Crowdfunding is a revolutionary way to monetize a new company in an almost riskless way. You collect funds and, if successful, you can use them to develop your product, manufacture it and then deliver it to your customers.
But, as we said previously in this blog, at least a bit of work in designing your product, closing deals with potential partners and properly taking care of intellectual property prior to launching it is a must. Otherwise you run the biggest risk in a crowdfunding campaign: not being able to deliver it.
That’s what happened to Matchstick, a Google Chrome competitor launched by one of the famous names in Internet: Mozilla, the makers of Firefox. How could it go wrong?
But it did. The project looked very appealing: the USB dongle would feature a dual core processor, 1GB of RAM, 4GB of internal storage, Firefox OS as operating system and Youtube, Netflix and Spotify apps. All of that for $18, a very low price when compared to the $35 charged by Google.
The goal was $100,000 but the campaign managed to raise $470,000. Not that big, but a fair value nonetheless. The project was funded and could be started.
However, in February something was not right. A lenghty note posted on their Kickstarter page informed backers that there several problems arised and they wouldn’t be able to deliver the product that month. Claiming hardware manufacture problems, software upgrades, DRM difficulties and problems communicating with developers and brands alike, they would postpone the delivery to August. As a way to appease backers, they promised an upgrade: a quad core processor instead of a dual core one.
The expectancy ended in August 3rd. After 11 months, they posted another note ending the project and promising to give funders their money back. Claiming DRM technology development is harder than they previously thought, they decided continuing with the project was just not worth it.
If you funded the project you should contact them via Kickstarter and ask for your refund. They will give your money back through Amazon payment system in a manual process. So, expect delays in that process as well.