Author Topic: $3.2 million OSSIC 3D Headphone flop  (Read 4645 times)

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Offline EEVblog

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Re: $3.2 million OSSIC 3D Headphone flop
« Reply #25 on: June 06, 2018, 08:24:44 am »
We cannot know if they were just sitting there doing nothing, or they worked hard trying to design something. All we know, they failed to produce marketable design.

They shipped several hundred units, they had something that worked, they did produce something.
 
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Offline dunkemhigh

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Re: $3.2 million OSSIC 3D Headphone flop
« Reply #26 on: June 06, 2018, 08:32:57 am »
Quote
I'll ignore the snark for now.

Do you expect everyone else to ignore your snarks?

Quote
How does the quoted text lead your conclusion without taking a family sized load of narcotics?

Perhaps you might like to treat others as you'd want to be treated by them, and then deeply entrenched opposed positions might be less likely to occur.
 

Online Mr. Scram

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Re: $3.2 million OSSIC 3D Headphone flop
« Reply #27 on: June 06, 2018, 08:37:11 am »
No.

What they did is more or less trivial - you track the position of the head and adjust the sound signal accordingly. All the mathematics is already well known. Does it really take several $M and 3 years of R&D? If you were tasked to design the thing they did, how much money and time would you budgeted?

People gave them money to produce cool headphones, they used this money for "R&D" and they haven't even thought of fulfilling their promises. IMHO, this is a legal way to steal people's money. However, if a scam is legal, it doesn't make it less of a scam.
You seem to be happy to wave the complexities of developing a technical product away. The irony is that that's exactly what trips up a lot of crowdfunded projects up. A lack of experience means fresh companies grossly underestimate what's involved, leading to the almost traditional delays and problematic phase between development and production.

I'm not claiming these people did well. I'm not claiming people who pledged money should be happy. However, if you want to call people criminals rather than inept you really need a lot more to go on than a few rough facts and a handful of guestimations. Intent and ineptitude are a world apart.
« Last Edit: July 01, 2018, 02:31:34 am by Mr. Scram »
 
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Online Mr. Scram

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Re: $3.2 million OSSIC 3D Headphone flop
« Reply #28 on: June 06, 2018, 08:48:57 am »
Quote
I'll ignore the snark for now.

Do you expect everyone else to ignore your snarks?

Perhaps you might like to treat others as you'd want to be treated by them, and then deeply entrenched opposed positions might be less likely to occur.
I was trying to keep things a bit lighthearted. Apparently opinions vary on how successful that was.  ;D
 

Offline floobydust

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Re: $3.2 million OSSIC 3D Headphone flop
« Reply #29 on: June 06, 2018, 08:50:50 am »
3-D audio and how the brain locates sounds is really interesting, but still doomed to fail.

QSound Labs developed by Archer in the 80's, they used DSP to encode music with the outer ear's acoustic transfer function adding spatialization.
Madonna, Sting and other artists mastered music encoded with QSound and I found it worked well as an added effect, i.e. a sound above/below/behind you if you had a decent stereo system and were patient to the experience.

It failed for two reasons:
It got hyped for a Superbowl ad in a world's first "3D sound" commercial which of course did not work with a single TV speaker. It needed stereo at least and response above a few kHz.
So the stock plummeted after the flop - nobody got the 3D effect.

Second, everybody's outer ear is a different shape, we all have different comb-filter response, which is how we localize sounds.

The brain seems to be able to auto-correct, if you hair is longer or wearing a big soft coat (absorbs shoulder diffraction), you can eventually locate sounds despite changes to your "ears" acoustics.

But there is no math to accommodate everyone's unique ear shape. So that needs a solution.
 

Offline NorthGuy

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Re: $3.2 million OSSIC 3D Headphone flop
« Reply #30 on: June 06, 2018, 09:05:36 am »
You seem to happy to wave the complexities of developing a technical product away. The irony is that that's exactly what trips up a lot of crowdfunded projects up. A lack of experience means fresh companies grossly underestimate what's involved, leading to the almost traditional delays and problematic phase between development and production.

Perhaps. But marketing is even more important. Without good marketing strategy, a campaign will not even get funded and nobody is going to discuss what they did. There are countless campaigns which don't get funded because they had bad marketing.

These guys were very good at marketing, so they raised money and they keep it. May be, if they were more capable technically, they would do better, may be not. But even as is, they've done remarkably well compared to the campaigns which didn't get any funding.

People who funded them are left holding the bag. Is this because OSSIC are technically inept? Or, perhaps because OSSIC are good  marketers? Go figure.

 

Offline coppice

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Re: $3.2 million OSSIC 3D Headphone flop
« Reply #31 on: June 06, 2018, 09:35:24 am »
What a lame excuse for stealing $3.2M.

They most likely just blew the $3.2M and couldn't manage the project, and ultimately have nothing to show for it.
Very different to stealing.

How so? If they squandered it, they basically ripped off/scammed their customers.
You do realise that the majority of product developments, especially of innovative products, fail, don't you?
 

Online Mr. Scram

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Re: $3.2 million OSSIC 3D Headphone flop
« Reply #32 on: June 06, 2018, 10:22:08 pm »
You do realise that the majority of product developments, especially of innovative products, fail, don't you?
Not just product developments. The vast majority of companies fail. I think it's something like 95% the first five years.
 

Offline coppice

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Re: $3.2 million OSSIC 3D Headphone flop
« Reply #33 on: June 06, 2018, 10:41:41 pm »
You do realise that the majority of product developments, especially of innovative products, fail, don't you?
Not just product developments. The vast majority of companies fail. I think it's something like 95% the first five years.
One of the most intriguing things about startups is that the vast majority of startups which survive to reach IPO are doing something very different at IPO from the thing they started out to do. Sometimes its a completely different use of their original core technology. Sometimes its using a completely different technique to solve the problem they started out to solve. Often it has no connection to their original work at all.
 

Offline JohnnyMalaria

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Re: $3.2 million OSSIC 3D Headphone flop
« Reply #34 on: June 06, 2018, 10:46:14 pm »
Can't help thinking of binaural and holophonic recording as exemplified by BBC Radio 4 for decades and Pink Floyd's The Final Cut.
Tell me it can't be done and I'll do it. Or die trying.
 

Offline snoopy

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Re: $3.2 million OSSIC 3D Headphone flop
« Reply #35 on: June 06, 2018, 11:20:06 pm »
Does anyone know what the success/failure ratio for Kickstarter projects?

The old motto: "Caveat Emptor" certainly applies here.
Caveat Emptor again suggests that you're buying a product. It's more like investing in a company in return for a physical incentive. Investments are more risky than simple purchases. Somehow people want to view crowdfunding sites as shops. Then again, people aren't know for being very sensible when it comes to financial products.

If it was an investment then one would expect that the investors would get some kind of equity in the company and share in any future profits and/or dividends as the company grows. This however is not what happens with crowd sourcing so it is still more like a shop taking pre-orders for a product that has not been manufactured yet.
 

Online Mr. Scram

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Re: $3.2 million OSSIC 3D Headphone flop
« Reply #36 on: June 06, 2018, 11:56:45 pm »
If it was an investment then one would expect that the investors would get some kind of equity in the company and share in any future profits and/or dividends as the company grows. This however is not what happens with crowd sourcing so it is still more like a shop taking pre-orders for a product that has not been manufactured yet.
You're right, it's not exactly like a traditional investment. It's not a webshop either. Kickstarter makes this clear. Kickstarter 101, first paragraph:

"Kickstarter PBC is a funding platform for creative projects. Everything from films, games, and music to art, design, and technology. Kickstarter is full of ambitious, innovative, and imaginative ideas that are brought to life through the direct support of others."

Elsewhere it says:

"When a project is successfully funded, the creator must complete the project and fulfill each reward. Once a creator has done so, they’ve satisfied their obligation to their backers.

Throughout the process, creators owe their backers a high standard of effort, honest communication, and a dedication to bringing the project to life. At the same time, backers must understand that when they back a project, they’re helping to create something new — not ordering something that already exists. There may be changes or delays, and there’s a chance something could happen that prevents the creator from being able to finish the project as promised."

It really should be very clear what you're getting into. Though it does fit the tradition of people selectively understanding the deals they get involved with, only to cry when the ignored part comes back to bite.

Don't get me wrong, I get that it stings if you lose good money. That's never fun.
 

Offline MicroBlocks

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Re: $3.2 million OSSIC 3D Headphone flop
« Reply #37 on: June 07, 2018, 02:15:36 am »
Everyone always forgets who is the real culprit.
And that is Kicstarter.com and Indiegogo.com.
They charge up to 9% basically for a self managed page and credit card handling.
I reported twice about a kickstarter that was basically scamming and nothing ever happened to it.
Backers were furious at me which was even a bigger surprise. Well, a sucker born every microsecond......
Still they got funded, monies were collected and nobody got anything.

Maybe they should change their website to not look like a webshop.

Make clear with every time someone 'invests' money you need to click a few checkboxes to make sure you understand the risks.

But they get away with, we are not responsible, we can not do anything, we are just the messenger, we don't check anything etc etc.




 

Offline dunkemhigh

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Re: $3.2 million OSSIC 3D Headphone flop
« Reply #38 on: June 07, 2018, 03:28:51 am »
Quote
They charge up to 9% ...

You can't expect them to run it all for nothing or, even better, from their own pockets. So the issue you have with them is really about the size of their cut rather than the fact that they take one. As with any other service, if you don't want to pay the rate you either go somewhere else or do without (or, if you're one of the very few, start your own competing service). No-one forces the startups to use kickstarter or indegogo and no-one forces the punters to splash their cash on what might be a scam.

FWIW, and as a declaration of interest, I've backed a few of these on both platforms. One allegedly shipped a product to me but I never received it and although they guaranteed a resend, they didn't. Of the rest, most were as expected and a few were brilliant. In fact, I just ordered another Daisy plant waterer for Mrs Dunkem's birthday. I also backed the Mu thermal camera thing but got my money back when the spec changed, and backed three projects that didn't make the funding finish line. Maybe I've been lucky, or perhaps just choosy.

 

Offline janoc

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Re: $3.2 million OSSIC 3D Headphone flop
« Reply #39 on: June 07, 2018, 05:59:06 am »

What they did is more or less trivial - you track the position of the head and adjust the sound signal accordingly. All the mathematics is already well known. Does it really take several $M and 3 years of R&D? If you were tasked to design the thing they did, how much money and time would you budgeted?

It is and isn't trivial. IMU is not hard to build and to get working. However, making a stable IMU-based orientation tracker where the orientation won't drift even after some vigorous shaking and moving, in the presence of magnetic disturbances (e.g. from the headphone speakers or radio antenna nearby, such as in the headmounted display) is a different story, especially if you don't want the user to first have to rotate the headphones around several times before each use to calibrate the magnetometer (the rest is less critical).

Also the  sound spatialization is not that complex and the techniques are known (every computer game does it). However doing it in an embedded device with limited computing power, space and power budget is quite a different matter - that's why they talked DSPs and what not (plus they wanted to autocalibrate the user's personal HRTF, which is yet another layer of complexity).

So I can well believe that they wasted all their funding on this - some of the rabbit holes you can get into here are crazy.

(That it was, IMO, a pointless exercise building a feature that nobody really needs because it is solved by other means already is another matter).

Unless you have some actual evidence, I suggest that you stop attempting to insinuate that there was some sort of fraud or misconduct there - you are potentially exposing yourself to a libel liability there.
 

Offline janoc

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Re: $3.2 million OSSIC 3D Headphone flop
« Reply #40 on: June 07, 2018, 07:18:07 am »
To me it has always sounded like a perfect example of the engineering maxim - the question is not whether you can do it but whether you should.

I'm about the release a video on Wi-Charge which is kinda like that. A ridiculously complicated system to do something that can be mostly solved with a much simpler solution. The product won't win in their originally intended market space.

I just saw that video - I actually know Yuval Boger and had to make a double take when I saw you posting that exchange with him. He is the (former?) CEO of Sensics, company that made a lot of virtual reality hw, including some optics stuff.

EDIT: apparently Sensics just went belly up and he jumped ship to Wi-charge in May ...
« Last Edit: June 07, 2018, 07:31:22 am by janoc »
 

Offline ChargeGuy

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Re: $3.2 million OSSIC 3D Headphone flop
« Reply #41 on: June 08, 2018, 02:01:33 am »
Yup, after 12 years at Sensics I felt it was time to do something else. Very excited about becoming part of the Wi-Charge team. Who knows, maybe we'll combine both activities and charge some AR or VR headsets soon.
 

Offline janoc

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Re: $3.2 million OSSIC 3D Headphone flop
« Reply #42 on: June 08, 2018, 02:26:06 am »
Welcome to the forum, Yuval :) And good luck with your new venture.
 

Offline edy

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Re: $3.2 million OSSIC 3D Headphone flop
« Reply #43 on: June 08, 2018, 04:00:56 am »
Everyone always forgets who is the real culprit.
And that is Kicstarter.com and Indiegogo.com.
.
.
.
Make clear with every time someone 'invests' money you need to click a few checkboxes to make sure you understand the risks.
But they get away with, we are not responsible, we can not do anything, we are just the messenger, we don't check anything etc etc.


I know it can be tempting to blame these sites, but I still think most or all should sit on the users/backers. Nobody is twisting their hand to back these items. I think it's pretty clear to everyone except the most naive people that they are taking a risk with their money and that there is a fairly high chance they will get something possibly very different from what claimed and with quite a bit of delay.... especially for items which seem too far-fetched.

People who back these campaigns are not thinking logically, they are doing it emotionally and want to be the first ones to have something. Even the "pre-order" pricing isn't a heck of a lot better than the final product. Certainly after you factor in the risk and time, I would gladly pay $150 for something when it is ready and tested and has been reviewed in 2 years, than to spend $100 now for vapour that may never be made or end up being garbage. Unless it is an out-right fraud on the part of the project, the majority of the risk and blame sits on people who decide to fund these campaigns. Just stay away from Kickstarter and IndieGogo, and the entire "Crowd-funding" ecosystem/platform if you are not able to trust it or the people behind it. Just not worth it.

For Ossic X campaign they had the following for regular contributors:

1000 x $199 (we'll round it to $200)
1999 x $219 (we'll round it to $220)
5997 x $249 (we'll round it to $250)
704 x $279 (we'll round it to $280)

The headphone was supposed to "retail" at $399 (let's say $400). Who knows if that would have been the final price or not. Nevertheless, let's say you got in with the majority of people and paid ~$250, so you save $150. Let's say that's a typical "savings" although from the campaigns I've seen the percentage you save going in isn't a great deal better, this one happens to be but the majority are not.

Let's say there are 4 different gadgets A, B, C and D, all being Kickstarted, and all happen to be $250 early-bird and final consumer cost $400. You enter into 4 different campaigns and pay $500 into each (you want 2 of each thing for a total of 8 items).... ok that's $2000 on the table. Now you wait.... 3 months, 6 months, production delays, 12 months, 2 years...).  :-DD

If all 4 campaigns deliver, you just paid $2000 for $3200 ($400x8) worth of tech. Not bad! You just saved yourself $1200.

Ok, if 3 campaigns deliver, you just paid $2000 for $2400 ($400x6) worth of tech. You are still ahead, by about $400. Again, this is a serious savings... I don't usually see it so much discount. You also still assume the final price is $400.... maybe they just say that to "inflate" the amount of saving. The real market may never bear $400 for the gadget.... they may end up only selling them finally at $300-350 when you paid $250.

In that case, 3/4 campaigns deliver, the actual price they can competitively sell for is $333 (not $400 as originally claimed), making the value of the delivered items $333x6 = ~$2000. In that case, you just barely break even. You paid in $2000, only 1 campaign of the 4 failed (I'm sure the odds are worse than that) and the final retail ends up being $333 (not $4000) when you paid $250. Even though you saved $83 on each item, you just broke even.

So now if 50% of the campaigns deliver, you have paid $2000 for $1600 worth of tech. You just lost $400 if half of the items don't deliver. Again, assuming it is even "worth" $400.

My point is, statistically speaking (and I'd like Kickstarter and IndieGogo to release stats), I'd like to see what the average early-bird pricing and final predicted retail and TRUE RETAIL prices are, and also what percentage of campaigns actually complete to final product. These are stats which *should* be available but are sorely lacking. It may make people think a bit harder about using Kickstarter as a "webstore" which it is absolutely not, and get a better appreciation of the true risks that exist with crowd-funding.
« Last Edit: June 08, 2018, 04:06:16 am by edy »
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Offline dunkemhigh

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Re: $3.2 million OSSIC 3D Headphone flop
« Reply #44 on: June 08, 2018, 04:44:37 am »
Quote
what the average early-bird pricing and final predicted retail and TRUE RETAIL prices are

I'd like to see that too, but to be honest it probably wouldn't make any difference to me :)

When I back a campaign it's generally not because it's cheaper than it will be retail (as you say, who knows what it will end up as) but because I want it and there is - literally - no other source. The monetary question for me is merely "Is the asking price acceptable to me right now?" Sure, I want to pay as little as possible, but trumping that is the desire to have one ASAP.
 

Online Mr. Scram

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Re: $3.2 million OSSIC 3D Headphone flop
« Reply #45 on: June 08, 2018, 05:20:16 am »
I'd like to see that too, but to be honest it probably wouldn't make any difference to me :)

When I back a campaign it's generally not because it's cheaper than it will be retail (as you say, who knows what it will end up as) but because I want it and there is - literally - no other source. The monetary question for me is merely "Is the asking price acceptable to me right now?" Sure, I want to pay as little as possible, but trumping that is the desire to have one ASAP.
That's the attitude you need for crowdsourcing. You're funding something that might otherwise never exist. That's the value of the concept. You don't look towards investors or banks to finance things as those tend to go for guaranteed successes or meddle with projects to safeguard their money. People can get together and decide this product is cool enough to exist and make it happen. That's wonderful and a remarkable thing. To mitigate the uncertainties and risks you usually get a discount, but that really shouldn't be the point.

Unfortunately, some people see it as a webshop and get upset when it turns out it isn't.
 

Offline edy

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Re: $3.2 million OSSIC 3D Headphone flop
« Reply #46 on: June 08, 2018, 05:47:33 am »
Agreed with the above 2 posts.... If it was a web shop then you would think through it logically, economically, calculate risks and final costs and make a rational decision after comparing everything. If you are someone who is excited about the project and wants to help fund the project and creator (and as a bonus get something back) then that is more of an emotional buy-in. You have to be willing to take the risk. If that is not your cup of tea, then there is always Amazon, eBay, Alibaba, etc.

My furthest experience on Kickstarter was with C.H.I.P. the $9 computer. I bought in "emotionally" and ended up spending more than $50 by the time I hit the purchase button (on all the add-ons). Before the campaign ended, I got cold feet and withdrew my contribution and was never charged. I'm not sure why, but I already had a RasPi and Arduino collecting dust and I realized my "emotional" brain was getting excited for yet another piece of kit that would collect dust on the table.

Here we are several years later, C.H.I.P. is still around but you can't find the original "$9" one (again, that price never was enough, most people likely paid as much as I did to get enough to make it worthwhile) and they have a few other permutations going which in as much as cost goes, isn't that much more in comparison to this crowd-funding campaign. But there was also a huge down-side which was that it may have never been made, period.  I didn't think about any of that when I made the emotional buy-in... it took me a few days to rationalize and once my more logical brain took over I realized it was not something I really wanted. Sure I could have still paid them to support the project but I have other things  I wanted to support with that money.
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Offline NorthGuy

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Re: $3.2 million OSSIC 3D Headphone flop
« Reply #47 on: June 08, 2018, 08:54:56 am »
I would expect the "price" that backers pay to be higher than the future retail price. Otherwise, it doesn't make sense to even run the campaign. Backers must cover the production of the devices they get plus at least some of the design and initial expenses. Then the campaign can produce and deliver products, and also develop some sort of base for future operation. Thus, backing shouldn't be regarded as an opportunity to get things cheap. Rather, it's an opportunity to buy something which would never be possible without the campaign.

Of course, the campaign may be organized only for advertisement, hoping that backers, being active people, will write favorite reviews thus promoting the product for free. But such enterprise assumes that the campaign already has enough money not only to produce things, but also to sell them at the cost or cheaper. In this case, there's no real need for crowd funding. I would expect this to be relatively rare.
 

Offline thermistor-guy

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Re: $3.2 million OSSIC 3D Headphone flop
« Reply #48 on: June 08, 2018, 01:20:50 pm »
.... It says that the additional goals tacked onto the project slowed down development and hampered their original product, which is consistent with their story that they've suffered from what's essentially fatal feature creep. It's also consistent with the notion that complicating a project and taking the focus away from your original product can cost you in the end. How does that lead to the conclusion they sat on their hand and paid themselves for doing nothing? That's pretty much the opposite.

Additionally, they actually supplied a small number of headphones. This means they developed and manufactured a product. According to the people who tested the product it's not shit, and reports are quite favourable. They probably jumped through all the certification hoops too. All that is no small feat. If you want to take the money and run you come up with some lame excuse without ever producing a result.

Like others here who have done ground-up product design professionally, I can verify that feature creep is alluring but dangerous. Yeah it can work, but it can so easily blow up in your face.

My guess is that someone tempted the company with a large payoff, on condition that the company reached a stretch goal. It takes a certain hard-headed shrewdness to resist the siren calls of dreams, ambition, and VC money, and focus on the original business plan - get something working, working well enough, and ship it. Cash flow from sales can then help fund the frenzy of better-faster-cheaper product evolution, and attract more investors, and move the team towards the next business goal.

I'm sympathetic to their story.
« Last Edit: June 08, 2018, 01:40:19 pm by thermistor-guy »
 

Online Mr. Scram

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Re: $3.2 million OSSIC 3D Headphone flop
« Reply #49 on: June 08, 2018, 01:48:12 pm »
I would expect the "price" that backers pay to be higher than the future retail price. Otherwise, it doesn't make sense to even run the campaign. Backers must cover the production of the devices they get plus at least some of the design and initial expenses. Then the campaign can produce and deliver products, and also develop some sort of base for future operation. Thus, backing shouldn't be regarded as an opportunity to get things cheap. Rather, it's an opportunity to buy something which would never be possible without the campaign.

Of course, the campaign may be organized only for advertisement, hoping that backers, being active people, will write favorite reviews thus promoting the product for free. But such enterprise assumes that the campaign already has enough money not only to produce things, but also to sell them at the cost or cheaper. In this case, there's no real need for crowd funding. I would expect this to be relatively rare.
Backers typically pay a lower price than the final retail price. This works out because the makers accept lower profitability for the chance of developing the product. It also allows them to avoid lending money at a non significant interest rate. Even if you make no profit, you still come out on top with a product to sell.

For this type of product, the cost of development can be high. This means chances are that the cost of development isn't amortized over those first batches. Ultimately, selling the initial units cheaper means it will take a bit longer to amortize the cost of development. If it isn't possible to get started otherwise, that's a small price to pay.
 


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