An Ambitious Plan for Putting Kickstarter Out of Business(mrteacup.org)
mrteacup.org
An Ambitious Plan for Putting Kickstarter Out of Business
http://www.mrteacup.org/post/an-ambitious-plan-for-putting-kickstarter-out-of-business.html
10 comments
It's called a marketplace. They bring people with "stuff" together with people with "money". That's the business concept, not production, not advertising, not selling webspace for 4 pages as this article suggests.
Is it a scam? no, not directly. The scam "sellers" on kickstarter take 6-months to a year to be found out, at which point, few people care if they get their product or not, and since their is always the implicit understanding that some of the kickstarter projects will not deliver, few complain.
Hence, yeah, kickstarters customer base is ripe for a good scamming and you'll likely never be called on it. Free money.
Is it a scam? no, not directly. The scam "sellers" on kickstarter take 6-months to a year to be found out, at which point, few people care if they get their product or not, and since their is always the implicit understanding that some of the kickstarter projects will not deliver, few complain.
Hence, yeah, kickstarters customer base is ripe for a good scamming and you'll likely never be called on it. Free money.
a) Trusted space for collecting backed pledges. Try doing that with PayPal and see how quickly you get shut down.
b) Well branded name with first-mover advantage which brings higher CTR on social campaigns.
c) Centralization of PR - contacts with traditional media which increase chance of mainstream coverage.
d) Volume of curated content makes it interesting to third-party developers, increasing 'virality' (see Twitter's media-in-post for any posted KickStarter link.
...
I could go on. It's pretty easy to build the same strawman argument against many businesses by focusing on a weakly analogous service and conveniently ignoring the laundry list of benefits. The whole 'socially interesting causes shouldn't be for-profit' argument is completely unsupported and drowned in pseudo-intellectual non-sequitur, which incidentally appears to be the raison d'être for this blog.
Name me another form of fundraising for arbitrary projects which doesn't require giving up significant equity at such an early stage. If you want a real target for a poorly-balanced funding arrangement maybe take aim at Dragon's Den. People who KickStart their projects are fully aware of what they're giving up for their seed capital - 5% of cash and no equity. Sounds pretty damn good to me.
b) Well branded name with first-mover advantage which brings higher CTR on social campaigns.
c) Centralization of PR - contacts with traditional media which increase chance of mainstream coverage.
d) Volume of curated content makes it interesting to third-party developers, increasing 'virality' (see Twitter's media-in-post for any posted KickStarter link.
...
I could go on. It's pretty easy to build the same strawman argument against many businesses by focusing on a weakly analogous service and conveniently ignoring the laundry list of benefits. The whole 'socially interesting causes shouldn't be for-profit' argument is completely unsupported and drowned in pseudo-intellectual non-sequitur, which incidentally appears to be the raison d'être for this blog.
Name me another form of fundraising for arbitrary projects which doesn't require giving up significant equity at such an early stage. If you want a real target for a poorly-balanced funding arrangement maybe take aim at Dragon's Den. People who KickStart their projects are fully aware of what they're giving up for their seed capital - 5% of cash and no equity. Sounds pretty damn good to me.
A) is a thin wrapper around Amazon Payments.
B) gives KS an advantage in the market. But as the article mentions, it doesn't justify gouging your customers just because you can.
D) Is "curating" content really worth 5%? Would you pay e.g. HN 5% for 6 weeks for linking to your site?
B) gives KS an advantage in the market. But as the article mentions, it doesn't justify gouging your customers just because you can.
D) Is "curating" content really worth 5%? Would you pay e.g. HN 5% for 6 weeks for linking to your site?
I hardly see it as gouging customers when they are happily, voluntarily entering into the agreement with full awareness of the terms and alternatives.
All of these poor souls were perfectly capable of setting up 'bobsdiyproject.org' and attempting to get popular support. Individuals trying to do this would have fixed up-front costs for developing all the 'little' stuff that KS does, zero access to an existing base of people interesting in paying, and no access to mainstream media to promote their idea.
The curation aspect is a large part of what creates value in KickStarter. The notion of 'SelfStarter' proposed in the blog completely misses the benefits to the community provided by centralised screening. If any and all projects were approved it would be chock full of scammers and opportunists with poor ideas - the SNR would be so low as to drive interest away.
Would I pay 5% of all cash raised specifically from HN members donating through a 6-week link to my project with no money upfront? Yes, absolutely. Zero-risk, $0 down traffic which only pays out if you hit your own projected goals?
Is Etsy a scam? Is eBay a scam? I'd say KickStarter has more favourable terms than these (still valuable) sites as they require money upfront regardless of the success of your listing.
All of these poor souls were perfectly capable of setting up 'bobsdiyproject.org' and attempting to get popular support. Individuals trying to do this would have fixed up-front costs for developing all the 'little' stuff that KS does, zero access to an existing base of people interesting in paying, and no access to mainstream media to promote their idea.
The curation aspect is a large part of what creates value in KickStarter. The notion of 'SelfStarter' proposed in the blog completely misses the benefits to the community provided by centralised screening. If any and all projects were approved it would be chock full of scammers and opportunists with poor ideas - the SNR would be so low as to drive interest away.
Would I pay 5% of all cash raised specifically from HN members donating through a 6-week link to my project with no money upfront? Yes, absolutely. Zero-risk, $0 down traffic which only pays out if you hit your own projected goals?
Is Etsy a scam? Is eBay a scam? I'd say KickStarter has more favourable terms than these (still valuable) sites as they require money upfront regardless of the success of your listing.
I hardly see it as gouging customers when they are happily, voluntarily entering into the agreement with full awareness of the terms and alternatives.
This seems like the exact same defense the banks were using when they were foreclosing on homeowners. Of course such behavior is "allowed" by a free market. The question is: is this behavior morally defensible?
This seems like the exact same defense the banks were using when they were foreclosing on homeowners. Of course such behavior is "allowed" by a free market. The question is: is this behavior morally defensible?
5% is nothing, if using Kickstarter more than doubles the amount you can raise.
> Would you pay e.g. HN 5% for 6 weeks for linking to your site?
Hell yeah!
> Would you pay e.g. HN 5% for 6 weeks for linking to your site?
Hell yeah!
A 5% fee is not what I would call "gouging".
Kickstarter is awesome. It helped bring light to this newly born industry in a way never been done before, and it's been responsible for scores of people being able to raise money to build really incredible things.
But then you have the people on the other side - those that might have raised 10, 20, 50, or even 80% that didn't meet their mark, and did all of that work for nothing. At the end of the day, the only thing they have left is a dead dream, and a burned out list of supporters.
I imagine it would be incredibly heartbreaking to walk away with nothing after a failed campaign.
On the money side, yes it's expensive, but that's not what I didn't like about it. My beef with Kickstarter is that I don't want to fill out an application and wait weeks before getting approved. I also don't want to send all of the SEO benefit to them.
Yes, I agree they should curate their marketplace, but it does filter out a lot of worthy projects.
I wanted to be able to raise money for a variety of projects, each in my own way and in my own time. I worked with my co-founder to build IgnitionDeck (http://ignitiondeck.com) to be able to do that.
It's actually doing pretty well, which I don't think would have happened without Kickstarter's popularity. In many ways, I view them as the MySpace of crowdfunding. It will certainly be interesting to see how they adapt and evolve as people get burned out from crowdfunding...or will they?
But then you have the people on the other side - those that might have raised 10, 20, 50, or even 80% that didn't meet their mark, and did all of that work for nothing. At the end of the day, the only thing they have left is a dead dream, and a burned out list of supporters.
I imagine it would be incredibly heartbreaking to walk away with nothing after a failed campaign.
On the money side, yes it's expensive, but that's not what I didn't like about it. My beef with Kickstarter is that I don't want to fill out an application and wait weeks before getting approved. I also don't want to send all of the SEO benefit to them.
Yes, I agree they should curate their marketplace, but it does filter out a lot of worthy projects.
I wanted to be able to raise money for a variety of projects, each in my own way and in my own time. I worked with my co-founder to build IgnitionDeck (http://ignitiondeck.com) to be able to do that.
It's actually doing pretty well, which I don't think would have happened without Kickstarter's popularity. In many ways, I view them as the MySpace of crowdfunding. It will certainly be interesting to see how they adapt and evolve as people get burned out from crowdfunding...or will they?
If you thought the first part was just wrong or ignorant, you really should keep reading all the way to the bottom.
It's sort of hard to take seriously an article that lists the "benefits" of Kickstarter without including "the ability to solicit and collect pledges".
I don't want to feed the troll, someone that calls kickstarter a web host company could not even discern between hosting web pages and videos.
It's only six orders of magnitude...
I won't lose more time with this, hats off for what the kickstarter guys had done. One of the good things in a free society is being able to choose who you want to help and who you don't.
It's only six orders of magnitude...
I won't lose more time with this, hats off for what the kickstarter guys had done. One of the good things in a free society is being able to choose who you want to help and who you don't.
One has to wonder that, services and technologies comparison aside, perhaps there's something appealing about the Kickstarter brand/community. Contributing to a random website out in the wild vs. contributing in an environment where there's a critical mass are very different. Whether or not the value is extracted from being a part of Kickstarter depends on many more variables than the article choses to mention. Perhaps a viable alternative would be a similar product but with a more de-centralized approach (ie. a mechanism placed on individual sites but with a recognizably safe community & brand).
Does anyone know if Kick starter subtracts credit card fees from their 5%, or is that an additional fee?
Kickstarter takes 5%. Amazon takes another 3-5% for payment processing.
http://www.kickstarter.com/help/faq/creating%20a%20project#F...
http://www.kickstarter.com/help/faq/creating%20a%20project#F...
I recently raised more than $38k from Kickstarter. There is absolutely no doubt in my mind that I wouldn't have been able to raise nearly that amount by throwing up a website and going it alone.
Here are some stats (for this project: http://www.kickstarter.com/projects/jackadam/dark-sky-hyperl...)
1) 32.26% of our funds came from visitors who found our page through the Kickstarter newsletter.
2) In total, 56% of funds came from visitors finding us via other Kickstarter pages (their home page, category sections, etc).
3) 44% were referred to from external sources.
But here's the thing: the external links were primarily due to the publicity we got from Kickstarter's promotional efforts. We got mentioned on Wired, Fast Company, the New York Times, and CNN.com -- not because we reached out to them, but because of the large number of people talking about us after finding us on the Kickstarter site itself.
In the end, Kickstarter enabled us to raise tens of thousands of dollars and in return took a measly 5%.