The perils of Kickstarter: Fulfillment can be a pain

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Kickstarter, and services like it, have changed how entrepreneurs fund and market their products, but as many young inventors have found, manufacturing and distribution are still a business governed by old rules. And while the manufacturing woes that can come with a widely successful Kickstarter project have been documented, it’s also worth delving into the trouble of fulfillment and distribution — namely, one you’ve made your widget, how do you get it out to customers?

It’s a topic that came up recently during a conversation with SparkFun, the retailer of DIY electronics kits headquartered in Boulder, Colo. While sitting at a table with Nathan Seidle, the CEO of SparkFun and Pete Dokter, the director of engineering, we discussed the impact of Kickstarter on the firm’s business. In general, Kickstarter is great marketing for the DIY movement that SparkFun is dependent on, and it is happy to supply boards for prototypes.

However, once you start talking about huge production runs of an electronic board for the next big widget, or even worse, fulfilling those orders, Seidle is leery.

He pointed to the MaKey MaKey campaign of 2011 as an example. The MaKey MaKey team, which was building a kit for would-be hardware hackers, worked with SparkFun ahead of the campaign to guarantee the production of the needed boards and for fulfillment. If the MaKey MaKey campaign was successful, SparkFun would manufacture and assemble the product and then ship it out.

What happened next was a nightmare for SparkFun, which to this day is still seeing at least two returns a week from the product. The problem wasn’t a bad product, but bad data. As Seidle puts it, Kickstarter doesn’t have checks in place to ensure people don’t enter the wrong address or make other mistakes when ordering a product.

The result was that about 40 percent of the data Kickstarter sent over on behalf of Makey MaKey needed clarification. That led to SparkFun’s customer service people trying to verify addresses — one example: is there a Houston, South Africa? — and it is still leading to returns. Seidle vowed to avoid that side of the business from this point forward.

Luckily a quick check among the people doing current and former Kickstarter projects shows that there are plenty of companies that will offer fulfillment for Kickstarter orders, and most entrepreneurs plan to use them. But it’s yet another sign of the holes we need to fill if we’re going to make the transition from the more traditional large-scale manufacturing process or the traditional funding models for a crowd sourced future.

It’s also a good idea to double and triple check your address when you enter it into Kickstarter.

Update: Kickstarter’s Dave Ghallagher notes that Kickstarter fixed the bad data problem by implementing an address validation system back in 2012, too late for the MaKey MaKey project, but in place for existing projects.

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