Kickstarter cracks down on hardware projects

September 24, 2012 | 11:05

Tags: #crowd-funding #crowd-sourcing #funding

Companies: #kickstarter #ouya

Start-ups looking to get some venture-free funding via the popular Kickstarter crowd-sourcing platform may find their job a little harder than before, with the site announcing new rules that would have made several high-profile projects ineligible for listing.

The crowd-sourced funding site has been getting plenty of press recently, with high-profile projects including Tim Schafer's Double Fine Adventure and the recently-reviewed FTL: Faster Than Light smashing past their funding goals with time to spare. Kickstarter isn't just about software projects, however: back in 2009 we explained how to raise funding for your next mod through the site, and recently a start-up company raised millions of dollars in a matter of hours with the proposal to create an open-source, Android-powered games console dubbed Ouya.

Those looking to hit the Ouya-scale big-time with their pie-in-the-sky hardware project should pay attention to Kickstarter's new rules, created following a spate of apparent scam projects seeking funding through the site. In a blog post entitled 'Kickstarter Is Not a Store,' the company outlined new restrictions on hardware projects which include the banning of rendered images and product simulations in favour of prototype photographs and footage of actual, current performance. 'Products should be presented as they are,' the company explained of its new rules. 'Over-promising leads to higher expectations for backers. The best rule of thumb: under-promise and over-deliver.'

Had the Ouya project been seeking funding today, it would likely have been significantly less successful: the company's Kickstarter page is festooned with now-banned content, including a simulated video demonstrating a device which doesn't exist and numerous renders of a design which even the company itself admits is by no means final.

Further changes to the funding rules for hardware projects make it verboten to offer multiple units in exchange for increased funding pledges - a common tactic for low-cost hardware projects to reduce the number of individual backers they need to reach their funding goals. The Pebble Watch is a perfect example of exactly that approach, offering a single watch for $125, two watches for $220, five watches for $550, ten watches for $1,000 and a hundred watches for $10,000.

That approach of offering bulk purchasing deals is clearly what Kickstarter had in mind when it described itself as not being a store - and is, again, now banned, meaning projects looking to duplicate Pebble's impressive $10M funding run will have to find other ways to do so. 'The development of new products can be especially complex for creators,' the company explains, 'and offering multiple quantities feels premature, and can imply that products are shrink-wrapped and ready to ship.'
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