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Compopoly - a fairer reward system for value creators?

Posted by Senake 
Re: Compopoly - a fairer reward system for value creators?
October 09, 2013 09:30AM
Startups with VC and kickstarter are two totally different things. I've heard this comparison before... but the two things couldn't be more different.

People who start shitstarter scampaigns have no responsibility to start a company. They could essentially run the campaign, send all their "investors" trash and quit with the money that they raised. If the people who ran the campaign decide to build a company, the investors do not share in any of the profit, nor do they have any influence in how the company is run. Quite simply, if you are approaching KS like a VC opportunity, it's the worst possible VC investment you could make, because you're guaranteed not to ever see a dime of your money return to your pocket. You might as well fund a pyramid scheme.

That is the reason you have to approach KS as a pre-order purchase. Since it has no investment value, the only value you can expect to get for your money is a product. In fact, KS sucks as a pre-order as well, because since their product is not backed by a brand, they are under no obligation to send you a legitimate product. The only thing they lose is your trust on future scampaigns! You might *think* you are funding research and development, but in fact there's no stipulation that you're to receive a polished product, one that performs its function well or one that can be made to work.

In my experience, KS frequently produces trash. People start campaigns and over-promise things they can't deliver. Then 2 years later, they send out a half-baked product, because they wanted to keep all the money they raised and not hire people to help them. Instead of developing a product, they spent all of their time fulfilling orders. OR just as often is that they send out junk at a 1000% markup and you never hear about the thing again.

People approach KS like a get rich scheme. A successful KS campaign is the only thing they are trying to achieve. My point is that there is no motivation or obligations after that. To most people, a successful KS campaign means they've done everything they've set out to do. Now it's time to get that product out the door and you'll never hear from them or see them again.

vegasloki Wrote:
------------------------------------------------------- and
>Many startups are
> funded from other peoples money at the seed phase
> and in the growth phase it's almost always outside
> money. That's how startups work. Haxlr8r works on
> the same VC model.

Edited 4 time(s). Last edit at 10/09/2013 11:40AM by iquizzle.
Re: Compopoly - a fairer reward system for value creators?
October 09, 2013 12:36PM
Quote

Bobc you are a lone voice

No personal assaults, please. Also I'm pretty sure you'll find many more in other areas, like IRC or the hangout.


Generation 7 Electronics Teacup Firmware RepRap DIY
     
Re: Compopoly - a fairer reward system for value creators?
October 09, 2013 12:50PM
Traumflug Wrote:
-------------------------------------------------------
>
Quote

Bobc you are a lone voice
>
> No personal assaults, please. Also I'm pretty sure
> you'll find many more in other areas, like IRC or
> the hangout.

To Bobc

My sincere apologies, that was uncalled for and not productive in any way.

I also regret insinuating that you might be trolling, that was just some bad humour, it really should have come with a smiley or been left unsaid as well. While I and some of the vocal others do not understand you position it means there is a lack of understanding and not a lack of intelligence on either side.

I think I need to take a break from the Open Source threads for a couple of days anyway to rest my nerves.

Markus, I do not know what happens in the other areas so you are correct in pointing out my incomplete sampling.

Sincerely


Kalle
--
Lahti, Finland
The only stable form of government is Open Source Government. - Kalle Pihlajasaari 2013
Re: Compopoly - a fairer reward system for value creators?
October 09, 2013 03:42PM
iquizzle Wrote:
-------------------------------------------------------

> People who start shitstarter scampaigns have no
> responsibility to start a company. They could
> essentially run the campaign, send all their
> "investors" trash and quit with the money that
> they raised. If the people who ran the campaign
> decide to build a company, the investors do not
> share in any of the profit, nor do they have any
> influence in how the company is run. Quite simply,
> if you are approaching KS like a VC
> opportunity, it's the worst possible VC investment
> you could make
, because you're
> guaranteed not to ever see a dime of your
> money return to your pocket. You might as well
> fund a pyramid scheme.


It's functionally the same thing, external funding. People need to take personal responsibility for thier decisions if they choose to back a project. You say that KS campaigns don't guarantee the product will be built. True, but any venture funded project isn't guaranteed either. In the case of a KS campaign the reward isn't equity, it's a "prize" or "award". You're basically paying to fund an idea in exchange for the potential of some sort of treat at the end be it a sticker, shirt, product, etc. While legally not an investment (as they would then become regulated) it is functionally outside investing. Crowdfunding is VC for the little guy but without giving up an equity stake.

In a VC funded venture the investors are likely to have more control within the management structure but we're also talking about a great deal more investment. That's where programs like Haxlr8r and VC funding are advantageous because because there is some mentorship to help with what is likely a very steep learning curve. The issue with KS isn't KS, it's some of the participants. I don't think you can provide any substantiative documentation that most KS projects are frauds. To stereotype KS projects in that way is insulting to projects like Smoothieboard that are doing the best they can to raise funds. If anything I'd say most of them aren't well versed in how to operate a startup and scale to meet demand and failures as such aren't based on nefarious reasons but for lack of experience and ability. IOW, the same reasons that most small business fails.
Re: Compopoly - a fairer reward system for value creators?
October 09, 2013 04:04PM
Traumflug Wrote:
-------------------------------------------------------

> Yes, i did read this and this is the exact reason
> why I promote accepting -NC licences. Because the
> GPL encourages commercialisation much more than a
> -NC licence. Look at RAMPS or Sanguinololu: both
> are found in almost every commercial shop, at the
> same time their community development has stalled
> long time ago. There's not even somebody who would
> replace the MOSFETs with more suitable ones, a
> matter of an hour of work.
>
> Compare this to Gen7, which apparently encourages
> making derivates and continued development.


RAMPS and Sanguinololu have been developed to the point where the next versions need to emcompass more changes. For example RAMBo and Smoothieboard and Brainwave as a Sanguinololu derivative that was designed for manufacturing. From the perspective of an engineer one is driving to always evolve and change. Many times for the sake of change. The market is different in that it's solutions driven. The current RAMPS and Sanguinolou meet the needs of the majority of not only Reprap users but also consumer based DIY 3D printing enthusiasts at this stage in the market. I see any future advancements in making them less expensive to manufacture and package rather than in any feature or performance enhancements. They do what they need to do and they do it well. The market for 3D printers including Reprap type printers has changed from one of developers to one of consumers. In any market there are always going to be more consumers than makers. To support those consumers there needs to be manufacturing capability and for many Reprap devs that's not their speciality. To that end what solution the consumers chose isn't based on technological prowess alone, but on a host of issues including availability, support, what others are using and others.
Re: Compopoly - a fairer reward system for value creators?
October 09, 2013 04:26PM
vegasloki wrote
The market for 3D printers including Reprap type printers has changed from one of developers to one of consumers

I think their is more than a little truth in this, but a vast amount of development is needed to achieve self replication, and if that is to happen we need a lot of people to become active developers and not just users.


Random Precision
Re: Compopoly - a fairer reward system for value creators?
October 09, 2013 05:02PM
vegasloki Wrote:
-------------------------------------------------------
> The issue with KS isn't KS, it's some of the
> participants. I don't think you can provide any
> substantiative documentation that most KS projects
> are frauds. To stereotype KS projects in that way
> is insulting to projects like Smoothieboard that
> are doing the best they can to raise funds.

If KS better enforced their own rules, I would agree with you -- however, the formula to a successful scampaign is quite simple. Forget about ideas and development. That stuff matters very little. Start with a price. For instance, if you can build a reprap for $500-600 dollars from shops online, your kickstarter should set a price of $400 dollars or lower. Then, build a prototype of whatever you want to sell and make claims that you'll be shipping something like that for the price you selected. Finally, replace all of the quality components in said product with shittier versions and cut corners until you achieve the profit margin you want. And last but not least, throw your pile of cash onto your bed and roll around in it. SUCCESSFUL KICKSTARTER!

I'm not claiming that all KS projects go this way, but people have dumped abandoned piles of expensive KS trash at my hackerspace that don't just borderline on scams -- but IMO were scams. These projects were enabled by following the million dollar KS formula I just laid out. By not enforcing their own rules, KS allows shit like this to happen time and time again... and in the end it tarnishes the good name of legitimate projects like Smoothieboard, which let the true cost of a quality product dictate the price at which it is sold.

From the KS site: "Backers are supporting projects to help them come to life, not to profit financially. Instead, project creators offer rewards to thank backers for their support.... Backing a project is more than just giving someone money. It’s supporting their dream to create something that they want to see exist in the world."

Tell me how pledging money at a 3d printer, which has no new innovation, helps anything come to life? In the history of KS and all the money put into 3d printers on that site, how many of those things have brought to life something that didn't already exist as open source within the reprap project? I'd say pretty close to zero. Translation: KS is blatantly allowing non-innovative projects to be funded so that they can get profit. I'm honestly confused why there aren't more people as jaded as I am...

Edited 1 time(s). Last edit at 10/09/2013 05:03PM by iquizzle.
Re: Compopoly - a fairer reward system for value creators?
October 09, 2013 05:23PM
I recall that back in 2012, Kickstarter came under fire from one of the most widely read gadget web sites because of non delivery, but I was under the impression that they had taken that to heart and tightened up what could be offered and expected especially with regard to hardware projects - see this link: http://www.kickstarter.com/blog/kickstarter-is-not-a-store.

I also know a reasonable amount about the early stage funding market - angel rather than VC investment - here in the UK as a result of my efforts in trying to get an alternative solution off the ground myself. My solution - based on the what worked when I bootstrapped my machinery company back in 1991.

In the first two years, whilst getting my first two reference sites, I was lucky enough to have various people - not friends and family as I did't know beforehand - offer me things that they weren't using on a pay us if and when you can basis. This included a 2000 sq ft derelict factory space, machine components, access to a pillar drill, a cheap car and even a flat. In return, I paid them back with a small premium and occasional sales/development work. They had little to lose as I was using what they couldn't sell/hire and everything to gain. After selling bespoke production line machinery to a couple of customers, I took one of two offers of angel investment (both introductions made for free by my bank manager) to try and get a standard product off the ground.

My approach to funding the high risk idea-to-market stage of business was therefore to:

(1) minimise the impact of things not working out by maximising the use of under utilised resources (spare time, underused workshop and factory facilities etc.) and;
(2) maximise the quality of due diligence, but make it affordable/free by using the spare time, dormant asset and investing/lending crowd to spot technical and commercial gaps in

Despite having spent quite a lot of time (2+ years) and money (some of my house) developing the solution, I gave up on pushing it into the market because:

(1) I ran out of cash - even with the solution working for us to dramatically reduce up front costs, I still had to meet some costs - and;
(2) crowd funding seemed to have solved the problem and;
(3) I think a Compopoly - consumer owned and run group buying portal is a more complete solution.

I was still thinking of offering the tool to those wanting to derisk their crowd funding projects. It can be seen here - www.jointventurehubs.com.

My experience of the early stage investment market over here is that less than 1% of screened deal flow gets funded and that entrepreneurs/innovators get charged quite a lot for introductions.

Crowd funders are often early adopters after a new technology product and investors generally just want a financial return which is best provided by later stage businesses, so in my opinion both solutions have their place.

Edited 5 time(s). Last edit at 10/09/2013 06:14PM by Senake.
Re: Compopoly - a fairer reward system for value creators?
October 09, 2013 05:26PM
Quote
iquizzle
KS is blatantly allowing non-innovative projects to be funded so that they can get profit.

Whose job is it to make sure the projects are innovative? Isn't that what the backers are supposed to do? Besides, even if a backer funded a totally derivative product then what's the difference? The backer got what he wanted, the people making the derivative product got what they wanted.

The bigger problem is getting products that don't deliver on what they promised. The people who made those products should be punished in some way, although in theory it should control itself by eventually destroying people's trust in the system.

Soon nobody will fund kickstarter projects, or the people that do fund them will become more wary, and scam projects will become less viable.
Re: Compopoly - a fairer reward system for value creators?
October 09, 2013 05:48PM
destroyer2012 Wrote:
-------------------------------------------------------
> The bigger problem is getting products that don't
> deliver on what they promised. The people who made
> those products should be punished in some way,
> although in theory it should control itself by
> eventually destroying people's trust in the
> system.


According to the KS model, this is not a problem at all. KS is not taking enough preventative measures to make sure people know that crowdfunding is NOT pre-order. According to KS, there should be zero expectation of return on investment. Problematically, KS has no system of accountability, allowing the most unconscionable people to receive the most funding. The weaker your sense of morality and obligation, the more you will earn on KS.


> Soon nobody will fund kickstarter projects, or the
> people that do fund them will become more wary,
> and scam projects will become less viable.


This is definitely already happening. People are starting to learn "the hard way" what the KS funding model actually is. Until people are scammed enough times to know better, KS will continue to allow the scam artists to make money... and as long as KS is being treated like a pre-order site by its backers, it wil be an enabling platform for the scammers to get their money.

If you are in the mindset of buying something on KS, you should expect to receive a pile of junk. If it turns out *not* to be junk, then by the good graces and moral characters of the stranger you handed your money to, you have gotten lucky.

If you are in the mindset of "backing" an idea that you just can't live without, then you're doing it right. You have no expectation of any return on the money you pledged. You might get nothing in return, or you might see it work out.
Re: Compopoly - a fairer reward system for value creators?
October 10, 2013 09:38PM
Quote
Iquizzle
According to KS, there should be zero expectation of return on investment. Problematically, KS has no system of accountability...

This is why on the RepRap site, we should encourage, nurture and enable the purchase of incrementally innovated 3D printers, components and related solutions (eg. Raw material producing aquaponics, PLA production units, filament extruders and the like).

Everyone should be able to contribute concept ideas for improvements or new solutions, but until they had been prototypes, videoed and vetted by the community, they would not be able to have a crowd fund or be sold in the RepRap store. In the interim, we could set up a bounty or all-or-nothing development crowdfund from which the contributors could optionally get repaid with a bonus from the volume sales crowdfund if and when that happened...
Re: Compopoly - a fairer reward system for value creators?
November 04, 2014 05:16AM
Interesting, well actually a bit peculiar, how this is no longer a searchable topic in the Forums.

I wonder how that can be achieved and who decides if it should be achieved?

I wonder if anyone is still following this topic and will see this post?


Kalle
--
Lahti, Finland
The only stable form of government is Open Source Government. - Kalle Pihlajasaari 2013
Re: Compopoly - a fairer reward system for value creators?
November 04, 2014 07:06AM
Quote
KalleP
Interesting, well actually a bit peculiar, how this is no longer a searchable topic in the Forums.

I wonder how that can be achieved and who decides if it should be achieved?

I wonder if anyone is still following this topic and will see this post?

I think you just had the time limit on your search. When you do a search, it will automatically search for topics that have been active for the past 30 days.

BTW, bountysource is mostly about programming, I have been looking on the site and I couldn't find much about things 'not programming'. Why is this?


http://www.marinusdebeer.nl/
Re: Compopoly - a fairer reward system for value creators?
November 04, 2014 08:28AM
Quote
Ohmarinus
Quote
KalleP
Interesting, well actually a bit peculiar, how this is no longer a searchable topic in the Forums.

I wonder how that can be achieved and who decides if it should be achieved?

I wonder if anyone is still following this topic and will see this post?

I think you just had the time limit on your search. When you do a search, it will automatically search for topics that have been active for the past 30 days.

BTW, bountysource is mostly about programming, I have been looking on the site and I couldn't find much about things 'not programming'. Why is this?

@Ohmarinus,

Ahh, silly me thinking all sorts of childish conspiracy thoughts. I had searched for the Interesting word in the title, I do remember seeing mention of advanced search but never used it.

I searched for RepRap on Bountysource.com and a whole bunch of stuff came up, not sure if they are current but a couple of them seem real though not hardware related as you say. Perhaps there is a bit of lull in the evolution of hardware at the moment while a whole flock of commercial desktop machines come onto the emarket.


Kalle
--
Lahti, Finland
The only stable form of government is Open Source Government. - Kalle Pihlajasaari 2013
Re: Compopoly - a fairer reward system for value creators?
November 05, 2014 07:50AM
Quote
Ohmarinus
I have been looking on the site and I couldn't find much about things 'not programming'. Why is this?

Wherever I look, developments are either with commercial intention or not open sourced. The latter with a few pictures for compliments fishing at best. Development happens, collaboration not.

Quote
KalleP
Perhaps there is a bit of lull in the evolution of hardware at the moment while a whole flock of commercial desktop machines come onto the emarket.

Commercial developments become more commercial, that's true. This will undoubtly make the number of self-built printers smaller.


Generation 7 Electronics Teacup Firmware RepRap DIY
     
Re: Compopoly - a fairer reward system for value creators?
November 06, 2014 08:10AM
Quote
Traumflug
Quote
KalleP
Perhaps there is a bit of lull in the evolution of hardware at the moment while a whole flock of commercial desktop machines come onto the emarket.

Commercial developments become more commercial, that's true. This will undoubtly make the number of self-built printers smaller.

I think this is a very good thing, imagine finding scrap $500 machines in a dumpster every other day when an inexperienced consumer jams a nozzle and the machine is out of warrantee, now this is a gold mine of bits for a next generation DIY machine. The number of hacks wll be huge because the hacking technology is freely available.

A bit like people used to take old cars and upgrade them to race cars.


Kalle
--
Lahti, Finland
The only stable form of government is Open Source Government. - Kalle Pihlajasaari 2013
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