What happens when a Kickstarter fails? Ask Aquabot.

There’s no ambition quite like that of an entrepreneur with an idea. These days, raising money on an idea is easier than ever with the help of crowdfunding sites like Kickstarter and IndieGoGo, but there is no single formula that guarantees success. In fact, less than half of all Kickstarters ultimately meet their fundraising goals. So what happens when you’re among the majority who see their ideas falter in the hands of the masses?

Just ask Nick Rhea, who took his idea of a pressurized water bottle to Kickstarter last year. Despite the support of more than 400 backers and raising $20,000 in funds, his project, The Aquabot, didn’t meet the $35,000 goal he and his team set.

“Leaving $20,000 on the table didn’t hurt. Not hitting $80,000 hurt,” Nick told me. “Everyone thinks they have a great product and then you get a dose of reality. It was a big hit to my confidence and team moral.”

Nick was sure his product was going to be a runaway success, but now it was just an idea among 86,000 others in the Kickstarter graveyard.

So why did Aquabot fail?

“Either we did it wrong, or we had a bad product,” Nick admitted. Despite the setback though he remained confident in his idea. Nick instead turned to possible faults in the execution of his fundraising campaign.

“I went to China in April [2013] to find a factory…I rushed to get a Kickstarter launched. We weren’t ready and I found out later that the factory was also struggling financially.”

Nick however decided not to change much about his product’s design. What he did change though was how he marketed it to his audience:

“We positioned the original campaign towards families. That was a mistake. You should always target your audience. I read later that the demographics of Kickstarter backers are mostly single men under 35. So we tried to make the product more about having fun than cleaning your kids’ hands.”

Nick also lowered the price of his product, cutting closer to his margins to make it more appealing to potential backers: “We came up with the lowest price we could offer and then went even lower for the early bird. We made our content more shareable. We featured the product more in our video. We wanted to build momentum.”

Nick also lowered his fundraising goal by more than half from $35,000 to just $15,000. This time it was about getting bare minimum funding to continue developing the Aquabot, rather than be poised for a runaway success.

It worked. The new Aquabot campaign went live on Kickstarter and in less than three days not only reached its goal of $15,000, but beat the $20,000 Nick and his team raised last year. The project has more than a month left to fundraise and has already raised $24,000 from more than 700 backers.

It’s a bittersweet moment for Nick though, “I’m still going to be disappointed if we don’t clear $80,000 and we probably won’t because that’s a lot of $18 Aquabots to sell. Still it is great to see we’ve validated consumer demand and secured funding for inventory.”

Aquabot has a long way to go before it’s the home run product Nick and his team imagined it would be. Some Kickstarters do get second chances though, and Aquabot ended up being one of them. Nick admits he was blindsided by the failure of the first campaign, but continues to be motivated for success.

“I ride a couple of horses called overconfidence and naivety. They keep me from worrying about failure. When you do fail though, learn from it.”

Some concerns about the Newsweek piece

Some quick qualms (let’s call them concerns) I’ll list about the Newsweek article:

  1. Refers to the price of Bitcoin of one exchange (That was not the market average) as the pulse and price of Bitcoin for the last three months, not a weighted average of all major exchanges
  2. Takes Gavin Andreson’s quote out of context. Repeats what he says about “breaking” the core of Bitcoin, but doesn’t point out how it first requires everyone to adopt the broken update (after facing the gauntlet that is open source testing) for it to prove risky. Tries to sensationalize the $8 billion net worth of Bitcoin as faulty
  3. Not once tries to actually have a real, in-depth interview with someone (who, as it appears, did not want to be interviewed) and does not try to ask in-depth questions about the math, methodology, etcetera.
  4. Refers to the Bitcoin whitepaper as “somewhat stiffly,” I guess she was waiting for the picture book to come out.
  5. Focuses on the opinions and thoughts of others as opposed to the person she claims is Nakamoto. Clearly demonstrates that that person’s voice is less reliable than those like Andreson (who are still taken out of context again and again when they talk about the beginnings of Bitcoin, and not the present state of the currency.)
  6. The story qualifies all discrepancies under the pretense of illness and that Dorian Nakamoto recently suffered a stroke and and other ailments. This seems like an inefficient amount of evidence compared to all the elements that do not add up between the two Nakamotos, such as spelling, demonstrated knowledge about cryptography and in-depth computer programming, less an engineering and physics background.

It’s one thing to be a journalist who wants to write about tech. It’s another thing to ignore blatantly important concepts of technology in your journalism. Let’s face it. This story is a character portrayal for someone she hardly understands, and likely he editors fail to understand as well. It rides the hype of Bitcoin in order to sell more print copies of the new-founded publication and I find it be grossly inaccurate of the state of cryptocurrency.

The Newsweek piece by McGrath Goodman seems to try to write an expose not just on the acclaimed Nakamoto but also on the very notion of Bitcoin itself: That it’s supposed to be some secret currency in disguise, run by a handful of hackers with the intention of swindling society. I could choke on the irony. Bitcoin is getting through growing pains but is definitely attempting to be a decentralized currency that people own and operate, not a single authority. This is a blessing and a curse, but not mentioned once in the article.

Etc. etc. etc. There are many points probably that counter mine and I will say all the issues about ethics speak for themselves. I am disappointed that this piece was published as it will likely hurt the ability for this growing community to trust other journalists like myself and colleagues of mine interested in Bitcoin.

Why get paid for an internship when you can pay for one?

dream-careers

In 2012 there were roughly 1.5 million internships. As we inch toward the summer, many of the 17 million college students in the United States, myself included, are looking everywhere for the right internship among the few (whether or not paid) that already exist. While I am quick to criticize the notion of an unpaid internship whether or not for college credit, I came across an entirely new beast that made my sick to my stomach: The pay-for internship. In other words, the internship you don’t receive, but you buy.

Meet Dream Careers, formerly the University of Dreams. This small company of 50 or so got started in 2001 with the goal of matching very qualified students with very rewarding internships with major firms not just in the U.S. but also internationally. The catch however is that you have to pay to apply and pay to participate. How much? Somewhere between $8,500 and $10,000, depending on where you end up.

The price comes from a number of things. Dream Careers promises not just an internship in your location of choice, but also arranges for housing, transportation, meals and a number of outings to help build camaraderie with you and your fellow interns for the summer. It’s a fine concept for an expensive summer camp (another industry I have a bone to pick with) but why in the world would thousands of people pay the price of an entire semester in college for a summer internship?

Two words: Guaranteed placement. Dream Careers reminds readers on almost every single page of its website and social media sites that if you apply and have a GPA above 2.0 (2.5 for finance work,) you will get an internship. While the company swears in an article in the NYTimes from 2009 that this is due to its extensive networking and contacts in a wide variety of industries, I think the potential profit from the $10,000 you’ll spend may also be a significant influence. As someone who’s yet to receive any offers for summer work, the feeling is terrifying. Perhaps if I was a little more privileged (not that I am lacking in privilege already) I could even consider such a system as a customer. Our system of oppression on young workers is decades in the making and continues to strike fear into millions of students. I can’t blame those who choose Dream Careers, but I can certainly blame Dream Careers for not being what it tries to portray itself in its promotional materials: A way for students to get much-needed help.

My first major issue with Dream careers is that it defeats the entire concept of what an internship is supposed to be. I don’t think there’s anything wrong with matching services. I do think however the process of applying, getting interviewed and getting to know a company are important assets to learn when you will eventually apply for real work a few years later. To add, the idea of being dropped in an entirely new city without your housing, food and transportation figured out is a challenge, but it’s one you will have to face eventually; the internship environment allows a more incubated space, but Dream Careers simply makes it turn-key, defeating this entire learning experience that no business can teach you.

Second, this entire program is classist, exclusionary and manipulating desperate students to generate profit. Dream Careers doesn’t disclose how much profit it earns on every student that participates, but the company is certainly making money if it can afford to hire more than 50 staff and negotiate internships with more than 3,000 employers. The fact that so little is known about the company’s actual financial numbers is deeply concerning. Matchmaking in higher education – an industry that is (for the most part) not-for-profit – is often expected to have some sense of higher purpose, and hardly be a for-profit initiative. Yet Dream Careers not only limits its own financials, but doesn’t even disclose limited data on an annual basis.

Also, if you can’t afford Dream Careers, you’re out of luck. The company recommends you reach out to your school’s Financial Aid Office or search for alternative financing options, like a third-party loan provider. There are no grants or scholarships advertised by Dream Careers. Clearly there is not a focus on ensuring that Dream Careers is being accessible for those who are qualified, not just those who can afford it.

Lastly, and most damning, the companies Dream Careers works with feed into this atrophic nature of the entire post-graduate industry. While some internship directories charge large companies for listing or offer freemium services to students, Dream Careers sees the value in charging the student, and the companies who partner with Dream Careers (including many big and small names alike) just sit by and let it happen. Rather than try to offer a more accessible, opportunity-focused program that actually rewards students of lesser privilege who are very qualified, they instead partner with a program that not just assures that they will not have to pay their interns, but that any and all concerns about the selection and integration process are taken care of by a third party.

Internships are about building a number of countless skills. To think that a company like Dream Careers can try to sell it like summer camp at a premium is appalling to students, as well as an industry that many are losing faith in as they see fewer and fewer prospects. I sincerely hope companies heed my advice and avoid companies like Dream Careers. I ask this not just as someone deeply concerned with the internship industry, but also as a concerned member of this industry.