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Kickstarter Sets Off $7 Million Stampede for a Watch Not Yet Made

nytimes.com

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Re: Kickstarter Sets Off $7 Million Stampede for a Watch Not Yet Made

#31

Post by granfalloon »

guard-of-terra wrote: post #23
bostonvaulter2 wrote: post #15

Earlier quoted context omitted.

Could you expand on what you mean by closer-to-perfect price discrimination?

You pay however much you are ready to pay. Traditionally if you price a ware 100$, you'll lose all the money from those who can only afford 10$, and if you price it 10$, you lose all the extra money from those who would have paid 100$. With Kickstarter, some people pay 10$, some 100$ and some 1000$, and they are all very happy about that. This is achieved by: Giving nice perks for extra money; Buyers understanding th…

But don't the different "tiers" generally offer different products (or multiple products, special goodies, etc)? If you just want the basic watch, you aren't free to "pay whatever you want to pay" -- you have to pay the asking price, just like everyone else.

Re: Kickstarter Sets Off $7 Million Stampede for a Watch Not Yet Made

#33

Post by guard-of-terra »

granfalloon wrote: post #31
guard-of-terra wrote: post #23

Earlier quoted context omitted.

You pay however much you are ready to pay. Traditionally if you price a ware 100$, you'll lose all the money from those who can only afford 10$, and if you price it 10$, you lose all the extra money from those who would have paid 100$. With Kickstarter, some people pay 10$, some 100$ and some 1000$, and they are all very happy about that. This is achieved by: Giving nice perks for extra money; Buyers understanding th…

But don't the different "tiers" generally offer different products (or multiple products, special goodies, etc)? If you just want the basic watch, you aren't free to "pay whatever you want to pay" -- you have to pay the asking price, just like everyone else.

That's the beauty of it.

Re: Kickstarter Sets Off $7 Million Stampede for a Watch Not Yet Made

#34

Post by Retric »

brk wrote: post #19
mattewing wrote: post #2

Love this line: “The terms on Kickstarter are more attractive than any bank loan or venture capital amount”

It's really not comparable to VC money in any normal way though. When you're raising VC money, especially early rounds, you're trying to prove and build a business model. You're trying to get market awareness and acceptance, develop your product, etc. There is a statistically high probability that you will fail entirely, or will at least fail to achieve the progress intended (meaning you may have to raise more money,…

For digital goods you can probably spend 85% of the funding on building the product AND you don't need to give up shares of your company to a VC. As for physical goods I don't think most physical kickstarter projects aim for 25% margins, especially when you look at all the diffident tiers. Many of which end-up as 1,000$ twice what you would get for 200$ but we will say thank you on our website.

Re: Kickstarter Sets Off $7 Million Stampede for a Watch Not Yet Made

#35

Post by 3pt14159 »

Negitivefrags wrote: post #20
zokier wrote: post #17

Earlier quoted context omitted.

imho Kickstarter is best suited for projects that are essentially finished and ready for manufacturing, but need money to actually do a manufacturing run. A comic book seems like a example of a "good" project in that sense. But basing kickstarter on just a idea seems extremely risky, and that's why I'm not all that interested in game kickstarters. If somebody wanted to kickstart a boxed copy of a finished game, that…

One issue with Kickstarter for games that are ready to play (at least for us) was that we want to give access to play the game the moment that you decide to give us some money. You can't really do that with kickstarter because you don't know if you will really get the money from each supporter. Due to this, and due to the fact that you need to be an American company (which can be gotten around, but is annoying) we de…

I have to say Path of Exile is my favorite indy game of all time. It is just crazy good. The skill graph, the socket gems, the general pace of the game. I can't wait until you guys launch out of beta because I don't want to get too emotionally attached to my characters, only to see them nuked in the final patch.

This game is going to be very successful and congrats on building something so awesome.

Re: Kickstarter Sets Off $7 Million Stampede for a Watch Not Yet Made

#36

Post by mason55 »

brk wrote: post #19
mattewing wrote: post #2

Love this line: “The terms on Kickstarter are more attractive than any bank loan or venture capital amount”

It's really not comparable to VC money in any normal way though. When you're raising VC money, especially early rounds, you're trying to prove and build a business model. You're trying to get market awareness and acceptance, develop your product, etc. There is a statistically high probability that you will fail entirely, or will at least fail to achieve the progress intended (meaning you may have to raise more money,…

Kickstarter, especially in this case, is people pre-ordering an already more fully defined and developed product. The money raised is going more or less directly to people purchasing product.

It's funny because Kickstarter is intended NOT to be pre-purchasing but to be an investment in something that might not pan out. People have gone out of their way to point that out when some of the high profile failures have happened.

Re: Kickstarter Sets Off $7 Million Stampede for a Watch Not Yet Made

#37

Post by Impossible »

egypturnash wrote: post #12
mattewing wrote: post #4

Earlier quoted context omitted.

It's hard to see kickstarter as the same type of bubble we saw in real estate or web 1.0. That type of bubble is driven by investor group think leading to absurd valuations. Kickstarter is based on purchases (or donations), not investments. In other words, I don't think people are paying irrational amounts for your comic book because Kickstarter is so hot right now. Now, if the pebble watch I just bought turns out to…

Yeah, I'm mostly worrying about what happens if some of these million-dollar projects fail horribly. Especially if some HOT GADGET turns out to be a scam and they just vanish with the funds. Games, I don't think that's a possibility - you have to have a giant reputation to raise the money to make one happen. I'm also pretty hopeful this is just paranoia talking, and that folks quickly realize they need to do a sanity…

There are quite a few game projects on Kickstarter that will never ship, or a boarding on scams that have been successfully funded by developers that are mostly unknown. Dead Linger and Takedown are both (imo) promising way more for the $150K and $210K they raised. They are also both relying on later funding or sales to raise more money. Starcommand has already publicly acknowledged that they've burned through most of their money and are $50K in debt. I played the game briefly at PAX East, and although it has potential it's nowhere near ready to ship by their promised date (August).

Some of these games will deliver something, but that something will disappoint most of the backers. I think in many cases, even if you deliver a good product, it will never live up to the game the backer imagined when you first pitched it. All games have this problem to some extent, even wildly successful ones like Minecraft or Elderscrolls, but I think it will be exasperated by the fact that people are selling game ideas, not actual games, with a few exceptions (FTL had a playable pre-alpha during their campaign).

Re: Kickstarter Sets Off $7 Million Stampede for a Watch Not Yet Made

#38

Post by FelixP »

Negitivefrags wrote: post #20
zokier wrote: post #17

Earlier quoted context omitted.

imho Kickstarter is best suited for projects that are essentially finished and ready for manufacturing, but need money to actually do a manufacturing run. A comic book seems like a example of a "good" project in that sense. But basing kickstarter on just a idea seems extremely risky, and that's why I'm not all that interested in game kickstarters. If somebody wanted to kickstart a boxed copy of a finished game, that…

One issue with Kickstarter for games that are ready to play (at least for us) was that we want to give access to play the game the moment that you decide to give us some money. You can't really do that with kickstarter because you don't know if you will really get the money from each supporter. Due to this, and due to the fact that you need to be an American company (which can be gotten around, but is annoying) we de…

>Really the reason to use kickstarter.com is as an advertising platform. I'm not really sure if having their audience as well as our own would have benefited us in this case or not.

I would also point out that Kickstarter acts as a trusted escrow service that will refund people's money if the project doesn't hit its funding targets.

Re: Kickstarter Sets Off $7 Million Stampede for a Watch Not Yet Made

#39

Post by pre »

egypturnash wrote: post #12
mattewing wrote: post #4

Earlier quoted context omitted.

It's hard to see kickstarter as the same type of bubble we saw in real estate or web 1.0. That type of bubble is driven by investor group think leading to absurd valuations. Kickstarter is based on purchases (or donations), not investments. In other words, I don't think people are paying irrational amounts for your comic book because Kickstarter is so hot right now. Now, if the pebble watch I just bought turns out to…

Yeah, I'm mostly worrying about what happens if some of these million-dollar projects fail horribly. Especially if some HOT GADGET turns out to be a scam and they just vanish with the funds. Games, I don't think that's a possibility - you have to have a giant reputation to raise the money to make one happen. I'm also pretty hopeful this is just paranoia talking, and that folks quickly realize they need to do a sanity…

Game projects come in many years late and millions over budget all the time. I ain't been in the industry for more than a decade but more games I watched being developed failed to get finished than actually shipped. I doubt it's changed much.

I'd guess a game will be one of the first big abandoned projects myself.

Re: Kickstarter Sets Off $7 Million Stampede for a Watch Not Yet Made

#40

Post by Negitivefrags »

goatforce5 wrote: post #27
Negitivefrags wrote: post #20

Earlier quoted context omitted.

One issue with Kickstarter for games that are ready to play (at least for us) was that we want to give access to play the game the moment that you decide to give us some money. You can't really do that with kickstarter because you don't know if you will really get the money from each supporter. Due to this, and due to the fact that you need to be an American company (which can be gotten around, but is annoying) we de…

"Due to this, and due to the fact that you need to be an American company (which can be gotten around, but is annoying) we decided to go it on our own [...] Using stripe.com for credit card processing" Don't you have to be in the US to use Stripe? https://stripe.com/global

Yes, we did in fact end up having to create a US company for stripe. I can still say that the kickstarter policy drove our decision to create our own payment system now though.

The way we handle it is by creating a US company that acts as our "publisher" and does a 30%/70% revenue split with us. We need to have an "arms length agreement" with the company to avoid paying double tax, so the reason we use 30%/70% is because we can prove precedent for it with other publishing deals (ie; The app store) which is a requirement for such deals.

We then pay all the expenses that we incur in US dollars (server hosting, bandwidth etc) from the US companys 30%. Doing this actually saves us the currency conversion fees as well (Which are especially nasty from credit cards). Anything left over in that company we can dump into advertising once we are really released.

After that, the 70% that comes to NZ is just normal income with nothing special about it and we can use it to pay our staff and (hopefully) our founders one day!

Could we have used this setup for kickstarter? Perhaps, but after we decided to go it alone, we realised that it was time for our own billing system anyway (as we will need it at release) and having that stuff rock solid before then would have non-trivial value for us.

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