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Video: Drone Firm Raises Millions via Kickstarter, Then Rage Quits

Video: Drone Firm Raises Millions via Kickstarter, Then Rage Quits

by P. H. MadoreNovember 25, 2015

Kickstarter projects and their woes are the subject of more than one website. While most focus on Kickstarter projects that fail to launch, there is another aspect of Kickstarter which doesn’t get enough attention and probably should: the projects which get funded and then never deliver a product. In this instance, the product is a drone.

Kickstarter backers never go into these things with the idea that they won’t get their promised reward. They’re not there to make a donation. They’re there to be the first to have a cool new piece of tech that’s being built out or a game that’s being developed.

A British firm called Torquing Group promised backers a new palm-sized drone called Zano, which would be:

an ultra-portable, personal aerial photography and HD video capture platform, Small enough to fit in the palm of your hand and intelligent enough to fly all by itself! ZANO connects directly to your smart device (iOS or Android) via onboard WiFi and enables you to instantly begin capturing and sharing moments like never before.

The idea proved quite popular, and the company found itself raising $3.4 million. You read that right: more than three million dollars for a product which did not demonstrably yet exist, although a prototype drone had been built. But one must surely understand there is a difference between prototyping and mass production. There were a variety of rewards, the top one being for around $800:

You will receive 4 x First Edition ZANOs. Your choice of Black/White and 4 x Charging Cables. You will also receive FREE capability software updates for 12 months after public launch.

97 people funded at this level. Interest in consumer drone technology is at an all-time high. It seems the hobby is fast replacing remote control airplanes and cars for nerdy outdoorsmen, and several firms are vying for a wide open market. It’s growing at such a pace that US-based firms recently saw fit to get ahead of regulators and install certain pseudo-optional airspace controls to keep drone operators out of trouble.

Also read: Consumer Drones Outfitted With Geofences Around Restricted Air Space

The funding campaign ended in January. In May, the company said they’d be shipping their first drones by July. This never happened at the scale promised, though as of November, they’ve shipped 600 out of 15,000 orders. However, that’s not all, folks. A few weeks back, the CEO suddenly left the company, reportedly citing “personal health issues and irreconcilable differences.”

Now, the company is not shipping anything and has instead decided to utilize a British law which allows them to pay back little, if anything, in cases like this.

Having explored all options known to us, and after seeking professional advice, we have made the difficult decision to pursue a creditors’ voluntary liquidation. All creditors will be contacted by an insolvency practitioner next week. […] We are greatly disappointed with the outcome of the Zano project and we would like to take this opportunity to thank everyone who has supported us during this difficult period, especially our loyal employees whose commitment has exceeded all expectations.

Ultimately, Kickstarter is by design not liable for defaults such as this. In the case of the Zano, they say they knew as little as anybody and apologized profusely. They had previously told Ars Technica:

The short version is that Kickstarter is a home for creative projects and a new way for people to work together to make things. It’s not a store. Creating something new can of course involve unexpected obstacles. We encourage project creators to be transparent with backers about any problems they run into on the way to completing their projects.

In a statement to backers of the project, Kickstarter reportedly said:

We learned the news of the Zano bankruptcy the same way that you did. […] We e-mailed the creators as recently as two weeks ago to encourage them to be more communicative with their backers, but received only a cursory response. […] [W]e sent an e-mail to the Zano team informing them of their obligations to backers and asking them to share an open and transparent update on what happened with the project. […] If they do not adequately brief backers by that time, Kickstarter will independently pursue an inquiry into the Zano project. Should this occur, we will share those findings with you, the backers, once completed.

Featured image from Kickstarter/Zano.

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  • pmj1979

    “…Kickstarter is a home for creative projects… It’s not a store.”
    Kickstarter is a store in every way except the in the description given by kickstarter themselves.
    Many projects are created by established businesses on their 4th or 5th project. To kickstart another project is fine but if you offer it as a pre-order service as many seem to do, that makes it a store. You are ordering something from the seller, they just haven’t made it yet.

    Kickstarter need to take responsibility for the millions that people have lost on thousands of failed projects or at least make the project owner responsible They would be less likely to create unachievable goals for themselves if they had to plan for failure.

    I have backed projects with no want of a reward, I have backed projects expecting the reward offered and it has never shown up. Kickstarter should realise they are making a bad name for themselves and people are losing money because of them and their irresponsible project creators.

  • P. H. Madore

    You don’t think it dis-incentivizes other companies to perform? There’s no repercussions for taking in $3 million and not delivering — shoot, we have nothing to fear if we just want $1 million. We’ll make something up. Someone will fall for it. You see where I’m going with this? I think that’s why Kickstarter went out of their way to address the community, they fear this, that I’m describing. Too many articles like this one and the backers will trickle away to a platform that looks after them.

    • John Scott-Harley

      Quite where’s the money gone? Zano may think they’re off the hook but they ain’t. If its proven that they have used those funds for anything else they’ll be in deep do do

  • Optimist911

    So what was the source of the fail? A few technical details would seem to be in order.