Why Crowdfunding Doesn’t Work For Drones

Crowdfunding has opened the doors for many cool non-tech and tech related products. Exploding Kittens, Oculus Rift, Lume Cube, 3Doodler 3D Pen, iLumi LED Smart Bulb, etc. The list is quite extensive, and most of the companies have been successful enough to not only continue selling that product but actually introduce new ones. Even Pebble, which recently went bankrupt and had its assets gobbled up by FitBit, completed several successful campaigns and delivered on their products to thousands of backers around the world.

The history of new companies trying to launch a drone through crowdfunding is very different. Usually the product which is finally delivered to backers is an extremely dumbed down version of what was originally promised to backers, and that’s usually the best case scenario. Take the latest crowdfunded drone to fail and the once darling of the tech world: the Lily camera drone. Backers were promised a drone which you could simply release into the air and it would accurately track you
and record what you were doing autonomously. The video which accompanied the Kickstarter campaign looked awesome, especially in 2015 when the campaign was launched. Little did we know at the time that the video was largely faked using GoPros and the $3000 DJI Inspire 1.

After pushing back the release date several times (a common thing with any startup), Lily drone founders finally announced on January 12, 2017 in a blog post that they were planning to “wind down the company and offer refunds to customers”. Many people were understandably upset at being led on for so long only to get nothing. However, the fact Lily was refunding all their backers and customers means that they lost nothing (other than time I guess?). Other drones which ended in similar “no harm done” situations include CyPhy LVL1 Drone ($882,000) and Fleye ($342,000).

Unfortunately this isn’t the case with all crowdfunded drones which fail to deliver a product. Zano, the largest drone-related campaign through Kickstarter to date, raised over $2.5 million dollars from 12,000 backers in the late fall of 2014. The creators of Zano promised a nano sized drone with autonomous capabilities, an HD camera, 10-15 minute flight time, and the ability to control it directly from your smartphone. One year later, they sent out an update to all backers saying that the company would be liquidated and that the backers would not be receiving their money back.

Looking at the top funded drone related campaigns on Kickstarter, 3 out of the top 10 saw the company fail to ever deliver a drone . Out of the 7 remaining, 2 are a year or more over their promised delivery date, one company is still within its allotted time for manufacturing, and the final 4 were actually delivered to their backers. Now while a 40%-70% success rate (depending on the outcome of the 3 campaigns still unresolved) may not seem too bad, this is only part of the story.

Of the 4 companies which actually delivered a drone to their backers, only 3 are still in business. AirDroids, the company behind the Pocket Drone, went bankrupt almost immediately after delivering its drone 8 months late and with many still unsolved technical flaws to their 1,600+ backers . I was one of these backers, and my experience with the Pocket Drone lasted a glorious 23 second flight until the GPS malfunctioned and the drone smashed itself into a tree.

Now to be fair, not all the drones which have tried to go the crowdfunding route have ended up a complete disaster. AirDog, X PlusOne and Urban Drones SplashDrone all completed successful campaigns and are still currently available to buy online. More importantly, all the companies are still in business so you can still get support and replacement parts. However, because of how long it takes to go through the crowdfunding process, all of these drones lack a lot of the newer features which drones by DJI, Yuneec and Autel now offer for a lot less.

Let’s take a look at the AirDog drone. Of all of the crowdfunded drones, this is arguably still the most competitive. It is waterproof, extremely portable, tracks the user via an included wristband, and is the only drone other than the GoPro Karma that can use the new GoPro 5. Unfortunately, it costs $1,599 without a camera, which is exactly double the price of a GoPro-less Karma. True, the GoPro Karma isn’t waterproof and currently lacks a follow me mode, but the AirDog doesn’t come with a true remote and has no video downlink. More importantly, for $600 more than the 4K camera equipped DJI Mavic Pro, the only thing the AirDog offers is waterproofness (though several people have crashed their Mavic’s in the water and been able to fly them again once they dried out).

Yes, I might be cynical towards the whole subject since I’ve lost over $700 backing drone projects on Kickstarter. If you are someone who is into backing Kickstarter projects as a way of supporting small companies (and not a way to buy new products) then you might just look at that money as lost as part of the whole process. I however, look at it as a $700 lesson. And if I can save another person some money by sharing my experience, I would be very happy.

So instead of backing SELFLY or AirSelfie, the latest drones to try and get airborne through crowdfunding (and admittedly very cool looking), I would suggest waiting a year or two. If history is worth anything, an established company will release a better product for a cheaper price before either of ever make it into the hands of their backers; if they are even  lucky enough to get that far.