Project delays anger Kickstarter backers

Kickstarter is on course to triple the amount of money pledged to projects on its crowdfunding site this year, with $277m offered to would-be creators in the first 10 months of 2012 compared with about $100m in 2011.

But as creators and entrepreneurs flock to Kickstarter with ever-more-ambitious ideas, some of the ideas that have raised the most funds are hitting delays, prompting outcry from backers and presenting new challenges for the New York-based site.

Kickstarter began in 2009 as a way for independent musicians and filmmakers to fund artistic endeavours that major labels and studios would not. The "backers" "they are not described as investors or customers – get to see the creative process as well as receiving a "gift" for their support. The vast majority of its projects remain small, raising an average of $6,000.

However, in May this year, a "smart watch", the Pebble, set a new Kickstarter record when it raised $10m for development and became a litmus test for crowdfunding of physical products.

When complete, the Pebble will allow its more than 65,000 backers, who have pledged $99 or more, to read messages and use apps from their smartphones on an e-paper watch. It was originally scheduled to launch by September but in July, Pebble's makers abruptly removed that deadline and have still not set a new one.

In an update posted this weekend, Eric Migicovsky, Pebble's founder, warned that many backers would not receive their devices before Christmas. Mass production is weeks away, he said, and even once it has begun "it will still take us several weeks to manufacture all 85,000 Pebbles".

"Our number one goal is to deliver the most awesome watch possible for our Kickstarter backers, number two goal is to do that as soon as physically possible," Mr Migicovsky told the Financial Times last week. "If our Kickstarter backers don't adore the product that we're creating, this whole project will have been wasted."

While some supporters wait patiently for the device, others are becoming angry and asking for refunds. Pebble's Kickstarter page has been filled with hundreds of questions and complaints – as well as fans defending the tough realities of manufacturing and designing hardware for small start-ups.

"A three-month delay is inexcusable and makes me mad," wrote Francisco Leon on Saturday. "But not knowing WHEN [it will ship], makes me even madder."

Another backer, Dustin Wood, said that he had stopped using Kickstarter after spending almost $800 on Pebble and other projects "and I have no products to account for it".

Professional tech investors are watching the Pebble's progress carefully, too.

"The Kickstarter community is amazing – where else can you drum up so much excitement for an unknown project and have a great dialogue?" says Eileen Burbidge, partner at London-based Passion Capital, which backs Memoto, a wearable camera on Kickstarter.

"The Pebble watch did raise the bar and made Kickstarter the destination for cool projects, but it's also the car-crash, too. It's become a sort of cautionary tale."

In September, Kickstarter introduced new rules for hardware and technology projects, forcing them to give a deadline, highlight risks and banning photorealistic product simulations, which can set misleading expectations. It has about a dozen employees to review each project to ensure it meets these guidelines but it still leaves vetting the viability of projects to backers. The liability for any failures lies with the creators, not the platform owner itself.

That has to change if Kickstarter is to become a reliable platform for product development, says Scott Wilson, founder of design agency Minimal and a Kickstarter veteran, after launching his TikTok iPod watch strap through the site in 2010.

Perry Chen, Kickstarter's chief executive, insisted that "in general people are aware" of the risks, stressing it is "not a store".

"The overwhelming majority of projects get fulfilled. That doesn't mean that we don't recognise that things could be better and we should try to help make things better," he said, particularly around communication. "Even if you have trouble, if you are honest and transparent, your backers will understand."

Some Kickstarter users argue that delays are inevitable, or even desirable, as backers can be more forgiving than traditional investors, publishers or customers.

"It definitely makes us feel a lot more free," says Greg Rice, producer of Double Fine Adventure, a game which raised $3.3m in March. "People feel like they are part of something special."

After raising seven times more than it had planned, the San Francisco video-game developer almost immediately set back its launch by a year, to expand the project's scope. Backers are updated every week on progress and shown regular videos.

"I feel like if we weren't doing all that and filling them in on what was happening, they might get a bit more upset," Mr Rice says. "But they've been very good about trusting us to do what's best for the project."

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