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Why a kickstarter project fails

By

Michael Faass

|

May 28, 2019

A lot of kickstarter projects fail because they run into difficulty executing on the idea or concept which they have succeeded in promoting. To put it most simply, they are not able to mesh the theoretical with the practical.  Having an idea and promoting it on social media with a one-off prototype and a video is a very different animal from actually taking a product to scale and mass-manufacturing it.  Theirs is a difficult goal, to make a revolutionary product that not only does what it’s supposed to, but one that also has the fit, finish, and performance to meet the demands of a consumer who is looking for something approaching perfection.  To accomplish this a transition must occur, from the abstract to the achievable, which is something that is much more difficult than anyone who hasn’t done it and been there before would ever imagine.

It is at this point that many inventors or startups can get caught up in what could be termed “Silicon Valley Syndrome” whereby newly flush with cash raised from crowdfunding,  they exhibit an almost myopic design-only focus while also  burning through cash as they work with high priced consultants and engineering talent without ever considering the realities which are lurking in the background waiting to rear their ugly heads, and it is generally as the nebulous product  now moves from the abstract world of “this is freaking awesome, everyone’s going to love it” to the actual first versions of a product that once tested doesn’t perform or live up to expectations that things begin to get bumpy and the rollercoaster of highs and lows is about to begin.  It is now the time for you and your project to enter the Middle Kingdom and to begin the Ride of the Dragon.

Until now line-drawings and spec’d out Bills of Material (BOM) flow together seamlessly giving everyone involved a confidence that they will be on target and on-time in delivering their promised product to eager backers.  This exuberance however almost always proves short-lived once the realities of scaling up a product from scratch in China become apparent.  It is not even up for debate that China is the world’s factory and home to world class manufacturing and technology.  It is, after all, not by accident that I have personally lived here and been involved in manufacturing and product development for over 20 years now.  It is also not really up for debate that for the foreseeable future manufacturing, and especially high-tech manufacturing, will continue to reply upon the infrastructure and know-how that China has built up since the Reform and Opening campaign began in 1978.  As integrated and integral as China is in the world economy, however, that still does not mean it Is the same as operating at home, yet it is here that invariably all start-up projects must come to go from theoretical great idea to scaleable and manufacturable great product.  It is here that the rubber hits the road and your product, project, and perhaps company will ultimately succeed or fail, yet it is also here that companies are generally the weakest in terms of organizational structure or understanding of what challenges they will face and how they will overcome them.

Generally speaking, when it comes to working with top talent in China one needs three things money, scale, and relationships, and as a foreign startup with no track record or experience in China they have none, especially if they have fallen prey to Silicon Valley Syndrome noted above.  Scaling up to mass production involves certain stages that no one can avoid which can be categorized into Prototyping, Design Verification Testing (DVT) and Process Verification Testing (PVT), and finally Mass Production (MP).  Each stage can have multiple cycles before you are ready to proceed to the next stage.  In each stage an increasing amount of money will need to be spent, first on prototype samples, then on soft-toolings for small run samples in DVT-1 and 2 and then more toolings for PVT-1 and maybe even more for PVT-2 if it is needed before MP can finally be signed off and product can now be produced for backers.  There are also costs at every stage for design work as well as all materials needed to make the small quantities required for proper testing and evaluation.  

During this testing and evaluation phase some other practical difficulties will begin to appear.  Parts that are key to the product may not be available in China, or the factory chosen may not have experience with certain techniques or technology that is taken for granted or assumed by the engineers you worked with in the design stages back home.  Additionally you will discover the limitation of the factory engineers who seemingly spend more time telling you what can’t be done or that something isn’t possible as opposed to providing a solution and things which should seem easy enough to be sorted out quickly but can end up in finger pointing between engineering teams from different component vendors and assemblers to the team back home as well on the other side of the globe.   Flexibility, pragmatism and constant attention will be required to work through the issues mentioned above, and a lot of unplanned time, expense  and heartache will be spent on handling engineering issues, dealing with reticent and reluctant vendors and engineers as well as sourcing materials and components and then finally implementing and testing various solutions all the while hoping that they perform as advertised so that the next stage can be reached and the final goal of MP realized.  Success at this juncture means success, while for some the inability to work around these issues will spell their demise before a backer ever receives a single product.

If the difficulties already noted aren’t already enough the process is made even more complex by the fact that most factories in China are only interested in making exactly what you tell them to make and in great quantity NOW.  Once they realize your product is not as easy to make as first thought, or that the margins to be made in doing the product right, exactly to spec aren’t there as they first thought, or that they simply just  might not have the technical ability to solve the issues interest in you and your project will wane and you will begin to  notice that the focus on your business is wandering and there is seemingly nothing you can write or say during Skype calls that gets the wheels moving at anything like the speed needed to satisfy backers who are beginning to wonder if they will ever see the product which they backed.    

A startup that has not operated in China and does not have the relationships or knowhow to be able to solve the issues laid out above nor the financial resources or extended timeline needed to pass the required DVT/PVT cycles will then be faced with a moment of reckoning or point of collapse.   I have personally seen several crowdfunded projects encounter one, some, or all of the problems listed out in this article and come to the same end while projects and it was such a personal experience with a friend who I watched go through the entire process only to fall short of Mass Production after having raised over $1 million dollars that motivated me to begin trying to focus my company in the direction of preventing such events from ever happening again.  I cannot go into details of many of the projects that we work on due to NDA concerns, but I can say that witnessing someone I know go through the process and seeing the physical and emotional toll that it took made me realize that there must be other similar cases out there waiting to happen and that with my experience in product development, manufacturing, but more importantly, operating in China, that I should do something to help whomever I might come across trying to make their dreams a reality and from that day on I became somewhat obsessed with finding similarly good products that needed stewardship and guidance through the process needed to get them and their creators ready for primetime and mass market success.

to work on their product and after many months and tens of thousands, if not hundred of thousands of dollars, what t a reality and, in fact, what they have after a significant amount of time and money has been spent is something that is still far from mass production ready.  Again, the difference from the theoretical to the practical.

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