Why I’m not backing you on Kickstarter

http://www.danshapiro.com/blog/2012/11/this-is-why-im-not-backing-you-on-kickstarter/

by jheitzeb • 14 years ago

136 65 14 years ago

polskibus2• 14 years ago

Lots of trolling and ranting. I mean seriously, kickstarter is an incubator. If you don't like it, don't participate. No need to whine about it loud. Instead of being really constructive in his critique, the author provides shallow critique.

daniel-cussen• 14 years ago

No. It was certainly constructive, just not without humor. For instance, he goes into detail on risks and challenges, saying that From Holden uses this section to talk further about how awesome it is, rather than talking simply talking about risks and challenges. This could have helped From Holden for next time; it is constructive.

duiker101• 14 years ago

I agree, the article might not be the best critique ever but I think there is a need to rise some noise about Kickstarter, not because I hate it or whatever, but because it made noise and now people are using it in the wrong way so to educate it's users we must give a strong, clear message of how to use it. And it should be a message both for founders and backers.

What I get from the article is that this guys had an idea and 24 hours later they created the Kickstarter. This is partly wrong, what is totally wrong is people supporting them(please note this is just my opinion) because you can find everywhere cheap shirts, even good ones. There a huge market about it what would make you think that some random guy can do better? Just because they say so? If this would make any money companies would have already adopted this.

When approaching Kickstarter I think one(with an idea or a prototype) should make it clear what he wants to achieve without the "I will make the best at the lowest price" attitude. Remember the users that backing the project it's a donation with a possible gift and not a preorder. Also you should have thought about it more than 1 day. The day you realize that you can't maintain your promises your reputation might end up destroyed.

I think that it's important that we use Kickstarter the correct way because we risk ruining it, when too many people will realize that they will not get what they paid for people will not use it any more, resulting a bad reputation for kickstarter and therefore other projects that might be worth checking.

wsul12• 14 years ago

I've been preparing for this Kickstarter campaign for six months. I'm doing it because I'm truly passionate about fixing a very broken retail/apparel manufacturing model that hasn't changed much in 50 years. I think there is a truly better way to make and sell the best men's clothes, and that is why I'm building this company. Kickstarter happens to be an incredibly efficient way to gain the resources required to continue down this path.

atuttle• 14 years ago

I could not find any trolling in the post, and also no whining. I mean, how should we have a discussion about a certain kickstarter project if all you have to say is "If you don't like it, don't participate."

Nursie2• 14 years ago

While I agree the article is negative in tone, I don't like this attitude 'if you don't like it shut up and leave us alone' or 'just quit whining'. If someone genuinely feels there are problems with kickstarter, why shouldn't they be allowed to talk about it?

I'm not backing you on kickstarter because you're asking me to give you money in the hope of a reward later, instead of it being either a real purchase or a real investment.

polskibus2• 14 years ago

That is specifically the incubator's role. It's a promise, not a shop. Promises can be broken, but they are also innovation's fuel. It's a bit like criticising a baby, for being a baby. You have to let it grow and be patient. If you don't want to support it, then don't. Perhaps I was too harsh in my comment, but kickstarter does not realize a typical transaction-oriented in capitalist sense shop. Some reserve is necessary for ideas to flourish.

azundo• 14 years ago

I'd like to see Kickstarter cap the maximum amount a project can raise at some (low) multiple of the minimum goal. I think projects get into a lot of trouble when they raise 6x or 100x more than they expected. That traction is exciting so people dream big and make promises when the cash is rolling in before they've even executed on the core idea.

If a project estimates correctly, they should be able to 'kickstart' once the funding goal has been met. After that they can set up their own sales and marketing channels to sell to follow-on customers after the original Kickstarter backers get their rewards. To me this matches the original intent of Kickstarter.

Obviously capping funding amounts cuts into Kickstarter's short-term gains. In the long run however I think it would minimize the risk of a high-profile project (or several) failing to deliver and sinking their whole model.

antr• 14 years ago

I agree on the cap idea. Another issue I've come across when projects have been oversubscribed is that the project's level of "customer service" (for lack of a better word) is inversely proportional to the amount pledged. In my case I contacted the Elevation Dock guys twice regarding my pledge, but I never got a reply from them - which is frustrating to say the least. A cap will definitely ease any potential bottleneck and distribution issues as well as focusing/providing good service to a reasonable number of customers.

EwanToo• 14 years ago

I agree 100%.

If anything, an enforced cap will increase the exclusivity of an offer, and reduce the number of people who hold off until the last day to back a project - they're the people who are really preordering a product name, not backing an idea.

wsul12• 14 years ago

I think an enforced cap and the exclusivity of an offer is a great idea, I'd love to use that in the future.

shadowmint2• 14 years ago

Yes.

Yeah, stretch goals are stupid.

Rewards tier X. Costs $ to provide and ship to customer. Minimum pledge amount is Y. Amount of 'extra' you make is PROFIT; Y-X.

Stretch goals seem to imply that if you hit the funding target $$$ now everything over that is Pure Bonus PROFIT and goes towards making an Extra Awesome version of whatever the project was.

...but it doesn't work like that does it?

Backers aren't stupid; they will by and large pick the most optimal pledge level (you see it all the time on successful projects). That's the pledge level that minimizes the PROFIT level to the project runners.

So really, when you make a million on top of your goal, what you're probably making is 1,000,000 * low profit factor, and the stretch goals you see for some projects are just ridiculous (eg. we'll ship extra stuff to all pledge levels! <--- totally smashes your PROFIT total for these pledge levels).

Poorly thought out is exactly how I would describe it.

Kickstarter should make people submit a budget excel spreadsheet that details exactly how much they expect each reward tier to cost, and how both a exactly-on-budget successful funding, and the 10x surplus funding will broken down into spending on delivering the project.

That doesn't have to be made public, but how can kickstarter stand there and go "we're good guys" when they're running projects for people who clearly haven't done this, and as such neither kickstarter nor they themselves have any idea if they'll actually be able to pull of the project when if its funded.

fr0sty• 14 years ago

Three words: Economies of Scale

A lot of stretch goals I have seen are things like upgraded components, extra colors, and the like which are wuite possible as your order sizes push your per-unit costs down. This is doubly so for software based offerings since marginal costs are zero for each additional pledge so you can take what would be pure profit to fund additional features.

cmckay• 14 years ago

The problem with capping highly funded projects ("hits") is that they make up a pretty small percentage of the Kickstarter project space, but they get a ton of press. It varies by category, but in most of the categories, the projects doing better than 3x their goal are less than 5%.[0]

The real problem (alluded to by both the article author and other comments) is that project creators don't ask themselves hard questions about how their project will scale. Unfortunately, this is more of a problem in the Technology and Design categories, which tend to have a higher hit rate than others. Many project creators envision doing the work themselves, or using hard to source parts. The Open Locksport guy even planned his reward tiers so that he was operating at a loss for each pledge. That's just poor planning.

[0] http://tachycline.com/index.php/kickstarter-funding-rates/

rwallace• 14 years ago

I'd like to see the reverse: don't let the project go through unless it raises at least two or three times the minimum goal. Okay I know that wouldn't actually work because people would start taking it into account, but the problem is that people always underestimate what projects will cost; the most likely failure mode is you get the money you ask for, the project is unexpectedly hard and the money runs out long before you're done. Of Kickstarter projects that have actually delivered products, I bet many have been saved only by the raised money far overshooting the underestimated minimum goal.

ljd2• 14 years ago

I have a hard time taking opinion pieces like this blog seriously. The verbiage is so strongly connected to his disdain that I can't hear anything through the noise.

If you want to be hypercritical of companies using Kickstarter for the first time, you should try to provide real feedback. Mindless comments such as the following are as unhelpful as tips get:

"Pro tip: if I, who know your business as well as I know the feeding habits of the Springbok Antelope, can come up with more risks than you can, you’re not doing it right"

Here, let's try to write some generic, but probably more helpful feedback:

When first filling out the Risks and Challenges section your first inclination will probably be to prove how there are no risks and no challenges. Instead of taking this path, be open about what you feel the risks are and your plan for minimizing them. Talk about the challenges you currently are facing and how you've solved other challenges in the past. If I'm going to sail out to sea with you on this voyage you'll be more likely to convince me you know how to handle a storm than to tell me there won't be any storms at all.

If you are thinking about doing a kickstarter campaign and you come across this blog it's not going to help you tackle any of the issues that he outlines. At best, it's just the author posturing with, "If your campaign doesn't meet my guidelines then I'll use social signaling to embarrass your company."

I would rather see high quality writing about how to be successful in raising money and delivering on Kickstarter.

raganwald• 14 years ago

What you suggest is another, different, and also valuable blog post. His choice:

  Pro tip: if I, who know your business as well as I know the
  feeding habits of the Springbok Antelope, can come up with
  more risks than you can, you’re not doing it right.

It's disdainful, sure, and not to my taste, but it's memorable and cuts right to the issue. He's trying to be George Carlin. There's some value overall in a reasoned argument, and some value overall in a certain amount of hip hectoring if the author can piggyback wisdom on entertainment.

ljd2• 14 years ago

I get that's his play. I still want to discourage people from writing this way. George Carlin's cutting humor was profound. It's my humble opinion that unless you intend to write as well as George Carlin, you should be less adversarial in your comments of others.

mbesto• 14 years ago

I would rather see high quality writing about how to be successful in raising money and delivering on Kickstarter.

That type of hyperbole doesn't sell as well as this one does.

SideburnsOfDoom• 14 years ago

Your "probably more helpful feedback" is far less readable.

CodeMage• 14 years ago

You know, I went to Dan's blog expecting to absolutely hate the post, mostly because of the title, but also partly because of the first line of your comment. I'm so glad you wrote it, because I ended up pleasantly surprised.

Maybe my habit of spending 10 minutes a week reading YouTube comments has made my skin thicker than before, but I wouldn't call Dan's tone "disdainful". Exasperated, yes. Impatient, yes. Frank and direct, yes. Disdainful, not that I can see.

Here's the problem with your generic, helpful feedback: my eyes keep slipping past it. I'm pretty sure I'm not the only one who ends up having to expend more effort trying to read bland and insipid content, so tailored to avoid offending anyone's sensibilities that it shows.

crusso2• 14 years ago

I found his blog to be more entertaining and likely to be read all the way through than what you just wrote.

For me, it struck a decent balance between straight prose and casual, frank humor.

If we wanted everyone's blog to read like the owner's manual for an automobile, I guess you'd have a point... but do we really?

wsul12• 14 years ago

Really appreciate your angle/suggestions here. Working on re-writing the Risks/Challenges section now!

jmilloy• 14 years ago

>I would rather see high quality writing about how to be successful in raising money and delivering on Kickstarter.

Not every "project" can and should be successful in raising money. The general gist of the example was not "You didn't write about this well enough, so I gave up on you and want to shout about it". Instead, it was "You don't seem to have any idea what you're doing, and here's how I can tell."

If you don't know what the risks, details, or plans are, you can't and don't write about those things. We can tell you don't know about them, and can choose not to support the "project". In this way, your Kickstarter page perfectly represents the project. Why would anyone want to change that?

kamaal• 14 years ago

Lets be frank kickstarter sort of really blows up in the face of many VC's and traditional investors. Watching a project you would never fund get super successful and go on to do profit especially in order of millions(in case of Pebble watch) can be very frustrating for a VC/investor.

Its like watching a rebel guy you didn't like and thought will never to well, go to work for the guy you hate and then both do amazingly well.

Besides this whole model of skipping a VC/investor to go directly to customers and then make super profits is a disruptive trend for investors.

timjahn• 14 years ago

"Besides this whole model of skipping a VC/investor to go directly to customers and then make super profits is a disruptive trend for investors."

Having customers pre-order a product and pay directly for it isn't exactly disruptive.

wsul12• 14 years ago

I think Kickstarter's innovation is in building a brand that people/press know and trust, their design of forcing time constraints, and the ability to add demand for an offering. My money is that they continue amping up social features to allow more gamified sharing and the like which will only increase the attractiveness of their proposition.

Domenic_S3• 14 years ago

> Having customers pre-order a product and pay directly for it isn't exactly disruptive.

Is it sustainable for tangible goods businesses? Generally, campaigns don't sell full pre-orders, they sell deeply discounted preorders. Unless there is some major, major margin built in there.... I mean, I'm looking at Pebble's kickstarter, and all but the first level give you 1 or more watches. Considering that the first run is the most expensive (by a wiiiiide margin, getting the tools made, setting up QA, etc), I wonder what Pebble's books are going to look like once all the preorders are filled?

therobot24• 14 years ago

the idea is to cut-out the traditional investors - if a product is good enough to be crowd-funded is the VC really necessary? Are you upset that the 'rebel guy' is doing what he want's to do and only has to give an initial cut to kickstarter instead of a recurring cut/part ownership to the VC?

Domenic_S3• 14 years ago

> go on to do profit especially in order of millions(in case of Pebble watch) can be very frustrating for a VC/investor.

It probably depends on the VC/investor -- the hands-off investor it not bummed because these guys are learning manufacturing. That's expensive. The Pebble guys had a working prototype and expected to ship production Pebbles in September of this year; they're not even in production runs yet. Not getting down on them, just pointing out the not-so-obvious: manufacturing is really hard to get right.

dutchbrit• 14 years ago

To answer your question regarding 'Who', it's William Sulinski. Company is Shareaholic.

I know, you could find this out too. But if they mention things, they should mention it properly since it's not clear at all.

I quite like this idea by the way, I just can't back them since I refuse to get a Credit Card :)

lerouxb• 14 years ago

Then get some other kind of account with a Visa/Mastercard number?

jonnathanson3• 14 years ago

I don't necessarily agree with a lot of this post. But I will admit that Kickstarter has a serious problem on its hands, namely, a growing dichotomy between its emergent user behavior (preordering) and its intended user behavior (crowdfunding).

The site has gone to great lengths in recent months to stamp out the former -- even going so far as to announce "We're not a store," and to impose a lot of restrictions on project listings.

IMO, these moves have only exacerbated the problem at hand. Now you've got a presumptive majority of users who still treat Kickstarter like a preordering site, but who get even fewer details about what they think they're preodering. Case in point: lots of blog posts like this one, which claim they grok the idea that they're not preordering finished goods, but nevertheless complain that they're not preordering finished goods. There's a very clear disconnect between intellectual admission ("I realize I may not actually get this item") and emotional expectation ("Where the f--- is my item???"). This is a recipe for cognitive dissonance, and it leaves a lot of very vocal users frustrated. Some of those users may be right, and others may be off base -- but they are Kickstarter's problem, regardless.

Quite frankly, I don't think there's a fantastic solution to this problem. But project categorization/tiering seems like at least a halfway decent step. Kickstarter should ask its listers to choose which stage of the idea they're in: early concept, prototype, pre-sale, etc. (I'm sure they can come up with better names for these categories). And that stage would be made very clear to the users/backers from the get go.

I don't think Kickstarter can continue to grow, or even last, without preordering. That just seems to be the dominant use case most people have for the site. It's here to stay. If Kickstarter shies away from it, some other crowdfunding company will claim the space and leave Kickstarter in the dust. Rather than trying to stamp it out, Kickstarter should embrace it -- but at the same time, take steps to differentiate it from true kickstarting.

jebblue• 14 years ago

Your post was thoughtful and articulate. I thought I'd check the site as though I were considering starting a project there. First I checked the Guidelines:

http://www.kickstarter.com/help/guidelines

Part of the first Guideline says:

"A project will eventually be completed, and something will be produced by it. A project is not open-ended. Starting a business, for example, does not qualify as a project."

If I were starting a project it seems clear that the expectation is that I deliver something.

I'm not clear if that agrees with your view or not I guess I'm not clear what the expectation of crowdsourcing is. Maybe it's just a buzzword.

jonnathanson3• 14 years ago

"I guess I'm not clear what the expectation of crowdsourcing is."

And this is exactly my point. :) I don't think most people are clear -- or at least can't agree -- about their expectations for crowdsourcing, including the users of Kickstarter. The only thing that seems to be clear is that a lot of funders assume that crowdsourcing means crowd-buying. Whereas a lot of project launchers tend to think crowdsourcing means X, Y, Z, what have you. There's a disconnect between these expectations.

saraid2163• 14 years ago

Two things:

1) A project is more clearly defined as something that the creators intend an eventual completion. Or, perhaps better, a project is something that has a hard ship date. A project is not necessarily successful: that is, it may fail to make that ship date. If it fails, it may fail in such a way that it never completes. That is the worst case scenario: your money went into a black hole.

2) There's a difference between crowdsourcing and crowdfunding. Crowdsourcing is a riff off "outsourcing"; it's using "the crowd" to accomplish tasks. Crowdfunding is a specific instance of this, in which the task is "give me money".

wsul12• 14 years ago

Let me preface by saying that I'm by no means a Kickstarter expert.

I think Kickstarter is fully focused on creative projects that do actually create things. Each project has to have a clear end point and well-defined creation. It definitely isn't made to clear out old inventory -- so in that sense, it isn't a store, but for those of us that need resources and scale to manufacture a product, it is hugely important, and a lot of their focus.

I do think there are a lot of ideas like categorization and tiering that could help people better understand Kickstarter, and I think they'll continue to refine the concept, of course.

saraid2163• 14 years ago

> I do think there are a lot of ideas like categorization and tiering that could help people better understand Kickstarter, and I think they'll continue to refine the concept, of course.

I think that tiering may help, though I don't have the variety of experience to suggest a set of tiers, and I suspect KS devs don't either. I would suggest to Kickstarter that, now that they have a few years' worth of data, mine it and figure out those tiers. Also, start actively going through failed projects and figuring out why they failed, and release that information to the public: you have inertia now; telling people that projects fail after funding is not going to stop them from contributing to ideas they're enthusiastic about.

danshapiro4• 14 years ago

(Author here) My post was to help encourage those using Kickstarter be more transparent and thoughtful about the risks and challenges of what they do. That doesn't seem to be the message you got. Can you explain why you think this post "complains it's not preordering finished goods"? I'd appreciate the feedback so I can be more clear next time.

jonnathanson3• 14 years ago

Hi Dan. Actually, the line about "complains it's not preordering finished goods" was not meant to be about you or your post. Rather, I was using it to describe a more general trend I've noticed with Kickstarter, and with people's collective commentary about Kickstarter. Did not mean to single your post out as a "complaint," per se, and I apologize if I created that impression. In retrospect, I should have been clearer in drawing distinctions between my take on your article, and my take on other articles about the same topic.

My broader issue is that Kickstarter, in general, seems to have a dilemma on its hands. On the "buy" side, it has a lot of users who are essentially treating Kickstarter campaigns like product preorders. On the "sell" side, it has a highly variable mix of project owners. Some are doing presales. Some are seeking funding for proof-of-concept. Some are seeking seed money. Some (seem to) have finished products, and are evidently using Kickstarter as a marketing tool. Etc.

The challenge is that you have a fairly homogenous use case on the buy side, and a heterogeneous use case on the input side. Adding to this challenge is the fact that the use case most "buyers" seem to be gravitating toward is directly at odds with the use case Kickstarter wants to encourage on the input/"sell" side.

Now, my recommendation stems from my assessment of the problem. I may be wrong. But to me, when I see a lot of variance on the sell side of a market, and considerably less variance on the buy side, I tend to think the solution involves bucketing, or categorizing, the different product types on the sell side. The goal is to create some sort of homogenous subsets of what is currently a very messy, variable master set.

smoyer• 14 years ago

I don't think that "From Holden" campaign is either of the user behaviors you describe, though I agree that the tendency seems to be moving from crowd-funding to pre-ordering.

The "From Holden" campaign seems to be more about market testing and broadening their reach. With the amount of work they'd already done, they had a product they were ready to start selling and could have set up an on-line store from day one. The low target ($5000) basically guaranteed they could run off 500 or 1000 units and move them out the door immediately.

Since most of us could throw that amount on our credit cards with ease, the only rational reason to run the kick-starter campaign was to make sure the product was wanted before committing to production.

I'm not saying this is all bad ... in fact it's way better than the campaigns with cool ideas but backed by founders with no idea how to deliver. I guess what I'm really saying is that there are more than two reasons for kick-starting.

crusso2• 14 years ago

While we're on a Kickstarter thread, I have a GREAT idea for a Kickstarter project. It's really unique and has never been done before.

I'm suggesting right here and now that someone create a Kickstarter project for a 3D printer. With such a unique and interesting offering, how could such a project not succeed?

Don't forget to give me credit for the idea when you eventually see it appear on Kickstarter.

[for the humor impaired, the above is sarcasm]

jermaink• 14 years ago

Oh no, not another 'Why I' article. This is at least the 5th on the frontpage today. I'm getting tired of these stories... HN starts to feel like being in Groundhog Day.

wsul12• 14 years ago

Hey all, I started the company formerly known as From Holden (we're renaming), and wrote all the copy for the Kickstarter campaign. I posted a reply on Dan's blog, would love to answer any other questions or hear any other thoughts there or here!

http://www.danshapiro.com/blog/2012/11/this-is-why-im-not-ba...

tg3• 14 years ago

In that post, your response to the risks section is that "there is literally no chance we're going to fail at delivering incredibly crafted shirts to all our backers." That is so completely disconnected from the world of reality that it shows a tremendous lack of foresight. Read literally any prospectus for companies much more proven and stable than yours and you'll see a litany of legitimate risks surrounding the business. Yours is no different. As a company who has, by definition, never done this before, your risks are quite high.

What if the fabric from your supplier is inconsistent in quality, do you have another supplier? What if your estimates are off, and labor+fabric costs more than $8, will your margins allow you to deliver? What if every other large manufacturer has discovered that the cheaper labor available overseas more than offsets the increased shipping costs? What if your manufacturer has a work stoppage, do you have another manufacturer you can turn to of high quality? What if their factory burns down? What if their quality is inconsistent? What if they don't deliver finished goods on time? What if your fabric gets damaged en route, do you have insurance?

I know next to nothing about clothing manufacturing, and I just listed more risks than you did. The risks section is not intended to be an exercise in braggadocio.

wsul12• 14 years ago

Trey, I'm not saying there are no risks -- there are. I promise there will be hiccups along the way, anything you mentioned could happen. As an entrepreneur, I work as hard as I can to mitigate these risks by having multiple mills, sewing contractors, etc. but shit WILL happen. What I meant is that, no matter what happens, I'm going to make and deliver high quality shirts. Small hiccups will happen, but the only thing that makes us fail is me giving up, and that isn't going to happen.

jamesmcn• 14 years ago

Can someone explain the whole frozen jeans thing? That sounds weirdly awesome. Particularly in the summer.

Why I’m not backing you on Kickstarter

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