Yes the point of Kickstarter is to get money upfront.

Wasn’t there also an issue of the specs changing that made the original propellers fail? Something the article touched on was that Zano suffered mission creep as the stretch goals were reached. Adding functionality X added Y grams of weight, requiring bigger motors, requiring larger batteries, etc. Changes in specifications can lead to a cascade of problems.

More generally, I think your proposal is a good one for projects that reach a certain size, either because they have ambitious fundraising goals at the start or when they exceed those goals. What you are describing is a sort of “rolling due diligence”. For smaller scale projects this might not be economically feasible, but for a project being funded in the millions of dollars it certainly should be. If KS needs to raise their commission, so be it, but how much would it cost to find a relevant expert to spend a week checking things out before releasing millions of dollars? (Serious question: how much? $10,000? $20,000? On a $1 million project, $10k is 1%.) How much would it cost to check out creator credentials, references, and bonafides? (It seems to me that a couple of phone calls could have shed light on Torquing’s defense industry track record. But let’s say it requires more digging. Does $2,000 for a preliminary investigation sound about right? That’s 0.2% of $1 million.)

Maybe KS should have a prototype testing lab to see if prototypes function as claimed. This could be funded as an optional cost for the creators (either as additional commission or as an upfront fee), the benefit being that their project receives the credibility of an additional KS seal of approval. It’s basic due diligence that KS and creators owe to the KS crowd for projects of this scale.

There is the obvious question of where to draw the line. I think making the testing/blessing optional will address this. Someone raising $50,000 to put a simple but ingenious kitchen doohickey into production might not need a seal of approval, whereas an ambitious and complicated tech project has more skepticism to overcome (or should have). They will be competing with other tech projects that do have the KS prototype lab approval (and therefore the additional public confidence). They will need to adjust their plans accordingly and evaluate whether their ambition is realistic.

With regards to overfunding, stretch goals need to be monitored when they begin to exceed the capabilities of the prototype.

A completely unrelated issue that I haven’t seen addressed is companies that fund their own KS projects through straw buyers to leverage the viral marketing aspect of KS. I would not be surprised in the least if this already happens. I’m not even sure if this is a good thing or a bad thing, but it should be explored (confession: I considered doing this for a writing project, but rejected the idea as crossing the line) because of the potential for abuse.

KS had developed credibility, perhaps undeserved or perhaps overblown. Now that credibility has taken a big hit. If they want to regain that credibility, they need to tighten up their ship and install the sorts of safeguards that will restore confidence.

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