How Ouya Shows Kickstarter Sucks for Hardware

Don't buy your electronics on Kickstarter. That's the lesson from the ongoing Ouya mess, the overhyped Android-powered game console that just landed in a dozen reviewers' offices with a sad little flutter.

This is really only a corollary of a general rule: don't put down money for things that don't exist, where you don't know whether or not they'll suck. That applies to all of Kickstarter and all of these "crowdfunding" sites, of course, but it's primarily a problem with technology hardware.

Remember, Kickstarter "backers" aren't investors. They don't have a stake in the product, and they don't get a share of the profits. Kickstarter is just a method to pre-sell items that traditional funding methods didn't find worthy.

You can reduce your risk by either pledging very little, or by going with projects from people with solid, established track records. Amanda Palmer has made a lot of albums, for better or for worse; if you contribute to an Amanda Palmer album, odds are you'll get an Amanda Palmer album. We'll probably get more Amanda Palmer albums whether or not we want them. Similarly, Rob Thomas has made 48 hours of Veronica Mars, so it's not a stretch to think he could make two more.

But high-quality technology hardware is difficult to make, especially by people who don't have a track record of building similar products. I've reviewed more than 800 gadgets, and a lot of the stuff that comes into our office is crap. Seeing the quantity of crap that comes into our office, it's mind-boggling to me that someone would plunk down $100 before anyone has even had their hands on a gadget.

This goes well beyond the question of whether these overhyped, big-dollar Kickstarter hardware makers can deliver products on time, which is also a serious issue: a CNNMoney study found late last year that 84 percent of the top 50 megaprojects missed their delivery dates. Note this doesn't seem to be a major problem in Kickstarter categories like art, comics, dance or theater, or for smaller-ticket projects. The problem has to do with the difficulty of building and mass-producing big, expensive ideas.

One of the common counterarguments I hear is that Android hardware has become commoditized. Yes: crappy Android hardware has become commoditized. If you want to buy crappy Android hardware, go to Shenzhen with a shopping cart and a wallet full of yuan and you'll be in hog heaven. Go with my blessing and never speak to me again.

Ouya's smart team just bit off more than they could chew, a common problem in the gadget world. This doesn't mean that people like Julie Uhrman, Yves Behar, and Steve Chamberlin are stupid. We've seen lousy products from great companies here at PCMag.com. Anyone remember the early LG GSM phones on Cingular? LG makes some great AT&T phones now, but whoo, they had a learning curve.

Perhaps Ouya is having its learning curve right now, but it doesn't mean you need to contribute money to its educational process. You take all the risk, they get all the rewards. That's the worst investment plan in history. They're a for-profit company, and the people making the profits will not be you. They should figure it out themselves, and you should buy their products once they do.

But for now: unless you light your cigars with hundred-dollar bills like John McAfee, don't spend any of them on mystery hardware that nobody has ever laid hands on, built by new teams. Let other people be the suckers, and reap the rewards later.

For more, see PCMag's full review of the Ouya and the slideshow above.