Connect with us

Business News

The anatomy of a Kickstarter scam, starring Peachy Printer

If as much effort went into actually building this product compared to scamming investors and covering their asses, the Peachy Printer founders might have actually come up with something worthwhile.

Published

on

Bad apples spoil the bunch

I always wondered what BS smells like and now I know. The Kickstarter Peachy Printer scam is so unbelievably crooked that I can’t help but wonder if these guys had just put the same amount of effort into actually following through on their promises that they did on siphoning money from investors, something worthwhile may have actually been produced.

This is going to be a wild read, hang on to your butts.

bar

The short version

Two young entrepreneurs come up with an idea to create a desktop 3D printer that would cost consumers only $100. Dreamy, right?

Impressed Kickstarter investors ponied up $600,000 (Canadian). For reasons that completely escape me, the inventor and his partner do this without having set up a business banking account, so all the money goes into a private checking account where one of the partners’ proceeds to spend most of the funds on a new house!

Said 3D printer never gets made, no one gets arrested, and the whole scam is covered up for more than two years before it goes public.

Note from the Editor: This all feels like an elaborate hoax, but is being reported by even the most credible sources (like BBC), but we’re still holding our breath – filmed confessions that sound like a high school play? We’ll see.

A template for success

Kickstarter has set up a process where entrepreneurs have the potential to find investors so funds can be raised and dreams can be realized. The track record for this is pretty good because Kickstarter seems to be stronger than ever and is extremely vigilant about protecting their community.

Further, Kickstarter tells you (in fine print) that respective products may never see the light of day. Which is why money pledged is considered a donation.

But I digress. The Peachy Printer debacle is a prime example of why the government is getting involved and trying to regulate crowdfunding sites in order to make those receiving funds legally responsible.

The fine print

Always read the fine print. This is from the Kickstarter Website:

“Kickstarter does not guarantee projects or investigate a creator’s ability to complete their project. On Kickstarter, backers ultimately decide the validity and worthiness of a project by whether they decide to fund it.”

What is a creator obligated to do once their project is funded? (Notice it says fundamental and not LEGAL obligation). I’m glad you asked.

“When a project is successfully funded, the creator is responsible for completing the project and fulfilling each reward. Their fundamental obligation to backers is to finish all the work that was promised. Once a creator has done so, they’ve fulfilled their obligation to their backers. At the same time, backers must understand that Kickstarter is not a store. When you back a project, you’re helping to create something new, not ordering something that already exists. There’s a chance something could happen that prevents the creator from being able to finish the project as promised.

If a creator is absolutely unable to complete the project and fulfill rewards, they must make every reasonable effort to find another way of bringing the project to a satisfying conclusion for their backers.”

That is what is SUPPOSED to happen. It doesn’t mean that is what WILL happen.

Integrity is SO overrated

You can see Kickstarter has tried to insert some inherent sense of doing the right thing. All they do is provide a template. They get their percentage and sleep well at night because investors more or less know up front what they are getting into.

As bad as the Peachy Printer project is/was, it’s nothing compared to the recent Zano mini-drone initiative that scorched investors for several million dollars.

In both cases, the project developers apologized and tried to smooth things over by presenting professionally made graphics that explain how the money was spent. I noticed in both cases that no one made the effort to include a pie chart showing expenditures for a new house or a private island in the tropics, but I guess that’s neither here nor there.

Like money in the bank

In the bigger scheme of things how this ultimately ends is anyone’s guess. Regarding Peachy Printer, so far no printers have been made, most likely for the simple reason that one of the partners in the project took the money and built a house with it. Investors are likely pissed off because they got burned.

Will this give investors more pause before investing in crowdfunding sites? Maybe, maybe not.

Lino Rivera tells us, “My overall opinion on crowdfunding is a positive one, but there are no doubt pitfalls at every corner. I’ve had customers come from that space who were wildly successful out of the gate only to lose steam and ‘realign themselves’ a year after. I’ve backed a few projects myself, now that I think about it though, I haven’t received anything yet from those campaigns.”

“The last one I backed was actually from an established company who said crowdfunding sped up the time to market,” Rivera notes. “Really though, I believe it had more to do with market validation, which I think is one of crowdfundings greatest strengths. Before investing in huge amounts of capital, you get to see if it is even something the market wants.”

Will one bad apple spoil the bunch? Probably not, because as Rivera notes, there are other reasons for crowdfunding than the actual dollars. And Peachy Printer is hardly the first to victimize the crowdfunding space, so stay tuned.


All links he mentions are on this site.

#KickstarterScam

Nearly three decades living and working all over the world as a radio and television broadcast journalist in the United States Air Force, Staff Writer, Gary Picariello is now retired from the military and is focused on his writing career.

Continue Reading
Advertisement
4 Comments

Business News

Chasing Clubhouse success? How the audio chat room trend affects products

(BUSINESS NEWS) It is inevitable that when a new successful trend comes along, other companies will try to make lightning strike twice. Will the audio chat room catch on?

Published

on

Smiling woman seated in dark room illuminated by lamp and phone light, participating in audio chat room.

Businesses are always about the hot new thing. People are the always looking for the easiest dollar with the least amount of effort these days. It tends to lead to products that are shoddy and horribly maintained with the least amount of flexibility in pleasing their customers. However, you also have to look at the customer base for this as well. You follow where the money is because that’s where its being spent. It’s like a merry-go-round, constantly chasing the next thing. And the latest of these is the audio chat room.

During the pandemic the entire world saw an eruption of social audio investments. Silicon Valley has gone crazy with this new endeavor. On the 18th of April this year, Clubhouse said it closed on some new funding, which was valued at $4 billion for a live audio app. This thing is still in beta without a single penny of revenue!

The list of other companies who have pursued new audio suites (either through purchase or creation) include:

  • Facebook
  • Spotify
  • Twitter
  • Discord
  • Apple

This whole new audio fad is still in its infancy. These social media and tech giants are all jumping headlong into it with who knows how much forethought. A number of them have their own issues to deal with, but they’ve put things aside to try and grab these audio chat room coattails that are running by. It’s a mix of feelings about the situation honestly. They are trying to survive and keep their customers.

If a competitor creates this new capability and they stay stagnant then they lose customers. If they do this however without dealing with their current issues then they could also lose people. It’s an interesting catch 22 for people out there. Which group do you fall in? Are you antsy for a new toy or are you waiting for one of these lovely sites to fix a problem? It’s another day in capitalism.

Continue Reading

Business News

This web platform for cannabis is blowing up online distribution

(BUSINESS NEWS) Dutchie, a website platform for cannabis companies, just octupled in value. Here’s what that means for the online growth of cannabis distribution.

Published

on

A small jar of cannabis on a desk with notebooks, sold online in a nicely made jar.

The cannabis industry has, for the most part, blossomed in the past few years, managing to hit only a few major snags along the way. One of those snags is the issue of payment processing, an issue compounded by predominantly cash-only transactions. Dutchie, a Bend, Oregon company, has helped mitigate that issue—and it just raised a ton of money.

Technically, Dutchie is a jack-of-all-trades service that creates and hosts websites for dispensaries, tracks product, processes orders, keeps stock of revenue, and so much more. While it was valued at around $200 million as recently as summer of 2020, a round of series C funding currently puts the company at around $1.7 billion—approximately 8 times its worth a mere 8 months ago.

There are a few reasons behind Dutchie’s newfound momentum. For starters, the pandemic made cannabis products a lot more accessible—and desirable—in states in which the sale of cannabis is legal. The ensuing surge of customers and demand certainly didn’t hurt the platform, especially given that Dutchie is largely responsible for keeping things on track during some of the more chaotic months for dispensaries.

Several states in which the sale of cannabis was illegal also voted to legalize recreational use, giving Dutchie even more stomping ground than they had prior to the lockdown.

Dutchie also recently took on 2 separate companies and their associated employees, effectively doubling their current staff. The companies are Greenbits—a resource planning group—and Leaflogix, which is a point-of-sale platform. With these two additions to their compendium, Dutchie can operate as even more of an all-in-one suite, which absolutely contributes to its value as a company.

Ross Lipson, who is Dutchie’s co-founder and current CEO, is fairly dismissive of investment opportunities for the public at the moment, saying he instead prefers to stay “focused with what’s on our plate” for the time being. However, he also appears open to the possibility of going public via an acquisition company.

“We look at how this decision brings value to the dispensary and the customer,” says Lipson. “If it brings value, we’d embark on that decision.”

For now, Dutchie remains the ipso facto king of cannabis distribution and sales—and they don’t show any plans to slow down any time soon.

Continue Reading

Business News

Ford adopts flexible working from home schedule for over 30k employees

(BUSINESS NEWS) Ford Motor Co. is allowing employees to continue working from home even after the pandemic winds down. Is this the beginning of a trend for auto companies?

Published

on

Woman in car working on engineering now allowed a flexible schedule for working from home.

The pandemic has greatly transformed our lives. For the most part, learning is being conducted online. At one point, interacting with others was pretty much non-existent. Working in the office shifted significantly to working remotely, and it seems like working from home might not go away anytime soon.

As things slowly get back to a new “normal”, will things change again? Well, one thing is sure. Working from home will be a permanent thing for some people as more companies opt to continue letting people work remotely.

And, the most recent company on the list to do this is Ford Motor Co. Even after the pandemic winds down, Ford will allow more than 30,000 employees already working from home to continue doing so.

Last week, the automaker giant announced its “flexible hybrid model” schedule to its staff. The new schedule is set to start in the summer, and employees can choose to work remotely and come into the office for tasks that require face-to-face collaborations, such as meetings and group projects.

How much time an employee spends in the office will depend on their responsibilities, and flexible remote hours will need to be approved by an employee’s manager.

“The nature of work drives whether or not you can adopt this model. There are certain jobs that are place-dependent — you need to be in the physical space to do the job,” David Dubensky, chairman and chief executive of Ford Land, told the Washington Post. “Having the flexibility to choose how you work is pretty powerful. … It’s up to the employee to have dialogue and discussion with their people leader to determine what works best.”

Ford’s decision to implement a remote-office work model has to do in part with an employee survey conducted in June 2020. Results from the survey showed that 95% of employees wanted a hybrid schedule. Some employees even reported feeling more productive when working from home.

Ford is the first auto company to allow employees to work from home indefinitely, but it might not be the only one. According to the Post, Toyota and General Motors are looking at flexible options of their own.

Continue Reading

Our Great Partners

The
American Genius
news neatly in your inbox

Subscribe to our mailing list for news sent straight to your email inbox.

Emerging Stories

Get The American Genius
neatly in your inbox

Subscribe to get business and tech updates, breaking stories, and more!