5 ms·

Take money from 'community', develop using that and get famous, get enterprise funding, stop community project and return the 'community money'. Good idea.

baybal2 9y ago
>Take money from 'community', develop using that and get famous, get enterprise funding, stop community project and return the 'community money'. Good idea. Except they took the "develop" stage out of the equation, and most likely never planned to make a functioning product except for shipping prototype grade minis. See, what they did is not much different than other Android "OS" spinoffs: take white box product, and put android with custom skin on it. All of that costs $200k at maximum in China, not $2m. What made them different thought is that they pumped so much into keep hype going. And that tactic paid them off. Corporate M&A people in the People Republic of China are known to be easily impressionable, if not worse.
smoyer 9y ago
I was thinking exactly the same thing ... the Kickstarter backers were essentially Angel investors or VCs who put up the money but didn't get a stake in the company. That's a pretty good deal for the founders!
- Double_a_92 9y ago
  You never get stake in the company on kickstarter. At least they got their money back now.
  - smoyer 9y ago
    I understand how Kickstarter works ... I was more referring to the fact that those who funded their Kickstarter campaign didn't get a return on their investment (there are plenty that lose). I won't go so far to say that the campaign was set up with false pretenses - I think the business probably just moved away from the consumer market - but the reality is that the backers funded the early stage growth of this company with no return-on-investment.
    - Double_a_92 9y ago
      There is never any ROI on Kickstarter... You are always throwing your money away. If you are lucky you get some stickers or a discount on the final product.
      - smoyer 9y ago
        You're still not getting my point - if the Kickstarter backers had instead written a check as an Angel investor, they might have lost their money OR they might have recognized an ROI.
        Double_a_92 9y ago
        > That's a pretty good deal for the founders! Yes, that's how kickstarter works. As an "investor" you just get screwed. There is no risk, you already know that your money is gone. It's not special for this case. Or what do you mean?
    - mikekchar 9y ago
      I think the point that the person is trying to make is that when you pledge money on kickstarter, you are doing it in hopes that you will see the product emerge -- because you want to buy/use it. An angel investor rarely invests because they want the product. They invest because they want the ROI. In that sense, having an investor take care of the funding so that the product comes to market is a good thing for the kickstarter pledger. Presumably a successful kickstarter campaign helped secure the investor. It's a success from that perspective.
      - smoyer 9y ago
        For Kickstarter to continue to function, most projects need to deliver what the backer originally wanted - this, in a way, represents an ROI since (presumably) the product of the campaign was worth more to the backer than the amount they spent. There are of course a whole tier of backers that get stickers or just thanks for backing projects at lower tiers - these backers are altruists who believe that the project is worthwhile without expecting compensation.
setr 9y ago
From my experience seeing games on kickstarter, this is pretty much what is reasonable to expect. I mean the whole model is 1. Get money from community to fund game development 2. Sell the game again after, for extra profit, because why not And somewhere along the way there's usually a total mis-estimation of funds and resources At least here something was given back to the "community"... The entire crowdfunding platform is absurdity; I'm not really sure what people are thinking when they use it. Nothing given back to community, significant risk of failure, no real quality control or even a basic measure to meet, and extremely hype-cycled. Its mostly just a platform to give away your money for empty promises...
- majewsky 9y ago
  > The entire crowdfunding platform is absurdity The totality of this statement is what's absurd. There's some good stuff on Kickstarter etc., but Sturgeon's Law applies: 90% of everything is crap.
  - StavrosK 9y ago
    No, it's crowdfunding itself that is absurd: You are literally pre-paying full price for a small chance that a product will actually be shipped to you. Imagine Amazon, but instead of next-day delivery you get next-year delivery and there's a 90% chance your product won't be delivered at all: That's what crowdfunding is. Traditionally, when funding a product, investors got a portion of the earnings to offset their risk. Crowdfunding has managed to eschew that in favor of just getting you to give people money just in case they can come up with a product. If the bet works out, great, you get a product, but so do I, and I didn't give the creators any money in advance. If it fails, you're out your money.
    - ivanbakel 9y ago
      The assumption you make is that the product would necessarily exist otherwise without the crowdfunding, which isn't accurate in my experience. The bet is sometimes between some product and no product.
    - 9y ago
_pmf_ 9y ago
> Take money from 'community', develop using that and get famous, get enterprise funding, stop community project and return the 'community money'. Good idea. Well, some projects "forget" step 5, so at least there's that.

baybal2 9y ago

>Take money from 'community', develop using that and get famous, get enterprise funding, stop community project and return the 'community money'. Good idea. Except they took the "develop" stage out of the equation, and most likely never planned to make a functioning product except for shipping prototype grade minis. See, what they did is not much different than other Android "OS" spinoffs: take white box product, and put android with custom skin on it. All of that costs $200k at maximum in China, not $2m. What made them different thought is that they pumped so much into keep hype going. And that tactic paid them off. Corporate M&A people in the People Republic of China are known to be easily impressionable, if not worse.

smoyer 9y ago

I was thinking exactly the same thing ... the Kickstarter backers were essentially Angel investors or VCs who put up the money but didn't get a stake in the company. That's a pretty good deal for the founders!

Double_a_92 9y ago
You never get stake in the company on kickstarter. At least they got their money back now.
- smoyer 9y ago
  I understand how Kickstarter works ... I was more referring to the fact that those who funded their Kickstarter campaign didn't get a return on their investment (there are plenty that lose). I won't go so far to say that the campaign was set up with false pretenses - I think the business probably just moved away from the consumer market - but the reality is that the backers funded the early stage growth of this company with no return-on-investment.
  - Double_a_92 9y ago
    There is never any ROI on Kickstarter... You are always throwing your money away. If you are lucky you get some stickers or a discount on the final product.
    - smoyer 9y ago
      You're still not getting my point - if the Kickstarter backers had instead written a check as an Angel investor, they might have lost their money OR they might have recognized an ROI.
      - Double_a_92 9y ago
        > That's a pretty good deal for the founders! Yes, that's how kickstarter works. As an "investor" you just get screwed. There is no risk, you already know that your money is gone. It's not special for this case. Or what do you mean?
  - mikekchar 9y ago
    I think the point that the person is trying to make is that when you pledge money on kickstarter, you are doing it in hopes that you will see the product emerge -- because you want to buy/use it. An angel investor rarely invests because they want the product. They invest because they want the ROI. In that sense, having an investor take care of the funding so that the product comes to market is a good thing for the kickstarter pledger. Presumably a successful kickstarter campaign helped secure the investor. It's a success from that perspective.
    - smoyer 9y ago
      For Kickstarter to continue to function, most projects need to deliver what the backer originally wanted - this, in a way, represents an ROI since (presumably) the product of the campaign was worth more to the backer than the amount they spent. There are of course a whole tier of backers that get stickers or just thanks for backing projects at lower tiers - these backers are altruists who believe that the project is worthwhile without expecting compensation.

setr 9y ago

From my experience seeing games on kickstarter, this is pretty much what is reasonable to expect. I mean the whole model is 1. Get money from community to fund game development 2. Sell the game again after, for extra profit, because why not And somewhere along the way there's usually a total mis-estimation of funds and resources At least here something was given back to the "community"... The entire crowdfunding platform is absurdity; I'm not really sure what people are thinking when they use it. Nothing given back to community, significant risk of failure, no real quality control or even a basic measure to meet, and extremely hype-cycled. Its mostly just a platform to give away your money for empty promises...

majewsky 9y ago
> The entire crowdfunding platform is absurdity The totality of this statement is what's absurd. There's some good stuff on Kickstarter etc., but Sturgeon's Law applies: 90% of everything is crap.
- StavrosK 9y ago
  No, it's crowdfunding itself that is absurd: You are literally pre-paying full price for a small chance that a product will actually be shipped to you. Imagine Amazon, but instead of next-day delivery you get next-year delivery and there's a 90% chance your product won't be delivered at all: That's what crowdfunding is. Traditionally, when funding a product, investors got a portion of the earnings to offset their risk. Crowdfunding has managed to eschew that in favor of just getting you to give people money just in case they can come up with a product. If the bet works out, great, you get a product, but so do I, and I didn't give the creators any money in advance. If it fails, you're out your money.
  - ivanbakel 9y ago
    The assumption you make is that the product would necessarily exist otherwise without the crowdfunding, which isn't accurate in my experience. The bet is sometimes between some product and no product.
  - 9y ago

_pmf_ 9y ago

> Take money from 'community', develop using that and get famous, get enterprise funding, stop community project and return the 'community money'. Good idea. Well, some projects "forget" step 5, so at least there's that.