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> "People reading HN probably understand concepts like investment and lack of guaranteed rewards." Investments usually have an upside commensurate with the per

> "People reading HN probably understand concepts like investment and lack of guaranteed rewards." Investments usually have an upside commensurate with the perceived risk. "Pay the regular price of a game, and you have a 50% chance of getting the game, and 50% of getting nothing" is not really an investment - it's a charitable contribution to someone's dream that you might see something out of. This is why I think the current Kickstarter model is doomed in the long run. Once it becomes clear that a large portion of Kickstarters will never deliver anything close to what they promised (if they deliver anything at all!), the whole concept of crowdfunding will become a whole lot less attractive to a lot of people. Not unless prospective projects were willing to take a substantial discount to soften the risk - but that destroys the viability of Kickstarter for many projects.

tptacek 14y ago
It'll work for music and art and literature; that was the point originally, right? But I agree with you that it seems like a dubious replacement for venture funding.
sliverstorm 14y ago
Well, maybe instead of offering product, they could offer... I don't know, equity? Then, perhaps, sell stakes in their future profits it some kind of public offering...?
saurik 14y ago
> Investments usually have an upside commensurate with the perceived risk. My mental model of Kickstarter is more like giving money to the EFF: maybe they give me a hat (they did, actually; I didn't want it; they seemed to refuse to let me leave without the hat... it was weird, as it almost made me want to give them money less, as they apparently were spending some of it on hats people didn't want, but hey: maybe it was some accounting thing), but the real reason I do it is I know I contributed to something that I believed in, even if it sometimes doesn't accomplish the things that they wanted to get done. When I see a Kickstarter, I think the same way: I think of it more like deciding whether or not to give the guy on the street corner some money in the hat (more hats...) that they have next to them; I don't really get anything in return for that money (arguably I got the music they already played, but I could have easily freeloaded that): I'm just contributing to his life as an artist, in the vague hope that I've helped something beautiful exist in the world.
- dragonwriter 14y ago
  That may be your mental model, but what's enforceable is the terms of service, not your mental model.
  - saurik 14y ago
    No: this has nothing to do with terms of service, this is "what do people use the service for". If your mental model of Twitter is "a place to have group discussions, in public" (a common use case), I think you are pretty crazy, but it obviously has nothing to do with the terms of service. The EFF gave me that hat: they seemed to consider it imperative that they did so; I did not for a second consider myself to be purchasing a hat. I maintain that if Kickstarter is "pay money now for gifts later" then they are not in compliance with either Visa's terms of service (no delayed renumeration for payments, a policy explicitly there to avoid "I have money ten months ago, and am now angry"), as well as laws regarding collecting sales tax (which are quite clearly written in a way that keeps you from just claiming "oh yeah, this thing where people give me money and I give them products? trust me: that's not a purchase... don't tax me, bro").

tptacek 14y ago

It'll work for music and art and literature; that was the point originally, right? But I agree with you that it seems like a dubious replacement for venture funding.

sliverstorm 14y ago

Well, maybe instead of offering product, they could offer... I don't know, equity? Then, perhaps, sell stakes in their future profits it some kind of public offering...?

saurik 14y ago

> Investments usually have an upside commensurate with the perceived risk. My mental model of Kickstarter is more like giving money to the EFF: maybe they give me a hat (they did, actually; I didn't want it; they seemed to refuse to let me leave without the hat... it was weird, as it almost made me want to give them money less, as they apparently were spending some of it on hats people didn't want, but hey: maybe it was some accounting thing), but the real reason I do it is I know I contributed to something that I believed in, even if it sometimes doesn't accomplish the things that they wanted to get done. When I see a Kickstarter, I think the same way: I think of it more like deciding whether or not to give the guy on the street corner some money in the hat (more hats...) that they have next to them; I don't really get anything in return for that money (arguably I got the music they already played, but I could have easily freeloaded that): I'm just contributing to his life as an artist, in the vague hope that I've helped something beautiful exist in the world.

dragonwriter 14y ago
That may be your mental model, but what's enforceable is the terms of service, not your mental model.
- saurik 14y ago
  No: this has nothing to do with terms of service, this is "what do people use the service for". If your mental model of Twitter is "a place to have group discussions, in public" (a common use case), I think you are pretty crazy, but it obviously has nothing to do with the terms of service. The EFF gave me that hat: they seemed to consider it imperative that they did so; I did not for a second consider myself to be purchasing a hat. I maintain that if Kickstarter is "pay money now for gifts later" then they are not in compliance with either Visa's terms of service (no delayed renumeration for payments, a policy explicitly there to avoid "I have money ten months ago, and am now angry"), as well as laws regarding collecting sales tax (which are quite clearly written in a way that keeps you from just claiming "oh yeah, this thing where people give me money and I give them products? trust me: that's not a purchase... don't tax me, bro").