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How can American manufacturing be reinvented to thrive in an era of globalization?

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"Kickstarter Is Not a Store"

Will the crowdfunding site's new message solve its vaporware problem?

Pebble: E-Paper Watch for iPhone and Android.

The Pebble smartwatch, a product funded by Kickstarter that hasn't yet materialized.

Courtesy Kickstarter.

This month, Slate is exploring how to reinvent American manufacturing. We'd like to hear your best ideas for that! Please submit them here.

Five years ago, if you’d seen a Kickstarter project asking you to fund Kickstarter, you would’ve skipped it. But in one of those quirks of online behavior that can’t really be explained—why does anyone spend hours volunteering on an online encyclopedia?—the site is thriving. Kickstarter’s crowdfunding model, in which ordinary people give money to dreamy inventors who hock their projects using flashy videos, has helped hundreds of artists and small businesses launch their ideas. Now, Kickstarter is being hailed as something more than just a place for people to raise money. By providing early funds to people with great ideas, some pundits (see Wired editor Chris Anderson) believe it will be a crucial ingredient in the revival of American manufacturing.

But Kickstarter’s long-term prospects have recently begun to look shakier. The problem is “vaporware”—several high-profile Kickstarter projects have failed to deliver their promised creations on time, or even at all. Among these is the Pebble smartwatch project, which garnered $10 million in donations in May and was supposed to have delivered its first watches to donors by September. Now delivery is delayed indefinitely. Felix Salmon has argued that Lifx, a Wi-Fi enabled LED light bulb that has raised about $1.3 million so far, is looking like vaporware, too—LED light bulbs are extremely difficult to manufacture, and the guys behind this project seem to be underestimating the costs and intellectual property minefield involved in making one. (Last year, I raved about Switch, a company that’s trying to make an amazing dimmable LED light bulb for $20; the company showed me a prototype and told me to expect the bulb to go on sale in October, but it’s still not available. So mea culpa for calling it “the world’s greatest light bulb.”) Then there’s Ouya, an “open” gaming console, which won $8.5 million and is supposed to deliver its tens of thousands of devices by early next year. Very few people expect it to meet that goal.

Kickstarter has a plan to address these criticisms. Last week, it put out new guidelines meant to raise the bar for new pitches. From now on, Kickstarter projects pitching new hardware won’t be allowed to show photos or videos that “simulate” what a product might do in the future. Instead, the site says, “Products can only be shown performing actions that they’re able to perform in their current state of development.” They’re also not allowed to show "photorealistic" renderings of hardware—they can show sketches or design diagrams, but if they want to give people an idea of what the finished product looks like, inventors must show real photographs of real prototypes.* And, finally, inventors can’t offer multiple quantities of a product in return for higher donations. For instance, the Pebble watch project offered to give 100 watches to donors who pledged $10,000 or more each (31 people took them up on that). Kickstarter says that offering multiple units implies that “products are shrink-wrapped and ready to ship,” when in fact they may be far from that.

These are sensible policies; I think they’ll go far in cutting down some of the fantastical projects that pop up on the site. But the most important part of Kickstarter’s policy update was the headline: “Kickstarter is not a store,” the site warned. That’s something everyone should keep in mind when they decide to back a project. Although Kickstarter can sometimes feel like a collection of infomercials—fast-talking guys make a slick presentation about their unbelievable new thing, and offer great deals for early acolytes like yourself—giving to a project is in reality more like funding scientific research. Or maybe it’s like dropping money into a subway performer’s tip jar. Or maybe it’s like a betting on roulette. Or all three—opening your wallet to fund a Kickstarter project is a way to further science and the arts, and, if you’re lucky, you may get a small reward in the process. But you should never expect to get anything in return. Kickstarter is an act of faith; if you can’t afford to give away your money and get nothing in return, you shouldn’t give anything at all.

This is especially true of hardware projects, which, even in our era of contract manufacturing and computer-aided design, remain extremely difficult to produce with high quality at large scale. This should be obvious to anyone who follows the tech industry: Every other week, big, seemingly successful hardware companies make huge mistakes. Last month, OnLive, a cloud gaming company that made an amazing product and received millions of dollars in funding, folded like a house of cards. Or look at Up, the fitness band made by the Bluetooth-headset company Jawbone, which was afflicted with a fatal bug when it was released last year. Or just look at what’s happened to the BlackBerry and Nokia, what happened to Apple in the 1990s, the failures of various Android tablets, or how Google had to pull its Nexus Q media player from the market because it proved to be kind of useless. These were all big companies with lots of money and, presumably, lots of expertise in hardware. And they still made huge mistakes.

What are the chances, then, for a random set of dudes who’ve made a nice video promising to build something revolutionary? How likely is it they’re going to be able to ship you an amazing product on time—let alone that the thing will look as nice, and work as well, as they promise? Not very likely. Hardware is hard. That’s why so few companies do it well. And it’s why you shouldn’t expect that anything you see in a video will ever become real.

Even so, Kickstarter is a great site that’s earned a well-deserved niche in the manufacturing world. I’d encourage you to browse Kickstarter, and to fund something if it strikes your fancy. By all means, take part in the dream. Just don’t forget that you’re buying a dream, not an object.

This month, Slate is exploring how to reinvent American manufacturing. We’d like to hear your best ideas for that! Please submit them here.

Correction, Oct. 4, 2012: This article originally stated that Kickstarter no longer allows "digital renderings of hardware" in its project pitches. It has actually banned "photorealistic" depictions of hardware.

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