Kickin’ the Can Down the Road – Kickstarter’s accountability problem

Remember Kickin’ It? It was a weekly look at some of the best and most interesting projects that Kickstarter had to offer. It was fun to write, and I really enjoyed learning about new projects in the process. I know what you’re thinking: “If that’s the case, then why hasn’t there been a new edition for months?” In one word, disenchantment. In more than one word, I became frustrated with the lack of accountability for those who post projects on Kickstarter. Thousands of people chip in their hard earned money to a project, and at the end of the day there’s no guarantee that they will have anything to show for it.

Yes, I know that there’s always a chance projects will fall through for whatever reason; part of the purpose of Kickstarter is to distribute that risk. As the staff puts it:

A Kickstarter where every project is guaranteed would be the same safe bets and retreads we see everywhere else. The fact that Kickstarter allows creators to take risks and attempt to create something ambitious is a feature, not a bug.

That’s a very valid point, and  especially true in the gaming industry, where publishers can be reluctant to take a chance on a new concept. But does that mean we need to make things as risky as possible? As it stands right now, pretty much anyone can ask for money on Kickstarter. They can claim credentials they don’t have. They can promise a product they can’t deliver. There are few measures in place to filter the con artists from the real artists, and even fewer to protect backers (and their wallets) from the former.

Case Study #1: Imaginary studio with imaginary credentials asks for real money

The game was called  Mythic: the Story of Gods and Men. It was an “action/strategy based RPG” with gameplay similar to World of Warcraft and graphics on par with Skyrim. Mythic would have an open-world design, and multiplayer available soon after launch. And you could trust all of this because the developers, Little Monster Productions, were a team of experienced Blizzard alumi: “2 former creative directors, 1 VP of production, 1 former CTO, 3 senior programmers,1 UI designer/programmer, and 4 3D experts (2 world/ 2 assets)” whose credits included Diablo II, StarCraft, and World of Warcraft circa 2009-2011.

Connections at Pixar would allow the game to feature motion-capture animation, and the soundtrack would be recorded at Disney Studios. These guys knew what they were doing, and they had the tools and experience to make this game a reality. Most of the funds needed were already raised from investors and other sources; they only needed an additional $80,000 to secure an animation team and some studio time. There was just one small problem…

None of it was true. The guys running the project didn’t have any of the credentials or connections they claimed; heck, they weren’t even game developers. They plagiarized the text of the reward tiers verbatim from another project, the images of alleged game assets and environments were stolen from a number of online sources and even the pictures that claimed to be from the offices of Little Monster Productions were stolen from the website of a different development studio. There is little evidence that Little Monster Productions ever existed at all. But that didn’t stop the project creators from amassing a collection of cribbed content, reorganizing it on Mythic’s Kickstarter page, and eagerly anticipating their $80,000 payday.

Luckily, some clever Redditors and the team behind the crowdfunding documentary Kickstarted called the would-be scammers’ bluff before the project took off. After briefly trying to deny the accusations, the creators conceded with just under $5000 raised. They canceled Mythic’s Kickstarter, the website for Little Monster Productions vanished, and nothing has been heard about the fictional studio or game since. But if you think the fact that the crowd managed to thwart this particular scam means that Kickstarter doesn’t have a problem, then you’re missing the point.

The problem: Kickstarter doesn’t verify creator information

The claims made about Mythic might seem obviously unrealistic in hindsight, but who’s to say the next scammer won’t be more convincing? Kickstarter’s moderation process consists only of a very cursory check to ensure that none of their guidelines are being blatantly violated. They don’t evaluate the creator’s ability to complete the project; that part is supposed to be up to the backers, an arrangement that might work just fine if only we could count on the information on the project page to be true. But since Kickstarter doesn’t verify any of that information either (they apparently missed the fact that Mythic’s reward tiers were identical to a project that ended only a week earlier), backers are left shooting blind.

Case Study #2: I do not think you’re backing what you think you’re backing

I’ve made no secret about my feelings on the Susan Wilson fiasco, but if you somehow missed that debacle there’s a summary here. If you’re of the mind that reading one long article is enough for the day, then I’ll summarize the pertinent facts:

• Susan Wilson starts a Kickstarter to raise $829 to send her 9-year-old daughter to camp
• Wilson courts and subsequently receives a huge amount of media attention
• Said media attention leads to thousands in donations
• It also leads to some questions about whether raising funds for camp tuition is within the Kickstarter Terms of Service
• These questions are made moot, because Wilson’s daughter is no longer attending the camp
• Despite asking for just $829, Susan Wilson raises $24,000 to spend on…what exactly?

It isn’t a technical requirement for projects to add stretch goals but it’s generally seen as an unwritten rule, especially for video games. When a project surpasses its goal by a significant amount, it’s only natural for backers to wonder where the excess will go. Will there be extra levels? Additional features? More platforms? Stretch goals are a courtesy that grants backers an extra bit of transparency.

But not only did Wilson disregard that accepted convention, she went so far as to change the original funding goal as well. The project claimed to be raising funds for an RPG Maker camp and potentially a laptop, but then a free laptop was donated and the camp plans were replaced with an (also free) trip to MIT’s Game Lab. So besides not knowing where the thousands in excess went, we don’t even know what happened to the original $829.

This isn’t a case of the company canceling the camp, or some other unforeseen circumstance interference with attendance. Wilson actively decided not to send her daughter to the camp she was raising money for while still raising money for it. And while it might seem logical (not to mention decent) to cancel the project after deciding not to follow through with the goal, who wants to say no to all of that free money?

Susan Wilson simply moved the goalposts, changing the text, title, and goal of the project several times. She first claimed the excess would go to charity, but that’s against Kickstarter’s ToS. So then she promised the project would use the funds to “Kick it Forward”, but that’s not how Kicking It Forward works. So now, months after the project was funded and hours before the game was set to be released, she revealed that the money was spent “in a way that would have a far reaching impact and directly change a few people’s lives including some well-deserving kids.” Make of that what you will.

It certainly doesn’t seem to have gone to developing the game itself. The most expensive version of RPG Maker will run you just $70. The characters and maps showcased here are all defaults so the money doesn’t appear to have gone towards original assets. And yet even after announcing on the scheduled release day that the game would now have to be split into 15 minute episodes released over time to avoid delays, $24,000 somehow still wasn’t enough to have anything to show backers. Despite continuing to hype the game and related business ventures during the run up to the release, backers got just a few hours notice that the task was now deemed “mentally and physically impossible.”

Even if you’re not as cynical as me about where that money actually ended up, is financing an anonymous group of people who needed “some bills paid” what comes to mind when you view a project that claims to be “to cover the basic cost of RPG Camp”? Surely it isn’t fair to start a project for one purpose and then drastically change it after receiving the funds, but Kickstarter doesn’t alert backers if a project changes significantly, and most aren’t invested enough to check back regularly.

The problem: What you buy may not be what you get

The only thing a project creator can’t change is the text of the reward tiers, and even that isn’t as much protection as it sounds like. Consider this hypothetical: I start a Kickstarter to fund development of Super Awesome Game, a 2D puzzle platformer. You back the project at a tier that includes “a copy of Super Awesome Game”. After receiving $50,000 in funding, I decide making a fun platformer is too hard. You receive a tic-tac-toe clone called Super Awesome Game instead. This sounds like a bait-and-switch to any reasonable person, but according to Kickstarter I’ve fulfilled my end of the deal: you got a copy of Super Awesome Game.

Case Study #3: Follow the money! Oh wait, you can’t

The previous case partially illustrates the lack of transparency with how money is spent, but that isn’t where the money problems end. What happens when, for whatever reason, a Kickstarter doesn’t pan out? The Kickstarter staff attempted to answer this question in response to an NPR segment (which in turn was a response to the success of Ouya’s Kickstarter) late last year.

Kickstarter’s Terms of Use require creators to fulfill all rewards of their project or refund any backer whose reward they do not or cannot fulfill. (This is what creators see before they launch.) We crafted these terms to create a legal requirement for creators to follow through on their projects, and to give backers a recourse if they don’t.

But a requirement like that is only meaningful if there’s a way to enforce it, and since “it’s up to the creator to issue a refund” and Kickstarter provides no mechanism for doing so, they rarely take place. Maybe that’s an acceptable risk for small projects, but what about when you get a few hundred thousand (or even a few million) from backers? Shouldn’t that come with some sort of responsibility?

We all accept that delays are a possibility when backing a project, but when the creator of the board game Katalayka claimed that her project couldn’t be finished because the sun told her so, many backers wanted their money back. It had already been nearly a year since the project was funded, and months since the project allegedly entered the “home stretch”. It seemed apparent that the promised rewards weren’t going to be delivered and with an average pledge of $92 the money wasn’t easily abandoned.

If it wasn’t clear after that post, it’s certainly clear now; it has been two years since the project was funded, more than a year since “printing began”, and almost six months since the last update. Time to request a refund right? Good luck with that; the original Amazon Payments transaction can only be refunded for 60 days after its processed. After that, it’s up to the creator to come up with some way to send out refunds. And my guess is that those who make off with Kickstarter funding under less than honest pretenses aren’t in any hurry to send it back.

Interestingly, even when a creator admits that they can’t fulfill their promises and decides to send out refunds, the process isn’t as simple as it sounds. Another board game called The Doom That Came to Atlantic City raised just shy of $123,000 last year, far more than Katalyka. Project creator Erik Chevalier recently announced in an update that the “project is over, the game is canceled”, and promised to do his best to “refund everyone fully”.

The fact that the project somehow failed despite raising nearly four times its funding goal has some backers questioning Chevalier’s sincerity, but let’s assume he means it; he now has to come up with $123,000 in refunds. This is no easy task, considering that he quit his job in order to pursue working on the game.

The problem: When funding is done, your money is gone

Even if Chevalier hadn’t spent a cent of backers’ funds, issuing refunds would still mean coming up with over $12,000 out of his own pocket to make up for the 10% cut that Kickstarter and Amazon take from each successful project, not to mention the additional fees from processing the refund payments through a third party like PayPal. This is not to say that Kickstarter shouldn’t take a cut, but merely to emphasize how very unlikely you are to get a refund from a project creator (well-intentioned or not) despite the “legal requirement”.

Can we fix it?

In comments made to Polygon, Kickstarter board member Sunny Bates insists that the company is powerless to stop abuse; “[S]ome of that may lead over on some people feeling, ‘Why can’t Kickstarter control this?’” she concedes, before answering, “Well, it’s a platform — we can’t.” But is there really nothing they can do? Last September, hardware and product design projects got a new set of rules to keep creators from overpromising. A few months earlier, these updates were made to the requirements for the design and technology categories:

In May 2012 we added additional guidelines and requirements for Design and Technology projects. These include requiring creators to provide information about their background and experience, a manufacturing plan (for hardware projects), and a functional prototype. We made this change to ensure that creators have done their research before launching and backers have sufficient information when deciding whether to back these projects.

Why can’t steps like these be implemented for all projects? Require creators to verify their credentials and experience. Ask them to provide a prospective timeline and a budget. Find out if they have manufacturing and shipping solutions lined up. I’m not sure why making sure “creators have done their research” and that “backers have sufficient information” to make a decision should be limited to just one section of the website.

Heck, it doesn’t even have to be a strict requirement for project creation; just add a “trust score” metric that rewards project creators for transparency. The score goes up when creators provide more information, stays at a neutral value when they don’t, and goes down when users report a project or too much time lapses between updates. Perhaps give creators with a history of transparency and delivering on their promises get a boost to the rating of their future projects, while those with a questionable record are penalized. Send backers an email alert when the project page or trust score is significantly (>10%) changed. Ask creators to update their plans or add stretch goals when the funding goal is surpassed by a substantial amount, and up their scores when they do.

By drawing attention to project creators that are honest about their abilities, open about their progress, and realistic about their goals, you maximize the chances of “successful” projects actually being successful. Many would-be scammers could be weeded out, and requiring a timeline and budget forces the well-intentioned but naïve to put more thought into the feasibility (and scalability) of their plan. It doesn’t quite address the difficulty of getting a refund, but if we can ensure project creators are credible and working in good faith to deliver, that might become a moot point. Besides, what’s the alternative?

It’s tempting to say “caveat emptor” and insist that people should do their own research before backing a project. Unfortunately, the crowd doesn’t always make the wisest decisions, and this problem is only compounded by forcing them to rely on potentially faulty information. Is it too much to ask that Kickstarter make more of an effect to vet the projects that get posted and the people that post them? Products have to be approved before appearing on the marketplace in the real world, and while I’ve heard the argument made that Kickstarter is less like a marketplace and more like a dog show, even a dog show will make sure that your poodle is actually a poodle before you’re allowed to compete.

Of course, Kickstarter would like us to believe that it isn’t a marketplace, or an investment, or even a competition like a dog show. It’s just a platform; backers’ money is little more than a gift for which they aren’t guaranteed to receive anything in return. Meanwhile, project creators continue to refer to rewards as “pre-orders” and the vast majority of backers are of the mind that giving their money comprises a purchase. It’s only a matter of time until the next unscrupulous person manages to pull the wool over the crowd’s eyes and make off like a bandit. We can either address the issue of accountability, concede to backers that there is none, or just keep kicking that can down the road.

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