|Cool Infographic (click to view)|
According to the Kickstarter Blog they have finally pulled their collective heads out and decided to make some changes for the better. I don't think that Kickstarter is completely to blame for the direction their site has gone, well they were until they decided to make these changes.
I just think the execution of this crowd-sourcing venture capital site simply didn't meet up with the initial vision the Kickstarter folks had. Most of the problems I saw were folks manipulating the system. Now to be fair, some Kickstarters, like the Reaper one I invested in, started off in one direction and blew up. Once the serious money started coming in reaper made changes that let them take the whole campaign from a capital investment venture to a pre-sales pitch. I also think that when the serious cash came in they saw an opportunity not only for pre-sales, but an opportunity to make a different type of capital investment that they could only dream about before.
BONES line. In their initial pitch they were up-front about just wanting the money to buy these new molds faster than they could through organic growth, but they could fund it organically over time. Since the BONES line was a significant portion of their new sales, they new the fans wanted these figures faster than they could otherwise push them out. When the Kickstarter campaign went over $1M and ended up at $3,429,236, 100x more than they originally asked for, the folks at Reaper realized that not only could they get many more molds made, but they should be able to bring the entire production line to their US facility.
Assuming this happens, that would mean this one Kickstarter campaign went from venture capital to pre-sales and possibly on to a blend of both. I just know why I contributed so much.....it wasn't to help Reaper out, but to get me a ton of product.
The irony isn't completely lost on me......
The changes that Kickstarter is implementing is to change the site back from largely a pre-sales operation back to a venture capital system:
- Creators must talk about “Risks and Challenges”
- New Hardware and Product Design Project Guidelines
- Product simulations are prohibited.
- Product renderings are prohibited.
- Offering multiple quantities of a reward is prohibited.
This is huge. Contributors tend to forget they are investing their money.....really donating it to a cause with a hope of some specific return. Just because you gave away your money it doesn't mean that you will get your product. If you look around it will be easy enough to find Kickstarter backers that haven't seen one single promised reward. People putting together projects need to be realistic about the problems they have to overcome. Some projects have actually failed, or at least are terribly stalled, because they were too successful. If you were only planning on making 100 widgets and having 100 rewards and all of a sudden you need to produce 10,000 widgets and give 10,000 rewards, the support systems and/or your ability to produce might not be able to meet up with demand. Showing folks some virtual representation of what you'd like to produce doesn't mean that is something you can produce.
What these changes require a manufacturer to do is show what they can make, not what they'd like to make. No more selling virtual promises and assuming you can deliver.