> Kickstarter's COO, Sean Leow, did an interview with The Beat to discuss the announcement. He seemed to be a little bit confused on the whole concept throughout, and seemed to believe that "open source" is some sort of competing idea to blockchains. At one point he stated, "We believe that that data can be structured in a way through a blockchain where it ... can move in a much more efficient and effective way between services ... in a way that open source doesn't allow". Later in the interview he spoke about governance, saying, "our understanding is that [governance] is done more effectively with blockchain then with open-source."
so people are validating their own feelings on blockchain based on an incoherent ignorant executive trying to shoehorn blockchain into something to stay relevant? fascinating
addendum: its funny that the investors were trying to use this ignorance to shove Celo EVM down their throat, but even funnier that there are waaay more EVMs now, with another one launching every week
Ah Kickstarter. I see why they tried the blockchain thing, but it probably wasn't the best decision for that particular company given their audience's utter disdain for crypto and web 3 in general.
As for this:
> The biggest problem for Kickstarter, though, may be that time has simply passed it by. “I feel like they just were left in the dust culturally"
I'm not sure that's really the whole story. The story (at least from what I can tell) is just that crowdfunding has developed a terrible reputation due to all the scams and failed promises from big name projects there, so people don't really take it seriously anymore. The rise in popularity for things like Patreon isn't a replacement for that, it's a move to a setup where creators are expected to show their work on a regular basis and provide an actual return on investment on a shorter timeframe than 'whenever it's ready'.
"The story (at least from what I can tell) is just that crowdfunding has developed a terrible reputation due to all the scams and failed promises from big name projects there, so people don't really take it seriously anymore."
I have some visibility into this space through the lens of "high-end" boardgaming (big boxes, frequently lots of minis, very high production value, and usually high time commitment to learn and play).
Crowdfunding's first use case was speculative investment in projects that might not ever succeed. I think this space has a big inherent trust deficit and Kickstarter can never solve it because Kickstarter will always have strong local incentives to not kick sketchy founders off of the platform, but Kickstarter is absorbing some of the loss of trust there because it's their platform.
There is another use case for crowdfunding - coordinating preorders of products that need enough orders to be worth a production run, but that are otherwise low-risk. This model works pretty well but Kickstarter also has competition from Backerkit in the space. I think Backerkit is also more focused on the safer use case of preorder coordination and less on the "speculative product" case.
Kickstarter did have a ton of scams, but my favorite "rise from the ashes" story was the ZPM Espresso machine. ZPM promised a revolutionary espresso machine that used a precisely controlled thermoblock (instead of a boiler) to control temperatures accurately.
I don't think ZPM was an intentional scam, but the founders got in way over their heads, and when the popularity of the product exploded, they then had to figure out all these volume manufacturing problems as opposed to just building some prototypes for a small number of backers (there is a cautionary tale about startups taking too much VC money in here somewhere...) Anyway, ZPM crashed and burned, and as far as I know none of the backers got their money back. Again, I don't think it was really a scam, all that money was just spent on things for the project. I don't think anyone got their machine, but maybe a few folks did, not sure.
Anyway, another company, Decent Espresso, came along and bought out ZPM's patents (note, backers still received nothing afaik), but now the Decent machine is an absolute marvel, with temperature and pressure profiling capabilities that are nuts. The machine is also not cheap (the original promise of ZPM), but it's still cool that in the world of so much BS where scammers produce nothing of value (cough Theranos cough), that at least in this case something really cool came of it.
I'm not sure they actually _had_ a critical problem, or at least didn't before the blockchain thing; it's just that it was a pretty limited market. AIUI they _were_ profitable, but they were never going to be a multi-billion dollar company. The blockchain thing did damage their reputation quite badly, while simultaneously showing that they weren't essential (big important creators were able to use something else.)
(It's _really_ weird that they gave up on attempting to compete with Patreon in a likely larger market, tho.)
Pure anecdata but I've backed ~180 projects on KS and I've only had <6 that have completely failed to deliver or have had huge issues with the delivered products. There's a lot of long delayed ones on that list but only a few that have truly felt like I didn't eventually get what I paid for or reasonably close to it.
If you're a bit choosier about the things you back you can get pretty good results from the site.
Although, even Patreon has this issue, since there is no hard requirement to be showing your work regularly; just more of an expectation due to the design of the system.
Part of this seems to be due to the reality of creative work: you need to be willing to fund failures as much as successes, or you'll end up getting more-of-the-same rather than something new. E.g. existing creators with well-established patron bases can feel pressured to make more-of-the-same, rather than experimenting, leading to their burnout.
The other part of it seems to honestly be gullibility (on the part of backers) and lack of focus on realistic, achievable goals ("go small, then incrementally bigger") from those seeking funding. The normalization/glorification of advertising culture (e.g. "fake it till you make it") is a non-trivial contributor to this issue, ultimately making it difficult to distinguish between grifters and people who drank the kool-aid.
While I'm sure some percentage of Kickstarters were outright scams, in general it is always a bad idea to push "investments" on people who cannot grasp the fact that 90%+ of them will fail despite the best efforts of the founders. That's just how any new venture works.
Frankly, this is nonsense. Total funds going to projects has gone up over time. I support artists on Kickstarter frequently. What has likely happened is that Kickstarter's investors realized that it wasn't going to make them as much money as they'd like, nothing more.
I think this is what a lot of people don't get about taking funding from a VC:
> The grand but improbable plan called for shifting its entire platform onto a blockchain called Celo, another a16z portfolio company
(emphasis added)
I was at an advertising startup which got a massive investment from SoftBank. One of the people involved in signing the deal told me that the main benefit wasn't the $$$; it was that the other companies which were funded by SoftBank would be encouraged to use our services. And, of course, we in return would use our stablemates' services where we could.
Yes, money is nice. But becoming part of a mutually-reinforcing collective is the real prize.
In this case, it was obviously an attempt to stimulate a market into existence. We should all be grateful it failed!
It's a terrible idea (for the companies) that sounds clever.
It's one thing to offer your product to "friend" companies for dogfood feedback. But pressuring stablemates to use the product creates a fake product market for that distracts from building good product, and invites the investor to sacrifice your company to help a different one. But you don't have stock in that other company, do you? If you want the companies to share fate, merge companies.
The purpose of a blockchain is digital scarcity. If the application doesn't need digital scarcity, it doesn't need a blockchain.
So yes, if you exclude the use case for a blockchain, there aren't a lot of blockchain use cases left. But what have you actually accomplished by structuring the question this way?
> "Did any company _ever_ launch anything borderline successful with The Almighty Blockchain(TM) that wasn't just some sort of token?"
No. But that only makes the goal more alluring:
"We could be the first company to make this work and unlock the untold riches of Blockchain as foretold by prophecy and the iron will of cryptographic destiny!"
Enough venture capitalists seem to have the faith too, to keep the money flowing despite lack of traction.
Blockchain is really the Philosopher's Stone for people who believe software is some kind of alchemy.
The answer to your question is yes, but you didn’t notice because there was no token, the answer to your next question is no, it probably doesn’t match your definition of success and it doesn’t matter that you weren’t the market for it
as the point is that tokens are very effective advertising engines
Years ago I backed two computer games. They both took about 5 years to be made and by the time they were ready I have already forgotten buying them. (They were good tho) Never felt the need to do that again.
Its a niche idea, unsuitable for VC money. On the other hand, non financial goals for companies almost always end badly. When you have more than one goal there is always an excuse for management to do what ever they want.
Want to do something for profits? we need this for the company survival. Want to do something financially irresponsible? Its aligned to our values. Unrelated to the core business? Social responsibility. Leave creative outlets to creative syndicates, leave charity work to non profits and leave money making to for profit companies... don't be another one of those that break the mold only to discover that people that came before you where not as dumb as you thought. Basically don't be Crypto.
> They both took about 5 years to be made and by the time they were ready I have already forgotten buying them. (They were good tho) Never felt the need to do that again.
What's wrong with that? I've backed more than two games. Some were good, some were bad, some failed completely. But I knew that from the beginning. And I just prepaid for the games at a discount, I didn't buy $5000 packages or anything like that.
I might do that again, but every game I picked was mentioned in the gaming press, so was promising enough to get their attention. I haven't seen that lately. No mention of kickstarter, indiegogo, gofundme or whatever else is out there.
Is it because game makers don't crowdfund any more, or because the press only covers AAAs now?
The article oozes an obsession with growth. Even before the blockchain incident. Which ruins any Kickstarter credibility btw.
Wouldn't Kickstarter have been fine if they just didn't take outside investment and just stayed a small entity bringing financing to some small projects and making some extra money in the process?
Why compete with Patreon? Personally I would and have thrown a one time few $ to computer game projects I was interested in on most crowdfunding platforms. But I'll never pay for a subscription.
If I needed to launder money, I would think running crypto through a Kickstater project would be a good way to do it. At least below a certain threshold where you don't create significant scrutiny.
Kickstarter was and will always be beholden to their credit card processors and a painful lesson in picking one’s payment provider carefully. It’s your payment processors fraud risk department which dictates which products and services you offer not your own team. This decision is a 100% dictated by pigeonholing themselves here and losing out to gofundme.
After Philips caused a stink about LifX[1], it was the threat of losing their payment partners that caused Kickstarter to ban all sales of hardware [2]. They would later walk back that decision but not before we launched our own open source competitor that went on to do $100m, including Bitcoin support in 2012 [3].
Which is to say decentralized payment systems solve a lot of problems for crowdfunding platforms. Specifically Kickstarter missed out on the explosive growth that GoFundMe captured because Kickstarters payment processor said “no” and GoFundMe’s said “yes”.
But switching to Celo or some other platform in 2021+ feels too little too late for a platform whose culture has ossified.
You’re making a lot of assumptions about what was happening behind the scenes with a payment processor agreement you weren’t privy to. Kickstarter was always and devoutly uninterested in medical fundraising, so missing out on GoFundMe’s growth was a feature, not a bug.
ceejayoz|2 years ago
Back in 2022:
> Kickstarter's COO, Sean Leow, did an interview with The Beat to discuss the announcement. He seemed to be a little bit confused on the whole concept throughout, and seemed to believe that "open source" is some sort of competing idea to blockchains. At one point he stated, "We believe that that data can be structured in a way through a blockchain where it ... can move in a much more efficient and effective way between services ... in a way that open source doesn't allow". Later in the interview he spoke about governance, saying, "our understanding is that [governance] is done more effectively with blockchain then with open-source."
yieldcrv|2 years ago
so people are validating their own feelings on blockchain based on an incoherent ignorant executive trying to shoehorn blockchain into something to stay relevant? fascinating
addendum: its funny that the investors were trying to use this ignorance to shove Celo EVM down their throat, but even funnier that there are waaay more EVMs now, with another one launching every week
CM30|2 years ago
As for this:
> The biggest problem for Kickstarter, though, may be that time has simply passed it by. “I feel like they just were left in the dust culturally"
I'm not sure that's really the whole story. The story (at least from what I can tell) is just that crowdfunding has developed a terrible reputation due to all the scams and failed promises from big name projects there, so people don't really take it seriously anymore. The rise in popularity for things like Patreon isn't a replacement for that, it's a move to a setup where creators are expected to show their work on a regular basis and provide an actual return on investment on a shorter timeframe than 'whenever it's ready'.
gafferongames|2 years ago
Sounds like a great fit for crypto!
jprete|2 years ago
I have some visibility into this space through the lens of "high-end" boardgaming (big boxes, frequently lots of minis, very high production value, and usually high time commitment to learn and play).
Crowdfunding's first use case was speculative investment in projects that might not ever succeed. I think this space has a big inherent trust deficit and Kickstarter can never solve it because Kickstarter will always have strong local incentives to not kick sketchy founders off of the platform, but Kickstarter is absorbing some of the loss of trust there because it's their platform.
There is another use case for crowdfunding - coordinating preorders of products that need enough orders to be worth a production run, but that are otherwise low-risk. This model works pretty well but Kickstarter also has competition from Backerkit in the space. I think Backerkit is also more focused on the safer use case of preorder coordination and less on the "speculative product" case.
hn_throwaway_99|2 years ago
I don't think ZPM was an intentional scam, but the founders got in way over their heads, and when the popularity of the product exploded, they then had to figure out all these volume manufacturing problems as opposed to just building some prototypes for a small number of backers (there is a cautionary tale about startups taking too much VC money in here somewhere...) Anyway, ZPM crashed and burned, and as far as I know none of the backers got their money back. Again, I don't think it was really a scam, all that money was just spent on things for the project. I don't think anyone got their machine, but maybe a few folks did, not sure.
Anyway, another company, Decent Espresso, came along and bought out ZPM's patents (note, backers still received nothing afaik), but now the Decent machine is an absolute marvel, with temperature and pressure profiling capabilities that are nuts. The machine is also not cheap (the original promise of ZPM), but it's still cool that in the world of so much BS where scammers produce nothing of value (cough Theranos cough), that at least in this case something really cool came of it.
rsynnott|2 years ago
(It's _really_ weird that they gave up on attempting to compete with Patreon in a likely larger market, tho.)
bcrosby95|2 years ago
But for the past 6 months or so, they've been slowly moving to backerkit. Including a $4mil funding of one of them: https://www.backerkit.com/c/projects/mcdm-productions/mcdm-r...
rtkwe|2 years ago
If you're a bit choosier about the things you back you can get pretty good results from the site.
bmer|2 years ago
Part of this seems to be due to the reality of creative work: you need to be willing to fund failures as much as successes, or you'll end up getting more-of-the-same rather than something new. E.g. existing creators with well-established patron bases can feel pressured to make more-of-the-same, rather than experimenting, leading to their burnout.
The other part of it seems to honestly be gullibility (on the part of backers) and lack of focus on realistic, achievable goals ("go small, then incrementally bigger") from those seeking funding. The normalization/glorification of advertising culture (e.g. "fake it till you make it") is a non-trivial contributor to this issue, ultimately making it difficult to distinguish between grifters and people who drank the kool-aid.
paxys|2 years ago
manicennui|2 years ago
edent|2 years ago
> The grand but improbable plan called for shifting its entire platform onto a blockchain called Celo, another a16z portfolio company
(emphasis added)
I was at an advertising startup which got a massive investment from SoftBank. One of the people involved in signing the deal told me that the main benefit wasn't the $$$; it was that the other companies which were funded by SoftBank would be encouraged to use our services. And, of course, we in return would use our stablemates' services where we could.
Yes, money is nice. But becoming part of a mutually-reinforcing collective is the real prize.
In this case, it was obviously an attempt to stimulate a market into existence. We should all be grateful it failed!
lupire|2 years ago
It's one thing to offer your product to "friend" companies for dogfood feedback. But pressuring stablemates to use the product creates a fake product market for that distracts from building good product, and invites the investor to sacrifice your company to help a different one. But you don't have stock in that other company, do you? If you want the companies to share fate, merge companies.
rsynnott|2 years ago
As is tradition.
(Did any company _ever_ launch anything borderline successful with The Almighty Blockchain(TM) that wasn't just some sort of token?)
kiicia|2 years ago
wlll|2 years ago
samatman|2 years ago
So yes, if you exclude the use case for a blockchain, there aren't a lot of blockchain use cases left. But what have you actually accomplished by structuring the question this way?
nicholasbraker|1 year ago
pavlov|2 years ago
No. But that only makes the goal more alluring:
"We could be the first company to make this work and unlock the untold riches of Blockchain as foretold by prophecy and the iron will of cryptographic destiny!"
Enough venture capitalists seem to have the faith too, to keep the money flowing despite lack of traction.
Blockchain is really the Philosopher's Stone for people who believe software is some kind of alchemy.
yieldcrv|2 years ago
as the point is that tokens are very effective advertising engines
HideousKojima|2 years ago
hanniabu|2 years ago
drdrek|2 years ago
Its a niche idea, unsuitable for VC money. On the other hand, non financial goals for companies almost always end badly. When you have more than one goal there is always an excuse for management to do what ever they want.
Want to do something for profits? we need this for the company survival. Want to do something financially irresponsible? Its aligned to our values. Unrelated to the core business? Social responsibility. Leave creative outlets to creative syndicates, leave charity work to non profits and leave money making to for profit companies... don't be another one of those that break the mold only to discover that people that came before you where not as dumb as you thought. Basically don't be Crypto.
nottorp|2 years ago
What's wrong with that? I've backed more than two games. Some were good, some were bad, some failed completely. But I knew that from the beginning. And I just prepaid for the games at a discount, I didn't buy $5000 packages or anything like that.
I might do that again, but every game I picked was mentioned in the gaming press, so was promising enough to get their attention. I haven't seen that lately. No mention of kickstarter, indiegogo, gofundme or whatever else is out there.
Is it because game makers don't crowdfund any more, or because the press only covers AAAs now?
unknown|2 years ago
[deleted]
nottorp|2 years ago
Wouldn't Kickstarter have been fine if they just didn't take outside investment and just stayed a small entity bringing financing to some small projects and making some extra money in the process?
Why compete with Patreon? Personally I would and have thrown a one time few $ to computer game projects I was interested in on most crowdfunding platforms. But I'll never pay for a subscription.
bmm6o|2 years ago
nazca|2 years ago
paulgerhardt|2 years ago
After Philips caused a stink about LifX[1], it was the threat of losing their payment partners that caused Kickstarter to ban all sales of hardware [2]. They would later walk back that decision but not before we launched our own open source competitor that went on to do $100m, including Bitcoin support in 2012 [3].
Which is to say decentralized payment systems solve a lot of problems for crowdfunding platforms. Specifically Kickstarter missed out on the explosive growth that GoFundMe captured because Kickstarters payment processor said “no” and GoFundMe’s said “yes”.
But switching to Celo or some other platform in 2021+ feels too little too late for a platform whose culture has ossified.
[1] https://www.npr.org/sections/alltechconsidered/2012/09/03/16...
[2] https://techcrunch.com/2012/10/07/the-story-of-lockitron-cro...
[3] https://github.com/apigy/selfstarter/pull/22
lelanthran|1 year ago
What does that mean? $100m revenue in a financial year? $100m since inception?
TBH, at those numbers you are self-sufficient and there are no upsides to taking VC money, only downsides.
mecredis|1 year ago
helsinkiandrew|2 years ago
The video is worth watching if you've seen it/the TV adaptation: https://www.kickstarter.com/projects/drywrite/fleabag
eterm|2 years ago
Mistletoe|2 years ago
rsynnott|2 years ago