Switched On: Higher stakes, higher ground for crowdfunding, part 2

Each week Ross Rubin contributes Switched On, a column about consumer technology.

Last week's Switched On discussed the issues around crowdfunding liability, offering examples of some recent tech projects that delivered late or inconsistently, and explaining the justification for sites such as Kickstarter and Indiegogo denying accountability. Given this, there are a few options in how consumers choose to engage with crowdfunding sites.

One option, of course, is to accept their positioning. Understand that, when you pledge funds with the promise of a reward that may include the product you are backing, you are assuming risk. All Kickstarter project pages must now include a section that describes some of the risk factors in bringing the project to market although these descriptions fluctuate in how forthcoming they are. Project backers vary widely in their experience and all projects have some risk of not coming to market.

A second option is, if not avoiding crowdfunding sites altogether, at least waiting until the products they've spawned hit channels where there is more accountability. Crowdfunding sites have been fertile grounds for incubating new categories such as smartwatches (and overly fertile grounds for things such as minimalist wallets). As these products become available to the broader public after the initial backers, you may be able to purchase from a party that will offer you a refund if a product arrives late or not at all. Once products are offered via web sites of physical locations that consider themselves stores -- or even an eBay storefront or auction -- there may be more recourse.

One crowdfunding site is directly taking on the onus of consumer protection, in large part by focusing on the feasibility of -- and note this word -- inventions. Christie Street was borne of frustration when the founders' Kickstarter project, a charging station for iPhones and other gadgets called Pop, was coming to market just as Apple was transitioning to the Lightning connector. The project owners thought they might need to find a way to give the money back and found there was no easy way to do so through Kickstarter. (Pop wound up moving forward as designed and is now available for pre-order.)

Founder James Siminoff describes Christie Street as a store, but one that does not sell pre-made products. Products sold through Christie Street go through a rigorous technical analysis to determine if they can be made at all, and for how much. Christie Street will not allow a product that needs $250,000 in funding to float a $50,000 campaign. Addressing Kickstarter's assertion that the goal of the crowdfunding site is to allow backers to assess risk, Siminoff notes, "My mom is one of the people buying it. She doesn't understand if it can be made or not. The crowd can't determine that."

And that's just the beginning. Funds collected are dispersed to the inventors from an escrow account and are generally paid out a third at a time as certain milestones are reached. Factories are screened to make sure there are no child-labor abuses. But despite all the oversight, Christie Street has few rules about the kinds of inventions it will accept. Unlike with Kickstarter, household items are allowed. About the only two restrictions are food and firearms. The site will even allow consumers to purchase "insurance" on the product they're backing, which will ensure a refund even if things go wrong despite all the protective measures.

Crowd Supply is another site that combines, but also draws distinctions among crowdfunding, pre-orders and sales, allowing more cautious early adopters to cancel pre-orders if they don't like the direction a product is taking. Like Christie Street, it has few rules about the kinds of products it will accept; co-founder Lou Doctor calls it, "Kickstarter for capitalists," and agrees with Siminoff that crowdfunding for technical products entails different requirements versus artistic products: "It's like oil and water, red states and blue states. They just don't mix." Crowd Supply also helps product creators bring their ideas to market by working with a network of rated service providers and sets expectations about delivery by adjusting delivery dates depending on when pre-orders come in.

Crowd Supply currently has about 12 projects on its site, including an artistic food magazine. Many are in early funding stages although a couple are shipping. At Christie Street, without Kickstarter's traffic and resulting network effect, projects have had a mixed record out of the gate. Siminoff's own project, DoorBot, reached its goal, but only after the team kicked in money to get it over the hump. The one open project currently on the site, an earphone cord organizer called Kordl, has attracted less than $1,000 of the $25,000 sought with about two weeks to go in the campaign.

At CES, Christie Street and established accessory maker TYLT showed off a backpack called Energi with integrated gadget-battery charging. However, that product is now seeking consumer contributions on Kickstarter where it's closing in on its $50,000 goal. There don't seem to be any hard feelings on Siminoff's part; he's a backer.

Ross Rubin is principal analyst at Reticle Research, a research and advisory firm focusing on consumer technology adoption. He shares commentary at Techspressive and on Twitter at @rossrubin.

Source

By: Unknown On 10:13 PM

Continue Reading

Visualized: JetBlue and ViaSat test Fly-Fi in-flight WiFi... from the ground

Gogo's ground-to-air transmitters typically mandate evaluating service while jetting around the country above 10,000 feet. Sure, you don't need to waste fuel flying around an empty airliner, but even the company's small jet can burn through quite a bit of cash. ViaSat, on the other hand, can do much of its service testing on the ground, using that fairly ordinary Ford van pictured just above. The reason, of course, relates to the location of the company's transmitter -- namely, the ViaSat-1 satellite, positioned some 22,000 miles above the ground. In the air, planes will actually be nearer to the orbiting device, rather than farther away, and assuming a line-of-sight link from the road, the truck can work out kinks at a fraction of the cost.

That white dome atop the van, which is similar to the device that'll soon be mounted on JetBlue's fleet, maintains a constant connection by rotating instantly as the van moves -- if the vehicle's heading changes, the antenna array will turn, too, so it's always pointed directly at the sat in the sky. You may have seen ViaSat's van driving down Southern California's freeways, but the rig has just arrived in Orlando, for some additional testing a few degrees away from the company's Carlsbad home. Assuming all goes well here, you'll be shooting around the web courtesy of Fly-Fi in no time at all.

Tags: fly-fi, inflightwifi, jetblue, viasat, viasat-1, visualized

Source

By: Unknown On 11:14 PM

Continue Reading

Switched On: Higher stakes, higher ground for crowdfunding, part 1

Each week Ross Rubin contributes Switched On, a column about consumer technology.

The power of crowdfunding is that, by aggregating relatively modest donations from what is often hundreds or even thousands of backers, consumers can help artists and inventors turn ideas or concepts into reality. The Pebble smartwatch that set the record for funds raised on Kickstarter was noteworthy for breaking the $10 million barrier. That money, though, came from nearly 69,000 backers.

Today, the two biggest crowdfunding destinations, Indiegogo and Kickstarter, offer different approaches to what gets presented on their sites. Indiegogo is a completely open site; there is virtually no screening of projects. Kickstarter, on the other hand, is a curated site. Projects must meet a range of criteria. As co-founder Yancey Strickler recently explained at Engadget Expand, the roots of Kickstarter were in the funding of creative and social pursuits. Kickstarter has been a haven for artists such as photographers looking to create a photo book or musicians seeking to cut a first album or create a music video.

Over time, though, through escalating successes such as the Glif iPhone tripod accessory, the Twine connected sensor and the Elevation Dock all preceding the Pebble tsunami, Kickstarter started to become better known for physical products and the pre-orders that came as perks for backing them. Tech and design projects now account for nearly $120 million of the $532 million raised via the site. Eventually, though, the question of liability came into focus; what happens if a backer doesn't receive the item they were promised?

On one hand, Kickstarter has taken measures to protect consumers by disallowing photorealistic renders that would imply a product is further along than it actually is. It has also disallowed ordering multiple units of a product (although certain projects have found ways around that) and that restriction may not make sense in some cases such as, say, a pair of video chat cameras. On the other hand, it has steadfastly insisted that it is not a store. Indeed, it points to such laudable projects such as a low-cost, wind-powered land mine detonator -- not exactly the kind of thing one would pick up on the next Target run (even on sale).

Still, that is cold comfort for the backers of products such as the iCache Geode, a strange and ambitious iPhone contraption combining NFC and e-paper with a reprogrammable credit card that was floated last April. The project blew past its $50,000 funding goal, raising over $350,000 and units were to be delivered in June. Some of the nearly 1,800 backers received their units to mixed reviews. Many others did not. The project's comments section is filled with angry statements from backers who had paid $159 for the product (with five backers purchasing "reseller packs" for $7,500), many of whom feel they have no recourse. As one noted last month, "I wish someone would just say, 'Look, this didn't work out, so go [bleep] yourselves.' We've just been left hanging, which sucks the most."

Other long-delayed tech projects include the Syre, a Bluetooth wristband adapter for the now long-discontinued sixth-generation iPod nanos originally due to ship last November. A recent update from the project's creators note that "we are unable to issue refunds in advance of finishing the project, as that would jeopardize the completion of the entire endeavor" although they will look into refunds prior to shipment.

Jorno, a promising folding Bluetooth keyboard, first saw public light back at the Consumer Electronics Show in 2011. It had a successful Kickstarter campaign last October after its creator, Cervantes Mobile, had initially indicated the product had been scuttled. In early February, though, the company noted only that there had been "a problem with our supplier" that would result in further delay. The update elicited frustration for its lack of specifics. The company followed up later that month with a new schedule that pegged the release of the product as September, assuming the deal with its new manufacturing partner could proceed quickly.

That many first-time -- and even some experienced -- gadget creators should experience problems and challenges navigating the rough terrain of product development and manufacturing is not surprising. While Kickstarter and other crowdfunding sites have attracted their share of established, or at least venture-backed, companies, there's a fair share of amateur hour on display.

Kickstarter says that it will take further measures to protect consumers. Its guiding philosophy, though, is to help educated adults best assess their risks.

The question of uncertain reputations and the potential fraud haunted another startup that pioneered a new marketplace many years ago: eBay. The company insisted it was not liable for transactions between those who bought and sold products. Ultimately, however, and particularly after it acquired PayPal so it could control the cash flow, eBay changed its tune. Indeed, PayPal is now often the target of frustrated eBay sellers who say that the company is too quick to pull the trigger on refunds on behalf of buyers.

Kickstarter says that it will take further measures to protect consumers. Its guiding philosophy, though, is to help educated adults best assess their risks. With their transactions falling somewhere in the gray between purchases and investments, crowdfunding sites may not be stores the way an Amazon.com is. But they are absolutely creating marketplaces. Next week's Switched On will discuss some options emerging in the wake of crowdfunding's laissez-faire.

Ross Rubin is principal analyst at Reticle Research, a research and advisory firm focusing on consumer technology adoption. He shares commentary at Techspressive and on Twitter at @rossrubin.

Source

By: Unknown On 6:25 PM

Continue Reading