I'm surprised that the idea that anyone other than the backers are going to lose money keeps coming up; it's always looked pretty clear to me (even though I've gotten rewards delivered from around 30 out of 45 projects, mostly hardware, and the remaining ones are still pretty visible and active - past success doesn't feel like a guarantee on anyone's part, it's just pretty cool.) It's helped that I'm pretty well-qualified to judge these projects, though the only ones that looked unlikely to actually deliver have been really obvious (the "projector" that was supposed to be something mini-maglite sized that plugged into an iPhone headphone jack comes to mind) so it's not like it's actually taken all that much effort :-)

It also seems like the small-donation structure should make it difficult for any individual to have cause for action; I see some of KickStarter's recent changes as not wanting to even get into that fight, but that's because even winning would be expensive (and as has been suggested elsewhere in the thread, they're actually in it for the indie films.)

Or do you mean just the popularity risk, if enough projects don't deliver?

Eichin,

I’ve also backed quite a few Kickstarter design projects. The biggest risk backers face from Kickstarter design projects is personal safety, not failure to deliver. I’ve spent many years in new product development and the items delivered to me wouldn’t come close meeting even the most basic consumer safety codes. Plus I have no expectation that the project creators have any sort of product liability insurance.

That being said, I think the Selfstarter model can directly address that risk. Backers are dealing directly with project creators. The liability is clear. I expect that in the future, project creators will need to demonstrate product liability insurance coverage and that they will meet safety regulations. I hope to see that option somehow added to the Selfstarter code so that project creators can show they have insurance coverage and that they will meet safety standards.

It seems to be understood that crowdfunding only guarantees an attempt at realizing an idea. Backlash will only be warranted when crowdfunding is used for anything other than an honest attempt. I think reasonable people agree that money can't buy success, so failure is and will continue to be an accepted outcome.

There is a subtle but critically important difference between the Kickstarter offer and the Lockitron offer. With Kickstarter, the backers’ money is transferred to the project creators at the end of a successful campaign. With Lockitron, the backers money isn’t transferred until the product is ready to ship. That completely changes the risks. Lockitron can get bridge funding based on the committed orders, but the financial risk of failure is born by the lender, not the backers. That strikes me as a much better model than Kickstarter for new product inventions.