For those unfamiliar with Kickstarter or crowdfunding platforms, Kickstarter features projects and bring them to life through the direct support of people around the world. Anyone can easily create an online campaign featuring what project they are working on, and raise money from people globally.
Since its launch in January 2011, more than 5 million people have funded more than 50,000 creative projects, such as films, music, stage shows, comics, journalism, video games, and food-related projects. These funders, also called backers, pledge whatever amount of money they want to support the project.
The Sinking Pirate Ship
When one talk about a successful crowdfunded project in Singapore, it would undeniably be the Buccaneer 3D printer from Pirate3D. The project had so much promise: it raised US$1.43 million in funding, backed by over 3500 supporters around the world.
However, despite the huge success, the project fell short on delivery.
While the team behind one of the most successful kickstarter project have been working very hard to fulfil the 2,500-plus orders from Kickstarter, so far, they have only shipped about 200 Buccaneers to the first batch of Kickstarter backers.
By November last year, there were already people expressing anger at changes in promises and demanding for refunds. Pirate3D stated that they would include ABS support, a heated bed and automatic bed calibration, filament feeding and an air filtration system if they reached the $1 million dollar mark. All of these features have been left out of the Buccaneer 3D printer. Backers could also pay another $100 more over the $347 asking price to receive their Buccaneer in December rather than April of next year.
Backers were not happy at all.
Chayne VandeZande, one of the backers had this to say:
“Just give me my refund and let me go with a Kickstarter that actually stands by their promises. I’m done with this company. Thanks for getting my hopes up and smashing them most nonchalantly. As Damian has posted below, they were blatant promises and now you can’t/won’t make good. While this may not be a “shopping cart” as some have put it, there is a degree of expectation when you pledge for something on here and going against everything you said you would do makes backers (rightly) uneasy. Well it’s mutiny plain and simple. And I’m joining the mutinous ranks before I go down with this sinking pile of crap you call a ship. I wish you all the best in your future endeavors, because you shall have none of my support.”
Pirate3D then issued a refund option for backers to get their money back. Those who did not choose the refund option would have wait a longer period time before they could lay their hands on the product they supported.
Mistake In Calculation Of Refund Date
Things turned ugly last weekend when an autoresponder email was sent out to backers who wanted their money back. Instead of the original promise where Pirate3D would refund backers by end of the year, now they would have to wait for another two years.
This email serves as a confirmation that you have selected a REFUND for your order of the Buccaneer 3D Printer.
Refund Amount: $497.00
Paypal Address to Receive the Refund:
Your refund has been queued based on a First Come First Serve basis and will be processed in chronological order. It is expected that you will receive your refund on September 2016
This sent backers into a frenzy mode, all demanded for explanation from the team from the official kickstarter page.
While the Pirate3D team clarified that there were some miscalculation on the refund date, the damage was done.
How NOT To Run A Kickstarter Campaign?
William Hooi, founder of Singapore Makers, was hopeful about Pirate3D and was among the original 3520 backers. He first heard about the proposed 3D Printer, the Buccaneer from the one of the founders himself during a meetup.
“I’m impressed with the promise of it being a well-designed, easy-to-use consumer grade 3d printer compared to many Rep-raps which look intimidating to novice learner and users. It also helps that its a made in Singapore product, so it was a no-brainer to back them as it has the potential to put Singapore in the world map,” William told Vulcan Post.
But what happened after? Of course, they raised lots of money and became the poster boy of Singapore’s 3D printing industry, winning lots of awards.
“Which was good,” added William.
“However, when it was time to deliver on the goods, they fell short. Expected delivery was supposed to be Feb 2014. And around end July, one of the founder sent a survey question asking backers to choose opting for either heater bed (which will deliver in April 2015), cold bed (deliver in Nov/Dec 2013) or opt for refund. I’m was told that those requesting refunds will get it in stages between Aug-Dec 2014 which was acceptable. I’ve actually seen a non-working prototype at Simplifi3D and am not confident that the printer will be as user-friendly as what it was touted to be so I decided on the refund instead.”
When Pirate3D said they couldn’t deliver and had to issue a refund, William lost the faith he had in the company.
“There has been promises, excuses and apologies one after another. If you could get hold of the backer email update you will find that for an award-winning company, it seems to be making blunders and not fulfilling promises after another. I can’t help but slowly lose my faith in the company. The hype of being poster-boy of success doesn’t seem to match their ability to ship a proper product.”
“The biggest blunder till date was the ‘mistake’ of informing some backers that they will only get their refund in 2017! My initial refund date was June 2017-which is totally unacceptable. Now they have said they’ve made a mistake and has issued a new date to refund. Even then, my refund date is Apr 2015, almost 2 years after backing the product. I wonder if this is standard practice for crowdfunding refund or is the company having difficulty fulfilling their part.”
“They will need to stop making blunders and saying things which they’re unable to back/fulfill and work on their product. Else it’s an embarrassment to the Singapore tech scene,” added William.
Pirate3D is on a huge ambition to put a 3-D printer into every home, which is not an easy feat at all.
From the looks of it, it might take some time before that could happen.
Update From Roger Chang of Pirate3D
We have reached out to Pirate3D on the matter with a few questions, and while not most of the questions were answered, here’s the official statement from the company:
Concerned friends have been asking me about Pirate3D in the aftermath of our blunder with the Kickstarter refund algorithm.
Mistakes were made, but overall it’s been great. Our current round of funding is just about done, we are ramping up to a higher volume production, and we are preparing for retail sales.
Nonetheless, I feel that more can be clarified about our situation in general. Here are some of the questions I’ve been frequently asked and if you’re looking to run a Kickstarter campaign yourself, you might find this useful.
1. Why the Kickstarter refunds?
We are behind schedule on our Buccaneer deliveries. Some backers also wanted official ABS material support, which we pulled for safety reasons.
Refunds for delays are actually not required by Kickstarter’s guidelines unless the Project Creator is unable or unwilling to fulfill the promised pledges.
We opted to offer refunds anyway because we have a saying in Pirate3D: “Do what is right, not what is easy.”
Your backers are the only people crazy/enlightened enough to put money behind your unproven product. They deserve to be treated fairly.
2. Don’t the refunds hurt Pirate3D?
Yes. We lose about 10% of the amount refunded owing to commissions paid to Kickstarter as well as Amazon Payments.
Nonetheless, we had already planned and provisioned for refunds in April when we missed our first delivery date. In fact, our refund policy was announced to backers in July, way before any coding errors made it public.
All-in-all, we’ve only had to refund about 15% of backers.
3. Why the delays then?
Building a hardware prototype and ensuring it is manufacturable on a large scale is a very long, technically challenging, and resource intensive process. Many other Kickstarter projects have been hobbled by delays, no doubt by similar challenges that Pirate3D faces.
I love this blog post by Zach Supalla of Spark, another Kickstarter-backed company. It neatly encapsulates the challenges a Kickstarter-backed hardware startup faces.
4. Wait, doesn’t having all that Kickstarter backing make things easier?
Hardware is hard indeed, and I would argue that having a successful Kickstarter campaign around your hardware makes it harder. On top of building a great product, you will also have to handle the expectations of your preorder backers, something our early stage company may not be prepared for.
Having a project that is super successful on Kickstarter also presents challenges in terms of scale. You’re going to need to think bigger and move faster, something that I took some time to become accustomed to.
5. So what now for Pirate3D?
We’re far from sinking. We will finish production, start shipping, start selling, and hustle hard as we always have. Fair winds!