Kickstarter Campaign for Zano ends in bankruptcy

This article on Gizmodo is about how the Kickstarter campaign for the Zano drone ended in bankruptcy for the company and also explains about how and why the backers of the Zano will probably not receive their money back.

The reason why I think this is important enough to post is not that it gives us a view on how the outcome can be for a kickstarter campaign and more because it explains in a few words how a kickstarter campaign is funded and that backers are not investors. Something that is quickly forgotten or assumed by a lot of backers. Kickstarter backers are consumers who pre-order a non existing product. Investors invest time money and knowledge into a company with the intent to make more out of it.

I’m not a pessimist and I have faith in humanity in general so I’m looking forward to owning my glowforge and I like that there is already a community forming around the product. Try and stay informed about how these crowdfunded campaigns work and what is going on in the world.



(tweaked the title to add the word “in” - I think the omission was a typo)

Funnily enough, I just sent an email about this to the whole company. I’ll hit the highlights here.

As some of you know, this is my second crowdfunding campaign. My first was Robot Turtles, a board game. It was much simpler, but it was also a solo project. I learned a lot.

As a result, we’re doing one very important thing very differently from most Kickstarter campaigns: we raised all the money we needed to build Glowforges before we started. Investors supplied $9M in capital to pay for things like injection molds, engineering salaries, and fancy coffee beans to keep everyone going. This all happened before Order Zero. That’s why we set our goal at $100,000 - because we already had $9,000,000. That’s how much it costs to do everything except manufacture the machines themselves. They money you paid is being spent to order parts, assemble the units, and ship them to you - not pay for salaries and rent.

I wouldn’t take your money if I wasn’t damn sure our team could deliver you something magnificent. I feel terrible for the Zano team, but we’re not going to be the Zano team. We can’t wait to get you your Glowforge.


Dan, this is fantastically said. You may want to not just put this out in a forum post, but maybe to the whole community as it A) shows some activity to people who aren’t in the forums daily and B) is very succinct and reassuring to the community. You don’t have to do a whole lot of editing, just post it up on the kickstarter update page to reassure folks after the Zano debacle.

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Except there is no Kickstarter update page because this isn’t a Kickstarter. :smile:

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Ha, @Mike13. Ah yes (it’s so hard to keep track - too many emails this morning from other campaigns on the issue…), a tad sleep deprived this morning. Yes, substitute broadcast message for update page.

Agree. If there is anything that worries me it is that a majority of the GF owners are not engaged in this community forum. Those owners have had little communication from the company. When they start to get frustrated and vocal, it could have a negative impact. Negativity could affect investment in S/W and H/W improvements, marketplace development, new features or even decrease the user base.

Yes, a little more encouragement to forum participation will be beneficial.

No problem, I’m not a native English speaker/ writer. Great info given in reply. Thanks!

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@dan - Very well said and thank you for taking the time to respond…I can not wait to get my GF and start creating …

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Smart man! Make me wish I was still in Seattle, I’d camp outside the office for a job!!

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I would never put $3000 on a Kickstarter (Or Indiegogo). The big reason I went ahead and pulled the trigger on a Glowforge is that Dan had already signed up investors who put a LOT more research and investment into Glowforge’s situation than can be conveyed/propped up/fabricated on a single Kickstarter page.

That’s the worst downside of crowdfunding. Each member of the crowd has an investment that is far too small for any sane attempt at legal action. Except for class action, which means the lawyers get all of the money.

Oddly enough, I am on another Kickstarter which happens to involve a lawyer who happens to live in the same state as the KS owner. And HAPPENS to have a gamer lawyer friend who is willing to do some work for beers and is curious to see if there is a legal way to deal with KS gone bad.

Glowforge did get a really interesting early round of press, with a little bit coming from investors themselves. Smart crew.

Two related notes of interest:

Doublefine is doing a videogame sequel that does involve crowdfunding with “investments” on a new funding platform:

And a recent study showing the fulfillment numbers on Kickstarter:

We’ve run 9 successful Kickstarter campaigns, and shipped all of them on time. Most creators on Kickstarter are going through the product development process for their first time. There are lots of unknown unknowns that can trip up even the biggest companies that simply wipe out first timers.

The best safe guard for backers is to pick creators who have experience in what they’re doing, and have plenty of Plan B’s in case something goes south.

Over all, it’s an awesome mechanism for getting hard working creators off the ground - changing the way that new products come to life…

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Heads-up: the investigative report that Kickstarter commissioned to report on what happened with Zano, has been completed and posted to the original backers ahead of the full public release. I highly recommend reading it, and I’m looking forward to seeing our follow-on discussions about it.

More than 13,000 words. Here tis.


That was a really way long article and I will admit I did some skimming from time to time. I think it was very well-written and informative, though. Thanks for the link, rpegg.

Just finished reading the article. Very well written and researched it seems. Sounds like the zano team got in over their heads in a big way.

Would love to hear what @dan 's thoughts are on the article too.


Definitely a case of over promise and under deliver. Would much rather have a case of under promise, over deliver. Interesting read all the way around though.

Agreed. Great article. Painful to read, even chilling, considering how the last section had a great deal to say about the foolishness of investing large sums of money in massively overfunded crowdfunds with big promises (cough, cough). I’ve been in three startups that I watched shiver into splinters due to various causes that were quite clear in hindsight, and should have been clear if the management, myself included, had had more insight into human weaknesses. I’d love to see the Dan Man’s perspective as well. In the meantime, I’ll keep dreaming of lasers and hoping for an awesome July delivery.

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Read the whole thing today. Terrible and sad.

The one takeaway, as silly as it sounds, is that they failed because they ran out of money. When the bank account is empty, you’re done, and there’s nothing to be done about it. Delays stink, but when delays mean that you’re broke, they’re fatal.

As a side note, our community’s own @glenn was the editor of the article. I bet if anyone has questions he’d be amenable to answering them.

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