Do Big Kickstarters Hurt Small Kickstarter?

Big Fish, Small Fish

I’ll start this post with an off-topic introduction.

There is currently a highly successful Kickstarter live to fund a new Indie-movie by Zach Braff of Garden State fame. The Kickstarter smashed through its 2 Million Dollar goal in less than 3 days.

Zach Braff has a huge fan-following, served an incredibly well-made Kickstarter video and is now reaping the Kickstarter rewards.

Zach Braff, however, is also a multi-millionaire. Moreover, he already had a “traditional” financing deal for his movie from a studio, which he turned down in favour of doing a Kickstarter-campaign.

The reactions, most prominently on Mashable yesterday, are raising many questions that sound eerily familiar to anyone following the ongoing miniatures and board gaming Kickstarter-boom (and partly, this post is inspired by this very discussion over at Quirkworthy.com).

  • Is it ethical for “big”, well-financed people or companies to ask for money on Kickstarter?
  • Should access to “traditional” financing preclude  (at least morally) a Kickstarter-drive?
  • Are the “big players” on Kickstarter hurting the smaller campaigns?
  • Are the “big players” on Kickstarter actually helping the smaller campaigns?

There are two main takes on this.

#1 – Ripple Effects: The Kickstarter.com Version…

Kickstarter’s official stance is that big , “blockbuster” Kickstarter-campaigns indirectly benefit the small, less professional campaigns on Kickstarter. Kickstarter argues that “money spend on Kickstarter” is not a finite pool. Big and small Kickstarters do not compete in a zero-sum game.

And when there’s a blockbuster project, they ask: Are these projects stealing backers from other worthy projects?

For both questions, the opposite actually appears to be true. Projects aren’t fighting over a finite pool of Kickstarter dollars or backers. One project’s backer isn’t another project’s loss. The backers that one project brings often end up backing other projects as well. Each project is not only promoting itself, but the Kickstarter ecosystem as a whole.

In a nutshell, big “blockbuster projects” raise the profile of Kickstarter as a whole. The more successful Kickstarter.com becomes, the more money is being spend on that site.

More money spend in total also means that more money will eventually trickle down to the small projects asking for crowd-funding support in the shadow of the Kickstarter-Leviathans.

#2 – Deflection: The Mashable.com Version…

Critics, among them Mashable.com and the Guardian, tend to disagree. To them, the issues isn’t the (straw?) argument of “Kickstarter is not a zero-sum-game“, but the more intangible perception by people of what “Kickstarter is” and what a worthy Kickstarter-campaign should look like.

Mashable calls it “Deflection”, noting that it used to be a concern of Kickstarter.com too…

“The thing is, if Michael Bay came along and wanted to do a Kickstarter we’d probably tell him, please don’t,” [Kickstarter co-founder Yancey] Strickler said at the time.

“I would never want to scare the girl who wants to do a $500 lithography project, ’cause that’s why we started this thing. We think we have a moral obligation to her.”

According to this argument, Kickstarter-backers/customers/visitors will be more and more reluctant to give cash to the smaller project as people become accustomed to the professional, highly polished campaigns boasting videos, graphics and social media marketing budgets that already exceed the total amounts small campaigns want to raise in the first place.

I grappled with the question of what makes the “big” Kickstarters successful in my old post on “Kickstarter is Entertaiment“. I still believe this argument is valid. To succeed, a Kickstarter-campaign needs to be entertaining for its backers, keeping them engaged and actively communication about the project in their own personal social (media) networks.

That said, good Kickstarter Entertainment – a constant stream of updates, sketches, sculpts, news, videos, etc – is a difficult thing to do for the proverbial one-guy/girl-in-the-basement.

I don’t think it is unreasonable to believe, that Kickstarter-backers accustomed, habituated to the 360°, all-out entertainment-assault of a big, professionally run Kickstarter drive will feel let down by smaller campaigns that cannot possibly deliver a constant stream of fun and gratifications.

#3 – Your Thoughts?

Whose side would you be on in this argument?

I admit, the second, “deflection” argument feels more intuitively right to me. However, I have no evidence to back this up. Both economics and human psychology can be highly counter-intuitive.

I would love to hear your thoughts on this, so leave a comment!

Z.

Zweischneid

Zweischneid

I am Zweischneid. Wargame Addict. Hopeless painter and founder of Pins of War. I hope you enjoyed this article. Don't forget to share your favourite miniature pictures and wargaming videos at www.pinsofwar.net.
Zweischneid
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  • http://www.facebook.com/president.beeblebrox Michael Bartels

    I have often stated my strong opinion that big Kickstarters absolutely hurt what in my mind was the original idea behind kickstarters. What does KICKSTART mean? Help someone with a great idea but no funds off the ground. Thats it.

    Companies like Reaper, KoD, Coolminiornot have enough money to fund their own products. But they don’t. Why? Because in this hype of ‘kickstarting’ it is so much easier to have the customer fund their whole production, often times more than a year in advance. Basically, the community is lending them money (albeit not at 0% interest, Kickstarter.com and the likes grab a hefty amount for their services).

    So why is that bad? Well, let’s say you fund two or three Kickstart campaigns. You have already spent a few hundred dollars on them. And you will receive your product in about a year time. That money is GONE from the market. Not everyone has unlimited funds. And in the year you are waiting for your product (in some instances even longer), there are so many new campaigns. Rinse. Leather. Repeat.

    Big Business has discovered Kickstarter & Co as a nice distribution channel with 0 risk to them.

    What’s even more aggrevating is that after these campaigns are successfully completed, you can buy the same stuff from a store – often times with no drawback whatsoever. The prices don’t change – and if you get in store rebates, these items are often times even cheaper than during the kickstart themselves…

    And what do the big companies do with all that money? Like Coolminiornot, they keep buying smaller companies (Enigma, for example) – all in order to make even more money.

    But, unfortunately, no discussion will change this. I think at some point the hype will be over because – particularly for miniature fans – funds are limited. And then you sit there, with nothing in your hand, waiting for stuff to be shipped at some undefined point in the future.

    It kinda makes me sad.

    • http://twitter.com/belverker belverker

      this is pretty much my view…

  • Orlando the technicoloured

    Personally I don’t think that big KS projects hurt small projects in general

    (although if a big project is very similar to a small one it might)

    Big projects bring in folk from outside the narrow pool of current KS backers, small projects just don’t (other than friends/family of the project creator), and once you’ve backed a KS project and enjoyed it you will, generally, back others.

    As to who should be allowed to use the platform I’d say that’s up to KS owners to puzzle out, personally I have no problem with any individual or company using it

    (although I’ll back projects from companies/individuals who have run but not yet fulfilled a previous project this is something KS should probably look at controlling more)

    As for money departing out of the pool available that would be the case whether it’s spend on KS or in the shops. If you buy one game or mini you can’t buy a different. Now if you spend on KS you don’t get your stuff for a while (quite a long while in some cases), but that’s were you need to decide how comfortable you are with that.

  • dynath

    On the surface Kickstarter seems to be of the belief that everyone using their service is of equal value. However, products, and money, are only worth what society agrees they are worth. It’s very easy for society to redefine the value of an item in the market place. I do believe the production values of certain kickstarters do hurt others specifically because they force the customer to redefine the value of the smaller or second product to market.

    Recently I pledged to Dwarven Forge’s dungeon tiles campaign. Only to find after it finished a second campaign for essentially the same product by Itar’s Workshop, a much smaller company run by one man. Comparing the quality of photos and renders of these comparable products, the sheer volume of graphical elements and videos in Dwarven Forge’s campaign is staggering. The Dwarven Forge campaign directly took money that I could have spent on Itar’s Workshop. Itar was asking for far less and just as deserving but Dwarven Forge’s name recognition and larger budget make it the campaign that will walk away the bigger winner. This is a direct causal hurt to the smaller campaign.

    Kickstarter flogs democracy and creativity of the creator in their about page. But they say it all when they call themselves a “for-profit company”. they don’t care about moral or ethical questions. They don’t care about big kickstarts hurting small kickstarts. They don’t want to stop big campaigns not because “everyone can flurish” but because they get a piece of every kickstart and the big ones make them a bigger piece.

    2 years down the road Kickstarter will be a bloated ebay like monstrosity that only serves the people who know hot to best exploit the system. Inbred by the same hundred companies doing bimonthly kickstarts for their new product they could have made without kickstarter if only they were willing to actually invest in a business model that kept up with the times.

    • disqus_V4xoe1691H

      Well, I backed both and spent $50 on the one-man Itar’s Workshop vs. $120 on Dwarven Forge. Since IW offered accessories DF didn’t, I pledged from both. I also didn’t see DF’s full-height walls as being interchangeable with IW’s half-height walls, so don’t see them as the same product.

      Anyway. If you’re going to complain about professional vs. amateur marketing on KS, why not the internet in general? Or shopping as a whole? With KS continually growing, why not have the large storefronts have their flashy presentations, while the smaller ones have their one-man booths — just like in real life? Some people need to buy their stuff at a fancy shopping mall, others are fine with garage sales.

      Don’t like where KS is going? Plenty of other places to support “the little guy”. I hear there’s this site called “eBay” where people sell things…!

      • dynath

        You’re right DF and Itar aren’t the “same” product they are competing products. If you buy one, you won’t by the other (generally, I know Itar had a lot more accessories than DFs KS).

        Professional vs Amateur isn’t the problem. Its a matter of interpretation and the inevitable hurdles that not understanding the actual intent of Kickstarter causes. A lot of people, and I mean a LOT, have been sold on the idea that Kickstarter is meant to help companies and creative individuals start getting funding for projects they couldn’t do without crowd funding. But KS itself is business and has no vested interest in actually supporting smaller projects and creative works over larger ones. People don’t understand that. What’s interpreted as complaints is really attempts to open people to that realization.

        I’m not sure your analogy of fancy store fronts and garage sales is accurate. Fancy store fronts and garage sales don’t happen in the same place, you don’t go to the mall and have people hocking their used junk in the parking lot. Beyond that “the little guys” on KS aren’t selling stuff they dug out of their attic. They are real businesses trying to improve themselves or start projects they couldn’t just walk into a bank and get a lone for. Comparing them to junk salesmen on the corner isn’t a legitimate argument. I’ll inherently argue that there aren’t enough places that support “the little guy”.

        I find it ironic that you mention eBay. A decade ago eBay was a bastion of people selling their old junk. 5 years ago it was a bastion of small startups distributing products both home made and imported. Now, its full of massive groups of chinese and russian importers selling knock offs and major companies liquidating refurbished items. It’s the same path Kickstarter is on and it never helps “the little guy”.

        • disqus_V4xoe1691H

          Really? I’d like to see what dungeon accessory in the Dwarven Forge Kickstarter “competed” against Itar’s Workship bookshelves.

          The analogy *is* accurate. On the same computer you pledge on KS, you have the entire internet in front of you. eBay, Amazon, OLGS, KS, they all have different sellers selling competing products. I would say the eBay is the *real* storefront that small sellers use and your description of them in unfair.

          I fully agree that “KS itself is a business” and is more interested in its cut of the money than fostering small creative ideas. OTOH, Such projects *do* get funded. Itar’s Workshop pulled in *seven* times as much money as their goal, which was to fund a resin spincaster, and the owner is contemplating getting a second one.

          To me, *that* sounds like success.

          • dynath

            I didn’t say DF had better accessories I said Itar did.

            By expanding the analogy as you do every store is on planet earth so everything is in competition with everything else. That argument is so expansive as to be absurd, yes taco bell competes with the gap in some cursory way. This article and my point is about a single venue that contains multiple “store fronts”. I hate even calling them store fronts because they aren’t. They are technically business proposals. And people seem to think of them as store fronts. The more store front like they are treated the less useful they become to small startups.

            I’m not saying Itar didn’t succeed. Yes they raised 12 times their goal. Dwarven Forge raised 38 times their goal. The problem is that as more mainstream companies poor into a venue like Kickstarter they eat market share, eventually someone like Itar WON’T get funded. Not because their creative project isn’t worth it or they didn’t put enough effort into it but because the larger companies that didn’t need Kickstarter are doing their 4th or 5th campaigns of the year sucking up funds so they don’t have to put their own money into their business.

            Not everyone sees this as a problem. If you don’t that’s fine but it is one. Its the same problem that Walmart causes when it moves into small towns and every mom and pop shop closes over night. People justify it by saying things like “they should have been more competitive or they wouldn’t have closed” or “they should have offered more variety” or “their prices were so high”. There is always a justification but that’s just an excuse for apathy towards corporate greed, and consumer’s apathy combined with corporate greed is why america is falling apart.

          • disqus_V4xoe1691H

            Well, if you want to start your own crowdfunding site, no one’s stopping you. Maybe you could IndieGoGo it.

          • dynath

            ROTFL! I love the irony of that. I wasn’t proposing replacing KS or IGG. Merely point out it doesn’t serve the purpose people claim it does and will inevitably drift farther from that purpose. I personally feel small startups should begin really thinking hard about what they expect from KS. Less and less small startups are going to explode like they used to. Its just not the magic money machine people make it out to be and people need to know that. Which is why this topic keeps being blogged about.

            I’ll also admit I think its sad, and a bit unfair, its not going to stay as helpful to new startups as it once was. We have a greed addiction in the US. :(

          • http://pinsofwar.net/ Zweischneid

            Well, I think the problem is that heading over to IndieGogo, Rockethup, Gambitious, Spot Us or whatever isn’t going to help you (entirely) escape the “expectations” people have build around the crowd-funding idea on Kickstarter (first and foremost).

  • Warrior Warlock

    Read Wired much? ;-)

    I dont think this is th case. As more projects that come online, whether by famous people or not, people’s expectations will be raised by those that do an outstanding job. While having industryconnections or an existing fanbase will help, this is the case across all products/industries.

    Id almost say its tougher as celebrities can cultivate apathy as people think that famous people earn more and shouldnt ask for money, eventhough they too cant fund such big projects.

    I agree with Michael that its the big corporations turning kickstarter into another distribution channel/marketing tool is the biggest hreat to kickstarters long term popularity. And indeed it unnecessarily removes money from market circulation (but this is arguable as the extra cash liquidity these companies now have could be invested elsewhere to generate equal growth). This together with the fact that too many people turn to crowdfunding now. The hobby industry in particular. I love the quality of miniatures on offer, but each comes with its own game system. I dont have the time foranother system. Im locked in. So my filter isthat i have to be able to use it in my current system, which is hy, despite being magnificent, i didnt invest in kingdom death.

    • Warrior Warlock

      Apologies for the double post and grammar mistakes, my ipad is being difficult. I think Orlando touches on a good point though, that big companies that might not need the liquidity drain the crowsfunding space of cash originally intended for startups. However, in theory (and based on the suggested pricing difference dwarven forge didnt do this) the larger companies could use their economies of scale and infrastructure to lower prices, realize better quality or use the additional funds more efficiently for other investments than a startup ever could. I think secret waepon and its terrain tiles is a good example of this.