4 ms·

This actually seems like a bad idea at this point. As I understand it these four guys are going to get 50,000+ (maybe 100+ by the time all is said and done) in

This actually seems like a bad idea at this point. As I understand it these four guys are going to get 50,000+ (maybe 100+ by the time all is said and done) in donations to implement this concept. The first problem I have is that this is entirely too much money. This is an open-source project. The idea is not for them to take a salary. They really just need money for living expenses for the summer. Second, I don't see any seasoned mentors in the picture. Not to be crass but I think young people are silly (I am a young person and I am no exception.) I think the money is overscoped and the time is underscoped. I can see a lot of that money being wasted. Prove me wrong guys. Third, since this is not the typical investor/entrepreneur relationship, the incentives are much different. This is not a loan, where they will feel super motivated to deliver because if they don't they will lose money. This is not an equity investment where an investor puts in money and has a say on the direction of the project. This is basically a really big grant(1) from 1,573 people who trust them with their money based on a 5 minute video. If they fail, who do they have to answer to(2)? They can always just say, "hey, we are four students who bit off more than we can chew." I think they will deliver something but I am not writing "social networking revolution" into my calendar for September 2010 at this point. I am totally happy for them, and happy that someone is doing this, but I am also skeptical that the final result will be anything revolutionary. 1 Regarding the donation structure: "Projects must comply with Amazon Payments' Acceptable Use Policy. Among Amazon's restrictions: *Loans, investment, and any kind of financial return are forbidden *Lotteries, raffles, and sweepstakes are not allowed" taken from http://www.kickstarter.com/help/guidelines 2 They answer to themselves from what I gather: "Who is responsible for making sure project creators deliver what they promise? Project creators are wholly responsible for their promises. Kickstarter is a venue, like eBay or Etsy." taken from http://www.kickstarter.com/help/faq#WhoIsRespForMakiSureProjCreaDeliWhatTheyProm http://www.kickstarter.com/help/faq#WhoIsRespForMakiSureProj...

jacquesm 16y ago
re: 1: these are not loans or investments but donations re: 2: that's the worrying bit. But there is nothing lost by trying, we'll all learn from this. If they fail, then we can analyze why they failed. If they succeed there will be a lot of attempts to copy this success. There already will be I believe. Something new is happening here, crowdsourced funding on a relatively significant scale. And I think you could safely add a 0 to your estimate of how much money they'll end up with, which will give them several things: Investors will see the concept as 'validated' by the target audience before they've even written a single line of code. And big name companies with resources and experience will fall over each other by next Friday to have their name associated with this effort. If they're smart they sell their skins dear and get a reputable investor on board for the expertise they miss and the networking factor. The excess money will give them runway and extra clout during negotiations.
- kwamenum86 16y ago
  The crowd-sourcing aspect of this has me really excited. I think it is awesome that people are throwing their support behind these four random guys with a dream. The skeptic inside me says, who the hell are these guys anyway? And how do I know they will act responsibly? And even if they attempt to act responsibly how do we know anything will come of it in a sub-optimal situation (sub-optimal in my point of view because they have little experience, no mentors, and don't have to answer to anyone. I don't think a great amount of experience is necessary but when combined with the other two it just doesn't look good.) Also, it just seems like this system is ripe for abuse. If I just want 50,000 bucks it seems like I can use Kickstarter to mobilize people around some fake or inflated cause, do little to no work, and pocket the money. No offense to Kickstarter, I participated in "New York Makes a Book"! [EDIT] Also, I agree with pretty much everything you said. All of that can and will happen in the best case scenario, but how likely is it?
  - jacquesm 16y ago
    Highly unlikely at the moment. Another 20 days of favorable press and a 0 behind the current figure and they're in the 'viable' department, even if they themselves are not capable of pulling it off they'll have to funds to attract the expertise to nail it and they'll have the 'ins' with VCs they need for the rest. Hopefully they'll pick something like YC for their source of knowledge. Or they might crowd source that too, no telling. Already people are offering them fat pipes, infrastructure expertise and so on. They're currently pulling in $3500 per hour, it is accelerating rather than slowing down. If they hit a feedback loop (if that isn't already happening) this will be the start-up story of the year. By some measures it already is. edit: they just picked up another $2K donation, $55,429 now, that's a 10% increase in about an hour and half.
    - kwamenum86 16y ago
      Alarm bells start ringing in my head whenever I see a "bandwagon" pattern. I always think to myself, is the popularity warranted here and I think the answer here is a resounding "no." The ratio of information provided to money donated is waaay to low and to me this indicates that people don't have a great idea of what they are donating to. Then again maybe there is very little harm since most people are donating very little money. If they raise 500,000 dollars that would be a truly remarkable outcome that I did not expect.
rythie 16y ago
I think your underestimating the cost of taking on a 6 year old business with 400 million users and $500m in revenue. I'd be more worried if they only got $10k. Currently they are at $82,690 for 1945 backers which is $42.51 each, does anyone really care if it doesn't work out? Before you answer think about people spending $499 on an iPad, a device they don't need and might not even work on their WiFi [I'll be buying one anyway]. Also, don't forget that each of the donations is essentially a pre-payment for some part of the service if it succeeds.

jacquesm 16y ago

re: 1: these are not loans or investments but donations re: 2: that's the worrying bit. But there is nothing lost by trying, we'll all learn from this. If they fail, then we can analyze why they failed. If they succeed there will be a lot of attempts to copy this success. There already will be I believe. Something new is happening here, crowdsourced funding on a relatively significant scale. And I think you could safely add a 0 to your estimate of how much money they'll end up with, which will give them several things: Investors will see the concept as 'validated' by the target audience before they've even written a single line of code. And big name companies with resources and experience will fall over each other by next Friday to have their name associated with this effort. If they're smart they sell their skins dear and get a reputable investor on board for the expertise they miss and the networking factor. The excess money will give them runway and extra clout during negotiations.

kwamenum86 16y ago
The crowd-sourcing aspect of this has me really excited. I think it is awesome that people are throwing their support behind these four random guys with a dream. The skeptic inside me says, who the hell are these guys anyway? And how do I know they will act responsibly? And even if they attempt to act responsibly how do we know anything will come of it in a sub-optimal situation (sub-optimal in my point of view because they have little experience, no mentors, and don't have to answer to anyone. I don't think a great amount of experience is necessary but when combined with the other two it just doesn't look good.) Also, it just seems like this system is ripe for abuse. If I just want 50,000 bucks it seems like I can use Kickstarter to mobilize people around some fake or inflated cause, do little to no work, and pocket the money. No offense to Kickstarter, I participated in "New York Makes a Book"! [EDIT] Also, I agree with pretty much everything you said. All of that can and will happen in the best case scenario, but how likely is it?
- jacquesm 16y ago
  Highly unlikely at the moment. Another 20 days of favorable press and a 0 behind the current figure and they're in the 'viable' department, even if they themselves are not capable of pulling it off they'll have to funds to attract the expertise to nail it and they'll have the 'ins' with VCs they need for the rest. Hopefully they'll pick something like YC for their source of knowledge. Or they might crowd source that too, no telling. Already people are offering them fat pipes, infrastructure expertise and so on. They're currently pulling in $3500 per hour, it is accelerating rather than slowing down. If they hit a feedback loop (if that isn't already happening) this will be the start-up story of the year. By some measures it already is. edit: they just picked up another $2K donation, $55,429 now, that's a 10% increase in about an hour and half.
  - kwamenum86 16y ago
    Alarm bells start ringing in my head whenever I see a "bandwagon" pattern. I always think to myself, is the popularity warranted here and I think the answer here is a resounding "no." The ratio of information provided to money donated is waaay to low and to me this indicates that people don't have a great idea of what they are donating to. Then again maybe there is very little harm since most people are donating very little money. If they raise 500,000 dollars that would be a truly remarkable outcome that I did not expect.

rythie 16y ago

I think your underestimating the cost of taking on a 6 year old business with 400 million users and $500m in revenue. I'd be more worried if they only got $10k. Currently they are at $82,690 for 1945 backers which is $42.51 each, does anyone really care if it doesn't work out? Before you answer think about people spending $499 on an iPad, a device they don't need and might not even work on their WiFi [I'll be buying one anyway]. Also, don't forget that each of the donations is essentially a pre-payment for some part of the service if it succeeds.