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posted by cmn32480 on Monday January 23 2017, @12:06PM   Printer-friendly
from the flush-that-cash-instead dept.

Gareth Everard has an interesting article on TechCrunch discussing what he believes crowdfunding will look like in the near future.

The golden age of irrational exuberance on Kickstarter has ended — Pebble is shutting down, marking the fall of crowdfunding's white knight after a string of other high-profile closures and failures.

Originally positioned as a medium for (especially arts-related) projects to garner modest seed funding from a diverse group of supporters, crowdfunding platforms like Kickstarter and Indiegogo have obviously evolved since their respective launches in 2009 and 2008. Yes, crowdfunding has produced some inspiring success stories that have grown into innovative businesses, like Peak Design and Flow Hive.

However, it also has facilitated the transfer of significant sums of money to teams that ultimately proved themselves to be incompetent, leaving backers with nothing. Recent headlines have been chock full of projects that have declared bankruptcy or otherwise betrayed their early backers, exposing cases where founders' and companies' egos have simply overtaken their ability to reason, plan and communicate logically or truthfully.

Have the high profile failures doomed crowdfunding?


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  • (Score: 2) by vux984 on Monday January 23 2017, @05:46PM

    by vux984 (5045) on Monday January 23 2017, @05:46PM (#457710)

    That's the thing though...there really are two separate kickstarters. There's the kickstarter where its basically a gamble and the project may or may not pan out for any number of reasons. And there is the kickstarter where it's really just a re-invention / evolution of the patronage model.

    I predicted the latter would become a thing 15+ years ago. Where authors, musicians, and other 'creators' would simply offer to create a new work and demand X$ up front to create it. That eliminates all the risk of poor sales, eliminates the risk of massive copyright infringemnt (reflected as poor sales), eliminates the risk of misjudging the market and producing something that nobody wants (reflected as poor sales), as well as gives you the capital you need while producing it ... to eat or get a print run done or whatever. The upshot is the author at least gets paid enough up front to ensure its worth their while to make it; so they're covered. Its a business model that just works.

    Of course, it only works well for 'experienced' / 'established' authors... but that's ok. One has to put in some time in the industry, release some freebies to build a fan base, tour if they are a musician, again: whatever. And then they can start "kickstarting" new works. The kickstarter implementation with the pledge system to raise money until its funded with no money raised if it doesn't fund, the stretch goals, and the backer rewards all really dovetails in and works beautifully with the model.

    Board game / tabletop game makers, RPG supplements, new music albums, novels, game mods / level packs / DLC -- in a lot of cases the main resource you are funding is the creators living expenses, throughout the time plus some fixed overhead. (e.g. for a print run).

    Bear in mind of course that it is still a kick starter, that you are taking a risk, and the odd product in this category still may never materialize.. but in general treating these kick starter campaigns in this class as essentially a pre-order is entirely reasonable.

    That does make the line a bit more blurry when you start looking at funding more risky projects, where they are explicitly planning to solve problems that haven't been fully solved yet as part of the project. Or where taking even a working prototype to scale production is full of unknowable unknowns that even if you have experience in taking prototypes to production you can only guess at what it will really ultimately require. Or larger software projects which likewise are always bigger than they appear, where specifications are never fully known. Those are inherently much riskier and may burn out of cash before they complete. Even under good management. (And project mis-management is itself a risk with these larger projects... which could have succeeded if they'd been managed better.)

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  • (Score: 2) by frojack on Monday January 23 2017, @08:03PM

    by frojack (1554) on Monday January 23 2017, @08:03PM (#457769) Journal

    I predicted the latter would become a thing 15+ years ago.

    And I think your bold prediction was wrong then, and hasn't improved with age.

    Most kickstarters indiegogo and the like are focused on delivering products.
    GoFundMe seems mostly about bailing out friends or people you feel sorry for.

    True there are few games and movie ventures that have done well, but they are by no means the majority of projects or the most well funded. These are news JUST because they are so rare and exceptional.

    Patronage isn't going anywhere in spite of the hype, in spite of the legal mandate in many states that art be a line item in any public building contracts, or in spite of public funding for arts of other types.

    None of these approach the blissful state of the Renascence of Patronage that most nerds suggest as a means of bitch slapping the corporate world, and killing big off Big Music or Big Movies. Nobody's getting rich on the Casino Concert Circuit either.

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    • (Score: 2) by vux984 on Monday January 23 2017, @11:13PM

      by vux984 (5045) on Monday January 23 2017, @11:13PM (#457851)

      Most kickstarters indiegogo and the like are focused on delivering products.

      What does that mean? Aren't most books, albums, game DLC, movies, etc etc "products"? I looked at KS just now... under 'publishing' there was 468 'live' products in the 'sell projects' section. Under the technology category there were 508. And I'd say most of the KS categories fall under "I want you to pay me to do some

      GoFundMe seems mostly about bailing out friends or people you feel sorry for.

      Its kind of sad that even exists. And it rewards getting a sob story trending on social media which is really sad. But then isn't that the modern equivalent of getting your sob story into the mainstream press where suddenly the antagonist corporation / govt bureaucracy "has a 2nd look at the situation and sees the obvious solution". Meanwhile everyone else with a shit situation but no media exposure continues to suffer. Some things never change.

      None of these approach the blissful state of the Renascence of Patronage that most nerds suggest as a means of bitch slapping the corporate world, and killing big off Big Music or Big Movies.

      Frankly I agree. If anything the corporations will embrace it. Its just a matter of time before marvel-disney-etc figures out how to crowdfund the next superhero-movie. Get the super-fans to fund it with their own money, and better still get them for far more $$ than a lousy ticket sale. Give them left overs from the buffet and a few selfies the director took with the cast as backer rewards at the $500 tier, and at the 5,000 tier fly them in after the wrap party and eat at the set after the cast has gone home... for 10,000 let them eat in a fenced off area within sight of the cast, and let the money roll in. TripleAAA gaming already has pre-orders down to an art form, and even have the collectors and founders editions and the "my money is too heavy please take some" edition. The movie industry hasn't quite latched onto it yet, but they surely will.

    • (Score: 2) by FakeBeldin on Tuesday January 24 2017, @11:34AM

      by FakeBeldin (3360) on Tuesday January 24 2017, @11:34AM (#458056) Journal

      There's always patreon.com. That seems to be filling the niche of patronage rather well.