What am I getting when I Kickstart something?

[BvBPL]

Back in the good ol' days of the early summer of 2013 I Kickstarted the new edition a favorite PnP RPG. The Kickstarter was a record success for RPGS with nearly $700k pledged (and, when the Kickstarter was over, charged to backers' credit cards).

Initial fulfillment was estimated for October 2013 with weekly updates along the way.

It is now December 2014 and weekly updates have slowly stretched into updates once every five weeks.

This is from a company that is a leader in its industry, who has launched many other successful Kickstarters that have been fulfilled in a much more timely manner, if not actually on time. I am really ticked off that the fulfillment of the Kickstarter has been so delayed and that they have failed to adequately set expectations as to when fulfillment will occur. When I Kickstarted a project with an anticipated fulfillment of five months later I presumed that I had funded a project that was nearing completion, not one that would enter the first round of editing some eighteen months later with the art as yet incomplete.

Anyway, that's my sob story. On to what I'd like you all to discuss.

What do you think you get when you back a Kickstarter? What should you get?

Do you, or should you, view Kickstarter as a product purchase with the rights to a resulting product in the end with recourse if the product fails to materialize? Is it more like a charitable contribution for which you have no claim after your credit card has been zapped? Or is it somewhere in between?

Some people I've talked to have said backer's rights are at one end of that spectrum and others have said those rights are at the other end. Where do you think they fall and where should they fall?

What should I be able to do in my situation? Should I be able to get my money back? What about interest for the three figure sum I put down and have not received anything back on?

 

[Valka D'Ur]

Have you contacted the organization that actually runs the Kickstart site? Have other people complained about this (on Facebook or Twitter, for example)?

My opinion is that unless the company already has a sterling reputation for honesty, you shouldn't expect anything and be prepared to consider any money you send them to be a donation for some cause that may or may not be fulfilled. That way, if they do come through with the promised goodies, it will be a pleasant surprise.

 

[warpus]

What do you think you get when you back a Kickstarter? What should you get?

Kickstarter is basically a place where you can throw your money at projects that may or may not succeed.

You go in with the risk that you might not get anything. You're putting your faith in the people asking for money.

The risk is a part of this type of funding model.

 

[tetley]

Kickstarter is a very poor investment, IMHO. Extremely high risk, not very high reward.

 

[BvBPL]

If I want to back a Kickstarter because I am interested in the resulting consumer product they are offering then I am hardly making an investment. Rather, I see the backing as a purchase.

warpus seems to think that if the Kickstarter project fails to materialize then I would not have any recourse if I want to get a refund (other than talking the creator into giving me a refund).

 

[Archbob]

Kickstarting something is not investing in it. You don't get shares in the company.

 

[Zelig]

Kickstarter is a very poor investment, IMHO. Extremely high risk, not very high reward.

http://www.theverge.com/2014/3/28/5557120/what-if-oculus-rift-kickstarter-backers-had-gotten-equity

Essentially none of the upside.

If I want to back a Kickstarter because I am interested in the resulting consumer product they are offering then I am hardly making an investment.

I get how it's not an investment from your point of view, but companies are using kickstarter as simply a cheap capital source to replace traditional investment sources.

 

[BvBPL]

Should that difference in viewpoint on what uses Kickstarter is being put towards change my rights as a consumer?

 

[warpus]

warpus seems to think that if the Kickstarter project fails to materialize then I would not have any recourse if I want to get a refund (other than talking the creator into giving me a refund).

Well, from their faq says this about it:

Is a creator legally obligated to fulfill the promises of their project?

Yes. Kickstarter's Terms of Use require creators to fulfill all rewards of their project or refund any backer whose reward they do not or cannot fulfill.

So you have legal course.

But if I'm giving someone money via kickstarter, in my mind what's happening is me saying: "I really like your idea! Here you go, take this free money and try to make your dream happen!". Sometimes businesses fail, ideas do not work, there are problems with execution, and so on, so I keep my expectations low. Of course I want the person to succeed, because that's why I gave them money in the first place, but it's a crapshoot. You haven't done any diligence, you're not getting an equity in the company, a royalty, it's not a real investment. You did a good deed to try to make someone's dream happen and the quality of the deliverables is yet to be determined. By paying you accepted the risk, IMO.

 

[Valka D'Ur]

The only successful Kickstarter campaigns I've seen that I care anything about are the Star Trek fan films. They've raised a lot of money over the years, which they put toward various things such as the materials for building sets, props, costumes, and a whole lot of other stuff that goes into a film studio. Some of the actors are paid, but I don't know if the Kickstarter terms allow their salary to come from this source of funding. They do offer incentives to people who pledge certain amounts of money, and from what I've seen mentioned on TrekBBS, the producers really do spend the money where they say they do and the incentives are fulfilled as promised. I've watched the finished products, and if I were one of those who had pledged, I'd be satisfied that I hadn't been ripped off.

Those are examples of successful campaigns, though. Unfortunately, a lot of them don't work as well as hoped.

 

[BvBPL]

But if I'm giving someone money via kickstarter, in my mind what's happening is me saying: "I really like your idea! Here you go, take this free money and try to make your dream happen!". Sometimes businesses fail, ideas do not work, there are problems with execution, and so on, so I keep my expectations low. Of course I want the person to succeed, because that's why I gave them money in the first place, but it's a crapshoot. You haven't done any diligence, you're not getting an equity in the company, a royalty, it's not a real investment. You did a good deed to try to make someone's dream happen and the quality of the deliverables is yet to be determined. By paying you accepted the risk, IMO.

Does this analysis differ for occasions where a party is backing a new creator versus an occasion where an established company regularly uses Kickstarter to obtain supplement funding for new projects within its industry?

Your statement makes a lot of sense where a new creator is trying to do something innovative, but other standards may apply when Kickstarter is used as a matter of course.

 

[filli_noctus]

Exalted III, huh? Yeah they messed that one up badly, although it looks like it's finally coming together going by the last blog post (I didn't back ExIII but I've been pretty happy with the more recent one's I have backed).

On topic: A few years ago I would have said backing something is a risk and if it goes tits up there's not much you can do about it. Now there's cases where people have been successfully sued for not delivering or refunding and Kickstarter have updated their T&Cs to reflect that.

 

[Tahuti]

I am surprised how many people say it is a poor investment. I though it was common knowledge that Kickstarter isn't about making money, rather, about seeing things you like come to life.

 

[warpus]

Does this analysis differ for occasions where a party is backing a new creator versus an occasion where an established company regularly uses Kickstarter to obtain supplement funding for new projects within its industry?

I just wouldn't fund crowdfunding initiatives by companies who already have a lot of resources and money.

Established companies do not need kickstarter. That's not what kickstarter is for, IMO.

 

[BvBPL]

Exalted III, huh? Yeah they messed that one up badly, although it looks like it's finally coming together going by the last blog post (I didn't back ExIII but I've been pretty happy with the more recent one's I have backed).

Yeah, well at this point people are suggesting that the product is 2-3 months out. Of course initially the kickstarter suggested it was 4-5 months out. Which means after eighteen months we are about two months closer to release! At that rate, I'll get my copy in time for Xmas 2016.

 

[JollyRoger]

My contributions to Kickender seem to not be working - it looks more like Kickdelayer.

 

[Valka D'Ur]

Does this analysis differ for occasions where a party is backing a new creator versus an occasion where an established company regularly uses Kickstarter to obtain supplement funding for new projects within its industry?

Your statement makes a lot of sense where a new creator is trying to do something innovative, but other standards may apply when Kickstarter is used as a matter of course.

I just wouldn't fund crowdfunding initiatives by companies who already have a lot of resources and money.

Established companies do not need kickstarter. That's not what kickstarter is for, IMO.

Normally, that's true. But again, with my example of Star Trek fan films, the production companies doing those are not allowed to make a profit. That's why CBS allows them to continue to produce these films. They have to be squeaky-clean and have impeccable accounting, to prove that they use their Kickstarter funds for what they say they do, and that they do not make a profit.

 

[tetley]

If you put down $40 on a game and that game is still incipient, I consider that $40 an investment and not a very good one.

What I didn't know until now is how many kickstarters there are for things like "establish a community center for inner city youth". That makes more sense.

 

[warpus]

@Valka But I mean, in the case of such films, it's fans coming together wanting to make a dream happen. It's not a large company, which already has a lot of resources and money available.. right?

That's the difference to me. Kickstarter is for dreams. By giving money, you are helping make someone's dream happen. Companies who have a lot of resources available already shouldn't be asking for handouts via such a platform. I dont' think that's what the spirit of crowdfunding is all about.

 

[Valka D'Ur]

@Valka But I mean, in the case of such films, it's fans coming together wanting to make a dream happen. It's not a large company, which already has a lot of resources and money available.. right?

That's the difference to me. Kickstarter is for dreams. By giving money, you are helping make someone's dream happen. Companies who have a lot of resources available already shouldn't be asking for handouts via such a platform. I dont' think that's what the spirit of crowdfunding is all about.

Take the example of the New Voyages/Phase II fan films. James Cawley has put in a great deal of his own money, and I'm guessing that other people have as well. But these are professional-level films, as good as anything you'd find on TV as far as the nuts and bolts of production are concerned. The actors either contribute their efforts for free or for a substantially-reduced fee. Sure, they have studio space, costumes, props, and other equipment that doesn't have to be funded again and again. But each new production does have costs that go along with them, and that's why these fan film companies (there are several high-profile ones now; those that come immediate to mind are the Phase II, Star Trek Continues, and Axanar productions) have had more than one Kickstarter campaign. These films are definitely a labor of love, but they're not cheap - not if they're to be done well.

I can't afford to contribute to this sort of thing, but I can certainly see that it's money well-spent, judging by the results. I agree that established commercial companies shouldn't be using Kickstarter.