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Kickstarter Is Totally Disrupting Consumer Electronics, Probably By Mistake (amandapeyton.com)
169 points by zachh on Apr 15, 2012 | hide | past | web | favorite | 67 comments

Seems like Kickstarter is also disrupting the game development process, allowing game studios to produce games without being beholden to publishers.


* Double Fine Adventure - http://www.kickstarter.com/projects/66710809/double-fine-adv...

* The Banner Saga - http://www.kickstarter.com/projects/stoic/the-banner-saga

* Wasteland 2 - http://www.kickstarter.com/projects/inxile/wasteland-2

* Shadowrun Returns - http://www.kickstarter.com/projects/1613260297/shadowrun-ret...

Even smaller games are getting funding this way:

* Valdis Story - http://www.kickstarter.com/projects/460275866/valdis-story-a...

* Echoes of Eternia - http://www.kickstarter.com/projects/1465600975/echoes-of-ete...

Don't forget Leisure Suit Larry! (hope this one meets its fundraising goal)


And not just electronic games, but pen and paper RPGs too:


A former roommate of mine is finishing a game (inspired by Ender's Game) with Kickstarter funding, and they've actually released a playable prototype for backers--even though the Kickstarter campaign isn't even over yet.


Also, a friend's game "Path of Exile" is using a pre-purchase model to fund the late stages of development


You can buy micro-currency in advance and in exchange receive perks similar to KickStarter. By running it themselves, Grinding Gears gets access to the funds and can dish out the benefits immediately.

Whoa, I hadn't caught the Shadowrun one. Looks like that's another $30 I won't have any more - good thing I feel it's worth that. :)

For me it was surprising at first that Kickstarter even worked. It pulled out a better part of people that I really didn't hope that it exists on such a level. People are basically paying for stuff without the 100% guarantee that they'll get it, without previous reviews and opinions about those products, and while knowingly being the first batch of users which will collide head-first with all first bugs and issues.

And most importantly, people are doing this all with an open heart, actually being happy to encourage and assist innovation and creation of new products. I would say that kickstarter is one of the coolest and world-changing website (more than a website.. product, idea) of this decade.

Consumer electronics is just one of the areas KS is disrupting. Software and games are another one. But there are basically no limits! I wholeheartedly believe that once KS is popular enough if someone came with a project to send a video camera to the moon (on which you can buy video time to simply rotate it and look around) it would get funded right away.

I have the feeling that a significant number of the payers are not aware of the fact that there is a decent chance of the hypothetical product never seeing the daylight. If not, it will almost certainly be delayed.

When one or two of highly publicized projects fold, I expect a good amount of Kickstarter complaints.

I don't know... I funded a video game (No Time To Explain) whose frankly was garbage. I didn't think at the time that kickstarter was responsible. I made a bet, and I lose. I still put money on projects I find awesome. I am not everyone, but I have the feeling that consumers are more relaxed when they put money on a kickstarter project.

that is exactly right. kickstarter is not a store. there will be bad products and probably some outright fraud. it is a marketplace like ebay. backer beware.

I am surprised as well, I did not expect it to work. I am very happy that it has however.

I wondered the other day if Kickstarter might be the next big Internet company (following Google, Facebook and Twitter). The business model has so much disruptive potential, and they've already overcome the chicken and egg problem. I wish it were possible to invest in them. :-)

That is highly unlikely. Kickstarter is essentially a marketplace for entrepreneurs. People don't go to Amazon or ebay in the same sense as Google or Facebook. Sure they have one hell of a business, but only a certain kind of person is attracted to it. Everyone uses Google (or some search engine) and Facebook's attraction is undeniable.

Well if they do, I sure hope they aren't bought soon like Instagram. I'd prefer they stay for the long haul and stay independent as much as possible.

I wonder if KickStarter and similar projects could disrupt YC and TechStars.

For example, I could see DropBox raising a sizable seed round on KickStarter if it was an option when they launched. (Free 250gb plan for a year with a donation of $50.)

Definitely! Why can't I buy $100 worth of stock in a startup along with 1000's of other people?

Some SEC rules or something?

EDIT: Then imagine how motivated those 1000's of others would be to promote a startup they owned a stake in.

Not sure if that's tongue in cheek or not...

But that was part of the recent JOBS act. You'll be able to do that soon for good or ill.

Given that law, I wonder if there's going to be a land grab to become the kickstarter of startups. Should be fun to watch.

Yeah, there's already startups waiting in the wings, which is interesting given that it'll be a solid year or more before regulations are formed around this. All we have now is an enabling act. As can be imagined, it takes time for regulatory agencies to iron out all of the details to put a body of regulations in place.

I'm most interested in how they deal with the rights of these investors. Will they be able to demand to inspect books of startups they invested in? Will they have voting rights?

It could get dicey, especially with unsophisticated investors.

If this becomes legal, wouldn't kickstarter instantly be the kickstarter of startups?

They've said they're not interested in doing it, which is kind of surprising.

There will be substantial regulatory issues to deal with, so it's not too surprising they don't want to drag themselves into that. Better to maintain their focus.

Well, that opens up the spot for a new startup.

I was actually looking at doing something like this about a year ago, before I figured it was virtually impossible at the time. The idea did come out to me after seeing kickstarter a couple of times. I even remember that one of the names I was playing with was Bootstrap.it or something similar. My logic went along the same lines as your edit. People would not only be able to donate monetary funds, but then each company would have access to a network of different individuals, some of whom would be willing to help out with advice, or maybe if one was a lawyer, he'd help them get incorporated, that kind of stuff.

Essentially it's because of SEC. First of all you have (had) the 500 limit for investors, so any fundraiser where only, let's say 400 people, could give money would be rather shitty.

Then the other part was that if you wanted to invest in early stage startups, you have to be an accredited investor. That is you have to either make 200K a year for the last two years (or 300K together with a spouse) or have $1 million in the bank. So again, not too many people fill those requirements.

In terms of companies that were still attempting this, http://www.profounder.com/ is one of the bigger ones. They (sort of) made it work through some loopholes as far as I knew.

I find it somewhat ironic that the same people who denounce the recent Instagram investment as an insider deal for a few priviledged people in the know tend to be the same people who oppose the democratization of angel investing.

Angel List is perfectly positioned to do just this.

Where disrupting means tiny, tiny, tiny niche with a disproportionate amount of hype.

Games are another example eridius pointed out, showing 6 successful projects out of the 10000s of games that will be produced outside of Kickstarter this year! What's happening is in some cases awesome but it's not disruption.

The timeline is never:

   Day 1: Disruptive company is formed.
   Day 2: Disrupted industry in flames, disruptive company wins!
It's a cowpath today, but I think there's every reason to believe this one can and will be paved.

This Red Hat video (Truth Happens) is very appropriate: http://www.youtube.com/watch?v=RXDsRoc6MGo

> Consumer electronics are among the most well-funded projects on Kickstarter, (...) which (...) means that consumer electronics as a market has been ripe for disruption all along

So true. Kickstarter is Wordpress for gadgets; anyone with an idea and some talent and experience can make something without first needing to get pre-approved by some self-appointed authority.

I think anywhere where someone says "you can't do that" is ripe for this kind of disruption. So what's next?

Is there a place that lists the projects that ended up being a failure? I'm curious what the failure rate of Kickstarter is, and if fraud artists are attempting to rip people off via it. Also, if the failure rate starts increasing, would that jeopardize the entire business model, if people lose confidence that the projects will see the light of day?

According to Kickstarter [1] the success rate was 43% in 2010 and 46% in 2011. Wikipedia [2] suggests the success rate so far in 2012 is 44%, but the source is no longer available.

I don't know if that's just the success rate of crossing the funding threshold or success rate of delivering the project as well.

[1] http://www.kickstarter.com/blog/2011-the-stats [2] http://en.wikipedia.org/wiki/Kickstarter

Maybe the Diaspora project qualifies as a failure or, at least, as a disappointment.

From Kickstarter's point of view, they enabled Diaspora to raise a big pile of money so that they could _attempt_ something. So it was a great success.

I'm not following it, but doesn't it work as advertised? what's the disappointment then?

I guess the disappointment is that people don't use it much.

I never held out much hope for Diaspora. For the most part I only use Facebook to connect with people that are helplessly or willfully ignorant of the issues that led to Diaspora in the first place.

I think we're just one big Kickstarter failure away from everybody rethinking things.

You could make the same exact argument on the same exact basis about the stock market. Yet it looks like kickstarter is far, far and away superior to that model in terms of translating initial funding to successful projects.

FWIW, I use Kickstarter solely as a way to fund art projects, a sort of modern art patronage system if you will.

I've never even considered that the consumer electronics projects are art in their own right.

Is only funding art intentional or haven't you seen anything in different categories that you wanted (and were willing to spend $X for)?

I've only funded a CD for my friends' band, but if I wasn't a student (aka, had disposable income), there are quite a few things in the consumer electronics space that I would have loved to pick up.

I guess I never really thought about it. I've never gone looking for things to fund -- I've only funded stuff my friends are doing.

I diagree with the thesis.

An art project like the one mentioned is relatively small. CE projects, which want to ship millions of units is an entirely different affair, usually costing millions of dollars and large teams composed of many different specialities.

Even if you did raise $5 million USD you still need a design team and manufacturing. And there's no guarantee of success either. I just don't see Kickstarter helping much.

Perhaps we merely need to modify the thesis: Kickstarter is the user interface by which independent designers connect a thoroughly mature, ever-improving ecosystem of OEMs and prototyping shops to consumers, thereby potentially disrupting consumer electronics.

The real force here is small-batch manufacturing, which has been a long time in coming. Laser cutters, water-jet cutters, 3D printers, and - perhaps more importantly - the technology to enter a credit card number, press a button, and ship your CAD drawings around the world to a shop in some Chinese city where a team of machinists can whip up a thousand units for small amounts of money.

But the way this technology manifests to US consumers is via Kickstarter campaigns.

And, sure, if you want to scale any of these Kickstarters up to millions of units you'll need a real manufacturing team and capital. But, as with software startups, it's easier to raise capital once you've found product/market fit. And here we have the other advantage of Kickstarter: It makes it easier than ever to find and energize a collection of early customers.

Don't think for a minute I'm satisfied with the status quo. I'd love it if all these rapid prototyping tools got cheap enough for mass production. But that's not how it is now or for the near term.

Actually, there is one area where rapid proto has helped, and that is with PCB manufacturing. It is relatively easy to get boards done quickly. The board outlines are done with CNC, and the holes are often laser drilled.

But your job is definitely not over when you email the design file, in many ways it is just beginning.

How does the Pebble Watch fit into your understanding of the difference?

They have a small team, single designer. Although they built a consumer electronics product before they seem to run on fairly limited funding.

Although I don't know of any Kickstarted consumer electronics designs that have already shipped successfully, so maybe the specific viability is not yet proven.

The Pebble watch is cute, and small enough scale that they might actually ship product. The question is, at what price?

Remember, we're talking CE, so every penny counts. Unless they've assembled a very good team, that thing will retail for over $100.

If the product seems like it might be successful, somebody like Samsung will jump in right away with a competing product for $50 USD. And 6 months after that the Chinese clones will be coming in at $30. Good luck trying to turn enough profit to fund development of the cost-down version.

The big boys like Samsung and Foxconn are so vertically integrated. It is tough to compete with them when they can buy the chips at a much lower price than you can.

Well, but they will get some amount of money from the initial batches and then they might grow, get bought by someone, or who-knows-what.

But the point (for me) is that they're developing a piece of consumer electronics that is actually useful. Right now there's (AFAIK) nothing there comparable to Pebble (wearable, nice-looking, programmable e-paper interface to smartphones). It's a hacker gadget, something that is heavily useful and can be made even more by anyone with a bit of free time on their hands. It's a very rare situation in consumer electronics market (Android is kind of new here, and vendors are going out of their way to break it anyway).

So yes, let's have Samsung jump in with a competing product for $50. And then maybe Nokia, or someone else. I would be happy to see that, because an useful tool would appear on market, and it doesn't really matter who provides it, as long as it's not crap.

Unless they've assembled a very good team, that thing will retail for over $100.

From the $99 pledge description: "This watch will retail for more than $150"

They've already sold devices for blackberry so they have a good grasp of what the costs are: http://getinpulse.com/

They now have what are essentially pre-orders for over 25K devices at around $115 a piece so they're on course to make a good profit on the first generation, and they'll have the brand, ecosystem, and everything they learned making the first generation to make the second generation devices a better offering than anything the competition can put together. They're targeting smart phone users who don't mind paying a premium so price won't necessarily be the deciding factor.

It's tough to compete, unless there's a product people are willing to buy which they simply can't buy from the big guys.

I think we see a little of what your talking about with Shapeoko ... awesome idea, execution, community... but the guy hit a scaling hurdle and put maybe a tad too much on himself, but now it is being handled by others, so the whole thing worked out. Other projects will have other experiences, and his situation is unique in most other ways, but it does coincide a little bit with what you're saying.

Another one is Open Pandora, the game console. It didn't use Kickstarter (it started before that was popular), and it took a while to get going. Go read their blog about the ir production difficulties. The last I checked, they had shipped only about 4K units. They started with a high-end mobile processor, but that was years ago, and the latest gen phones and tablets have eclipsed them. They've had quality issues too, because they didn't have good production line testing.

I've been wondering how easily a situation could arise in which an underdog could try something like this on Kickstarter and give up, and end up having done nothing but provide free research into market demand that a bigger player with more resources can then take advantage of.

Uh... crowdfunding sounds like the PERFECT model for consumer electronics!

It's a business that requires high startup capital, and where uncertainty comes with much greater costs than software. You're going to be making thousands of units of whatever it is you're making if you want it to be even remotely cost effective.

So, a method of funding where customers vote with their wallets before you face the biggest headache in consumer electronics--turning a design/prototype into something mass produced--sounds like a great fit.

I'd like to see a graphical Dwarf Fortress funded through Kickstarter.

I don't know how it compares to the depth of Dwarf Fortress at the moment, but there is Towns:

I've been watching a Let's Play of it on YouTube recently:


you can already get pretty nice 3Dish plugins for dwarf fortress the lazynewb pack even comes with stonesense http://img228.imageshack.us/img228/5143/screenshotlv.png also http://www.bay12forums.com/smf/index.php?topic=63484 and http://www.bay12forums.com/smf/index.php?topic=70700.0

Funny; I only discovered that there are non-tech projects there quite recently. I found out about Kickstarter via HN, so most of the projects I saw were hardware and software ones, and guess what... I think it's what was needed.

There's lot of creativity to be unleashed in building new technology, tools and practical gadgets (as opposed to what typical commercial gadget is). And Kickstarter tech projects are definitely awesome-first, money-next type of projects - maybe because people involved are often building them for themselves? I hope to see more such projects, I will be happy to back them.

The big consumer electronics companies should be really scared right now. Hardware startups are coming. Wouldn't be surprised if some hardware incubators start popping up too

There are several that exist already. Here is one in located in San Francisco.


" Consumer electronics are among the most well-funded projects on Kickstarter despite the fact that it’s dubious whether they should even be included in the scope of fundable projects. "

Why would it be dubious to have them be included as a fundable project? Am I missing something?

Kickstarter has a sort of vaguely worded scope that indicates they're interested in funding art and other "creative" projects, but not normal products. Some tech clearly falls into the creative/artsy category, but some of the tech projects on Kickstarter are veering closer towards "just" funding a consumer electronics product.

I would disagree with the post. Kickstarter doesnt change the field of consumer electronics at all. The products created would usually not have been made but for the pre-sale funding available.

I would also disagree that these items can even be considered consumer electronics, they are widgets at best and really destined for a large consumer market.

Kickstarter is a great platform but like the instagram sale recieves too much hype whenever something big goes up.

Kickstarter ay have started as a growd funding plattform for art projects. But by doing that, they lay ground to a new way of funding, well, virtually everything. And since funding can be a major pain in the ass, Kickstarter has a opened up opportunities nobody would have ever dreamed of.

When they now get a banking license or an other type of SEC "enter random monetary regulating body" blessing, the finacial industry should worry! ;-O)

Does anyone know how to do a consumer electronics startup? Can you contract out the design to someone knowledgeable? How do you find such a person? How do you get it manufactured?

Are there a lot of regulations to be aware of?

Where do people selling consumer electronics on Kickstarter find manufacturers and supplies? (My first guess would have been Alibaba, but is that feasible for someone really starting from zero?)

I think, instead, that this is teaching us something about the distinction between consumer electronics and other goods requiring some creative genesis.

Is anyone else bothered by the use of the word "mistake"? It seems "unintentional" is a more descriptive term.

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