I’m increasingly seeing a problem with how the media covers the crowdfunding space.
Rewards-based crowdfunding has resulted in the equivalent of a media gold rush. There are hundreds of topics to cover with more popping up every day. Project creators are anxious for press and usually pretty happy to give an exclusive to a larger media entity. Crowdfunding-related articles also tend to draw a lot of eyes. The public is clearly fascinated with the idea, and more and more people become aware of it every day.
However, the media needs to begin to cover campaigns on sites like Kickstarter and Indiegogo for what they are: early-stage ideas that can (and do) run into hurdles and even fail. No exceptions.
Instead, campaigns are often covered as a sure thing. It’s disingenuous, it puts the less informed members of the public at risk and it often makes the industry look bad. The only sure thing in rewards-based crowdfunding is a campaign that has already shipped rewards.
In fact, crowdfunding campaigns ship late all the time. Inevitably some also fail. None of this is the end of the world. It’s part of the entrepreneurial process. Rewards-based crowdfunding is a revolutionary way for the public to support the ideas they want to see come to market. It’s a good thing.
Having said that, you’ll often find that articles about crowdfunding offerings make no mention of risk at all. They often frame the offering as if it’s just e-commerce. “You just have to decide if you want to order yours early?” You also have to decide if yours will arrive, and when.
There is also the fact that failures are rarely covered, at least not with the zeal that current campaigns are. In fact, the recent Kobe beef jerky episode is one of the first times I’ve seen a widely-covered crowdfunding failure. Consider some of the early articles written about the campaign. It is a huge risk to the industry to have media outlets covering outright frauds in this rosy fashion.
Doesn’t journalism exist to surface the (sometimes ugly) truth? I’d argue that talking openly about crowdfunding failure better informs the public of how the space works and makes it clear for project creators that there are consequences to mismanaging a campaign. That isn’t to say that every failed project mandates a witch hunt. Take our recent article about the Levitatr failure. There’s no need to beat an entrepreneur when they’re down, but there are things to be learned too.
The media is all too happy to cover rewards-based crowdfunding campaigns as they’re seeking funding, but what happens when the projects ends? Backers are directed to these campaigns by the media during funding, but if a project goes toes-up backers often have a hard time getting the media to cover a failure. The failure isn’t as sexy as the launch. The problem is that the post-failure coverage can be pivotal in putting pressure on a project creator to increase transparency. It can also serve to inform the public about the risk of backing a project on sites like Kickstarter, spurring them to do more due diligence on project creators before pledging funds.
How do I know that the media is ignoring these backers? We’ve perhaps covered more crowdfunding failures than anyone, and after backers have been ignored by larger media outlets they come to us for coverage. They tell us who they’ve already reached out to, and often times these outlets were the ones that covered the failed campaign before things went sour.
The good news is it is an easy problem to fix. It’s all in semantics. Crowdfunding project creators are funding the promise of a product, not necessarily the product itself. They’re guaranteeing delivery, but delivery isn’t guaranteed. Meeting the funding goal isn’t the end goal of a campaign. Delivery is.
Is it splitting hairs? No. It’s being transparent and truthful, and in a space like this transparency is everything.