There’s a very long, detailed and fascinating story on Medium about the colossal failure of startup Zano How Zano Raised Millions on Kickstarter and Left Most Backers with Nothing by Mark Harris.
Kickstarter tasked me, a freelance reporter, to find out why a highly funded crowdfunding campaign for a palm-sized drone flamed out in order to give backers the full story, and provide lessons for itself and others.
If you lack the patience to read the entire story there’s an excellent summary at the endof the report.
One of the major recommendations of the author is that funded startups on Kickstarter should have mentors:
External support and advice is invaluable. Once funded, platforms could automatically assign every creator a mentor from a project in the same category that had already delivered rewards. There are now tens of thousands of such projects across the platforms. Mentors would be volunteers at first, but after one or two iterations, this would hopefully become an accepted and valued part of the fabric of crowdfunding, and organically build into a supportive community.
Kickstarter, and other crowdfunding platforms, should reconsider the way that they deal with projects involving complex hardware, massive overfunding, or large sums of money. There should be better mechanisms to identify weak projects before they fund, as well as new processes to provide mentorship, support and expert advice to newly-funded projects.
When you think about it this recommendation seems obvious. After all, virtually every crowdfunded project on Kickstarter is a startup and every startup can benefit from mentors, and probably Kickstarter projects more than most, given the complexity of their funding and customer acquisition model.
However, it appears that neither Kickstarter nor its competitors like Indiegogo have added mentoring to their models. Zano blew through nearly $3.5 million dollars of funders money. It will be interesting to see what, if any action Kickstarter takes due to Mark Harris’ report.