Kickstarter sucks

[highgravitybacon]

This isn't a kickstarter thread. It's about how awful Kickstarter is. Why would anyone give money to an idea when it's all the risk for you, none of the risk of the recipient? In a traditional venture capital situation, it's totally different. The VC provides the money and in return captures some of the revenue stream from the business or idea. You get none of that with Kickstarter. The recipient takes your money, spends it in any manner they deem fit with no accountability to you, and then if things go well you might get whatever product they promised in a year or two.

I see breweries doing Kickstarter stuff all the time. It's usually "give us a few hundred, get a mug." A mug? For real. Wow. What a bargain. So I give you a bunch of money and in exchange get a piece of $8 glassware that I have to pay to fill? Oh, you include a $9 T shirt, where do I sign up?

Kickstart is the internet equivalent of panhandling. It's just like the vagrants I see congregating on the side of the road with their cardboard signs begging for money to get another beer with.

 

[LabRatBrewer]

So, you would want a percentage of ownership for a couple hundred dollars? That doesn't seem reasonable. If there was a brewery kick-starting in my neighborhood, I'd consider contributing in the hopes that it actually opens. I would love to have another nearby brewery.

I've seen many kick starters for interesting products that absent kick starter many not get built. For example, there is one that is a Johnston style temp controller that tweets the temp for easy logging. If I contribute, I'd actually get the product. Perhaps I am over paying in comparison to other customers who buy on the subsequent runs as the company lowers its production costs, but if not enough people contribute it never gets built and I don't get a cool product.

Nothing (I don't think) stops anyone from contacting the kickstarters with VC type money and trying to buy some of the company.

 

[TNGabe]

Just an idea, but have you considered not looking at Kickstarter? That's what I usually do with completely avoidable things I don't like. Come to think of it, I ignore panhandlers, too.

 

[Gitmoe]

I love Kickstarter. So many amazing projects and cool new things. I contribute to campaigns frequently and I've never not received what was promised in the beginning. I've also given to projects that never got funded which is a bummer. But yeah, don't go there if you don't like the idea. I think it's an interesting way to find new things...

 

[Zuljin]

It's not about doing it the conventional, text book way. The idea is that there are enough people out there with small money to part with that these kickstarter companies don't have to deal with as many traditional venture capitalists.

There was a company on the news last night, some kind of bee keeping honey making outfit, that is being funded by some guys who are just going to give it away to the employees in two years. They're doing it to help these folks out. And get some PR, it seems, but still, not every business deal has to follow economics 101.

 

[reverendj1]

For one, you don't pay unless it is successfully funded. It's really just like any other fundraiser. A lot of people have ideas that banks, or traditional VC's won't help fund. So, they ask people who want this thing to help kick in some money and they will usually give them something in return. For the most part, you get a lot more than you give. With your example of a brewery charging a few hundred for a mug (which I will agree is pretty ridiculous), you aren't buying a mug, you are raising funds for them, and they are given you a mug as a token of appreciation. Just like when you donate to PBS, you aren't buying a mug for $75. You are donating $75 and they are giving you a mug as a token of appreciation. When you go to a baseball fundraiser for your local little league and they charge $3 for a GFS hot dog, it's the same thing.

 

[Bobby_M]

I generally have a bad taste towards E-beg funded upstarts just based on the fact that I grew my business from the ground up by grinding it out, saving up to afford new stock, etc. I definitely appreciate the model where the contributor is actually pre-ordering the product in a like-value way rather than it being 80% donation. In fact, I think pre-development contributors should get the product for cost. If it's really an amazing idea, it should be easy to start selling it to the full retail market.

 

[LabRatBrewer]

For one, you don't pay unless it is successfully funded. It's really just like any other fundraiser. A lot of people have ideas that banks, or traditional VC's won't help fund. So, they ask people who want this thing to help kick in some money and they will usually give them something in return. For the most part, you get a lot more than you give. With your example of a brewery charging a few hundred for a mug (which I will agree is pretty ridiculous), you aren't buying a mug, you are raising funds for them, and they are given you a mug as a token of appreciation. Just like when you donate to PBS, you aren't buying a mug for $75. You are donating $75 and they are giving you a mug as a token of appreciation. When you go to a baseball fundraiser for your local little league and they charge $3 for a GFS hot dog, it's the same thing.

wondered what a GFS hot dog was. I thought it was a slur for God Foresaken Sh*****... or something. Google says its Gordon Food Service. Learn something new everyday here.

 

[highgravitybacon]

You are donating $75 and they are giving you a mug as a token of appreciation. When you go to a baseball fundraiser for your local little league and they charge $3 for a GFS hot dog, it's the same thing.

Yeah! New thread. Little League Hot Dogs Suck!

 

[Yooper]

Kickstart is the internet equivalent of panhandling.

It's probably my age, but I agree. While others see it as a viable alternative when funding is difficult, I see it as begging/panhandling.

Having investors in a business is one thing.

I would not even look at a "kickstarter" site nor be interested in looking at products.

 

[Misplaced_Canuck]

One thing you gotta keep in mind, is that as an "investor" in a kickstarter, you're not doing a damn thing but fronting money. The guy that's using the money is doing most of the work.

But in any case, no one's forcing you to put in money.

MC

 

[Gitmoe]

I went on Kickstarter earlier after reading this thread and found some cool products. Ended up spending $30 for a plastic lid that turns a mason jar into a coffee cup and a knit koozie to go around the jar and protect my hands from aforementioned hot coffee... Yup, I'm a dirty hipster. I have fixie bikes, and love overpriced stuff. Sorry.

 

[RacingRam]

I agree that campaigns that ask for money without offering a product of value are similar to panhandlers. A brewery offering a mug for $200 in funding is really just asking for a donation. No way I'd fund that unless it was a friend or family member of mine.

However, I think of the others like pre-sales. They need a certain number of people to commit to buying their product before they can justify the expense to produce it. They get their money up front and do a production run, then send out the products to the people who funded it. If you don't want to make a $50+ commitment but still want to support the project, you can give $5 and get a bumper sticker. Later on, if the product continued to be successful, you might buy it. I don't see anything wrong with that.

If the founders wanted to chase VC funds, they have good evidence of demand for the product.

I think the a Growler Saver is awesome. Can't wait to get my hands on one of those.

 

[blizzard]

I don't totally agree, but I think you have a point. I think there are some products that are worth investing in... that is, you pay a 'reasonable price' and you get the product when it is developed, meanwhile the starters prove they have a marketable product and have some capital to get started. I think it is kind of a lame thing to do for something like a brewery.

I have one friend that started a brewery by getting investors (friends and family) with a business plan. And they repaid their loans with a really low interest rate. Win-win for everyone. The Crooked Stave model is also pretty decent. The Cellar Reserve gets you ten beers that you can't buy anywhere else and first dibs to buy extras at a discount. The membership is pretty high priced compared to what you get (IMHO), but you are helping to grow the brewery and the stuff you get can't be obtained elsewhere.

Both better models than kickstarter, I think.

 

[blizzard]

I went on Kickstarter earlier after reading this thread and found some cool products. Ended up spending $30 for a plastic lid that turns a mason jar into a coffee cup and a knit koozie to go around the jar and protect my hands from aforementioned hot coffee... Yup, I'm a dirty hipster. I have fixie bikes, and love overpriced stuff. Sorry.

You can't be a hipster; you're too far behind the trend. Those are both already commercially available.

 

[highgravitybacon]

One thing you gotta keep in mind, is that as an "investor" in a kickstarter, you're not doing a damn thing but fronting money. The guy that's using the money is doing most of the work.

But in any case, no one's forcing you to put in money.

MC

Right, but how did I get that money? I already did the work. I put in my time at my job working to earn it. There's no shared risk when I hand it over. I take all the risk that it will not be spent on hookers and xbox.

 

[LabRatBrewer]

It's probably my age, but I agree. While others see it as a viable alternative when funding is difficult, I see it as begging/panhandling.

Having investors in a business is one thing.

I would not even look at a "kickstarter" site nor be interested in looking at products.

Something's off tonight, I disagree with Yooper. Maybe now that Kick Starter is popular, the panhandlers are surfacng. But, at least at the beginning, it was..."wouldn't be cool if...'" matched with "That'd be so cool if..."

 

[grathan]

I doubt there is 0 accountability. The site would be flooded with scams if that were the case.

 

[Grannyknot]

This thread is hilarious.

 

[Warthaug]

This isn't a kickstarter thread. It's about how awful Kickstarter is. Why would anyone give money to an idea when it's all the risk for you, none of the risk of the recipient? In a traditional venture capital situation, it's totally different. The VC provides the money and in return captures some of the revenue stream from the business or idea.

You've clearly never dealt with a venture capitalist. I have - via 3 biotech startups. This is not what a VC relationship is like. VCs invest money, expecting not only a cut of the profits but also expecting a degree of managerial control - in general, proportional to their degree of investment. Say goodbuy to your control over the company, any long-term growth plans you may have, etc - you're now dancing to another persons tune. About the best thing you can say about VC funding is eventually you may be able to buy them out. Even banks will often put conditions like having 3rd party oversight (accounting, or otherwise) as a condition of a startup loan.

And, going through this for the fourth time, I can say that trying to find a VC these day's is like trying to find a virgin in a whore house. They're all still in recession mode, so unless you're looking to drill holes in the ground to pump oil out of, money is very hard to come by. If the idiocy of the patent system didn't prevent it (disclosure rules suck), my newest startup would be on there.

You get none of that with Kickstarter. The recipient takes your money, spends it in any manner they deem fit with no accountability to you, and then if things go well you might get whatever product they promised in a year or two.

And this differs from any other investment how? You go in with a certain amount of money, with a defined expectation of return. If lucky, you'll see that return.

I'd agree that from a straight financial point of view its generally a bum deal, but not everyone is looking for a profit. Much of what started kickstarter were high-tech toys that had little commercial appeal - for many, a small investment/donation/etc was a small price to pay to promote a chance that one day they'd get their hands on something that otherwise would never come to market.

I generally have a bad taste towards E-beg funded upstarts just based on the fact that I grew my business from the ground up by grinding it out, saving up to afford new stock, etc.

Ahh, the 'holier-than-thou' gambit. There are a thousand ways to start a company - if it works, why would you look down on it? I find it ironic that many here think that "begging" money from VCs, banks, investment firms, etc is A-OK, while "begging" money via other channels is somehow evil or lazy. At least with the latter, you get to keep control over your company.

 

[jglazer]

People donate extra money they have to things they find interesting. No one is forcing them to, no one is tricking them into doing it...no one forces you into giving a dollar to someone on the side of the street...but some people do it because they can, and I personally think that is amazing.

 

[Grannyknot]

Is suppose you folks think that farmers who grow subsidized crops are panhandlers as well.

 

[Spc_Scott]

I like it. I have backed two book projects and an MMORPG from a person who worked on a game from a long time ago that I love. The book projects I got a copy of the book for $5 and for $20 I will get a copy of the game and some in-game fluff. Two people, that in my opinion, are good people got to publish a book and I will get a $50-60 game for $20.

Good for me and good for them.

 

[evrose]

Is suppose you folks think that farmers who grow subsidized crops are panhandlers as well.

Yeah, pretty much.

Rent seekers will seek rent.

There is a major difference between Kickstarter and subsidized farmers though. I can voluntarily choose to give my money to a Kickstarter project. I can't not pay taxes. In that way, the farmers are worse... they manipulate a system that forces people to pay in to it.

Flame away!!!

 

[aygov]

So it sucks that people are willing to voluntarily donate money to fund a project/product that they would like to see made and that there is a website that enables people to do that...

That logic.

 

[jbaysurfer]

It's like panhandling I guess. Only the panhandlers are all confined to one building that you never have to go into unless you want to, and the panhandlers in many cases are talented people that embody the American spirit of capitalism, entrepreneurship, and innovation- while eschewing the new detrimental paradigm of debt financing if at all possible.

Ask yourself this. Do you think it's better for an innovator to fund his/her invention with willing contributions from the consumers who want to see it come to fruition...or is it better for the innovator to leverage him/herself and families' financial well being and to propagate a debt culture that many believe is going to be the undoing of this economy?

 

[m_stodd]

The reason you hate kickstarter is the reason you will never have something on kickstarter, and the reason you would spend money on hookers and xbox: lack of imagination.

You can't imagine that someone would simply want to help out a friend, family member, member of their community, or stranger? I'd rather buy a $200 dollar mug and help someone in my community build something that they want and that I want than invest it.

WTF am I going to do with a $200 dollar investment in a startup? Watch it make me $2 in the next year? Waste of time.

That's pretty sad if you can't imagine that someone would want to help another person.

 

[Homercidal]

Kickstarter is a great concept. Firstly, it all voluntary. If you don't like the product or premise, simply don't invest. I don't consider it "panhandling" due to the fact that you aren't just giving these people money, you are getting something in return. MAYBE it's not as valuable as the amount you invested, but if that were a problem for you, just don't donate!

Usually, though, you get something in the future, that is worth at least as much as you donated.

A friend backed a bluetooth watch this past year. It syncs with your phone and can display calls, and a bunch of other stuff without you having to put out your phone. I think it was called a pebble. It took a while to come out, but it's great concept.

I recently helped fund a band I liked. They needed $20,000 to record a new album and I was fairly anxious to get my hands on a new album. I donated $20 and will get a download of that album when it comes out, plus I think I get a physical CD and some other stuff. I wouldn't give $20 for any old album, but I really enjoy these guys' music, so it's worth a shot for me. Who knows how long it would take for a new album if they hadn't done a kickstarter.

The downside that we are starting to see is that a few unreliable people are having their kickstarter funded, then the completion of the project drags on and on. That's another small risk, but I think that that kind of stuff will lead to lawsuits and likely will adjust itself out over time.

$200 for a mug from a brewery is ridiculous, but $50 for a mug and discounts pours (ala mug club) is not a bad deal.

 

[Xpertskir]

No exchange takes place in a free market unless both parties benefit(or at least think they do)...

There are several rounds of financing before a private equity firm becomes interested or involved. Those rounds are typically dominated by self funding, friends, family, and angels. While they are typically getting more than a mug, often times what they get is relatively comparable to what most kickstarters are offering.

Kickstarter is a very efficient way to bring people together, and no one is forcing you to give BTW.

I think your problem is a lack of understanding of how start-up businesses are actually funded, not an issue with kickstarter.

FWIW, I have never given to a panhandler(travels and living in a big city have given me many opportunities)...but would consider a contribution to a kickstarter if I saw a value in the transaction.

 

[reverendj1]

Many local breweries that started up around me sold mug club memberships to raise funds before the brewery was started. I was told by the owners that many of the initial members rarely (if ever) actually came in. They just wanted to support a new brewery. And I'm sure if the brewery didn't take off, they wouldn't have gotten a refund on the membership. It's really not any different.

 

[broadbill]

I use my own money to commercialize my idea = OK.
My dad uses his money to commercialize my idea = OK.
My cousin uses his money to commercialize my idea = OK.
My cousin's aunt's maid uses her money to commercialize my idea = OK
Putting my idea out on the internet for people to find and donate to in order to commercialize my idea = PANHANDLING!

makes sense.

 

[highgravitybacon]

The reason you hate kickstarter is the reason you will never have something on kickstarter, and the reason you would spend money on hookers and xbox: lack of imagination.

You can't imagine that someone would simply want to help out a friend, family member, member of their community, or stranger? I'd rather buy a $200 dollar mug and help someone in my community build something that they want and that I want than invest it.

WTF am I going to do with a $200 dollar investment in a startup? Watch it make me $2 in the next year? Waste of time.

That's pretty sad if you can't imagine that someone would want to help another person.

Wow. You've certainly established an ability to miss the point.

 

[MuddyCreek]

A good kickstarter project will set the rewards for investment such that at any given tier the investor feels as though he or she is getting good value.

A poor kickstarter project doesn't do that. Generally speaking, poor kickstarter projects don't get funded.

It's like nature. The bigger, smarter bugs eat the small, dumb bugs' heads.

 

[broadbill]

A good kickstarter project will set the rewards for investment such that at any given tier the investor feels as though he or she is getting good value.

A poor kickstarter project doesn't do that. Generally speaking, poor kickstarter projects don't get funded.

It's like nature. The bigger, smarter bugs eat the small, dumb bugs' heads.

Well, lets not get ahead of ourselves, people who put money toward a KS should not be considered investors in any sense of the word.

You are throwing money toward what you consider a good cause with the return of some swag. You aren't getting a "share" of anything, and its not going to gain in value. Donor is a better descriptor.

 

[mbbransc]

I think KS is a GREAT idea (wish I'd thought of it). I'd donated to some local shops trying to get their feet under them as well as some local breweries opening up shop. I think it's a fantastic way to support my community in a way I choose. Similar to patronizing a store I like or supporting my LHBS. If I want those shops/svcs available to me, I should help support them.

Seems like a great way to tap into your community.

 

[MuddyCreek]

Fair enough Broadbill. I use the word "investor" very loosely. Certainly the return on investment is slight.

 

[TxBrew]

So, you would want a percentage of ownership for a couple hundred dollars? That doesn't seem reasonable.

Correct me if I'm wrong, but isn't that owning stock?

Just an idea, but have you considered not looking at Kickstarter? That's what I usually do with completely avoidable things I don't like. Come to think of it, I ignore panhandlers, too.

Sure, but this is an off topic section so they can come here to complain about kickstarter as long as I can keep posting polls on nonsense.

It's probably my age, but I agree. While others see it as a viable alternative when funding is difficult, I see it as begging/panhandling.

Having investors in a business is one thing.

I would not even look at a "kickstarter" site nor be interested in looking at products.

It is, and I had to put the kickstarter section in place to put a stop to people signing up and trying to pan handle here.

I like the idea of crowd sourcing, and please feel free to invest in whatever you would like, but Kickstarter isn't for me.

 

[fosaisu]

This isn't a kickstarter thread. It's about how awful Kickstarter is. Why would anyone give money to an idea when it's all the risk for you, none of the risk of the recipient? In a traditional venture capital situation, it's totally different. The VC provides the money and in return captures some of the revenue stream from the business or idea. You get none of that with Kickstarter. The recipient takes your money, spends it in any manner they deem fit with no accountability to you, and then if things go well you might get whatever product they promised in a year or two.

I see breweries doing Kickstarter stuff all the time. It's usually "give us a few hundred, get a mug." A mug? For real. Wow. What a bargain. So I give you a bunch of money and in exchange get a piece of $8 glassware that I have to pay to fill? Oh, you include a $9 T shirt, where do I sign up?

Kickstart is the internet equivalent of panhandling. It's just like the vagrants I see congregating on the side of the road with their cardboard signs begging for money to get another beer with.

I don't really get the vitriole here. There are no doubt some Kickstarter offers that are essentially requests for donations, but I think the vast majority give you something substantial in exchange for your money. For instance, I got copies of a boardgame (physcial and digital) in exchange for pledging less than it would have cost to buy the boardgame at retail (assuming they were even able to get it off the ground w/o the Kickstarter funding). I don't view that as a charitable donation, I view that as pre-ordering something I was interesting in.

Or you could read about this awesome kickstarter, where a guy wrote a choose your own adventure version of Hamlet and kept using the additional money coming in to improve the quality. The book's now selling for $20 on Amazon, when you would have got a signed version plus some other schwag if you'd done the Kickstarter.

Ultimately, I'll bet if you look at which projects get funded it tends to be ones where a) you get a "prize" of reasonably comporable value to your pledge and b) the company seems reasonably likely to actually pull it off if they get funded.

 

[LabRatBrewer]

Correct me if I'm wrong, but isn't that owning stock?


That's a good point.

 

[Randy_Bugger]

Prairie Ales out of Oklahoma recently funded their new brewery with kickstarter money. They got distribution with Shelton Brothers before they even had their own brewery. They make really good beer! They make mostly saisons that probably wouldn't score well at a homebrew contest, but get rave reviews from people who paid $15 for a bomber.

Now more people will get to enjoy their beer and more people will be employed simply because there were some people who wanted to help them get started. I have a hard time seeing the downside here.

Panhandling is when someone gets in your face and begs or coerces money from you. That's not what Kickstarter does.