Canon, an international company with almost 200,000 employees and annual revenue of over US$3.5B, is using the Indigogo site to try and get people to crowd fund a new camera.
Look at the self-serving lie I bolded. “It’s not about the dollars, but we are trying to minimize any financial loss on our part.” “Nobody wants it? No problem; it didn’t cost us anything.” Yeah, it’s about the dollars. Fuck you.
Piece of shit company charges as much as they can to make as big a profit as they can, then they expect those same people to DIRECTLY fund R&D. Fuck that.
I bet they’re part of this whole Libra shitshow that Facebook is trying to make happen, too.
I can see how it might work well for them. Why develop something that isn’t going to find a market? Why wouldn’t a company seek to minimise financial risk?
I don’t see any obligation on those who are funding it, seems like a free choice so if you don’t like it don’t do it and if that funding model proves unpopular it won’t be used.
OK. So instead of paying some marketing research company to go out and guess whether they have a viable product, they are asking consumers to do it.
Your complaint about it not being about the money is silly; the amount that will be raised will probably not even show up as a rounding error on their financial statement.
I have a great idea to stop them: do not donate to their crowdsourcing.
And since supporters can get 30% off the purchase of the camera if Canon moves ahead with it, I imagine that many will contribute at a level that means they will save money with their investment. Those who put in more aren’t being forced to do so, so what’s the problem?
Canon are a large company. As a company they benefit from tax breaks that apply to companies and other legal breaks that apply to companies, like limited liability. Companies are not natural entities that roam the financial and economic plains in a state of bucolic innocence, they are the creation of societies and laws which give them certain liberties unavailable to the individual.
They are given these breaks in order that they may be able to take risks and if they’re any good turn those risks into profit for their owners. Some they’ll win, some they’ll lose. The assessment of those risks is down to market and other research, company activities which are legitimate expenses against declared profit on which they pay tax.
By outsourcing this research to a crowd funding platform they offload a chunk of their costs onto potential customers. They also offload a chunk of risk onto those same potential customers. These are costs and risks which have in the past been borne by the company and its owners, who get a share of the profit and much legal protection and tax breaks in return.
What do subscribers to the crowd funding operation get? For the most part they don’t enjoy the tax benefits the company has, they’ll usually be investing a bit of spare cash from their already taxed income. They’ll not be buying into a future profit the company may make, they’d need to buy shares to do that. They’re paying for research costs that will benefit the company and ought therefore to be paid for by the company.
They may benefit from a discount on the product if it goes to market but they lose their money if it doesn’t. Shareholders will get their dividend whatever happens with this project and if it doesn’t go ahead they’ll have the advantage of knowing that some of their risk has been borne by others who won’t have a claim on their dividend pot. They’ll have the advantage of having someone else pay for research which would normally be a cost to the company.
I know the sums are small and there is no pressure to contribute to the crowd funding operation but I suspect most people would not see what is happening in value to the company as opposed to value to themselves. The company gets a lot of breaks in exchange for risk, the crowd funding punter gets none; win or lose they enhance shareholder value without having the benefit of holding shares.
I see a tendency for companies to offload risk in ways that are far from transparent to the average punter (I write from a UK perspective) to people who are ultimately adding to shareholder value without having a stake in the company. While this isn’t a strict legal abuse of company law, I do see it as an abuse of the spirit which led to those laws.
Without changing company law this can’t really be stopped but I would never contribute. If I want goods from Canon I’ll buy their products. If I want money, I’ll buy their shares.
I agree with you. It’s a bullshit thing for a company to do. It steals attention from projects that might really never been realized without crowdfunding and if it becomes a thing many companies do it will ruin the original purpose of such sites. (Well, except the sites whose original purpose is “Let’s make some money off of crowdfunding!”)
Crowdfunding is also a great marketing tool. It gets people talking about it. I wouldn’t have known about this camera if it weren’t for this thread, so thanks OP!
I wish more companies would do this sort of thing. Put out test projects, see which ones get traction, and then make those. We’d get more early prototypes, faster production cycles, and fewer wasted resources making things that people don’t really want.
Think how much wasted effort goes into products that are failures. If we could reduce that even a little it would be a boon for society.
Obviously, things that companies do are about the money. I think the point here is that they’re not using the crowdfunding site to actually get the capital they need to make the thing. They’re using it to determine whether there are enough people who want to buy the thing before they make it.
And, like everyone else said, you can just choose not to participate. I don’t see how this harms anyone.
Crowdfunding is also a great way to get feedback from potential customers. Not just random people, but people who are already interested in the product and have strong opinions about how to make it better. Which is why many crowd-funding campaigns send surveys to backers asking what configuration they want, what additional features they want, etc. And I think a lot of customers enjoy the experience - we aren’t just buying a finished product, but we are part of a community that produced it.
I get where Bo is coming from. Kickstarter was created to allow projects to be funded that normally can’t be. Some group has a plan for some cool product and has a great prototype, solid plan, and people would love it if they only had enough capital to pay for manufacturing, advertising, shipping, etc. They need enough to get started (hence the site’s name) and once that’s accomplished the product sales will be enough to continue development.
When a major manufacturer uses it to fund a project it’s going against the spirit of the site. They don’t really need Kickstarter, but it helps them gauge interest, provides a budget that they can use without pulling from existing profits, provides advertising, etc. They don’t really need it, but it might help their bottom line and generate a profit. You could argue that they’re exploiting Kickstarter, and are using the platform against itself. If you are a photography enthusiast and you see a group of kids from Ontario who need money to start up their camera business, and Canon wants to create a new camera, who will you pledge your $200 to? The kids who are new to business and might go out of business before shipping any rewards to backers, or the 80+ year-old major corporation that’s a household name in cameras? I think many people would pick Canon, and now the Ontario kids have their thunder (and funding) stolen away, even though Kickstarter was founded for exactly that sort of thing.
On the other hand, Canon isn’t breaking any rules. I’m not aware of Kickstarter denying a project because its creator is already too successful. And that’s a slippery slope; where do you then draw the line? If a creator makes one project, it works, they do well, and start a second one for a new thing should that be denied? What if an old, failing company that is well-known and enjoyed past success is trying to revive itself with a new and innovative product but they can’t find traditional investors who don’t want on a sinking ship, should they be denied?
I dislike the idea of Canon or companies like them using Kickstarter, but I don’t see a fair way to exclude them if they follow the same rules as any other creator.
By the way, I know I mentioned Kickstarter (because that’s the platform I’m most familiar with and have contributed to most often) but the same argument applies to Indiegogo. As far as I can tell it has much the same purpose and works the same as Kickstarter.
You know, somebody should start a Kickstopper site–for companies that make products that other people find annoying, obnoxious, or offensive, the company can offer to quit making it if enough is donated to the Kickstopper campaign.
That reminds me of the guy I saw earlier this year while on vacation in Vegas. He was repeatedly singing “I will shut the fuck up if you put money in my cup” off-key and holding a plastic cup out. Extortion through annoyance.
It’s definitely true that that was the original idea behind Kickstarter, but I think it’s unnecessary to limit it to that. Lots of great ideas (like Kickstarter) start out as one thing but end up getting used for different (but also good) things.
Despite the suggestion in your post and the linked article that Kickstarter is mostly used by people with great ideas who don’t have enough capital to produce them (the article even suggests that it’s charity with the “begging for dollars” phrasing), I think that’s mostly not true. Even most small players probably could fund their ideas. What they can’t do is figure out which ideas are worth funding. The critical value that Kickstarter provides is not the capital necessary to produce a good: it’s an idea of how big the market is. If you can get 1000 people to preorder something, then you know you can make and sell at least 1000 of them. If you can’t it’s probably not worth making any. That problem exists for big companies too. They can sort of solve it expensively with market surveys, but why not solve it better by just getting people to line up before production? Is there so much animus for large companies that they should have to waste money figuring out what people want to buy instead of just asking them?
I think we should analyze this based on whether it has good results. It seems to me that it’s going to result in a better product/market fit for everyone, less wasted effort on products that aren’t really what people want. Is there actually a downside here except for a sort of aesthetic purity argument?
I’m not super convinced by the argument that this kind of thing is going to crowd out low-capital startups. Those kids with a camera startup are mostly going to succeed or fail based on the merits of their ideas. It’s not like people who are backing camera-startups on Kickstarter are somehow unaware of Canon and its offerings. And success looks very different for them anyway. A legit camera startup on Kickstarter is going to be a success if it sells a few thousand of their thing. Canon is operating on an entirely different scale.