Is that what happened with this company? That's the model of kickstarters and the like, but this story sounds like it was a real company offering a product for sale. If a company can form, offer a product, sell 350 units, pay employees & expenses, then fold without delivering product or refund, nor facing any legal repercussions, what's to stop the same employees and founders from following that method ad infinitum? Form company #2, offer a different vapor, take in money from sales of the never-to-be product, spend it on salaries, declare that the product won't be delivered nor refunds given, and move on to company #3. If that's what this company has done, and the court systems are never burdened with tackling such an issue, it is a viable if entirely unethical model for the people involved.
I've backed a dozen or so, and I've got about a 50% hit rate of anything coming through. The failures are always interesting. Trying to guess, ahead of time, which ones are failures (or scams) - is an education into itself. They always seem so earnest in the beginning.
But, yeah - go into kickstarters with your eyes open. Particularly with people who don't have a track record of deliverying - that, in my mind, is the best signal around. If they've come through more then 3 or 4 times in the past, that's a good indication they may come through on this one.
The link doesn't mention Kickstarter at all - I assumed Unicorn was selling through their own website?
This is a bit nebulous. Every consumer, especially where the expense is a lot of money for them would do well to give this idea more thought.
A pretty website, a few employees and some prototypes doesn’t hit a meaningful bar, let alone millions of dollars in capital (which this joint didn’t even have), TBH. Too bad fuckedcompany is no longer around, it did a great service.
https://www.bizjournals.com/sanjose/news/2018/06/25/segway-n...
Regardless, doesn't change my basic point, which is that "real company" is a nebulous concept and not prudent for a consumer. My neighbor's venture without even a business certificate may be a more "real company" because if he fucks me over he has at least has to see me everyday for years.
I agree with you and didn't mean to dispute your point, just add to it.
Informed consumers
Consumers can absolutely that.
I certainly have.
If you're screaming in my face and hurrying me along to pull out my wallet and buy something ASAP, 99 times out of 100 it's a scam.
Maybe informed lenders is a solution, though.
This is my problem. It is not reasonable to expect a purchase of a product online to be a gamble, a risk that you will get nothing in exchange for your money. No matter whether they're internet based, no matter how old they are, if a company offers a product for sale, it should not be "risky" to purchase it.
The comment I replied to said we shouldn't burden the courts with taking the people behind such companies to task. But if we don't, there's nothing stopping them from doing it again and again.
When I buy a product online, this is ALWAYS a risk, no matter what.
Your solution uses my tax dollars to make online businesses more competitive with brick and mortar stores, thereby making it more difficult to run a profitable brick and mortar store/mom and pop shop.
>No matter whether they're internet based, no matter how old they are, if a company offers a product for sale, it should not be "risky" to purchase it.
Your solution offloads some risk from the consumer onto everyone else. I agree with the comment, you put the burden on the courts and by extension, me, to pay taxes to support other people's poor ability to reason about what businesses may or may not be scams and encourage risk-taking buying products from risky businesses.
>But if we don't, there's nothing stopping them from doing it again and again.
Again, informed consumers... Accept you're taking a risk buying a product from a fledgling internet-based startup, a risk that wouldn't just go away even if we all incur the large expense getting the courts involved.
We're both basically just saying everything we've already said. No sense in going in circles
We have to sign documents that assert our finances are in good order for this reason. Violating the law subjects you to various penalties. I'm not eager to find out what they are.
I've backed a few here and there. Two of them I knew the principals for a while before the kickstarter began.
And I supported them at a level I considered a donation, so that if I never received anything, that's OK.
Another I backed (ReSpeaker from Seeed Studios) I did because we were interested in it for a project at work, and it was convenient for me personally to back it. And they did (eventually) deliver, which I had a reasonable assurance of because I'd bought from Seeed before.
If you want to back a game or something at a reasonable level (like $40), that's fine.
I did almost back Tilt-5, but ended up not doing so, not because of any concerns about the company, but concerns about my time that I'd have to mess around with it when I got it.
It used to be they were a cool way to get access to products that were otherwise unavailable.
1. I got some amazing desserts from around the world that no way would have been able to try otherwise 2. Limited production run clothing using experimental materials 3. Stick on Cell phone microscope lens! The ones I got were before they became a common thing, and they were a small batch production run 4. Board games that are only ever sold through kickstarter.
Now days kickstarter is a lot less fun, it used to be I could go browse local projects and find a ton of local creators to support, lots of kids out of school trying to make their first video game, local board game designer wanting to release his/her dream, that sort of thing. Now days I find a lot less of those quirky fun projects, which is sad.
I never expected anything to arrive on time (software!) and it is pretty easy to spot a hardware project that is going to fail, e.g. if the amount of $ a team wants to raise to make a smartwatch is less than a single run of tooling to make a smartwatch, it is obvious the team doesn't know much about manufacturing! (Though now days outside investors are pulled in after a successful Kickstarter demonstrates interest).
I also got one of those cool track-belts before they became easily available in the US, and I got this obscenely overpowered LED light bulb that I can't actually use anywhere because it is too bright!
Still sad I never got my glow in the dark plants though, that project is what first got signed up for Kickstarter.
This was happening probably since the very beginning. Around 2013, I did independent technical evaluation of a certain hardware startup on behalf of a local accelerator, and one of the things I've learned is that the startup in question had some funding that was conditioned on the success of their Kickstarter campaign, which was meant to feel out the market.
The level of professionality in modern kickstarters is a bit of a turn off really. Seeing massive slick ad campaigns for a kickstarter isn't exactly a sign of authenticity.
But then again if those ads have a positive ROI I totally get it.
Tons of billion dollar projects, let alone those with only a few million, have been delayed for years, changed half way through, or have died before finishing.
The failure rates for new businesses is pretty high, 50% in the first year.
One could question if its moral to take early preorders without some form of insurance but at the same time a ton of good things have come about using this process and proper communication by the company/purchasing platform can mitigate most of these issues.
Plus it’s pretty rare for people to being giving hundreds of dollars, let alone almost $1000, to an unproven product so it’s probably best not to judge based on the extremes.
Obviously if shady stuff is going on and there’s some evidence the company didn’t meaningfully try to accomplish the goals for which it raised money and misused company funds for personal benefit then there’s a serious problem. There's plenty of laws in place for that already.
Even though you are trying to warn people, you've accidentally fallen into Kickstarter's "dark pattern in broad daylight" by using the word "preordering."
Kickstarter donations (I consider it a charity) are not pre-orders. If I preorder a book on Amazon and it is late, tough for me. If the publisher closes down, Amazon gives me my money back.
Kickstarter donations, on the other hand, don't even have that recourse. We're giving them money out of the goodness of our hearts, and if everything works out for them and they feel like giving us our reward, we receive a nice "thank you gift."
Kickstarter transactions are charitable donations. We don't get a tax receipt, but if things line up, we do get a reward. If we think of it as charity without the tax benefits, we won't go wrong.
But the moment words like "preorder" or "purchase" enter into the conversation, we've fallen into the trap of thinking that we're consumers purchasing a good or service.
Unless the whole plan was to sell preorders and feigning failure in order to take the funds. But that's a serious claim and it could be grounds for an investigation if law enforcement was pressured. But it would take more than complaining about FB ads.
Quite right. It's potentially an dereliction of duty and could be seen as being dumb enough that shareholders in a company could force an officer out (of course, here it doesn't matter b/c the company is bankrupt), but unless you can prove malice or untoward gains (like, the person making the Facebook buys was getting a cut from Facebook or money was being funneled from the ad buys into someone else's pockets, which does NOT appear to be the case here), there is no fraud.
When a company is going bankrupt, the best that can be done is that the backers can try to fight to be higher on the creditor list to get whatever scraps are left (assuming any scraps exist at all).
If you gave $700 to a company who promised to deliver you a scooter a few years down the line if all of the dominoes fell exactly as planned... I would argue that you got what you paid for even if it amounts to nothing tangible in the long run.
Which is to say, you paid for a pricey digital lottery ticket with a very low potential ROI.
It's a crying shame, absolutely.
But it's nothing to burden the court systems with.