Has Kickstarter Peaked? 156
Nerval's Lobster writes "Kickstarter has taken off in the past year, raising big money for a wide variety of projects. Look at some of their stats: in June 2012, only seven projects raised more than a million dollars apiece; in the past nine months, another 16 projects have passed that threshold. Since the site began operations in 2009, several of the 38,000 funded projects have broken out as superstars, including the Pebble Watch and a new gaming console. With all this competition, has crowdfunding gotten, well, too crowded? Is Kickstarter peaking? As the dollar amounts have grown, so has the potential for abuse. Hidden amidst all these success stories and multi-million dollar payouts are some sadder tales. The majority of the nearly 50,000 unfunded Kickstarter projects received less than 20 precent of their funding goals, with 11 percent never even getting a single pledge."
Yet another one..... (Score:5, Insightful)
Does it matter? (Score:5, Insightful)
Kickstarter itself cannot reasonably be used as source for projects to be funded. If there is a project you are potentially interested in, you have to get it from some other source. But that is fine, first and foremost, Kickstarter organizes the "business" side, having "advertising" separately is not an issue. And of course there will be a lot of projects nobody is interested in or that have unrealistic goals or are otherwise "fishy". Again, so what?
Nothing really changed (Score:5, Insightful)
Kickstarter didn't really change anything. The success stories have been on the back of great marketing campaigns done by experienced marketeers. Hence, Elite and Ouya were able to make money, without really offering very much that couldn't have been done anyway (Braben couldn't get publisher money for Elite? Of course he could - but the Kickstarter money has fewer strings attached, and no penalty if he screws it up). Often, Kickstarters will already have funding and just need a bit more to launch - it's a pre-order system, and really does nothing to help start new ventures. And as with everything else, you need to get your head above the crowd. Not everyone can do that - by definition - so there's bound to be a majority of failures and a few stars. But the market already worked like that, so nothing has changed. Fundamentally you still need a business with a product that people want to buy, and you have to reach those people with marketing. Kickstarter doesn't help with any of that - why would it?
Saying it's "peaked" is missing the point. It assumes that Kickstarter was meant to be something it never could have been anyway. Once you ignore the hyperbole of what Kickstarter thinks it is, and look at what it actually is, there's no case to answer. It's a website serving a purpose, and that purpose hasn't gone away, but nor is it greater than what it really is
Lack of Publicity (Score:5, Insightful)
Pointing the finger at under-achieving projects as evidence of some kind of peak is silly - under-publicity is more likely to be the cause there, especially for projects that get nothing at all. I seem to recall iTunes have a similar problem for a lot of it's artists, I can't find a link for it but a huge % of tracks on iTunes were reported at one time as having 0 purchases. IIRC it was something like a third. Looks like people are prematurely worrying this is a bubble, which is understandable considering the economic damage we've suffered over the past 15-20 years thanks to bubbles.
Betteridge's law of headlines (Score:5, Insightful)
No.
Seriously though, probably not. It's experiencing a dip after it's initial surge of interest. It's not a roller coaster, or a rocket, it's a company. It will have ups and downs. Demand will fluctuate over time. It can experience market saturation (those of us who have now kickstarter-ed so many projects that we need to wait for some to finish before we pay for more).
Also; what's this nonsense about 50,000 projects and not getting near their total, as if that's a bad thing. It's not a magic money tree; most of those projects probably didn't interest people, so they failed at the first hurdle. That's not a tale of woe, that's someone being saved from spending months/years of their life developing a product that wasn't going to sell.
Sounds about right (Score:5, Insightful)
Isn't that the point of crowdfunding? (Score:5, Insightful)
If "the crowd" don't like your project then it's not going to be successfully funded. The site isn't an automatic "setup project receive money". The harsh reality is that most ideas don't receive funding, this is true whether the source of funds is a crowd of people or one very rich person.
a) your idea isn't very good
b) your idea isn't very well presented
c) nobody sees your idea
Blaming any of the above on the platform you use to get funded is silly.
Re:Nothing really changed (Score:5, Insightful)
The claim that nothing has happened with kickstarter that wouldn't have happened otherwise is nice and untestable, as we can't run history backwards and try what would have happened without it. It's still silly and obviously false.
What Kickstarter provides is a mechanism for overcoming a collective action problem. You might be willing to pay $15 to make a Veronica Mars movie, but you're not going to pay $15 for a Veronica Mars movie that's made on a $15 budget. Kickstarter lets you conditionally commit to something, the condition being that the product can be realized to an acceptable quality (as measured in budget. Not the perfect measure, but it's the one you've got). This is a service which has been able to large scale investors before, but not to end users/consumers/what you want to call us.
Project starters on the other side, get a low-risk way to gauge interest in the product. A conditional preordering scheme is not the same, because they can't reserve the purchase amount. Companies that have conditional preordering schemes have had big issues with people committing to buy, then changing their mind when the product actually got produced. (The board game company GMT has had this problem. It has led to some flamewar/meltdowns on BGG.)
This is a real, tangible difference which can be predicted to make a difference in market outcomes.
This is also why the "flexible funding" schemes of sites like IndieGoGo is such a scam. They really do offer nothing new. It's just fundraising on a website. Crowdfunding without the threshold pledge mechanism is not deserving of the name.
Re:Nothing really changed (Score:2, Insightful)
I've contributed to a couple of kickstarted games (Elite, Star Citizen, Torment), and the main point for the authors seems to be precisely the lack of a publisher (i.e. EA), with the implied greater freedom to make the games as they want and not as the publisher believes they should be (thus avoiding things like the recent SimCity ridicule).
Also, it's seen as a good way to gauge your potential audience in advance. A good kickstarter campaign probablymeans good sales when your product comes out.
Re:Isn't that the point of crowdfunding? (Score:4, Insightful)
The primary problem Kickstarter is having right now is that they let just about anything in, so it's flooded with crap. They don't even adhere to their own rules (like, no "fund my life" projects and no charities -- but just recently there was one to fund someone sending their kid to camp for a week). The other is a lack of vetting. When your entire business plan is "get a cut of funding given to successful projects", you need to make sure people feel safe and some degree of trust in backing things via your site. If you let in a flood of scams (and there have been a number) or things that are clearly poorly thought out from the get-go, you are damaging the entire crowd-funding concept. It may cost more money, time, and other resources -- but they need to start vetting people and projects. That you are who you say you are. That your project even makes sense, etc.
The recent four or five "build the death star" and "defend the galaxy from the death star by helping fund the rebel forces X-Wing project" joke shit doesn't help, either.
Re:Nothing really changed (Score:5, Insightful)
Braben couldn't get publisher money for Elite? Of course he could - but the Kickstarter money has fewer strings attached
Braben is an artist. This gets him artistic freedom, which is exactly what game development has been lacking over the past decade. Same with Brian Fargo. You think he hasn't tried to get a turn based RPG made this century? I'm sure he has, but hasn't been able to for business reasons. Kickstarter made that possible.
Re:Does it matter? (Score:5, Insightful)
"Kickstarter itself cannot reasonably be used as source for projects to be funded."
except it has been, continually, and successfully. We're talking multi-million dollar projects now.
He means "as a source to learn about projects to be funded", not "as a method of aggregating funding." Hence his mention of "advertising." He is right: it's almost impossible, browsing their catalog, to find which are good projects and which aren't, given how many projects there often are (you can do it, but it's quite a lot of work). The only real filter is by already popular projects, which means that project has already gotten attention from external sources. Every project I've funded on there I've found out about through a different site.