I'm not a lawyer but...

The internet is a strange place. Intelligent, aware people like me quite easily approve extraction of money from their bank accounts by invisible means, and its almost simultaneous crediting to other people's bank accounts. And then, after a time of anxiety or confidence, depending on your personal level of paranoia, you receive a product or service that you consider roughtly equivalent in value to what you paid. It's not called internet shopping for nothing.

Then there's crowdsourcing. Many people using crowdsourcing to raise money offer small inducements, often worth much less than the donation. It might only be that your name and generosity will recorded for posterity. In that sense it's a bit like raising money for charity, except that the charity doesn't have to be registered and the money raised is usually supposed to fund a very specific thing. Sometimes people using crowdsourcing to raise funds will be offering a product that will only be available if the full amount is received so the project can go ahead. I suppose I'd assume if it doesn't go ahead I'd get the money I'd pledged back. I'd certainly assume that if it did go ahead I would get the goods that I'd paid for (usually paid more than they were worth because I believed in the cause) in my pledge.

And (you know where this is going, don't you?) there is trust involved. When the person who is running the scheme is very well-known, both personally and digitally to the pledgers, there is a high level of trust. And the companies who handle the pedges and access the bank accounts of pledgers also have a high level of trust in the community. One of these companies is Pozible. If you're not familiar with the idea of crowdsourcing their home page will give you an idea of how it works. If you're supporting the launch of an EP and you pledge over a certain amount you'll get a copy. If you're supporting a play at a fringe festival and you pledge over a certain amount you get a ticket. Makes lots of sense, and I see that the Queensland Literary Awards, replacing those that were axed by the new premier, have raised $142% of their goal at Pozible (Yay crowdsourcing!).

A successful Pozible project in 2011 was Ton of Wool. In the words of the organiser, Kylie Gusset:

Processing wool in Australia is fast becoming a dying art, and wool needs to stay in Australia for creation from sheep to skein in order to support small farmers and micro business.

The successful project will ensure that your money will be put into directly paying the farmer, scour, fibre processor, mill and transport companies. The whole project occurs within the 03 area code - grown in Tasmania, processed and milled in Victoria.

1 Ton Of Wool - Why so much?
1 ton of wool is being processed because that's the smallest amount we can get through a commercial scour. We're a grain of sand in their usual beach of processing, so we're rather lucky to get a foot in their door.

I was happy to subscribe, and I promoted the project to friends and through the NSW Knitters' Guild. I was very happy with the three skeins of undyed wool I received back in April: soft, smooth, buttery. But I've recently realised that a lot of people who ordered dyed skeins haven't received anything. It was very galling for these pledgers (shall we call them customers?) when the wool was offered for sale at the Bendigo Sheep and Wool Show in July, but they couldn't get any response to pleas for a delivery date for something they paid for more than twelve months ago. This week Kylie responded to some questions on her Ravelry page:

” You’ve taken peoples money in return for goods. That falls under “business transaction”. ”

i’m wondering if that is what is the whole problem here. see, i used pozible. a crowdsource funding site. i took pledges in return for rewards. it doesn’t fall under business transaction. for example, as far as i know, consumer affairs in this instance is unable to do anything if someone who pledged wanted to make a complaint.

As I say, I'm not a lawyer, but this seems very disingenuous to me. Taking money in return for a promise of goods sounds like business to me. She has said that she still has to process 60 of the 400 orders - that's nearly 1 in 7. This woman is in business as a dyer, has been for years and she was trusted. More from the Ravelry site:

“We thought we were dealing with a reputable business with a track record.”
i have no track record with crowdsource funding on pozible, cormo, or dealing with wool brokers, farmers, scours, or wool processors. spinning mill? sort of, but TON OF WOOL is a different beast entirely. i used to dye sock yarn (and i’m looking forward to getting those days back)
now, together, we’re making history.

But that's not all that the 400 people who supported her were paying for. Sure, we 'got' that this was an important moral and environmental issue. Air miles, supporting local growers and businesses, yada yada yada. But we were also after the wool that we paid for. I'm not sure why that's such a complex concept.

Comments

[Jan]

Quoting you: “We thought we were dealing with a reputable business with a track record.”
i have no track record with crowdsource funding on pozible, cormo, or dealing with wool brokers, farmers, scours, or wool processors. spinning mill? sort of, but TON OF WOOL is a different beast entirely. i used to dye sock yarn (and i’m looking forward to getting those days back)
now, together, we’re making history.

I think disingenuous is a good word for the moment. Something stronger may be needed. She remarks on her Rav group in a now locked thread with many enquiries and comments deleted, that she does not do customer service well, in fact she's no good at it. So why did she take it on in the first place?

I think she's disingenuous in thinking that no one considers her previous track record of service as an indie dyer. Of course that was considered. Not many people would have regarded the original venture if someone unknown had popped up out of the blue with such an idea.

It seems that many people regarded it as a business venture when really, it was nothing of the kind. I believe that it should clearly, very clearly, have been pointed out that the return on investment made was not necessarily something set in concrete.

The Rav group further left a nasty taste in the mouth for many. Total lack of communication, deletions, broken promises have left a nasty taste in the mouth for many. The thread is locked. We both know someone who has been banned after just one query. She at least had her money refunded so financially is not out of pocket. She's just had an unpleasant experience to undergo and recompense for that won't be given.

Promises of postage which went unfulfilled remind me of a similar debacle currently going through yet another reincarnation in England, (mostly).

Now I'm not involved in either of these. I learnt my lesson with Lush where I should have paid more attention to the fact that one partner had withdrawn not long before. I had bought twice from them and been happy with service and wool. However, I'm saddened when what is usually a fairly supportive community is treated like this.

I'd like to think that she was just overwhelmed by size of the undertaking. However, her manner of withdrawing from enquiries, her non-communication of postage dates, progress etc etc., and her high handed treatment of many raising very reasonable questions raise nasty doubts in my mind.

Such a shame and I really hope that all concerned get some just treatment and received their "rewards" as she calls them. Sooner rather than later. I also hope that if she really meant well that she gets some business advice and that she uses a business plan etc even for "just returning to dyeing sock wool."

I think she has probably done a very considerable amount of damage to her reputation built on what she had done prior to this mess. I believe it will be almost impossible to ever regain the good reputation she had there.

[Jan]

I've just discovered a still active new thread from other "customer" who have announced they have banned themselves.

http://www.ravelry.com/discuss/msgusset/2249282/1-25#6

[Sally]

With 400 people signing up to this and the massive amount of ensuing publicity this woman has received, it was a tremendous opportunity to build her business. Lots of new, happy customers for her database.

As a result of incompetence and a total inability to provide any sort of customer service, I think (from the messages I’ve received) that she not only has not gained many new customers (if any) but has lost a number she already had. What a complete waste!

I think she had every intention of providing the “rewards” but it does raise many questions about the role Pozible could play in scams. As she constantly points out, those who don’t receive what they believed they paid for have no legal recourse; in other words, it all depends on the goodwill of the person being funded.

I’ve now been sent an unsolicited refund and barred from any discussion in her Ravelry group as apparently I was “negative” and it was decided that I wouldn’t be happy with the yarn when I got it. "Experience has told us that if we do send yarn to people who are already extremely unhappy with what we’ve done, they won’t be happy with that either."

I wonder what the School of Social Entrepreneurs makes of their member’s entrepreneurial skills?

[Jan]

What entrepreneurial skills?? LOL. Yes, I think it got all out of control and now it's too much to do. However, being an ostrich won't help her either.

[redambition]

I definitely think she's damaged her reputation. I've had her on the list of dyers to buy from for quite some time, but with her behaviour in this debacle she's been crossed off.

I don't mind if things take a while. I don't mind if there are delays. The most important thing is to treat your customers well and ensure that they are kept up to date with the situation.

Silence, ignoring requests and being wilfully rude is a no go to me.

I'm also thinking very carefully about whether to get involved in any crowdfunding projects. This has me thinking about the risks.

[JoVanEvery]

As I understand it, crowd sourcing is like venture capital but for small ventures and smaller investors. This case sounds like it was badly managed. She needs to keep her investors happy and she hasn't. Not only that but she was drawing on an investor pool that are also potential customers so she's burning all sorts of bridges to future business success.

It seems that the business woman in question didn't think this through very well and didn't get the support she needed to make it happen. Maybe 1 ton of wool is the minimum order for processing but if that's the case she should have thought about her capacity to deal with that much yarn and made plans to hire help, if not with dying then with customer service and other admin functions so she could devote her time to getting the product out the door.

As far as whether you support future crowd sourcing projects, I'd say keep in mind that you ar being a venture capitalist/investor. Examine the business asking for support in this light.