Pre-purchase schemes like Kickstarter and Indiegogo are not a good deal for the consumer. Anybody can come up with an idea, but previously they had to convince an investor or a bank to financially back their idea. Or back it up with their own cash. In other words, the amount of risk of the project failing is proportional to the ease of obtaining capital. Factors like the founder’s financial history, skills, business plans, market schedule are all considered.
But with sites like Kickstarter, suddenly access to money becomes far easier. Put up a slick video and some blueprints, and the risk of losing money is no longer borne by the person with the idea, but instead by the public who is willing to put down money for a product before it even exists. If it fails because of the creator’s inexperience (as is very often the case), they just walk away and do it again, no black mark. Then there are the scams.
Most importantly, a creator with just an idea and their own money (or money they need to repay), will be spending every waking hour trying to make their idea work, no matter what. But if they already have the money in their pocket just from the 1% of work it required to put a Youtube video up, what’s the motivation to follow through?
There is a good reason why so many ideas fail, because despite how much wishful thinking it inspires, it’s just a terrible or unworkable idea.
“But in ZPM’s case, the enchantment was long ago irretrievably dispelled. Once the money was finally gone, and the project’s consultant had bolted with engineers in tow, the founders’ only option was to hope somebody might buy what remained of the company and deliver them from their moral (and, possibly, legal) commitments. They knew it would be a tough sell: They had a technology at last viable for mass production, but they were also lugging around hundreds of thousands of dollars in liabilities. Their backers, sending comments and emails into the void, had always felt a lack of leverage, but now Polyakov and Tambasco were in something of the same position. They walked into rooms with their backs already against the wall.”