How Kickstarter Costed Ed Carter His Home
Ed Carter had plans to launch a board game called “Glory to Rome” through his company Cambridge Games Factory (video above). Carter turned to crowd-funding website Kickstarter.com to help him get his idea off the ground. Carter wanted to raise $21,000 through Kickstarter to help him launch a deluxe version of the game, but he ended up raising over $73,000 by over 1,600 people.
This is how things went south. In his Kickstarter campaign, Carter promised supporters that they would receive free shipping of the board games if they agreed to pick them up from specific retailers, reported Mashable. Carter had plans to develop business relations with the retailers and to provide incentives for supporters. Many of his supporters were baed in Brazil and Australia. Shipping to 1,600 people is expensive.
As a former retail consultant, Carter used to work in China. He was hoping to conduct business with Chinese producers, but his head of operations quit. The operations head was able to speak in Chinese. He was not able to find anyone to work with him that could speak Chinese. Carter ended up having to spend over $100,000 of his own personal savings and he lost his job as a contractor at Staples. Since he could not afford his mortgage in Boston anymore, he ended up losing his house.
Kickstarter has helped a lot of people out, but sometimes there is a dark side to crowd-funding. If you have plans to launch a Kickstarter campaign, make sure not to over-promise unless all of the gears are in place.