Kickstarter is Like an Amazon.com for Stuff That Will Never Exist
Kickstarter is an amazing website. It lets people who have an idea take it directly to the people who want to see that idea happen. For established creators like the development team behind Megaman, it’s a great way to new video game outside of the traditional development process. For amateur creators like myself, it’s a great way to beg for money from your friends and family without the shame of asking them directly.
The main problem with Kickstarter is that too many people treat Kickstarter like it’s an on-line store. It’s not. There’s no guarantee that any money that you donate will result in any project being made or rewards being sent out. What you buy when you donate money to a Kickstarter is an idea that may or may not actually happen. It’s also nearly impossible to get your money back once someone has run off with it.
What do you do if you don’t get your rewards or the project you backed never actually happens? There’s not really much you can do. Kickstarter will pull down fraudulent projects if they happen to notice them before the funding goal is reached. This has happened most notably with a fake beef jerky company and with a scammer pretending to be Lit Motors.
Once the project is funded, Kickstarter does very little to police whether or not any of the funds are actually used in the way they were promised. Kickstarter’s position is that you shouldn’t back something that you don’t think looks legit. They put the blame for being scammed solely on you, the project backer. There’s absolutely no recourse outside of getting a lawyer and suing the project creator to get your money back. It’s not really worth hiring a lawyer to get back your $50 donation.
Kickstarter says that the reason they don’t guarantee any projects is because they don’t want their company to be profit-focused. That’s a nice sentiment. It’s really nice of Kickstarter to help all of these projects get made out of the goodness of their heart. Oh wait, Kickstarter is making a fat stack of cash off of people’s dreams. They take a 5% cut of every single donation. On top of that, Amazon takes another 3-5% cut of the project. That’s a huge cut for basically doing nothing.
Kickstarter claims to have raised over a billion dollars for projects. That means Kickstarter has made over 50 million dollars for offering their services. It’s a brilliant business model. They make money for doing nothing and have absolutely no risks. That’s probably why there are a ton of Kickstarter copy cats that offer their services for just about every niche you can think of.
I think that most of the projects that don’t get completed or don’t send out rewards aren’t scams. They’re people who just aren’t very well prepared. The reason they’re using Kickstarter to fund their project and not traditional means like loans or investors is that they really don’t know what they’re doing. For example, let’s look at Pictures For Sad Children. It was a popular web comic that ran for ten years. The creator decided that maybe it was time to put out a book of his work so he could actually make some money off of it. This seems like the perfect project for Kickstarter. It was an established creator who needed money to help take his project to the next level. For a mere $25 donation, you would get a signed copy of his brand new book. The project was hugely successful. He asked for $8,000 to publish his books. He got over $50,000.
Unfortunately, he ran out of money before he was able to ship off all of the promised books. So what did he do with the extra books? He burned them. He burned 127 books and posted the video to his Kickstarter page. That was one book for every angry e-mail that he received. In his project update he said, “I shipped about 75% of kickstarter rewards to backers. I will not be shipping any more. I will not be issuing any refunds. For every message I receive about this book through e-mail, social media or any other means, I will burn another book.” If you were one of his backers that didn’t receive your book then you’re out of luck. You’re never going to get the book that you paid for.
The problem he had finishing his project is the same problem that many Kickstarter creators have. They’re artistic people trying to start a business without any knowledge of how business works. The problem with late rewards and unfinished projects is so rampant that Kickstarter addresses it in their FAQ. “Sometimes creators hit unexpected roadblocks, or simply underestimate how much work it takes to complete a project.”
A lot of Kickstarters are successful. The project gets made, the backers get their rewards, and everyone is happy. All I’m saying is that you should take a few extra minutes to go through all of the claims of the project before you make a donation. Like most things you buy on-line, if it seems too good to be true then it probably is too good to be true. You’re probably never going to get that pair of rocket powered shoes for $20.
Zach Ames is a writer based on Los Angeles. He has the voice of an angel and looking in to his eyes is like looking in to the ocean.