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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.

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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.

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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.

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Business News

Leadership versus management: What’s the difference?

(Business News) The two terms, leadership and management, are often used interchangeably, but there are substantial differences; let’s explore them.

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leadership Startups meeting led by Black woman.

Some people use the terms “leader” and “manager” interchangeably, and while there is nothing inherently wrong with this, there is still a debate regarding their similarities or differences.

Is it merely a matter of preference, or are there cut and dry differences that define each term?

Ronald E. Riggio, professor of leadership and organizational psychology at Claremont McKenna College, described what he felt to be the difference between the terms, noting the commonality in the distinction of “leadership” versus “management” was that leaders tend to engage in the “higher” functions of running an organization, while managers handle the more mundane tasks.

However, Riggio believes it is only a matter of semantics because successful and effective leaders and managers must do the same things. They must set the standard for followers and the organization, be willing to motivate and encourage, develop good working relationships with followers, be a positive role model, and motivate their team to achieve goals.

He states that there is a history explaining the difference between the two terms: business schools and “management” departments adopted the term “manager” because the prevailing view was that managers were in charge.

They were still seen as “professional workers with critical roles and responsibilities to help the organization succeed, but leadership was mostly not in the everyday vocabulary of management scholars.”

Leadership on the other hand, derived from organizational psychologists and sociologists who were interested in the various roles across all types of groups.

So, “leader” became the term to define someone who played a key role in “group decision making and setting direction and tone for the group. For psychologists, manager was a profession, not a key role in a group.”

When their research began to merge with business school settings, they brought the term “leadership” with them, but the terms continued to be used to mean different things.

The short answer, according to Riggio is no, not really; simply because leaders and managers need the same skills to be productive and respected.

This editorial was first published here in June of 2014.

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Business News

Does Raising Cane’s have the secret to combatting restaurant labor shortages?

(NEWS) Fried Chicken Franchise, Raising Cane’s, has turned to an unusual source of front-line employees during the labor shortage- Their executives!

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White paper sign with black text reading "Help Wanted."

I wouldn’t call myself a fried chicken aficionado or anything, but since chains are designed to blow up everywhere, I have experienced Raising Cane’s.

I’m pretty sure the Cane’s sauce is just barbecue mixed with ranch, but hey, when you’ve got a good idea, keep with it.

In the further pursuit of good ideas, the company has resorted to an intriguing method of boosting staff in a world where the lowest paid among us are still steadily dying of Covid, and/or choosing to peace out of jobs that they don’t find worth the infection risk.

Via Nation Restaurant News: “This is obviously a very tough time, so it was a joint idea of everybody volunteering together to go out there and be recruiters, fry cooks and cashiers —whatever it takes,” said AJ Kumaran, co-CEO and chief operating officer for the Baton Rouge, La.-based quick-service company, from a restaurant in Las Vegas, where he had deployed himself.”

The goal of this volunteer mission, which involves 250 of the 500 executives deployed working directly in service roles, is to bolster locations until 10,000 new hires can be made in both existing locations and locations planned to open.

It’s obvious that this is a bandaid move – execs exist for good reason, and in terms of sheer numbers (not to mention location and salary changes), this is hardly tenable long-term. But I can say this as someone who’s gone from retail to office, and back (and then forth…and then back again) several times – if this doesn’t keep everyone at the corporate level humble, and much more mindful of employees’ needs, nothing will.

The fast-food world is notorious for wonky schedules only going up a day before the week begins, broken promises on hours (both over and under), horrendous pay, and little to no defense of employee dignity in the face of customers with rank dispositions. With the wave of strikes (Nabisco, John Deere, IATSE) making the news, and lack of hazard pay/brutal physical attacks over mask mandates still very fresh in workers’ minds, smart companies are hipping themselves to the fact that “low level” employee acquisition and retention needs to be much more than the ‘work here or starve’ tactics that have served since the beginning of decades of wage stagnation. The best way for that fact to stay front-of-mind is to go out and live the truths behind it.

In Raising Cane’s case, the company also announced that they’re upping wages at all locations — to the tune of an actually not totally insulting $2 per hour, resulting in a starting wage of $15 and a managerial wage of $18.

Ideally, paying people more to cook, clean, and customer service all in one job will actually attract people back to fast food work. Seriously consider the fact that the people cleaning fast-food toilets are the same people making the food that goes into your mouth. The additional fact is that it’s better for everyone’s health when they’re paid enough to care about what they’re doing and stay healthy themselves.

Of course, one does also need to consider how much inflation has affected the price of goods and housing since the ‘fight for $15’ began almost a decade ago in 2012. Now, raising wages closer to the end point of multiple goods still might not be enough!

AJ Kumaran continued, “The chicken prices are through the roof. Logistics are very hard. Shipping is difficult. Simple things cups and paper napkins — everything is in shortage right now. Some are overseas suppliers and others domestic suppliers. Just in poultry alone, we have taken significant inflation.”

That’s global disruption for ya.

It remains to be seen whether this plucky move can save Raising Cane’s dark meat, but I’m very pro regardless. Send more top-earning employees into the trenches! No more executives with 0 knowledge of how the sausage sandwich gets made.

No more leading from behind.

Why not? What are ya? Chicken?

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Business News

Unify your remote team with these important conversations

(BUSINESS NEWS) More than a happy hour, consider having these poignant conversations to bring your remote team together like never before.

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Woman working in office with remote team

Cultivating a team dynamic is difficult enough without everyone’s Zoom feed freezing halfway through “happy” hour. You may not be able to bond over margaritas these days, but there are a few conversations you can have to make your team feel more supported—and more comfortable with communicating.

According to Forbes, the first conversation to have pertains to individual productivity. Ask your employees, quite simply, what their productivity indicators are. Since you can’t rely on popping into the office to see who is working on a project and who is beating their Snake score, knowing how your employees quantify productivity is the next-best thing. This may lead to a conversation about what you want to see in return, which is always helpful for your employees to know.

Another thing to discuss with your employees regards communication. Determining which avenues of communication are appropriate, which ones should be reserved for emergencies, and which ones are completely off the table is key. For example, you might find that most employees are comfortable texting each other while you prefer Slack or email updates. Setting that boundary ahead of time and making it “office” policy will help prevent strain down the road.

Finally, checking in with your employees about their expectations is also important. If you can discuss the sticky issue of who deals with what, whose job responsibilities overlap, and what each person is predominantly responsible for, you’ll negate a lot of stress later. Knowing exactly which of your employees specialize in specific areas is good for you, and it’s good for the team as a whole.

With these 3 discussions out of the way, you can turn your focus to more nebulous concepts, the first of which pertains to hiring. Loop your employees in and ask them how they would hire new talent during this time; what aspects would they look for, and how would they discern between candidates without being able to meet in-person? It may seem like a trivial conversation, but having it will serve to unify further your team—so it’s worth your time.

The last crucial conversation, per Forbes, is simple: Ask your employees what they would prioritize if they became CEOs tomorrow. There’s a lot of latitude for goofy responses here, but you’ll hear some really valuable—and potentially gut-wrenching—feedback you wouldn’t usually receive. It never hurts to know what your staff prioritize as idealists.

Unifying your staff can be difficult, but if you start with these conversations, you’ll be well on your way to a strong team during these trying times.

This story was first published in November 2020.

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