
Kickstarter Sets Off $7 Million Stampede for a Watch Not Yet Made - mattewing
http://www.nytimes.com/2012/04/30/technology/kickstarter-sets-off-financing-rush-for-a-watch-not-yet-made.html?_r=2&ref=business&pagewanted=all
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egypturnash
I'm trying to decide if Kickstarter is the blossoming of a new way to do
business, or a bubble fueled by a few hits that came at the same time.

I'm hoping it's the former, as I've got a campaign going to print a comic book
that's close to being funded, and I'm hoping to have it around as a viable
option to repeat this stunt to fund future books, and ultimately maybe even
support myself this way. The limited duration makes stuff MOVE which is great.

~~~
mattewing
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 be a POS, I'm probably
going to be a lot less likely to buy other new untested products on
Kickstarter. So, a few high profile flameouts could damper the whole
marketplace, but I don't think could lead to value crushing collapse like when
a bubble bursts.

Good luck with your comics!

~~~
egypturnash
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 check. Maybe Kickstarter will end up with a
tighter TOS and will send lawyers after a huge scam if one happens, I dunno.

While people are definitely paying for my own personal awesomeness rather than
Kickstarter's awesomeness, I think the fact that people know and somewhat
trust the model and te middleman is helping. Break the trust and it doesn't
work.

And thanks for the well wishes, the comic leapt from 80% to 121% around the
time you sent them!

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Impossible
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).

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carbocation
Unless I'm missing something, Kickstarter sure seems like the closest thing
I've seen to a tool that enables closer-to-perfect price discrimination.

~~~
bostonvaulter2
Could you expand on what you mean by closer-to-perfect price discrimination?

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guard-of-terra
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
that by paying less they only steal from themself.

~~~
_delirium
That's not that uncommon a pricing model in the arts even pre-Kickstarter.
You've got the $10 CD, the $25 limited-edition CD with bonus tracks, the $100
super-limited leatherbound box set signed by the artist, etc.

~~~
guard-of-terra
I'll argue the incentive is different for goods that already exist.

Also kickstarter takes this to a radical new level with tens of price tiers
compared to two or three.

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pepijndevos
It saddens me that Kickstarter is US only. I know there are some equivalent
european websites, but I haven't heard of any big success stories about them.
HN bias? or is Kickstarter-the-brand really that much more successful than
Kickstarter-the-concept?

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naish
From my understanding, the US requirement is due to Amazon Payments. It would
be great if they could offer an alternative to those who are ineligible for
Amazon's service. I'm not sure what incentive there is for Kickstarter to
explore other options--they are likely happy to enjoy their current growth and
success.

That said, as a backer of many Kickstarter campaigns from north of the border,
it would be nice to be able to tap into their momentum with projects of my
own.

~~~
TazeTSchnitzel
You can still use Amazon Payments outside the US. Unfortunately, unlike
PayPal, they bill you directly in the target currency which means your bank or
credit card company may charge you fees - they did for me :(

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

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catch23
I wonder if this will make angels worry, the same way that angels made VCs
worry. And if so, I wonder if we'll be seeing better terms for future founders
from the old system investors.

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InclinedPlane
Yes and no.

Yes because Kickstarter has a high profile now, and there is rather
significant amounts of money flowing through it. Angels and VCs sometimes only
put in a few k or a few mil. for a company, and now it seems as though you can
just go to kickstarter for that amount.

No because kickstarter isn't for everything. The closer your project is to the
ideal of a semi-artistic one-off project with a timeline of months that
produces a tangible product that the backers can receive the more likely it is
to be approved and funded. But not all businesses fit in that model. More so,
that model of venture isn't necessarily the sort of thing that is most
attractive to an investor. Kickstarter projects are the sort that scale up
slowly and carefully. But a lot of the most desirable investment targets are
software companies which provide a service who can scale up by a factor of
thousands or millions in a matter of months.

Now, there is still a sizable niche that straddles both worlds (such as game
development) and you can expect a lot of interesting things to happen in that
space in the near future.

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markerdmann
A word of warning for anyone considering funding a software project through
KickStarter: they may reject it.

I recently spotted this blog post written by a team trying to fund the
development of an iPhone app:

[http://famnerd.com/2012/02/update-famnerd-rejected-by-
kickst...](http://famnerd.com/2012/02/update-famnerd-rejected-by-kickstarter/)

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pronoiac
Nice graphs -
[http://www.nytimes.com/interactive/2012/04/30/technology/thr...](http://www.nytimes.com/interactive/2012/04/30/technology/three-
years-of-kickstarter-projects.html)

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spdy
Would love to see the margins of popular products. By the end the will
probably sell over 50k+ watches. Im sure they now negotiate better terms.

Direct Kickstarter link:
[http://www.kickstarter.com/projects/597507018/pebble-e-
paper...](http://www.kickstarter.com/projects/597507018/pebble-e-paper-watch-
for-iphone-and-android)

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igorsyl
What would happen if the company fails to deliver the watches? Give a refund?
What if the company has no cash left?

