Kickstarter recently paid tech journalist Mark Harris to investigate what happened to the money in its biggest failed campaign to date - a palm-sized drone called the Zano. Investigate it he did in this 53 minute read Medium feature, concluding that crowdfunding sites like Kickstarter should have better mechanisms in place to identify weak projects in which the team or startup will ultimately be unable to deliver what has been promised.
Zano raised £2.3 million from 12,075 backers in 2014 but not every disappointing crowdfunding campaign gets a Kickstarter commissioned investigation.
Legal action? Crowdfund it
That's why a number of backers of the Agent smartwatch, a project Secret Labs, in collaboration with the House of Horology, are taking matters into their own hands. In June 2013, the campaign, lead by project creator Chris Walker, raised a total of $1,012, 742 from 5,685 backers. The estimated delivery dates were December 2013 for Early Bird backers and June 2014 for all other backers.
The "world's smartest watch" still hasn't arrived and, in a very meta turn of events, a group of backers recently turned to crowdfunding to raise money to hire legal representation and potentially initiate a class action lawsuit against the project's creators. The campaign, which ran for two months on Funded Justice and was titled Agent: The Smartwatch That Never Was, wasn't successful at raising its $10,000 target. Maybe people didn't want to spend any more cash on the project.
In the end, 43 backers pledged $2,538 to the Funded Justice campaign, which was set up by Martin Calsyn, as senior software engineer who tries to help other crowdfund backers by asking the right questions and offering his expertise. Last year, we dubbed him the "Kickstarter crusader" after his involvement with a number of other failed or long running wearable tech crowdfunding projects.
"Today, not only is the Agent smartwatch two years late, but it is looking more and more like the creator is just running out the clock," Calsyn told us. "As a result, we are using crowd-funded legal action to counter crowd-funded tom-foolery."
"This has been a long project so far"
It's not clear yet how far $2,500 will go towards a class action but what is obvious is that the backers have lost faith in ever receiving their smartwatches. There are now 11,134 comments on the campaign and the last update and in the past six months, there have only been two updates from the project creator, one in October and one on 1 January.
"While it is not uncommon for Kickstarter projects to run behind schedule, the Agent smartwatch is a particularly egregious example, and the actions of the project's creator/project manager now demand forceful action," reads the Funded Justice page.
"The project is now two years overdue with no timeline or even evidence of positive progress toward refunds or the delivery of promised rewards. The creator/project manager appears to be engaging in stalling tactics for the purpose of denying backers their rights under the Kickstarter Terms of Service."
We contacted Chris Walker asking for a response to backer complaints and the Funded Justice campaign but we are yet to receive a reply. Either Walker is stalling or this is the most unfortunate wearable tech crowdfunding campaign yet. His one time collaborator House of Horology was "unable to complete their work" and "now we have a series of major design defects to overcome" as his latest post, which includes charts, transcripts and MP3s, detailing the project's struggles.
Essentially, the latest update says that a lot of people want the project to be cancelled but Kickstarter's terms require that the project is brought to conclusion. As you might have guessed from the Zano investigation, Kickstarter has been trying to solve one of its biggest problems.
The never ending Kickstarter
In September 2014, Kickstarter updated its terms of service to essentially make it easier for backers to sure project creators who fail to deliver rewards. The updated terms, which came into effect in October 2014, refer to a "contract" between backers and creators. It then details what a creator must do to remedy the situation and meet their obligations but crucially, there is nothing in the terms about a timeframe limit to a campaign such as the Agent smartwatch.
Chris Walker is (sporadically) posting updates about what work is being done, how funds are being used etc, which is what Kickstarter's terms specify creators must do. But the project updates also signify that, the $1m appears to be gone and backers won't be getting a refund:
"Since, to the best of my knowledge, neither House of Horology nor Secret Labs are big companies who could just write a big check, roll back backer pledges and cancel the project."
Kickstarter's terms state that "if they're (the creators) unable to satisfy the terms of this agreement, they may be subject to legal action by backers." But that doesn't mean the platform itself will step in, making it still fairly laissez-faire about the transactions on its crowdfunding site.
Maybe Kickstarter and Indiegogo need to impose a worst case scenario time limit for projects of say, 18 months overdue or more. The Agent smartwatch is over two years late. The whole industry has moved on considerably since then. As backers are pointing out, Apple could well soon release its second smartwatch. The Agent watch looks like a combination of the early Pebbles of 2012 and 2013 and whoever took a shine to it in June 2013 has probably bought a Pebble or Apple Watch or Android Wear watch since. Will Chris Walker still be posting updates in 10 years?
We'll keep an eye on the Agent smartwatch saga as it continues. If Calsyn and co do manage to scrape together enough money to sue, it could be the start of serious trouble for crowdfunding projects that are all talk and no wearable tech.
Main image credit: Pete Brown