Kickstarted

February 10, 2012 3:27 PM

The last 24 hours at Kickstarter has demonstrated that the site has become a major player. At 12:45pm Thursday, NYC Council Speaker Christine Quinn announced that the city work work with Kickstarter to spotlight community projects and businesses in need of funding in those same areas. Just over an hour later, at 2:08pm, Elevation Dock becomes the first Kickstarter project to reach $1M in pledges. Four hours later, at 6:42pm, Double Fine hits the $1M mark after being on Kickstarter for just under 22 hours. By the end of the day on Thursday, Kickstarter has seen its largest day of pledges, with $1,605,981 put towards projects. As VC Fred Wilson tweeted, "they don't come very often, but days like this are why startups are exhilarating."
posted by NotMyselfRightNow (45 comments total)

Some friends of mine are trying to raise $20k for a film project on a local Kickstarter equivalent. I suggested they should just create some kind of iPhone case or iPad stand since they get funded so quickly. Then use the profits to make their film. I was only half kidding.
posted by dumbland at 3:35 PM on February 10 [11 favorites]

Chris Avellone of Obsidian Studios (probably most loved for Planescape: Torment) is also testing the Kickstarter waters.
posted by Decimask at 3:37 PM on February 10

FWIW, I don't know that one could do a spiritual successor to PS:T, though. So much of that games strength comes from a meta-narrative/twist that would seem trite now.

I still need to beat that damned game, too.
posted by Decimask at 3:40 PM on February 10 [1 favorite]

Well, charitable impulses aside, the easiest projects to get funded are the combination pre-order / risk capital Kickstarter projects. They also tend to raise the most money, because people keep spending money on them post-funding if they want the product.
posted by atrazine at 3:45 PM on February 10

I'm wondering how quickly we'll see some competition for Kickstarter as the platform of choice now that it's making mass-media headlines. At the very least, somebody in Europe or Japan or South America has got to be looking at this and working up the design docs for a site that does the same thing but doesn't require creators to be based in the United States.
posted by Holy Zarquon's Singing Fish at 3:47 PM on February 10 [2 favorites]

I think Obsidian would need to make their own IP to keep costs down - I imagine that now with DnD being a big thing and Hasbro owning it, it's not as cheap as it used to be. Then again - I guess it's up to people what they want. But I'd prefer more creative and original works. This is really the way to fund the tail end, I think. The big publishers can have their MechWarrior Modern Warfare and Call of Duty and Madden and all the other "Bro" games, and old IP that has fans, and smaller/indie can go the microfunding route. Win win.
posted by symbioid at 3:48 PM on February 10

Sorry, no results for "living rideable chocobo".

Sorry, no results for "miniature elephant that will wander cheerfully from room to room with a feather duster in its trunk, performing light housekeeping".

Stupid Kickstarter.
posted by Blue Meanie at 3:56 PM on February 10 [31 favorites]

Fred Wilson cares so much about connecting people and making the world a better place that he runs all of his ventures as non profits, right?
posted by outlaw of averages at 4:02 PM on February 10

It would be really depressing if it were impossible to make a profit while making the world a better place.
posted by empath at 4:08 PM on February 10 [8 favorites]

I had no idea they required creators to be in the US. I guess that's why none of the creatives I know in Toronto have a Kickstarter project.
posted by thecjm at 4:10 PM on February 10

@Holy Zarquon's Singing Fish: here in Hungary we actually have two fresh (one launched in December, the other in January) Kickstarter clones, both with a slightly different take on the concept, though: one has a curatorial system with a strong oversight of the project; the other won't give you the money, but instead acts as a middleman and negotiates with companies that can make your idea happen. We have yet to see which, if either one will succeed.

(source. warning: google translated from Hungarian.)
posted by KTamas at 4:13 PM on February 10

From their FAQ:

To be eligible to start a Kickstarter project, you need to satisfy the requirements of Amazon Payments: Be a permanent US resident and at least 18 years of age with a Social Security Number (or EIN), a US bank account, US address, US state-issued ID (driver’s license), and major US credit or debit card.

You can donate from outside the US, but from what I've heard hanging around the Order of the Stick forums, you need a credit card; bank-issued debit cards, which are perfectly fine for domestic donations, get rejected frequently for international donors.
posted by Holy Zarquon's Singing Fish at 4:14 PM on February 10

Schafer said he could see it being used for "more music, more voice" and possibly "new languages" and team members.

TIM

TIM

TIM

_{HIRE ME}
posted by hellojed at 4:17 PM on February 10

Zarquon: There are a number of crowdfunding sites outside of the US, like Indiegogo, which works worldwide. IMO, their main problem is that they suffer from bad UX and a lack of focus.

Having done three Kickstarter projects (one of which was the most successful videogame project ever until that blasted Tim Schafer came along!), I always find it mystifying that many people think it's some kind of magical ATM. It is not, and I'm glad it's not. Many, many projects do not get funded because they're no good or poorly described, and simply putting a project on Kickstarter is not going to get you any traffic at all. I estimate that my projects got a maximum of 15% funding from Kickstarter in total.

Kickstarter isn't about magically getting you money. It's about establishing whether your idea is any good or not, and whether people are willing it back it with cold, hard cash. As such, it's a very brutal arena, one that a lot of people are understandably very reluctant to enter. But having been at the sharp end of pitching for projects from commissioners who claim to know what the market needs (but don't) or have some kind of expert knowledge (that lots of other people have as well), it is impossible to underestimate how freeing it is to be able to connect with people directly.

When I saw that Double Fine had raised a million dollars in a day, I wrote to a friend saying that we didn't have to put up with gatekeepers' bullshit any more. Now, there will always be a place for publishers, especially for those who have the stomach to deal with them. But now there's an alternative, one that is a real free market.

Regarding US creators - we are a London-based company but one of our directors is an American, so that's how we made it work. For individuals, it's pretty easy to just team up with a trusted friend in the US and use their SSN and other details to sort things out. There are tax implications though...
posted by adrianhon at 4:17 PM on February 10 [8 favorites]

Kickstarter is just a clever way to get around securities law.

Everyone's really waiting for H.R. 2930 to get passed out of the lazy Senate.

It lets an organization such as Kickstarter crowdfund raising shares in a creative project/idea so you can own equity/invest in these ideas, instead of merely buying products.

Its support is led by Obama (with support from the Republicans), but the Democrats in the Senate are too busy listening to banking special interests derailing it with alternates like S. 1791 to get it passed.

The moment it gets passed, you'll see crowdfunded creative projects really explode with creative projects giving the middle finger to current funding intermediaries such as movie studios and record labels, with ordinary citizens investing (up to $10,000 max per person) to get creative projects out the ground.
posted by amuseDetachment at 4:18 PM on February 10 [22 favorites]

Man, the Order of the Stick reprint Kickstarter [MeTa] isn't so exciting, when compared to these $1 million marks (and Double Fine is nearing $1.5 million! I wonder how many millions is enough?)

(Or maybe it's more exciting, given that tOotS is a DnD-inspired stick-figure web comic, and there are a whole lot of web comic Kickstarter projects, of which this is the most funded to date?)
posted by filthy light thief at 4:19 PM on February 10 [2 favorites]

This Kickstarter thing sounds like it may be just the solution for the problems described over in the UC Tuition plan thread!
posted by Saxon Kane at 4:21 PM on February 10

You know, I'm not totally convinced that people want to invest in creative projects, rather than pre-order. It would require a level of reporting and control that I think many creatives would be uncomfortable with, and it supposes that a big reason why people would fund is because they want to make money.

I interviewed Yancey Strickler of Kickstarter and Slava Rubin of Indiegogo for a thing for the Telegraph, and they made a very good point about why people fund projects. There are four key reasons why people might fund:

1) You want the thing; a copy of the movie, the game, the book, the poster

2) You want to see it made, because you think it's important.

3) You like the person - they're a friend or family

4) You want to make money

No doubt there are a lot of people who want to make money. But you can already do that through stocks and bonds. Still, maybe it could be huge - we'll see. It looks like a bill will get passed eventually.
posted by adrianhon at 4:23 PM on February 10

The last 24 hours at Kickstarter has demonstrated that the site has become a major player.

That's funny, because just the other day I decided that I had no more patience for Kickstarter. I've had it.
posted by R. Mutt at 4:26 PM on February 10

1) You want the thing; a copy of the movie, the game, the book, the poster

I threw my $15 at Double Fine for that exact purpose. I don't care what they make, but I'll take anything from the creator of Grim Fandango combined with the negotiating powers of the Cookie Monster.

Now I'm surfing through to find something worthy of going on my wall.
posted by Mister Fabulous at 4:26 PM on February 10

adrianhon: I think Kickstarter is facing a upper ceiling for the kinds of projects they can make under their current business mdoel. If you want to make 1000 orders of an iphone case, then yes, it's sufficient. But if you want to fund many game developments, many art projects, and many music/movies, there isn't enough capital in the marketplace. Kickstarter funded around $100million last year. That's a lot for small projects, but it won't scale. If you want it to scale, you need monetary risk/reward investment, beyond donations. There's only a handful of Double Fines in the world that can be crowdfunded like this. It requires an existing fanbase where the reward is not commesurate with the risk undertaken. Without actual equity investment, this can't be realized.

Current legislative proposals removes most of the regulatory costs for creatives. This is the biggest barrier to entry. Raising equity will run you between $50,000 to several million dollars per capital raise today in the US. That isn't feasible for small projects today, which is why you don't see it happening. I'm pretty sure most creatives would give up 50% (or even higher) of their future income just to get something off the ground. If you're Columbia and want to raise capital, it's easy and cost efficient, if you're an independent artist, not so much.
posted by amuseDetachment at 4:32 PM on February 10 [1 favorite]

You want to make money

AFAIK, there is no way to earn money from investing in Kickstarter projects.

I don't think there needs to be, for it to fund most art. The point of funding art is to get art. If anyone makes money, it should be the artist. As far as I'm concerned, if I'm contributing to a kickstarter fund, I don't care if they take the money and wipe their ass with it, as long as the promised work gets made.
posted by empath at 4:35 PM on February 10 [1 favorite]

You know, I'm not totally convinced that people want to invest in creative projects, rather than pre-order. It would require a level of reporting and control that I think many creatives would be uncomfortable with, and it supposes that a big reason why people would fund is because they want to make money.

I agree with this. If you want to see a small preview of what the future holds, go to the update page of any Kickstarter project that hasn't managed to deliver its rewards (or even one that is a few weeks late in doing so). There'll be tons of people accusing the people involved of thievery, scrutinising their twitter feeds for 'evidence' of this ("I saw that you took your girlfriend out to dinner last night, I guess that's where our money's gone!"), and just generally misunderstanding the inherently speculative nature of Kickstarter funding.

I wonder when we'll see the first court case, and whether the court will find that a donation in exchange for a future product is a pre-order and the project team has to deliver or refund the money.
posted by atrazine at 4:36 PM on February 10 [1 favorite]

AFAIK, there is no way to earn money from investing in Kickstarter projects.

Reselling the items you've purchased. For example, the card game "Cards Against Humanity" has yet to be reprinted and regularly sells for triple the original Kickstarter price.
posted by ten pounds of inedita at 4:37 PM on February 10

empath: I'm very aware there is no way to earn money from investing in Kickstarter projects. You can't do it in Indiegogo either. But Crowdcube in the UK and Appbacker both promise returns, so it's not a hypothetical. The point is that a monetary return is only part of the reason why people might fund.

amuseDetachment: I disagree. Kickstarter had about a million unique pledgers last year - a big number, but most only pledging once, so there's plenty of room to grow. The fact that Kickstarter made $1.6m in a day - as compared to $100m last year - shows that they're on an upward trajectory, one in which they could easily fund billions a year. Now, that *still* wouldn't even rival the funding that goes to creative projects currently - but that also ignores the sheer amount of waste that goes into creative projects today. When people get to do what they really want to do, money can be spent much more wisely.

I've raised money from investors and VCs before. It's an option and it makes sense for certain projects, but it is also a royal pain in the arse, plus there are certain things they will never touch (like point and click adventures). Kickstarter won't be for everything - but it is a serious alternative.
posted by adrianhon at 4:40 PM on February 10

If you want it to scale, you need monetary risk/reward investment, beyond donations.

Why? Kickstarter is still small now, but let's pretend that Peter Jackson wants to fund a Halo movie through Kickstarter (or something equivalently blockbuster-y), and let's say he promotes it by hitting the talk show circuit, etc -- how much money do you think he could pull in? Think how niche Double Fine is -- they're a small company that has done nothing but produce critically acclaimed flops for the past 10 years -- and they still pulled in 1.5 million in 2 days, and the only promotion was a reddit post and some people on twitter.
posted by empath at 4:40 PM on February 10 [3 favorites]

Perhaps I am wrong about this. Perhaps the total supply of funding dollars through donations will be high enough.

It just feels like you're not going to get sufficient funding for new projects with unknowns. No doubt Peter Jackson can get funded however he wants. However, he would probably not go through Kickstarter, because he'd be able to get more funding via traditional studios. Tim Schafer already has an existing fanbase. The promise for something like Kickstarter is for the small indie projects. With Kickstarter you're functionally bundling the delivery of the work with the investment. There are fewer incentives to promote a relative unknown to get their project done. It can happen, but I think the amount is capped in the total number of projects unless there is a potential for a future return. It's too risky to donate to a project without a proven track record at all if there's a lack of a possible future reward, might as well donate to the safe bet. But again, I can be completely wrong on this, I have no numbers to back it up because this market is so new, but it just feels like if you allow for actual investment, this will be several orders of magnitude larger.
posted by amuseDetachment at 4:56 PM on February 10

It just feels like you're not going to get sufficient funding for new projects with unknowns.

Unlike the traditional model, where studios are handing out checks to unknown talents left and right?
posted by empath at 4:58 PM on February 10 [1 favorite]

R. Mutt: "That's funny, because just the other day I decided that I had no more patience for Kickstarter. I've had it."

That's funny, because just the other day I decided that I had no more patience for drive-by unexplained threadshitting. I've had it.
posted by Hargrimm at 4:59 PM on February 10 [12 favorites]

I wonder how many millions is enough

Interesting question: for comparison, Brutal Legend cost $27 million to make. I'm not sure there is enough crowdfunding out there to make that many AAA, or even AA, games. But there are probably a couple of Costume Quests that you could shake out of it. And Costume Quest was kind of great.
posted by running order squabble fest at 5:01 PM on February 10

Maybe not left and right, but every studio has people whose jobs are, in whole or in part, to locate potential blockbusters and bring them to the attention of people who write checks. The question is how many people would be willing to do that for an artist they don't already know - or would even go looking for the opportunity, even if they'd be theoretically willing for one who knocked on their electronic door.

I mean, I've backed exactly three projects on Kickstarter, all in the last month - OOTS, DoubleFine, and a translation of Osamu Tezuka's "Barbara." All three were chosen because I already know that Burlew, Schafer and Tezuka produce art that is worth paying for. If Digital Manga was proposing to translate Barbara, buy Some Random Manga Artist I've Never Heard Of, then in all likelihood they wouldn't have gotten my sixty bucks.
posted by Holy Zarquon's Singing Fish at 5:03 PM on February 10 [1 favorite]

I'm not saying the traditional model is superior, I'm saying that the available money for something like Kickstarter is not that much for people who wouldn't be able to go through traditional means (Peter Jackson and possibly even Tim Schafer don't count).

There is one aspect of the traditional model that is good, the unbundling of investment in production and consumers of works. If you bundle them together, you reduce the amount of capital available for investment in a work. Why? It makes the actual consumption of a creative work have risk. There's no risk in buying a game, there's risk in investing in a future game from Kickstarter. That messes up the order of the financial world. It removes specialists from the equation. Integrating risk costs to the purchase of a good is inherently problematic.

Ultimately, I'd be 100% behind a model such as Kickstarter if intellectual property didn't exist at all. It'd be the best way to run things. However, whatever one wishes about IP, it doesn't change the reality of the world today, and given the way IP laws work, I'm of the opinion that there would be more capital for creatives if there was actual investment going on.
posted by amuseDetachment at 5:09 PM on February 10 [1 favorite]

A major player compared to what?
posted by spitbull at 6:05 PM on February 10

R. Mutt: "That's funny, because just the other day I decided that I had no more patience for Kickstarter. I've had it."

That's funny, because just the other day I decided that I had no more patience for drive-by unexplained threadshitting. I've had it.
posted by Hargrimm

I agree with you, & apologize.
posted by R. Mutt at 6:25 PM on February 10 [3 favorites]

It makes the actual consumption of a creative work have risk. There's no risk in buying a game, there's risk in investing in a future game from Kickstarter.

There's no reason why risk shouldn't be priced into the model. I'm sure that studio people price risk into it. I'm imagining a situation where someone with good taste puts together a 'package' of artists that people with similar tastes can support as a group. And in return they get to be part of the process, get personalized items and so on. Some of them work out, some of them don't, but on balance you get a lot of good art, more or less personalized for you.

To be specific, imagine that someone like Penny Arcade put together a 'label' of comic book writers and game designers that you could invest in as a package, and in return you get signed comics and so on..

Or Quentin Tarentino put together a group of film directors who want to make shorts or kung fu movies, or something.
posted by empath at 6:53 PM on February 10

There's a huge amount of projects that never could really make a ton of money, but would basically break even. Those don't make any sense as investments at all, so most of those projects never used to get funded. The long tail of market consumer demand is full of this kind of stuff. People committing to pre-orders ahead of time enables projects that would otherwise be impossible - there will always be some risk, but it's a lot easier to guess how much a project will cost than it is to guess how many people will pay how much for it.

For projects where the creator can make a convincing case that it will make a good ROI, there's already a number of avenues for fundraising - publishers, business loans, VC. I don't see any advantage to getting those dollars from a bunch of little investors instead - you'd still have to pay them back, and then some. And I'm not sure there's much of a long tail of investment opportunities that isn't just stupidly high-risk or stupidly low return.
posted by aubilenon at 7:21 PM on February 10

Kickstarter is just a clever way to get around securities law.

Everyone's really waiting for H.R. 2930 to get passed out of the lazy Senate.

It lets an organization such as Kickstarter crowdfund raising shares in a creative project/idea so you can own equity/invest in these ideas, instead of merely buying products.

Interesting. Yeah the "qualified investor" restrictions are really a huge problem, they basically make it illegal for people who aren't rich to pool their money and do something. Obviously there's a risk of getting scammed hard. But overall it's probably a bad thing. If they're thinking of reforming that, that's great.

You know, I'm not totally convinced that people want to invest in creative projects, rather than pre-order. It would require a level of reporting and control that I think many creatives would be uncomfortable with, and it supposes that a big reason why people would fund is because they want to make money.

Well, you're confusing creatives with investors with consumers. Creative might prefer pre-orders, 'users' might prefer investing over pre-orders. The question is how do you setup the legal stuff so that it can work on a small scale without a massive paperwork burden, while at the same time protecting investors?

4) You want to make money

No doubt there are a lot of people who want to make money. But you can already do that through stocks and bonds. Still, maybe it could be huge - we'll see. It looks like a bill will get passed eventually.

You can make a lot more money investing in early stage stuff, if you can pick winners. Would you rather have bought Google stock 4 years ago, or Facebook? Or Dropbox's? If you look at the stock market over the past 10 years, it's basically flat. So this idea that you can just throw your money at wallstreet and "make money" isn't true. The stock market went way up in the 1970s, and did pretty well for most of the 20th century. But now everyone is investing in the stock market through employee retirement plans and the like, so the market is saturated and returns will be lower.

In theory, investing randomly should yield returns at the GDP growth rate, which is pretty anemic anyway. But since so much GDP growth comes from small companies getting big, not being able to invest at the early stage means you don't have access to that.

And anyway, it's fun to invest in things and make money. With things like video games and the like, it's easy for people who actually play video games to know whether something has potential or not. But like I said, you have to figure out how to avoid getting scammed.

On the other hand, a million dollars for a cellphone stand? Really?
posted by delmoi at 7:39 PM on February 10

No doubt Peter Jackson can get funded however he wants. However, he would probably not go through Kickstarter, because he'd be able to get more funding via traditional studios.

Unless publishers have perfect information about what people are willing to spend money for (which, obviously, they don't), there's got to be some amount of mismatch between what publishers are willing to fund and what they could sell successfully. So there must be some number of artists who can't get a publisher to back something they want to do but who actually have a large enough fanbase to support their project this way.

The only question is how many of those artists / projects are out there. How large is the mismatch between what publishers think they know and what they actually know?

This also seems like a pretty good answer to the alleged problem of piracy. If Double Fine raises enough money up front to comfortably support the game, it won't matter how many people pirate it. They could give it away free.
posted by straight at 7:50 PM on February 10

Chris Avellone of Obsidian Studios (probably most loved for Planescape: Torment)

He did something other than Fallout 2 and New Vegas?

I kid, I kid. Though the one game I'd want to pay him to make through Kickstarter probably isn't going to happen.

Bethesda's probably going to want to do the next single player installment of Fallout in-house, instead of contracting it out to Obsidian again, now that their resources aren't tied up on Skyrim and they've locked down the MMO rights. Not like Chris can just come knocking on the door and say "Hey guys, I'm here to help. No, you don't have to pay me, the internet's already got that covered."
posted by radwolf76 at 8:06 PM on February 10

If Double Fine raises enough money up front to comfortably support the game, it won't matter how many people pirate it. They could give it away free.

I'll say this -- I would pay extra up front for a project that committed to a creative commons license.
posted by empath at 9:50 PM on February 10 [1 favorite]

The Double Fine thing makes me very happy, because I was starting to despair that Kickstarter was just a miserable backwater of shit for your iphone.
posted by migurski at 1:21 AM on February 11

It's important not to compare crowdfunding against a platonic ideal of the publishing model, in which impartial and enlightened gatekeepers can divine the wants and needs of 'audiences' better than anyone else - in fact, better than the audiences themselves - because they can look to the long term and are willing to 'take risks' on unproven artists and such.

The issue is that in practice, that is rarely the case. Most commissioners and publishers I know barely have the time to look over the hundreds of submissions they get, and often don't have much more knowledge or skills than other talented people out there. As a result, they understandably favour people they know or have heard of and trust - they're only human, after all.

Coupled with a host of factors that encourage short-term thinking (e.g. commissioners are highly mobile and tend to jump between commissioning and production every few years, they're governed by the relentless needs of shareholders, they're subject to complex bureaucracies), and, well, you end up with the sort of mediocre stuff we see on TVs, cinemas, and game consoles.

I don't want to idealise crowdfunding either, though. It can be hard for individuals to assess the trust of new artists, leading them to favour people they know, which isn't great for newcomers - but I'd argue that it was always a lottery for them, and at least now they can get together a few hundred dollars to try out something.

I think the most important objection, discussed above, is that crowdfunding doesn't pool risk like publishers do. Again, I don't actually think that publishers do this in the way we think they do any more - but that's not a proper answer. What I can see is that people like notch and the Indie Fund are showing one possible route forward, in that developers of successful indie/audience-funded games understand they have an obligation to pay it forward. Maybe this should be formalised further, with sites that ensure a percentage of profits from crowdfunded projects automatically(?) gets paid forward - I have a couple of friends who really want to make that work.
posted by adrianhon at 4:15 AM on February 11 [2 favorites]

Though the one game I'd want to pay him to make through Kickstarter probably isn't going to happen.

Fallout 3?
posted by ersatz at 3:21 PM on February 11

No, he made that one. He just couldn't call it that.
posted by radwolf76 at 3:28 PM on February 11

If Terry Gilliam ever decides to Kickstart "The Man Who Killed Don Quixote," I'd kick in a C-note, even if I just get a postcard of thanks in return. Just so I could say that I did.

Wonder how much he could raise?
posted by Bill Peschel at 3:52 PM on February 11 [1 favorite]