That article has nothing to do with anything. For those who didn’t read, the title is a quote from a restaurant owner who is trying to expand sell his popular chain to a national-level investor, reacting to a crowdfunding effort to buy the company that has raised all of $11,000. Yeah, uh, that crowdfunding effort didn’t work, but it’s hardly proof of anything.
I do think the underlying principle has a chance to completely change the way the world does business. Obviously, established enterprises are going to have an advantage at building any product that uses commonly available parts - like, say, laptops. The economies of scale will always be there.
On the other hand, a crowdfunding arrangement means somebody developing something new only has to pay people they actually need for that project: R & D up to date X, then you get rid of all of them and hire manufacturing (and perhaps marketing) personnel.
I’ve kickstarted 33 projects - about half of them games, plus some music and art. Only one of those projects has failed outright - Haunts, a one and a half man operation which fell apart because the half man left and the full man couldn’t code.
Of the 33 projects, half of them have delivered and I’m happy with what I received. (Even the first half of Broken Age. I can’t stay mad at Tim Schaefer.) The other half are all providing regular updates and communications except for one, Moon Intern. That one sort of worries me because the guy behind it is looking for job instead of working on the game. (People! Ask for enough money to cover your bills or don’t bother!). Also the guy behind it turned out to be kind of a schmuck but that’s a separate problem.
I gave five bucks to Veronica Mars because it was all the bucks I had to my name at the time and I couldn’t bear not to be part of it. I’m not getting anything for that five bucks except the expectation of netflixing the movie this summer and the delight in knowing that I participated. I got a generous helping of delight, in fact. It was totally worth it.
I know this is all anecdata but no I don’t think Kickstarter is in any trouble. Successful kickstarting - both the giving and the getting - involves successfully educating oneself about how it works. As time goes on, more of the public will become better educated about what to expect. I believe that will lead to more kickstarter success, not less.
Interestingly enough, I have only funded one crowdsourcing venture, but it wasn’t through Kickstarter or Indiegogo because those were just getting started at the time. In my case it was for a movie called “Iron Sky”, which was a dark comedy about Nazis escaping to the moon at the end of WWII and then re-invading the Earth in 2018 when Sarah Palin is President and they are accidentally discovered up there as part of a ‘return to space’ political move. Perhaps you’ve heard of the movie. The minimum investment was 1,000 euros to be a part of it, which is what I paid (about $1,400 at the time about five years ago). What persuaded me was that the Finnish Government put up a huge chunk of change for it in an effort to stimulate the film industry in the country, and a studio in Australia put up a big chunk of change as well for a budget of over $9 million. Meanwhile, the movie was basically a flop and I have only recovered $153 of my investment in royalties. Yet they are making a sequel and looking for investors again using one of the crowdsourcing sites. No thanks. All I got for my investment was a free copy of the movie, a poster, and was featured as one of the characters in the comic book marketing piece (which they made us buy instead of giving it to us). They also made a board game (rip off of Risk) and a video game that was equally poorly conceived. Ultimately, I’m glad I tried it, but I don’t think I’d ever do that again unless it was something I was very passionate about, and providing funding had a promised unique return for it. Usually when I donate to something it is a charity. Donating to help someone else make a profit on a random product doesn’t feel right to me. I’ll buy it at retail if they really are making something great. Paying many times as much for it, often for no return or perhaps early access to it, hardly seems worth it to me. Half the time it seems the product on its first release is incomplete or full of bugs in an effort to get it released early, so it seems strange to pay MORE for that.
That is true - the recent purchase of Oculus Rift surely was excellent, free publicity. I see their good and bad reputations as a race. Can they keep their good reputation far ahead of their bad? Or will the bad catch up?
Something else related to Kickstarter: they seem to have changed the colour of their logo recently. It seems more turquoise now. If you look at their web page icon, it’s still the old colour (or is my icon buffered?).
Yeah, but what’s your take in all of this? I want to know about your return.
My return? Not sure if this is a whoosh or sarcasm.
My “take” is 1) The satisfaction of knowing that I am helping art and artists to flourish and 2) Whatever rewards the pledge level promised, if I bothered to specify a pledge level. I don’t always.
And just to be clear, part of helping art and artists to flourish is understanding that sometimes project don’t work out. Sometimes life intervenes, or an idea on paper isn’t actually cool once you start sculpting, or sometimes artists just don’t have the talent or skills to fulfill their dreams. All of that is ok. Well, disappointing, obviously. But ok. The system working as intended. Artists need to be free to fail or they will never be free to succeed.
That’s what I get for my pledge. And, if I’m lucky, some occasional delight. It’s a fair bargain, imo.
The other key takeaway from the Veronica Mars project is that it’s easier to get a studio to agree to make your movie contingent on a successful Kickstarter campaign than it is to get them to agree to make it unconditionally. As a result, there’s a good chance that crowdfunding campaigns will be a new phase of market research for major studios, music labels, publishers and the like.
All Kickstarter creators agree to the following when the launch their campaign:
So yes, failing to fulfill this legally-binding agreement can get you sued. That it usually doesn’t is because the dollar amounts involved for individual backers usually amount to only a few bucks. Not even Judge Judy cares about that.
I’m actually amazed at just how well crowdfunding is working, way more than I would have expected. Studies have shown that something like 80% of kickstarter campaigns deliver on their promises, even if most of them are overly optimistic about their timeline. When you consider all the things that can go wrong between product conception and go-to-market, 80% is amazingly high, possibly even higher than traditional mega-corporations like Proctor and Gamble.
What worries me more is the out-and-out pseudoscientific scams that are emerging on less regulated crowdfunding sites like indiegogo. Healbe managed to raise $1M and TellSpec raised $400K on technologies that experts are saying are impossible to make and don’t even make sense from a technological point of view.
But these problems are not exclusive to crowdfunding. Hucksters have been bilking people of their money for perpetual motion machines and gasoline-from-water devices since time immemorial.
While reading about Healbe/TellSpec I found this site with lots of articles on the fiasco (mostly on Indiegogo):
http://pando.com/tag/healbe/
There’s also a (incomplete) list on Reddit of projects that failed to deliver:
http://www.reddit.com/r/kickstarter/comments/1j6ubm/complete_list_of_funded_kickstarter_projects_that/
Didn’t mention previously - wow the posters above that paid >$100 and didn’t get anything are taking it really well. Maybe you’re really seeing it as an investment, like Kickstarter wants. I don’t think I could do that.
I am as well. I think the key is that a lot of the campaigns that attract attention are run by people who 1) have a history in the industry they’re trying to launch the campaign in, and so have at least some idea what they’re doing and 2) are well known enough that they have a reputation on the line. So even though the legal obligations to deliver something are pretty low, they usually still end up, if not coming through, then at least putting in a good faith effort.
Of course, you have cases mentioned in the OP, where your crowdfunding a mentally ill comic book artist or a nine year old video game developer (!). That stuff like that doesn’t work out is pretty predictable from the outset. But since most funders seem aware of the people behind the projects, that doesn’t really seem like a huge problem.