Kickstarter Hate

Posted on November 8, 2011

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I’ve been researching about crowd funding in order to prepare the Zombie Roller Derby project for a public market.  The premise is simple: submit your proposal for public review, promote it as much as possible, and if it’s a good idea, people will give you money to make it happen.  The reality is far more complicated.

You may have heard of Kickstarter.  It might be the most popular crowd funding website in current operation.  You submit your project to them, along with information such as donation amounts, rewards (associated with various donations), delivery date or end goal, etc.  You’re expected to bring your own contributors, but Kickstarter has a search and browse function, so users can browse the projects for something that strikes their interest.  If you make your donation goal within the allotted time, you get the money (no matter how much it is), minus a fee to Kickstarter for hosting the site, and to Amazon for processing the payments (contributors must have valid credit/debit cards).  If you don’t make your goal, there’s no transfer of funds; contributors don’t have to worry about donating to a failed project.

For our project, I decided to look into Kickstarter specifically and crowd funding in general in order to prepare myself as much as possible.  So far it’s been the right choice: too many projects fail (through Kickstarter and other sites) because they didn’t have a realistic goal (often asking for too much), good rewards (incentives to donate more), or good advertising (poor artwork or presentation; it’s interesting how much a heartfelt video makes a difference in this sort of thing).  But along the way I found a lot of hate for Kickstarter.  At first I was worried, because I stumbled upon these websites through Google–when you type in “Kickstarter,” one of the options they suggest is “Kickstarter scam.”  Naturally, after reading this article, I was concerned that Kickstarter was a scam, or was involved in shady business practices, and therefore a bad choice for crowd funding.

(Mind you, I think the issues surrounding the American patent office are retarded.  But that’ll have to wait for another post…)

So I went to those websites where people complained about how wrong and evil Kickstarter is.  Actually, nobody called them evil; I was rather surprised at how reasonable and civil the complaints were.  The basic argument is this:

Kickstarter claims to allow only creative projects with a clear beginning and end.  They do not support new business ventures; they do not support charities; they do not support “fund my life” proposals.  However, examples seem to crop up of Kickstarter doing the opposite of what they claim.  One proposal is turned down, while another, very similar one, is accepted; both are for a restaurant-based enterprise.  In another case, the project’s manager admitted his intent to turn his idea into a business after he met his funding goal.  Some projects are very clear about their intent to give some of their proceeds to charity.  But the predominant theme among the aggrieved seems to be this: their project was turned down, while similar projects were accepted; and the reasons given don’t seem to match the submission guidelines put forth by Kickstarter.  (Note: the link to Mapager’s blog, the latter in this paragraph, is long; but the post and comments bear out my conclusion, that people think Kickstarter is failing to follow their own guidelines and cannot give a good account of their decision-making process.)

So after all this digging around, what’s my conclusion?  Is Kickstarter a poor choice for crowd-funding?  Do they employ a spurious selection process?  Is it a waste of time to use Kickstarter?  What about other crowd-funding websites?  Does anyone really care about this subject?

Whether or not the last question has an answer, the truth is: I care.  I’ve seen enough successful projects through Kickstarter to suggest that it’s not a waste of time.  (Seriously, click that link: a couple artists failed to raise capital with their online game idea, then received an offer of $20,000 from a German investor.  Seems that big-money investors use sites like Kickstarter in their spare time to find projects worth funding.)  I’ve an idea why some succeed and other fail; and I intend to use those successes and failures to structure my proposal.  But should we (the designers and artists) vilify Kickstarter because we weren’t accepted or don’t agree with their policies and procedures?

I believe the majority of good websites are businesses.  You need personnel to maintain and update the site, and you need management to keep the team focused on the site’s purpose.  You need capital to pay your employees, and you need lawyers to conduct legal business concerning things like advertisement and payment processing.  Now, it’s true that not all websites offering a service need all of these things, but I think it’s fair to claim that well-structured, successful websites have some measure of these (and other) factors.  Kickstarter in particular offers an information database to its users.  It shows off popular or successful projects.  It accepts those that it thinks will succeed; and it promotes those that it really thinks are worth the effort.  It provides a selection of well-structured projects.  This may not be in line with their guidelines, but that’s because they can’t tell people that they’re going to arbitrarily accept submissions, or everyone would blow them off.  The truth is, if someone submits a proposal that Kickstarter feels doesn’t fit their database samples, or doesn’t have a chance of success, or just looks wrong, they don’t want to risk turning away investors.  That means a loss of business, and Kickstarter (like most good websites) has a bottom line to think of.  As Kickstarter makes their money by handling the logistics of payment processing (which is worth paying a cut of profits; after all, I sure don’t know how to take credit card information for payment), so it’s in their interest to promote projects that succeed rather than those that fail.

In other words, I think Kickstarter is doing a great job.  Their success rate is phenomenal; they’re considered one of the best options for crowd-funding; and if they’re more selective than other sites, than that’s their choice.  I sympathize with people who have been “wronged” by misleading information from Kickstarter’s FAQ; that should probably change so the customer has a clear idea of how to structure their proposal.  But given the success of Kickstarter, I’m inclined to argue against the nay-sayers: quit your belly aching and find another website, or re-write your proposal.  I doubt your situation is much different from a bank that turns down a new business venture…

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