Last month, it was reported that Kickstarter had hired an investigative journalist to find out why Europe’s biggest project on the crowdfunding site, the Zano mini-drone, became one of the its biggest failures after the whole thing suddenly collapsed. Six weeks later, Mark Harris has published a 13,000-word report on Medium detailing his findings, and it seems that it was all due to incompetence rather than fraud.
Zano’s Kickstarter promised an autonomous, intelligent, developable drone that would be ultra-portable and capable of ariel photography and HD video capture. It was these exaggerated promises that persuaded over 12,000 backers to pledge more than £2.3 million ($3.25 million) to the project.
In the end, just 600 of the 15,000 drones promised to backers were shipped. Those who did receive their units claimed they lacked many of the features promised in the Kickstarter campaign. The camera quality was terrible, the autonomous flight was missing, and they could barely fly. In fact, some couldn’t fly at all - a pretty important function for a drone.
Torquing, the company behind Zano, eventually filed for bankruptcy and the incident proved to be some very bad publicity for Kickstarter. Backers lost their money, thousands of people were never going to get their drones, and those who had received drones lost the use of them when Torquing’s servers went offline.
This disaster prompted Kickstarter to hire Harris in order to discover what went wrong and to find out if the whole thing was a scam. His report goes into a stunning level of detail, but he concluded that: "Torquing's directors managed their business poorly and spent the Kickstarter money too freely, but I've found no evidence that any of them ended up rich on the backs of the crowd."
Ultimately, Torquing didn’t have the skills or resources to meet expectations. The company also had a "dangerous lack of self-awareness" and didn’t realize that everything was falling apart until it was too late. Harris also said that these “small businesspeople who bit off more than they could chew” had no idea how to keep their budget in check.
Even though Kickstarter funded Harris’ investigation, the reporter said that the site isn’t without blame for the incident. He suggested that all crowdfunding sites should keep a closer check on projects to avoid failures of this magnitude occurring in the future.
“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.”
As the report points out, the entire fiasco should remind people that backing projects on crowdfunding sites often come with risks. "If you want 100% success with hardware and new products, I think the only solution is that you just shop on Amazon," Harris wrote.