Update as of August 27, 3p.m. EST: Coolest Cooler has raised $10.5 million and counting.
Inventor Ryan Grepper calls his creation the "Coolest Cooler." Yes, it keeps your beverages cold, but it also features a built-in battery-powered blender, waterproof Bluetooth speakers, and a USB charger to power up your electronics.
When he started a Kickstarter campaign to produce his coolers, he set a cool $50,000 as his fundraising goal. To date he's already raised $6 million--and there are still 42 days left to go. And therein lies the problem. What happens when your Kickstarter project becomes too successful?
The Swiss Army knife of coolers is now Kickstarter's fifth most-funded product, and at the rate it's going, according to Kickstarter tracker Kicktraq, it could raise some $30 million before August 29, when funding closes.
Grepper received glowing press this week for how quickly the campaign went viral. But ultimately he will be judged by his ability to fulfill all of those Coolest Cooler orders--and that will be no easy task. At press time, Grepper had not returned my requests for comment.
A cursory glance at the cooler campaign shows Grepper, who lives with his family in Portland, has more or less created a timeline: Those who pledge $5 or more can expect to receive their coolers by December, while those pledging $2,000 or more could have theirs by September.
However, there's no guarantee. And if Grepper gets overwhelmed or closes his shop, his backers won't be protected.
When one of the creators behind a Portland-based Kickstarter campaign told his 1,246 backers that, despite his best efforts, he couldn't produce the project he raised $122,000 to create--a Vaudeville-esque board game called The Doom That Came to Atlantic City--backers were livid. And who can forget when Kickstarter darling Pebble refused to set a delivery date for its 85,000 smartwatch orders?
Those weren't the only times product creators failed to deliver. Last year, CNN reported most projects (84 percent) miss their target delivery dates, while others fail to meet the quality expectations of their backers. Worse still, when CNN contacted the creators of the 50 highest-funded Kickstarter campaigns with estimated delivery dates of November 2012 or earlier, it found only eight of those 50 projects met their deadline.
Kickstarter says it has no legal liability in the dealings between backers and project creators. In a section on its site called Trust & Safety, the company explains the onus is on the backer to know there are risks. And while Kickstarter does its best to police outright scamsters--as it did last year with a phony beef jerky project--there is no "satisfaction guaranteed." When a backer puts down money, they get a pop-up reminder explaining as much.
"Projects are the responsibility of the creators who launch them," says Justin Kazmark, a spokesman for Kickstarter. "It's Kickstarter's responsibility to make sure everyone has the right expectations going in and backers understand that Kickstarter's not a store ... Ultimately, backers believe in the creator's vision and want to help them see it through."
Even so, cases like the Coolest Cooler beg the question of why Kickstarter doesn't let project creators set a maximum on the amount of funding they can raise so that they can manage the outcomes better. After all, when entrepreneurs seek funding from professional investors, they don't have to take more money than they originally intended to raise.
"As a platform, we're trying to help creators create on their own terms, not try to stifle by setting arbitrary limits," says Kazmark. He added that creators can set a maximum by limiting rewards. But limiting the kind of rewards backers receive wouldn't necessarily slow down the amount of funding they pitch in. It's worth noting that Kickstarter doesn't really have much of an incentive to curb project funding--the company gets 5 percent of the total funding a project raises.
Five years after its launch, Kickstarter is clearly a mainstream crowdfunding operation. And to its credit, its failures--outside of The Doom That Came to Atlantic City and Pebble--have been modest in scale. Daniel Gorfine, director of financial markets policy and legal counsel at the Milken Institute, an independent economic think tank in Washington D.C., attributes that to the risk of putting one's name on the line.
"If an entrepreneur raises funds, his name and reputation are at stake," he says. "The Internet doesn't forget. That reputational risk is going to motivate many people to be responsive and communicate with their backers."
In his video, Greppen assures viewers he's covered all his bases, lining "up a world-class sourcing company with years of experience making top-shelf products" that is "standing by to coordinate all standards and logistics." He assures "you'll not only get your Coolest on time" but that it will be of the "highest-quality."
With 30,676 backers so far, here's hoping he can deliver.