People use the term disruption pretty loosely, I think crowd-funding is really doing it. Goodbye middlemen, sayonara to the massive traditional barriers to entry. Hello bootstrapped projects like this that would otherwise never see the light of day.
I think one important thing here to note about crowd-sourced funding is that it doesn't just eliminate the middle-man, but rather it connects the end consumers with the product directly. It may seem a small difference, but it is real.
Consider this, when a company goes to get funding, it is the company and the investors together who are postulating what consumers might want. In this model, the consumers fund what they actually want, not what some guys who got lucky once or twice (VCs) assume people want.
Add that to the fact that VCs like to fund things that are going to be like winning the lottery, whereas consumers want to fund things that seem useful to them right now. Huge difference.
I have a burning question. Have you figured out how you're going to do shipping and handling? Are you using a 3rd party to do all of the distribution, or do you have the workforce yourself to do it? Kickstarter and Amazon don't do it for you, do they?
In classic "disruptive technology/business model" terms, I agree.
(1) What is disrupted? Existing means of accessing capital (banks, individual investors, corporations).
(2) It's coming at it from the low end of the market. Small little projects getting funding, nothing that hits the bigger players' radar. But slowly, it starts to grow in terms of volume, and funding project size.
(3) It's addressing an end of the market that was really underserved by mature sources of funding.
Based on all this, I would say crowdfunding is disruptive, with Kickstarter leading the way.
Casey way to go man! Huge fan of what you did. If you ever want to talk about growing a manufacturing business with an e-commerce component reach out to me. I have some experience from building dodocase.com, my email is patrick (at) dodocase.com.
Other than having a great product, are there any marketing things you feel added to your success? Particularly things that could be applied to other projects.
This is really starting to show the potential of Kickstarter.
So many of the successful Kickstarter projects have been unknowns. Just really smart and driven people with a dream.
If established companies can bypass publishers and investors by promising to sell a product directly to the consumer then we have a whole new ballgame here.
Double Fine has successfully funded a game where the only promise is that they will release it. That's it. No percentage of revenue to the publisher. The publisher can't demand they add DRM, etc. Their only obligation is to do what they do best because they are only answering to someone who wants a great game, not a return on their investment.
They already decided to use DRM. They use Steam. I'd be among the backers if I would get a simple standalone installer or even zip archive without any honest-customer-punishment.
DF/Tim is/was already famous in the gaming community beforehand though. This helps. It's a bit like if Paul & Ringo created a Kickstarter project saying they're thinking of making a new Beatles album, and wanting to know if anyone would front them the production costs upfront.
One has to wonder though, if you priced out your Kickstarter project because you wanted to make one for yourself and well if you could get 100 other people to kick in you would be able to get the better price on parts, and then 10,000 people kick in and now you're looking at something which was 'spend the weekend building up a hundred or so foo-widgets' becomes 'spend the next six months building 10 thousand foo-widgets' that has to suck.
Kickstarter is really about funding a project, not really about selling merchandise. You can put "perks" for various funding levels, and many projects use the product as a perk at some level, but you don't have to. And KS lets you put limits on rewards. For example the DoubleFine page says
Pledge $1,000 or more
84 Backers • Limited Reward (16 of 100 remaining)
Mini portrait of YOU, painted by the game's artist, and all previous reward tiers.
So if Blizzard does a Kickstarter and raises $10M in pre-sales for a new game, is that within the mission of the site? I was under the impression that it was a site for projects by people who otherwise wouldn't be able to fund them. This seems to be pushing that boundary.
I'd rather rephrase the question to ask generally what it would take to break the spirit of the site. A lot of projects already use it as a shop-like site.
And as far as big companies are concerned, Kickstarter and Amazon take a combined 7.9% cut, which is quite significant.
I'm also not entirely sure whether companies with DRM-encumbered games will manage to attract donours in a similar fashion to Double Fine who seem to be using the Steam platform, which is widely used and loved.
Blizzard could probably pull it off with their games (MMOs not included) because of Battle.net, but it would turn into a major shitstorm, if they funded something like Call of Duty, which is a magnet to controversy and uproar. Then there would be the ensuing hell of charge-backs and refunds.
With Kickstarter, you generally invest in an idea more so than a product. What but a product do you invest in by giving Blizzard money? With Double Fine, you revive the adventure genre, have a chance of disrupting the videogame industry and bring back some of the biggest videogame developer legends and give them free reins over their product without having to go hat in hand and pander to producers. With Blizzard, it would just be business as usual.
I don't know whether Kickstarter will ever lose its indie feel, but if it does, or some project starters do, they will be subjected to a level of scrutiny orders of magnitude higher than what we are used to.
I think Kickstarter projects depend more on goodwill than most of us imagine.
The Double Fine Kickstarter pitch video does a pretty good job of explaining why it can't fund an Adventure game, primarily because publishers generally won't fund anything that isn't a guaranteed success. The Double Fine kickstarter projects shows a shift in power from the publisher to the developers/players.
Ultimately it's a place where anyone can post a project and try to raise some money to make it happen. I don't think it's limited to only people who couldn't raise it otherwise.
Why can't Apple launch the iPad 3 on there? There's no reason they can't, except why would they give Kickstarter a cut of their profits when they've proven they can sell them directly with no middleman.
Comparing Double Fine to Blizzard is a little extreme. Although Double Fine has an experienced team with a long history in the industry, none of their games have been huge commercial successes, and they've had some spectacular commercial failures over the years. Most of their projects up until this one have been funded by traditional game publishers (Majesco, EA, Warner Bros., THQ, etc.) and this is a genre no one wants to touch, even at the small scale for download only titles on XBLA\PSN\Steam ($500K-$2 million range).
Afaik, Ron Gilbert has been trying to make a traditional adventure game for years and has been unable to get it funded until now.
I see your point, but I feel like the true success of any platform is achieved when people start using (in a positive way) for things you hadn't even thought of.
Congrats to Kickstarter!! This is the type of win-win startup I want to create/work at. Gives a simple example of pg's essay about wealth not being a fixed cake to share but that it can be created (http://paulgraham.com/wealth.html).
Two things that piqued my interest:
1) They kept saying that they were refreshing the project page to say when it'll hit 1M. Surely a company like Kickstarter has created visualization tools that create nice, real-time graphs of selected projects. No?
2) "After not having a single million dollar project in Kickstarter's first two-plus years, there are suddenly two within four hours of each other." Call it black swan, non-normality, heavy tail, whatever, this shows how common (and lumped) rare events are.
I would be more surprised if they did. For Kickstarter to succeed, they need the entire site doing well, not so mich individual projects, so tools to monitor individual projects are probably not the useful.
On the other hand, stats about the whole site, eg donations per time period, new projects being created, total visitors, etc, would be much more relevant. Business like Kickstarter are about the long tail, not the mega-hits, and, if I were running it, I'd want my analytics to represent that.
> 1) They kept saying that they were refreshing the project page to say when it'll hit 1M. Surely a company like Kickstarter has created visualization tools that create nice, real-time graphs of selected projects. No?
I found that odd as well. Where's the websocket goodness?
Consider the time frame of funding for every single other project. On average, it takes a month or two just to raise a few thousand dollars of funding. Even the biggest projects only raise about a million dollars in that time frame, and those are rare. A project raising thousands of dollars per minute is exceptionally rare on kickstarter, why would they build a tool who's use case is specifically targeted to such an unusual and unprecedented event?
Trade of money in return for promise of a future good/service is unquestionably income in the US, but that does not necessarily imply that sort of marginal rate. For example, if the money hits a corporate entity who hires programmers with it, the corp will use their salaries as an expense to offset that income.
Similarly, if you raise $25k to make a foobar and spend $20k on materials, you'd only owe taxes on the profit.
I think Kickstarter is the most interesting thing happening on the net today. Simply because it aggregates the most interesting things happening in the real world, by its very nature. Browsing Kickstarter has actually become a fun activity for me.
It's such a simple and genius way of directly connecting producers and consumers, reducing risk for both parties, verifying ideas, creating relationships. So elegant. The number of opportunities this is going to enable is staggering. And Kickstarter themselves, do they have any overhead? These guys are going to be printing money.
And being a patron is fun!
One thing I'm curious about is Kickstarter's exposure to someone who fails to produce the promised rewards for funding. As a funder/patron, do I have any recourse for a producer failing to uphold their end of the bargain?
I love how enthusiastic the Kickstarter team looks in those photos - it's awesome for them to be able to share in the success of the projects on their platform.
I'm looking forward to seeing how it grows and what other projects crop up now that people have seen this incredible milestone passed.
I give my respect, admiration, to the empowerment Kickstarter is enabling in the world. People say they do crap like empowerment all the time.. Kickstarter seems to say very little themselves, all I hear is the success stories.
It's a delightfully simple concept: Put a great idea out there and let it be loved and supported.
Ideas that wouldn't have seen the light of day are, fuelled by early adopters and pioneers.
Being on the web for almost 2 decades makes everything look the same, or at least kind of blur together over time.
For me, with information and innovation; since Gutenberg, the web really was the second big thing.
Maybe enablers like Kickstarter are part of the third leap for our world where they are creating change in the real world from innovation.
I've rarely seen something successful on Kickstarter I didn't want to buy. Normally I can't decide as quickly on items in the retail market that compete with it.
The continued popping up of Kickstarter stories and dreams becoming a reality have made me think about all those things I wondered about.
Could they become a reality? Where could I start learning about how to kickstart something successfully? (I Might be a search or two away but the feeling of possibility is great.)
Congratulations to all concerned. I think the Kickstarter model is really powerful, and it's exciting to see that these projects have got off the ground, but - without wanting to be party pooper - what happens if a fundraiser can't deliver?
It seems that Kickstarter have an incentive to raise as much money as possible. After all, they take their 5% - so as a company they've taken over $100,000 in the last 24 hours from two projects alone. Spending a vast amount of money without the necessary battle-scars and bruises gained from experience, is likely to involve a steep learning curve.
Bringing a product to market isn't easy. The fundraisers in question are in a unique position, because they have their buyers' attention and money from the start. This has to be a great thing, and to large extent levels the playing field and creates a great environment for innovation .. BUT, the hard work has just begun.
I can't help feeling that this model of funding is about to gain even more popularity - but could eventually open up a can of worms.
What I see as a problem is a failure by some projects to manage expectations. I think that a lot of people who are backing projects like this don't realise that they are not pre-ordering anything, they're making a contribution to the project startup costs and hopefully they'll receive one or more of that product when manufacturing begins. I've seen comments on some Kickstarter projects that have slipped on shipping deadlines that don't seem to indicate that the commenter understands the uncertainty of funding a project like this.
I don't think there's much risk backing an experienced person with a ready to be manufactured product, and I've backed several such projects on Kickstarter, but I think that backers need to remember that part of the Kickstarter proposition is that you get discounts on products like this as a reward for putting in fixed upside risk capital.
Kickstarter continues to prove that good ideas spread quickly. Where websites show viral growth in user visits, kickstart shows it with real dollars for real products. Very inspiring. Thanks for sharing this post- it lets the community get an insider view of the excitement.
This is going to put Kickstarter well and truly in the public eye and, as a result, bring many more potential wallets browsing the site. Great time to be an entrepreneurial industrial designer in the US.
Just wish it was open to those outside the US as well.
[+] [-] hop|14 years ago|reply
People use the term disruption pretty loosely, I think crowd-funding is really doing it. Goodbye middlemen, sayonara to the massive traditional barriers to entry. Hello bootstrapped projects like this that would otherwise never see the light of day.
[+] [-] tibbon|14 years ago|reply
Consider this, when a company goes to get funding, it is the company and the investors together who are postulating what consumers might want. In this model, the consumers fund what they actually want, not what some guys who got lucky once or twice (VCs) assume people want.
Add that to the fact that VCs like to fund things that are going to be like winning the lottery, whereas consumers want to fund things that seem useful to them right now. Huge difference.
[+] [-] VikingCoder|14 years ago|reply
First off - Congratulations!
I have a burning question. Have you figured out how you're going to do shipping and handling? Are you using a 3rd party to do all of the distribution, or do you have the workforce yourself to do it? Kickstarter and Amazon don't do it for you, do they?
[+] [-] forgottenpaswrd|14 years ago|reply
The middleman is there(kickstarter gets 5%) but is way more reasonable than old middleman.
[+] [-] bhc3|14 years ago|reply
(1) What is disrupted? Existing means of accessing capital (banks, individual investors, corporations).
(2) It's coming at it from the low end of the market. Small little projects getting funding, nothing that hits the bigger players' radar. But slowly, it starts to grow in terms of volume, and funding project size.
(3) It's addressing an end of the market that was really underserved by mature sources of funding.
Based on all this, I would say crowdfunding is disruptive, with Kickstarter leading the way.
[+] [-] prbuckley|14 years ago|reply
[+] [-] nathanbarry|14 years ago|reply
Other than having a great product, are there any marketing things you feel added to your success? Particularly things that could be applied to other projects.
[+] [-] test23452|14 years ago|reply
[deleted]
[+] [-] reidmain|14 years ago|reply
So many of the successful Kickstarter projects have been unknowns. Just really smart and driven people with a dream.
If established companies can bypass publishers and investors by promising to sell a product directly to the consumer then we have a whole new ballgame here.
Double Fine has successfully funded a game where the only promise is that they will release it. That's it. No percentage of revenue to the publisher. The publisher can't demand they add DRM, etc. Their only obligation is to do what they do best because they are only answering to someone who wants a great game, not a return on their investment.
This is big.
[+] [-] aw3c2|14 years ago|reply
[+] [-] mkramlich|14 years ago|reply
[+] [-] ChuckMcM|14 years ago|reply
[+] [-] sp332|14 years ago|reply
Pledge $1,000 or more 84 Backers • Limited Reward (16 of 100 remaining)
Mini portrait of YOU, painted by the game's artist, and all previous reward tiers.
[+] [-] ricardobeat|14 years ago|reply
[+] [-] InclinedPlane|14 years ago|reply
[+] [-] marquis|14 years ago|reply
[+] [-] vannevar|14 years ago|reply
[+] [-] kmfrk|14 years ago|reply
And as far as big companies are concerned, Kickstarter and Amazon take a combined 7.9% cut, which is quite significant.
I'm also not entirely sure whether companies with DRM-encumbered games will manage to attract donours in a similar fashion to Double Fine who seem to be using the Steam platform, which is widely used and loved.
Blizzard could probably pull it off with their games (MMOs not included) because of Battle.net, but it would turn into a major shitstorm, if they funded something like Call of Duty, which is a magnet to controversy and uproar. Then there would be the ensuing hell of charge-backs and refunds.
With Kickstarter, you generally invest in an idea more so than a product. What but a product do you invest in by giving Blizzard money? With Double Fine, you revive the adventure genre, have a chance of disrupting the videogame industry and bring back some of the biggest videogame developer legends and give them free reins over their product without having to go hat in hand and pander to producers. With Blizzard, it would just be business as usual.
I don't know whether Kickstarter will ever lose its indie feel, but if it does, or some project starters do, they will be subjected to a level of scrutiny orders of magnitude higher than what we are used to.
I think Kickstarter projects depend more on goodwill than most of us imagine.
[+] [-] jakelear|14 years ago|reply
[+] [-] unreal37|14 years ago|reply
Why can't Apple launch the iPad 3 on there? There's no reason they can't, except why would they give Kickstarter a cut of their profits when they've proven they can sell them directly with no middleman.
[+] [-] Impossible|14 years ago|reply
Afaik, Ron Gilbert has been trying to make a traditional adventure game for years and has been unable to get it funded until now.
[+] [-] wmeredith|14 years ago|reply
[+] [-] Jun8|14 years ago|reply
Two things that piqued my interest:
1) They kept saying that they were refreshing the project page to say when it'll hit 1M. Surely a company like Kickstarter has created visualization tools that create nice, real-time graphs of selected projects. No?
2) "After not having a single million dollar project in Kickstarter's first two-plus years, there are suddenly two within four hours of each other." Call it black swan, non-normality, heavy tail, whatever, this shows how common (and lumped) rare events are.
[+] [-] SoftwareMaven|14 years ago|reply
On the other hand, stats about the whole site, eg donations per time period, new projects being created, total visitors, etc, would be much more relevant. Business like Kickstarter are about the long tail, not the mega-hits, and, if I were running it, I'd want my analytics to represent that.
[+] [-] Aqua_Geek|14 years ago|reply
I found that odd as well. Where's the websocket goodness?
[+] [-] InclinedPlane|14 years ago|reply
[+] [-] sp332|14 years ago|reply
[+] [-] bvi|14 years ago|reply
[+] [-] patio11|14 years ago|reply
Similarly, if you raise $25k to make a foobar and spend $20k on materials, you'd only owe taxes on the profit.
I am not an accountant, etc.
[+] [-] newobj|14 years ago|reply
It's such a simple and genius way of directly connecting producers and consumers, reducing risk for both parties, verifying ideas, creating relationships. So elegant. The number of opportunities this is going to enable is staggering. And Kickstarter themselves, do they have any overhead? These guys are going to be printing money.
And being a patron is fun!
One thing I'm curious about is Kickstarter's exposure to someone who fails to produce the promised rewards for funding. As a funder/patron, do I have any recourse for a producer failing to uphold their end of the bargain?
[+] [-] jomohke|14 years ago|reply
[+] [-] sawyer|14 years ago|reply
I'm looking forward to seeing how it grows and what other projects crop up now that people have seen this incredible milestone passed.
[+] [-] j45|14 years ago|reply
I give my respect, admiration, to the empowerment Kickstarter is enabling in the world. People say they do crap like empowerment all the time.. Kickstarter seems to say very little themselves, all I hear is the success stories.
It's a delightfully simple concept: Put a great idea out there and let it be loved and supported.
Ideas that wouldn't have seen the light of day are, fuelled by early adopters and pioneers.
Being on the web for almost 2 decades makes everything look the same, or at least kind of blur together over time.
For me, with information and innovation; since Gutenberg, the web really was the second big thing.
Maybe enablers like Kickstarter are part of the third leap for our world where they are creating change in the real world from innovation.
I've rarely seen something successful on Kickstarter I didn't want to buy. Normally I can't decide as quickly on items in the retail market that compete with it.
The continued popping up of Kickstarter stories and dreams becoming a reality have made me think about all those things I wondered about.
Could they become a reality? Where could I start learning about how to kickstart something successfully? (I Might be a search or two away but the feeling of possibility is great.)
[+] [-] kilian|14 years ago|reply
[+] [-] lwhi|14 years ago|reply
It seems that Kickstarter have an incentive to raise as much money as possible. After all, they take their 5% - so as a company they've taken over $100,000 in the last 24 hours from two projects alone. Spending a vast amount of money without the necessary battle-scars and bruises gained from experience, is likely to involve a steep learning curve.
Bringing a product to market isn't easy. The fundraisers in question are in a unique position, because they have their buyers' attention and money from the start. This has to be a great thing, and to large extent levels the playing field and creates a great environment for innovation .. BUT, the hard work has just begun.
I can't help feeling that this model of funding is about to gain even more popularity - but could eventually open up a can of worms.
[+] [-] Mvandenbergh|14 years ago|reply
I don't think there's much risk backing an experienced person with a ready to be manufactured product, and I've backed several such projects on Kickstarter, but I think that backers need to remember that part of the Kickstarter proposition is that you get discounts on products like this as a reward for putting in fixed upside risk capital.
[+] [-] powertower|14 years ago|reply
Then Stripe.
Then CloudFlare (I really like their story and pivot).
[+] [-] troygoode|14 years ago|reply
[+] [-] AdamFernandez|14 years ago|reply
[+] [-] forgottenpaswrd|14 years ago|reply
[+] [-] akazackfriedman|14 years ago|reply
[+] [-] Blocks8|14 years ago|reply
[+] [-] prawn|14 years ago|reply
Just wish it was open to those outside the US as well.
[+] [-] unknown|14 years ago|reply
[deleted]
[+] [-] nreece|14 years ago|reply
Grow organically.
[+] [-] wildster|14 years ago|reply
[+] [-] Mvandenbergh|14 years ago|reply
[+] [-] 1sttimefounder|14 years ago|reply
[+] [-] aidenn0|14 years ago|reply
[+] [-] test23452|14 years ago|reply
[deleted]