 11 years ago

Thus, they struggled to build DRM into the product, although DRM had nothing to do with the product they promised their backers, and everything to do with their other business dealings and plans.

You do realize that most HDMI chips require you to sign that you will adhere to HDCP?

jsprogrammer• 11 years ago

I think the device only needs one HDMI chip.

pjc503• 11 years ago

Look, if you want this it could undoubtedly be done much more cheaply by not building new hardware and taking one of the Chinese Android sticks and getting it to run Firefox OS. A hassle, and not an inconsiderable project, but much less so than building the thing from scratch.

AndrewDucker• 11 years ago

The thing about Matchstick was this line from the original campaign:

"The product is fully functional today, with the hardware design final, tooling complete, and manufacturing ready to ramp up in the next 30-60 days"

followed six-months later by:

"We want to update the hardware" and "is being updated to support DRM" amd the ship date being moved back to now.

A lot of people backed Matchstick because it was going to be open - the plans were all available for download, it was all ready to go, and we were going to have kit in our hands really quickly. Instead we were going to get something that was slowed down by six months so that it could have closed DRM-support added. And then it's cancelled because they added support for something that wasn't even part of the original campaign!

It's not surprising that the backers are upset.

CmonDev• 11 years ago

Their fault for dealing with Firefox OS.

dlitz• 11 years ago

More useful tech destroyed by DRM. How long are we as an industry going to keep this up?

The only DRM that's even remotely defensible is like what KDE's PDF viewer has: a checkbox that says "Enforce DRM restrictions". For that, we don't need anything more than a couple of flags and some copyright metadata.

mseebach• 11 years ago

we as an industry

Step 0: There is no "we". There are millions of individuals in thousands of companies across dozens of industries with wildly divergent goals, priorities and philosophies.

corobo2• 11 years ago

How long are we as an industry going to keep this up?

Depends who you ask. I imagine the RIAAs and the MPAAs would respond "We'll keep doing it until people stop pirating". Otherwise the response would be along the line of "Until they realise it doesn't stop us pirating anyway"

People will always pirate digital goods, so there'll always be DRM.

tinco• 11 years ago

Netflix is half of all Internet traffic (crazy), and all the content owners are hopping on board. We want to create an ecosystem built on open hardware and software so its easy for anybody to get to this great content, anytime, anywhere, without one of the "big guys" imposing their rules on who gets what, when, or where.

This is plain crazy. Netflix can't offer their service without DRM, Intel can't even release a chip without supporting DRM. How on earth did anyone expect this to be succesful without DRM? In the kickstarter movie they even show clips of Game of Thrones and John Oliver, how did people envision the Matchstick to play that content without DRM support?

And then the craziest part, after working for 11 months with I imagine a team of at least 3 but probably more, they fail which is understandable but then they refund the kickstarter campaign. That means they actually have 470k lying around. Probably from VC funding.

So they used the kickstarter money as leverage in VC negotiations, got funded. Then worked for 11 months on something the kickstarter backers didn't ask for which creates a backlash, then they decide to drop the kickstarter. I wonder what their investors think of it "Oh yeah, the initial 17000 people that believed on our project whom we woo-ed you with? Yeah they're not happy with the direction we're going in so we're dropping them". So now it's just going to be an HDMI TV stick which to my knowledge already exist right?

(BTW the proper way this should've gone is: After 11 months Matchstick admit they got nowhere because of supplier issues (i.e. they couldnt get DRM) have run out of money and give up. The backers sue for reimbursement. Matchstick LLC files for bankruptcy, court finds no wrongdoing, no one gets money. The end and everyone lives happily ever after. Faith in Kickstarter restored)

georgemcbay• 11 years ago

Yup, assuming they were on the up-and-up to begin with, they could have saved a bunch of time and effort by just asking anyone who had worked on video playing devices in the past 10 years if their idea was remotely feasible to bring to market while keeping both open source developers and content providers on-board.

The Sony Dash was the only locked-down "tivoized" (in the rms sense of the word) "chumby powered" device and also the only "chumby powered" device that had netflix support. These two facts are not unrelated.

JustSomeNobody• 11 years ago

I wonder if this could, in any way, be covered under bait and switch laws. Yes, I know people are getting their money back. I'm just thinking to help prevent other people on kickstarter from trying to switch up their product midway.

michaelbuddy• 11 years ago

Good lesson in keeping product simple. They could have delivered their original product. And the backers would have figured out what they'd do with it. Why wouldn't Netflix help them succeed I wonder instead of just scrapping it.

zz110• 11 years ago

"Rumor is that they're being bought out by the Chinese company they've been developing the unit with. So the refund is so that no can have claim the designs (like a bunch of people who bought a product because its all open source.)"

https://www.kickstarter.com/projects/matchstick/matchstick-t...

Matchstick to refund everyone's money

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