Kickstarter Hires Journalist to Investigate Campaign That Failed to Deliver to Backers

The Zano crowdfunding campaign raised $3.6 million to make mini drones that take pictures and video. Some drones were delivered, but overwhelmingly, backers did not get the rewards they expected.

learn more about Catherine Clifford

By Catherine Clifford

Zano | Kickstarter
ZANO next to an iPhone 5

Opinions expressed by Entrepreneur contributors are their own.

Failure is a part of crowdfunding. And Kickstarter is making a push to be more transparent about what that failure looks like and why it happens.

Science and technology journalist Mark Harris announced this week that he has been hired by the Brooklyn-based crowdfunding platform Kickstarter to investigate and write an expose about why a crowdfunding campaign on its platform failed.

Harris, a freelance journalist who has written for publications including The Economist, The Guardian, MIT Tech Review and New Scientist, will be writing about the Zano campaign, which raised more than $3.6 million for a nano drone that takes pictures and video. Zano says the drone is able to fly on its own, and users can control the device from a smartphone. The campaign got a lot of buzz and was covered by dozens of media outlets.

Related: Why This $34 Billion Company Is Dipping a Toe Into Crowdfunding

Ultimately, however, some drones were shipped, but most backers did not get the drones they were expecting in exchange for their contribution to the campaign.

The Zano team said that it added features to the prototype that were suggested by the crowdfunding campaign backers and the additional features added 15 grams to the weight of the prototype. To try to balance out the additional weight, the Zano team tried to use lighter plastics and bigger propellers on the construction of the drone.

"These upgrades represented technical challenges, which added to an already complicated project," the Zano team said in a letter to backers when they disclosed that they would have to quit operations and cancel production. "Ultimately, these upgrades coupled with delays caused by the creation of a bespoke and automatic testing rig had significant financial and timeline impacts upon the project."

Kickstarter wants to know more. It also hopes that by investigating what went wrong with Zano, other campaigns can learn from the company's mistakes.

"It's OK for Kickstarter creators to take on big ideas and fail, but we expect transparency and honesty along the way. The backers of the Zano project deserve a full account of what happened," says David Gallagher, a spokesperson for Kickstarter. "Transparency around the ups and downs of the creative process helps us all build a more creative world."

Related: The Inventors of This Travel Jacket Set Out to Raise $20,000 With Crowdfunding and Ended Up Raising More Than $10 Million. Here's What Happened Next.

Harris said that he would show the report to Kickstarter before publishing the article, but he insists that the crowdfunding platform will not have any right to make any changes to his story. Part of what Harris has been tasked with researching is whether Kickstarter itself could have done anything to prevent this failure, Harris wrote in a post he published on Medium disclosing the commission for the article.

The announcement of Kickstarter hiring Harris comes on the heels of a report the crowdfunding company released earlier this week disclosing that nearly one in 10 successfully funded projects don't deliver rewards. That report was independently researched and produced by a professor at the Wharton School of Business at the University of Pennsylvania.

Viewed together, hiring an journalist and performing an independent report show that Kickstarter is making a concerted effort to be more transparent about the dark corners of crowdfunding.

Often hailed as the great democratizer of finance that gives entrepreneurs opportunity where previously they had none, crowdfunding is an inherently risky operation. Backers need to be fully aware of whats at stake when they decide to put their hard-earned dollars into a crowdfunding campaign.

Related: Nearly 1 in 10 Kickstarter Projects Fails to Deliver Rewards

Catherine Clifford

Senior Entrepreneurship Writer at CNBC

Catherine Clifford is senior entrepreneurship writer at CNBC. She was formerly a senior writer at Entrepreneur.com, the small business reporter at CNNMoney and an assistant in the New York bureau for CNN. Clifford attended Columbia University where she earned a bachelor's degree. She lives in Brooklyn, N.Y. You can follow her on Twitter at @CatClifford.

Related Topics

Editor's Pick

The Dark Side of Pay Transparency — And What to Do If You Find Out You're Being Underpaid
Thinking of a Career Change? Here Are 4 Steps You Can Take to Get There.
A Founder Who Bootstrapped Her Jewelry Business With Just $1,000 Now Sees 7-Figure Revenue Because She Knew Something About Her Customers Nobody Else Did
Everything You Need to Know About Franchise Law
Money & Finance

7 Ways to Make Extra Income Even With a Full-Time Job

Want to make more money? Real estate investing, Amazon ecommerce and the sharing economy are waiting for you.

Business News

Carnival Cruise Wants Passengers to Have Fun in the Sun — But Do This, and You'll Get Burned With a New $500 Fee

The cruise line's updated contract follows a spate of unruly guest behavior across the tourism industry.

Leadership

Improving Yourself Takes 9.6 Minutes of Work Each Day

Micro-habits are the antidote to a chaotic world, offering a pathway to sustainable change.

Franchise

How to Bring Your Franchise to the Next Level With Marketing Automation

With the impacts of inflation and associated costs of running a business, automation is a powerful solution for streamlining a positive guest experience and overall marketing.

Growing a Business

How to Outpace Your Competitors During a Recession

Here's how you can use economic uncertainty as an opportunity to grow your business and stand out among your competitors.

Business News

TikTok Influencer Reveals She Makes $350,000 a Month on OnlyFans. 'Absolutely Unreal.'

When Tara Lynn promoted her OnlyFans page on TikTok, she saw her income more than double.