Kickstarter: Established companies crowdfunding

I got to have some interesting chats on Twitter today after bringing up my dissatisfaction with the new Paizo/Unusual Dice Kickstarter. If you haven't seen it, Unusual Dice is making a set of "Pathfinder" dice. They're Pathfinder dice in that they will have the Pathfinder 'P' on it. A full set on the KS will run $69 bucks, and they'll be sold, after, for over $100. When I saw this, it annoyed me. I tweeted about how I was concerned with how big companies are treating crowdfunding, and it lead to two particularly challenging conversations, which I loved, because they were with people who didn't share my opinion. I figured it may be good for me to write an article on how I feel about KS and getting your money's worth.

I decided to start by helping me get information, and opinions, both supporting and opposing. What do you guys think about Kickstarter? How do you feel about established companies using crowdfunding? Are there companies doing it right/wrong? Is there anything wrong with established companies using Kickstarter to essentially preorder their products?

I would have to say I am for to it. Like when movies go on crowdfunding I am fine with it.

Sometimes companies do not make things because there is a chance for loss. However now you can see if you can get enough to cover cost and profit.

With crowd sourcing you can get things sometimes you normally can't because it is to "risky" to make.

How about when companies launch products that have very low risk? And aren't all business ventures risky? Some might have almost no risk, others a lot, but nothing in business is guaranteed. Is it fair/acceptable to push that risk to the customers?

For example, Kickstarter offers no guarantee that what you pay for will be produced. A failure can result in civil litigation, but its a meaningless thread IMO, as who's going to bring up a civil suit, likely in a different state/country, over $100? And if you're putting in for one of those $5000 levels, I have to assume you've done a lot of risk calculation or have 5 grand to spare.

By moving the cost of the product up front, companies are pushing the risk onto the customer, and the customer is often getting nothing more than they would have gotten in the end out of it. When an established company offers more up front than you could otherwise get (see Monte Cook Games or CoolMiniOrNot), those are times when I feel its acceptable.

But looking at the Pathfinder metal dice, for example. Do you think a cost valuation of $100+ for a set of metal dice is acceptable? Do you think selling it for $70 as a preorder is acceptable? In their KS, they talk about how they need the money for production... if we, as customers, put up the money for production, lets say 10k, as a whole the company should expect to get much more than that out of it, yet all they're offering is a slight discount on what is already a ridiculously priced product. Are they just fleecing the consumer from the start?

So, I won't imply that backers are being cruelly hoodwinked or anything: they're making a choice, and if backers continue to support Kickstarter moving in this sort of direction, so be it. But it doesn't sit well with me. I can't shake the feeling that (even putting risk avoidance aside) it's essentially trying to gauge interest/get free advertising at the expense of the smaller players who, well, need the platform to function at all and will now be competing with yet another big project competing for everyone's attention.

KickStarter has become a miniature version of the larger art world, and you're going to have good artists to support and bad ones (substitute "worthy" and "talentless" if you don't like the good/bad dichotomy applied to artists). Kickstarter is a patron model; backers pledge money to support an artist, like the Medicis supporting Renaissance painters. Part of the work a patron has to do is to discriminate between artists who can actually produce something when given patronage and those who can't. They also have to determine whether the artist actually needs patronage. Ideally, the patron supports only those artists who would not be able to produce their art without that patronage.

The correct response to a crowdfunding project from an established company is "Sorry, no" just as that is the correct response when an artist has no credibility in being able to produce the stated art. Unfortunately, there's no good way for Kickstarter to pre-screen artists who genuinely need patronage and those who don't, nor can they screen projects to determine their chances of producing art if funded. So that burden is entirely on the backers.

The presence of rewards at different levels of patronage is essentially marketing; it's a mistake to think that, as a patron, you are buying a product. You are not buying a product; you are investing in an artist. The rewards are a carrot to get patrons to invest in the artist.

So, yes, I think that projects run by established companies that don't really need the money should not be supported.

I also think that projects that produce art only for the patron rewards - that is to say, the entire goal is to produce art for the backers and no one else - should not be supported. That's not patronage of an artist; that's commission for a product.

Both of those are allowed models in Kickstarter - no good way to prevent them - but they absolutely should NOT be supported, by anyone.

In that sense, I disagree about Monte Cook games. It is an established company; nobody needs to back its projects anymore, because it has many ways of producing its material and collecting revenue, not least of which is its own e-shop. It's not a starving artist; it doesn't rely on your patronage as its sole income. Sure, it would like to have your patronage, because writing novels is scary, and it might not take the risk to produce novels if not for getting advance money, and if there was a project just to back the novels, that might be more palatable. But it doesn't need to be backed for its games.

All that was different with the project that created Numenera: Monty Cook was not a company then; he was an artist who was trying to strike out on his own after decades of working for other companies. It was a huge risk, and a game that he couldn't afford to produce on his own. Monty Cook Games - the company - was formed because he received so much patronage. That's a great success story! I love the company's games, but being on Kickstarter is really not the right venue anymore.

Patrons should answer two questions when considering a project on Kickstarter:
1. Do I want to support this artist?
and
2. Does this artist need my support?

All that said, anyone is free to disagree with me, and thousands will back each of these projects. Patrons can do what they like with their resources.

I agree with spaceseeker19 100%. You don't have to kickstart anything. I wouldn't pay $69 for dice nor would I pay $20. I am just a cheap bastard. However if people want to back that they can. They can back Joe Smoe making a new rpg app or Wizards. If the consumer wants it they will do it.

This has been standard practice in the wargame* world for quite some time starting with GMT's P500 system. Companies will put up a game for preorder but it's not a preorder in the normal sense. Customers sign up with more a less a promise (backed by payment info) that if the game gets produced they will purchase it. Once the number of preorders match a given number (normally 500, hence the name) the company will actually produce the game. In most cases no one is actually charged for the game until it is ready to ship, and people can drop out before being charged. Very few new wargames get produced that haven't been through some sort of P500 system.

My first thought when I heard of KickStarter was that it was P500 for non-wargame stuff - just more risky.

I'm not sure that I have any sort of problem with established (however that's defined) companies using KickStarter. Generally supporters get a little something extra for their support and the companies know they're not taking much of a risk. I haven't backed a lot of KickStarter campaigns, but I've been very happy with the ones that I have, especially the MCG ones. I still get stuff rolling in that I forgot about that were extras from their campaigns - not something I'd get if I hadn't supported them via KickStarter.

*I'm speaking strictly of the hex & counter historical paper wargame stuff.

Short Version: I think its okay, as long as people/companies have products people want to purchase at the cost and have a good track record on Kickstarter on delivery the product with the specks they explained plus in a timely manner they build reputation to attempt other projects. Not following through and delivering anything is an option I guess and just keeping money from backers… this option doesn’t let you open another project though without the fear of salty backers letting your new backers know what’s up, plus if they have a social media feeds they will let people know.

Long Version:
Kickstarter is an interesting beast to say the least. From my personal experience you get established and established companies (sometimes a single person really) trying to get a product out there, it might be to make a profit or it might be to share a game idea with the world. There’s good and bad stories from companies small and large having delays sometimes smaller companies never actually delivering on any of the proposed pledge levels. Sometimes it ends up biting them in the rear others have actually been taken to court and gotten a harsh punishment.

Couple things though, Kickstarter is changing ‘what’ they are. That’s a different discussion entirely though. Focusing on products and companies, some use it as a preorder process pretty much to see how much interest there is in a proposed product and as stated takes the risk off the company but it also means they can get products to the customer quicker and work on other things more quickly. Granted some companies might have too many kickstarter projects in the works at the same time leading to a delay or hiccup in one product getting all hands dropping everything to fix an emergency quicker (delay in one leading to slippage in several projects).

Most people know someone or have personally been burned by a kickstarter that never delivered but they did take your money. Some can chalk it up as spilt milk others might remind the backers they were paying for the option to possibly get what your pledge stated. Personally if you raise money for a project and you owe me something, yeah I said it like that. Either updates on what’s going on if you’re on track or not and eventually a finished product or updates on why you’re behind. You might respond to that honestly they don’t really owe me jack personally not even a thank you for my money. Which might be true. But most projects don’t just have one backer and if you fail to deliver I figure there’s at least 20% of backers any undelivered project will eventually notice if you open another kickstarter. If you haven’t promoted competence and getting people their pledges they’re going to tell your new backers about it, granted you can delete it or even attempt to get people on the grounds of harassment but if you rub people the wrong way it’s bound to happen.

A purchase is where two parties exchange goods, services, or currency. Today, its typically someone trading money or contract for money in exchange for goods. Basically, both parties are guaranteed something based on mutual agreement. A loan involves providing currency up front, in exchange for future currency, goods, or services. Typically a loan involves an increase in yield to accommodate for the lack of currency for a period of time and risk involved.

My view on Kickstarter and all crowd funding is simple: microloans. If I'm giving money ahead of time, I expect that when it comes in, I get more than the original money I put in. Getting more can mean getting more product, getting a product worth more, or getting back stuff emotionally, by seeing a product that wouldn't otherwise exist come to light.

Maybe its just because its how I am, but I believe an ethical business does better long term than an unethical one, while an unethical company does better in the short. I believe in long term planning, and more pragmatically, I believe I do better by supporting companies interested in long term survival.

So when I see a Kickstarter by a person or company who new to the scene, or doesn't have much under their belt, I consider the risk to be receiving the product or receiving a substandard product. When I see a Kickstarter by an established company, my standards are much higher. Just like if I buy a product from a top of the line company vs buying one from someone brand new: I understand there are risks, and thus have different expectations.

If an established company puts up a Kickstarter, has a history of launching successful products, I know the money I give them up front will lead to them reaping much higher profits over time, and so I expect that the money I put in up front should yield higher results. When a company like Unusual Dice launches a new dice set, specially with a well known company like Paizo, they (and we) know the product will be successful. There is no risk beyond the usual every product faces, and there is strong brand recognition assuring a certainly amount of exposure and sales. So if I were to back their dice, I expect to be compensated for the profit they'll be earning off me.

It's not a question of if people will back a product: it's a question of what ideal world would we like to see. I think there's general agreement that how DLC is handled in the modern video gaming community is lazy and insulting to gamers. But then each time we go ahead and buy games from those same companies, we also tacitly support those companies. EA is well known for disdain to its release habits; if even 20% of its customers decided to not buy its products anymore, it'd be hit hard enough to reconsider how to do business, or someone else would come into the market to take that customer base. Either way, it's a push towards what we want as a whole, rather than what piece we want today.

Yep those suck. And I have no idea why people continue to buy those. DLC isn't all bad, but it can turn nasty real quickly (curse whoever thought up an 'energy' system).
As for well-known companies using Kickstarter for personal propaganda and what-not, I don't see the problem with it. Sure do these companies over price things? Certainly. But, if people are willing to buy them, then they are worth the price. I agree with what you said, these are deals between the Kickstarters and the company. "I'll give you something and then you will give me something in return". I, personally, don't think it is wrong to push the boundries of what your product is worth. If people are all right with buying it, then you have a successful product. If your price is not worth it, then people won't buy it.
In short: I don't think it is the companies fault, I think it is the people who think that trivial things such as dice are worth that much money. The companies might be taking advantage of the situation (which is smart business), but (and like you said) they wouldn't if people did not put such a high value on kickstarter items.
Not a problem just consumers and producers.

Why do you think that the consumer has the responsibility to be mindful of what they buy, but the company doesn't have the responsibility to be mindful of how it sells? Shouldn't it be on both parties? And given that people will buy things they disagree with, doesn't it show in modern consumerism that as a populous, people will buy against their own self interest?

Like cigarettes. People buy all kinds of crap. $70 million for a van Gogh? Pffbbtty. But there you go. That's the beauty of it. People put different values on things than what is on a MSRP info sheet. That leads to some products that are great deals languishing while people buy iPhones (that was a burn from a Samsung user heh).

Kickstarter is a modern flee market. Sometimes your loot falls apart when you get it home, sometimes it's worth more to you than what you paid.

I'm actually in the mind that Kickstarter and other crowdfunding sites are for start-ups. When large companies like Paizo, WotC, Monte Cook Games, and even Reaper minis. They don't need the backing of kickstarter and should be limited to their own resources.

Drawing the line can be difficult though. When does a company stop being a 'start up'? When is a company 'established'?

There are some clear cases. Obviously Hasbro using KS would be a clear violation of its spirit (and a clear case of a company just making the customer shoulder the burden of the risk). But Monte Cook Game, maybe not. It depends on how much capital the company has, how big their fanbase is, how big the industry they work in is. It might be that, for MCG, a new RPG supplement is only possible with KS.

There are some board game companies that started on, and exist purely through, Kickstarter. Board game publishing is a low margin business, and so by using Kickstarter to fund every game they publish, these companies can slowly grow while the people behind the companies can actually make a living wage. If they were told 'oh, you've published 4 games on KS now, you're established and don't qualify for crowdfunding' they'd close their books and call it a day.

Another side of it is KS remorse. It only takes one or two bad experiences (a project that doesn't deliver or a project whose delivered product is disappointing) before people start becoming very discerning. Established companies using KS makes this situation even worse for people trying to catch a break because those discerning KS backers are going to prefer to back the established company with the established track record instead of taking a risk on being burned again by another new face. I'm not sure if this is good, bad or something else entirely. It's all to say, it's complicated.