
The Story of 2 $1 Million Projects in 24 Hours - zachh
http://www.kickstarter.com/blog/24-hours
======
hop
Hi HN, Casey from the Elevation Dock project.

People use the term disruption pretty loosely, I think crowd-funding is really
doing it. Goodbye middlemen, sayonara to the massive traditional barriers to
entry. Hello bootstrapped projects like this that would otherwise never see
the light of day.

~~~
VikingCoder
Hi Casey,

First off - Congratulations!

I have a burning question. Have you figured out how you're going to do
shipping and handling? Are you using a 3rd party to do all of the
distribution, or do you have the workforce yourself to do it? Kickstarter and
Amazon don't do it for you, do they?

~~~
ChrisNorstrom
I did calculations for my (failed) kickstarter campaign between Amazon
Fulfillment and me personally packing and mailing everything.

Amazon Fulfillment would have cut my profit in half. Yes it saves you time but
depending on where you live and where the fulfillment warehouse is, the size
of the products you're making, and the cost of shipping them. For my specific
case it wasn't worth it. Hiring a few neighbors and working out of the garage
for a few days would be far more feasible.

~~~
rikf
There are cheaper alternatives then Amazon for fulfilment.

~~~
prawn
Can you list them?

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reidmain
This is really starting to show the potential of Kickstarter.

So many of the successful Kickstarter projects have been unknowns. Just really
smart and driven people with a dream.

If established companies can bypass publishers and investors by promising to
sell a product directly to the consumer then we have a whole new ballgame
here.

Double Fine has successfully funded a game where the only promise is that they
will release it. That's it. No percentage of revenue to the publisher. The
publisher can't demand they add DRM, etc. Their only obligation is to do what
they do best because they are only answering to someone who wants a great
game, not a return on their investment.

This is big.

~~~
aw3c2
They already decided to use DRM. They use Steam. I'd be among the backers if I
would get a simple standalone installer or even zip archive without any
honest-customer-punishment.

~~~
reidmain
True. They've decided to go with the least invasive form of DRM that is
typically excepted.

I agree with you that a stand alone installer would be best but because of how
easy Steam is I am gladly willing to give them $30 for said game.

------
ChuckMcM
One has to wonder though, if you priced out your Kickstarter project because
you wanted to make one for yourself and well if you could get 100 other people
to kick in you would be able to get the better price on parts, and then 10,000
people kick in and now you're looking at something which was 'spend the
weekend building up a hundred or so foo-widgets' becomes 'spend the next six
months building 10 thousand foo-widgets' that has to suck.

~~~
marquis
I think that's a problem we'd all like to have.

~~~
ChuckMcM
Actually its not. Let me phrase it differently and you tell me if you'd
volunteer :-)

"Hi! I need you to work for slave labor wages for the next six months, if you
don't you are going to be pilloried and your reputation destroyed, no one will
ever work with you ever again, you may not be able to find future employment.

How about it?"

The situation arises when you haven't covered all of the possibilities.
Generally the one over looked by Kickstarter participants is the 'wildly
successful' one. The dilemma is as follows, to make one of something by hand
might take an hour of your time. If you are going to make 10 you might create
a couple of frames or something to hold parts to make it go more smoothly so
it takes three or four hours, to make 100 might involve some slightly more
elaborate frames and all weekend. Now if you've priced your kickstarter such
that you 'make' a couple of dollars on each unit, then you've spent your
weekend making a hundred widgets and you've got $200 to show for it. If you
need to make 10,000 things get more complicated. You can invest in more
sophisticated jigs and holders (that eats into your profit), or more
sophisticated machinery (that eats into your profit), or more help (that
hugely eats into your profit) So you still 'make money' after making 10,000
but its like $2,000 over 6 months, rather than $200 over a weekend. I suspect
you could find better work for $350/month. However if you had priced your
widget such that you could make money building 10,000 of them, well then
you're golden because you've included the cost of paying for tooling at a
small factory nearby and having _them_ make the widgets. Now the second 10,000
are like 'free' since you've already got the overhead of setting up
manufacturing paid for. The downside is that at the higher cost your
Kickstarter might not fund that many.

Its just a cautionary tale for would-be kick starters to think though the
various scenarios and internalize what each scenario would mean to them and
then price out accordingly.

~~~
buu700
Really interesting point, but since kickstarters aren't technically obligated
to offer their product as an incentive, it would be pretty simple to get
around that without messing with pricing by just saying 'first N backers get a
widget' (though, this in itself does also require the foresight to consider
your scenario).

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vannevar
So if Blizzard does a Kickstarter and raises $10M in pre-sales for a new game,
is that within the mission of the site? I was under the impression that it was
a site for projects by people who otherwise wouldn't be able to fund them.
This seems to be pushing that boundary.

~~~
kmfrk
I'd rather rephrase the question to ask generally what it would take to break
the spirit of the site. A lot of projects already use it as a shop-like site.

And as far as big companies are concerned, Kickstarter and Amazon take a
combined 7.9% cut, which is quite significant.

I'm also not entirely sure whether companies with DRM-encumbered games will
manage to attract donours in a similar fashion to Double Fine who seem to be
using the Steam platform, which is widely used and loved.

Blizzard could probably pull it off with their games (MMOs not included)
because of Battle.net, but it would turn into a major shitstorm, if they
funded something like Call of Duty, which is a magnet to controversy and
uproar. Then there would be the ensuing hell of charge-backs and refunds.

With Kickstarter, you generally invest in an idea more so than a product. What
but a product do you invest in by giving Blizzard money? With Double Fine, you
revive the adventure genre, have a chance of disrupting the videogame industry
and bring back some of the biggest videogame developer legends and give them
free reins over their product without having to go hat in hand and pander to
producers. With Blizzard, it would just be business as usual.

I don't know whether Kickstarter will ever lose its indie feel, but if it
does, or some project starters do, they will be subjected to a level of
scrutiny orders of magnitude higher than what we are used to.

I think Kickstarter projects depend more on goodwill than most of us imagine.

~~~
asb
Steam games are DRM encumbered. If Valve decide they don't like you any more,
you can no longer play the games on your Steam account.

~~~
kmfrk
I didn't mean that as mutually exclusive but yes, Steam - obviously comes with
DRM. Valve have so much goodwill that it isn't a problem with its users.

------
Jun8
Congrats to Kickstarter!! This is the type of win-win startup I want to
create/work at. Gives a simple example of pg's essay about wealth not being a
fixed cake to share but that it can be created
(<http://paulgraham.com/wealth.html>).

Two things that piqued my interest:

1) They kept saying that they were refreshing the project page to say when
it'll hit 1M. Surely a company like Kickstarter has created visualization
tools that create nice, real-time graphs of selected projects. No?

2) "After not having a single million dollar project in Kickstarter's first
two-plus years, there are suddenly two within four hours of each other." Call
it black swan, non-normality, heavy tail, whatever, this shows how common (and
lumped) rare events are.

~~~
Aqua_Geek
> 1) They kept saying that they were refreshing the project page to say when
> it'll hit 1M. Surely a company like Kickstarter has created visualization
> tools that create nice, real-time graphs of selected projects. No?

I found that odd as well. Where's the websocket goodness?

~~~
acgourley
This just in: Web-socket powered dashboards not necessary for success.

~~~
Aqua_Geek
You're right - they're not. I'm not trying to argue that they are, though. I
just assumed that a company that's dependent on projects succeeding to make
their living would have something more than "keep hitting refresh" in place to
track big projects like these.

------
bvi
Is the money raised through Kickstarter seen as income, and therefore, taxable
(meaning that 20-30% of the final amount raised is lopped off)?

~~~
patio11
Trade of money in return for promise of a future good/service is
unquestionably income in the US, but that does not necessarily imply that sort
of marginal rate. For example, if the money hits a corporate entity who hires
programmers with it, the corp will use their salaries as an expense to offset
that income.

Similarly, if you raise $25k to make a foobar and spend $20k on materials,
you'd only owe taxes on the profit.

I am not an accountant, etc.

~~~
tesseract
> For example, if the money hits a corporate entity who hires programmers with
> it, the corp will use their salaries as an expense to offset that income.

Or, to my understanding, even if it goes to a person. Being a sole proprietor
does not preclude you from deducting your business expenses.

------
newobj
I think Kickstarter is the most interesting thing happening on the net today.
Simply because it aggregates the most interesting things happening in the real
world, by its very nature. Browsing Kickstarter has actually become a fun
activity for me.

It's such a simple and genius way of directly connecting producers and
consumers, reducing risk for both parties, verifying ideas, creating
relationships. So elegant. The number of opportunities this is going to enable
is staggering. And Kickstarter themselves, do they have any overhead? These
guys are going to be printing money.

And being a patron is fun!

One thing I'm curious about is Kickstarter's exposure to someone who fails to
produce the promised rewards for funding. As a funder/patron, do I have any
recourse for a producer failing to uphold their end of the bargain?

~~~
jomohke
There's no guarantee that a project will be successful – your funds are
treated as a donation. Here's a story from a few weeks ago of a failed
kickstarter: [http://a.wholelottanothing.org/2012/01/lessons-for-
kickstart...](http://a.wholelottanothing.org/2012/01/lessons-for-kickstarter-
creators-from-the-worst-project-i-ever-funded-on-kickstarter.html)

------
sawyer
I love how enthusiastic the Kickstarter team looks in those photos - it's
awesome for them to be able to share in the success of the projects on their
platform.

I'm looking forward to seeing how it grows and what other projects crop up now
that people have seen this incredible milestone passed.

------
j45
This is really inspiring to see.

I give my respect, admiration, to the empowerment Kickstarter is enabling in
the world. People say they do crap like empowerment all the time.. Kickstarter
seems to say very little themselves, all I hear is the success stories.

It's a delightfully simple concept: Put a great idea out there and let it be
loved and supported.

Ideas that wouldn't have seen the light of day are, fuelled by early adopters
and pioneers.

Being on the web for almost 2 decades makes everything look the same, or at
least kind of blur together over time.

For me, with information and innovation; since Gutenberg, the web really was
the second big thing.

Maybe enablers like Kickstarter are part of the third leap for our world where
they are creating change in the real world from innovation.

I've rarely seen something successful on Kickstarter I didn't want to buy.
Normally I can't decide as quickly on items in the retail market that compete
with it.

The continued popping up of Kickstarter stories and dreams becoming a reality
have made me think about all those things I wondered about.

Could they become a reality? Where could I start learning about how to
kickstart something successfully? (I Might be a search or two away but the
feeling of possibility is great.)

------
kilian
This must be the epitome of feel-good startup stories. Congrats to everyone
involved!

------
lwhi
Congratulations to all concerned. I think the Kickstarter model is really
powerful, and it's exciting to see that these projects have got off the
ground, but - without wanting to be party pooper - what happens if a
fundraiser can't deliver?

It seems that Kickstarter have an incentive to raise as much money as
possible. After all, they take their 5% - so as a company they've taken over
$100,000 in the last 24 hours from two projects alone. Spending a vast amount
of money without the necessary battle-scars and bruises gained from
experience, is likely to involve a steep learning curve.

Bringing a product to market isn't easy. The fundraisers in question are in a
unique position, because they have their buyers' attention and money from the
start. This has to be a great thing, and to large extent levels the playing
field and creates a great environment for innovation .. BUT, the hard work has
just begun.

I can't help feeling that this model of funding is about to gain even more
popularity - but could eventually open up a can of worms.

~~~
Mvandenbergh
What I see as a problem is a failure by some projects to manage expectations.
I think that a lot of people who are backing projects like this don't realise
that they are not pre-ordering anything, they're making a contribution to the
project startup costs and _hopefully_ they'll receive one or more of that
product when manufacturing begins. I've seen comments on some Kickstarter
projects that have slipped on shipping deadlines that don't seem to indicate
that the commenter understands the uncertainty of funding a project like this.

I don't think there's much risk backing an experienced person with a ready to
be manufactured product, and I've backed several such projects on Kickstarter,
but I think that backers need to remember that part of the Kickstarter
proposition is that you get discounts on products like this as a reward for
putting in fixed upside risk capital.

~~~
lwhi
So is the contribution a donation?

~~~
Mvandenbergh
I think that might be an open legal question, if you use the word pre-order
all over your Kickstarter page you might be creating a situation where you're
on the hook, legally speaking for fulfilling those orders.

------
powertower
KickStarter is one of the very few businesses that's truly innovating /
disrupting anything right now.

Then Stripe.

Then CloudFlare (I really like their story and pivot).

~~~
troygoode
Don't forget Khan Academy.

------
akazackfriedman
For Kickstarter, business model... Validated! Great job guys congrats! What a
great story of someone not playing the startup lottery and winning.

------
Blocks8
Kickstarter continues to prove that good ideas spread quickly. Where websites
show viral growth in user visits, kickstart shows it with real dollars for
real products. Very inspiring. Thanks for sharing this post- it lets the
community get an insider view of the excitement.

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prawn
This is going to put Kickstarter well and truly in the public eye and, as a
result, bring many more potential wallets browsing the site. Great time to be
an entrepreneurial industrial designer in the US.

Just wish it was open to those outside the US as well.

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nreece
Every startup should be like a Kickstarter project. Show your concept, find
customers who pre-purchase, build product, deliver and scale.

Grow organically.

------
wildster
Why din't Raspberry Pi use Kickstarter?

~~~
Mvandenbergh
Kickstarter is US only, isn't it?

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1sttimefounder
Why is Ron Gilbert nowhere to find in the celebration photo? Is he really that
grumpy & shy?

~~~
aidenn0
Maybe he was smiling and didn't want to be caught on camera (It would reduce
the value of the $35k reward)

