Are App.net's Crowdfunders Being Taken For a Ride?

snydeq writes "At least 10,000 people believe in App.net's vision of a messaging platform for Web apps — but it's unclear whether those people will be peers or sharecroppers, writes Simon Phipps. 'Last week App.net reached the milestone of 10,000 users who signed up for a new — mostly yet to be written — social network that looks like an early reimplementation of Twitter. Signing up people to claim user names on an (not vaporware) alpha Web service may not seem surprising or novel, but this time there's a difference: Everyone who signed up for App.net paid $50 for the privilege,' Phipps writes. 'App.net has used the crowdfunding approach, but it's not the same kind of project. While superficially similar — there's an offer of immediate use of its Twitter-clone service and reservation of the user ID of your choice — it's much more speculative. It's crowdsourcing the seed capital for a new venture, crowdsourcing the design, crowdsourcing the testing, and crowdsourcing most of the software that interacts with the venture, all without actually giving anyone but the founder a true stake in the outcome.'"

Comments

Completely Backwards

[agizis]

You have it all backwards. The Kickstarter model gives an opportunity to get products built that *customers* want, and are willing to pay for, without having venture capitalist in the middle, funding everything and demanding their return. The backers' relationship to the project is that they are *paying customer*, which is less than being the owner of the company, but much, much more than just being a *user* of a free service like Twitter or Facebook.

well, duh!

[cas2000]

Kickstarter enables a style of capitalist parasitism that was previously only available to huge corporations to be scaled so that it's accessible to small-time scammers as well as the giant fraudsters:

Privatise the profit, socialise the risk and expense.

That's not all there is to kickstarter or to kickstarter projects but it's easy to see why it is attractive to such parasites - the crowd-funding model has most of the benefits of the stock market without the anti-scammer regulations and without having to give annoying outsiders (aka shareholders) a share in what they're funding.

Re:well, duh!

[fermion]

I am not sure what protection the stock market gives. The people who invested in facebook during the IPO has lost half their money. The people who capitalized facebook has made money. You could have invested in Microsoft back in 2008 and have lost money due to the stock decline or inflation. People invested in Enron, Worldcom, all under the so-called stock protection, and lost everything. Sure there are now more regulations, but that seem more there to protect CEOs then investors. The reality is that the stock market is not a magic money machine, and there are real risks. The elites has created this myth for the middle class, in the same way the lottery myth was created for the for those with only a dollar to invest, so that we can believe it is possible to live the american dream without working for it.

Kickstarter is a service that connects people with ideas with people who are willing to risk a little money. 50 dollars is a lottery ticket a week. The rewards are less than a lotter ticket, but so are the risks. If you give $20 and an album is made by your favorite artists, then you get an album. If not you lost twenty dollars, which is about the markup on a concert t-shirt and few seem to have problem throwing money away on that.

In this case some are choosing to spend $50 to buy a product as opposed to selling themselves to advertisers. I don't know why this makes people so upset? Because it disrupts the current corporate model of monetizing people? Because some people are so cheap that they value $50 more than themselves? Because some people are so risk adverse that all they can do is hide in their parents basements or living rooms? What gives?

Re:well, duh!

[cas2000]

Your attitude is exactly what is wrong with american business ethics.

'caveat emptor' is not a description of a legitimate business model, it's a fucking warning.

People who are stupid or ignorant or ill-informed or just plain conned by slick salesmen DO NOT DESERVE TO BE RIPPED OFF.

And those who do the ripping off are criminals who deserve jail time.

Also, aside from the criminality of ripping people off, even a staunch libertarian type should be able to see that deceptive exploitation of information asymmetry like this inevitably leads to a lemon market, which is bad for everyone: if you can't trust the market at all, the only rational option is to treat everyone as a scammer (and scam or be scammed) or not to play at all.

Re:well, duh!

[Archangel Michael]

The six scariest words strung together are "There ought to be a law".

You cannot fix stupid. Some people are so stupid, they actually go looking for stuff like this because of laws that are supposed to prevent people getting ripped off. The problem is, they still are stupid, they still get ripped off, but now, they want the Government to fix their stupidity so they can do it all again next week.

Re:Can someone....

[stephanruby]

tell me how this is any different from xmpp+chatrooms+db+php rss feeds?

It wouldn't be.

In any case, with kickstarters concepts, you don't usually just invest in the idea. You invest in the people first and foremost. For instance, if the creator of a previous online service I had been using and I actually liked, were to start a kickstarters' project, and if his idea was decent (not great, but decent enough), I might chip in $50, even if the project went no where.

That being said, I don't know the guy. I've never used his previous project before, so I'm just going to watch from the sidelines. I wish him luck. If nothing else, this kickstarters project should be viewed as a meaningful petition that many Twitter addicts (and third party developers) are starting to get fed up with the service.

Re:As usual

[Noughmad]

There is an xkcd for that too http://xkcd.com/543/

so...

[Tom]

It's crowdsourcing the seed capital for a new venture, crowdsourcing the design, crowdsourcing the testing, and crowdsourcing most of the software that interacts with the venture, all without actually giving anyone but the founder a true stake in the outcome.'"

So, in other words, it's brilliant.

We are witnesses to a retro dot-com boom, doesn't anyone notice? For the second time, Internet geeks are taking the business world for a ride. Ticket price: A couple billion bucks. There's a number of startups out there with completely insane ideas that get millions in VC funding. The Facebook IPO took heaps of money from the dumb "investors" who jump on every hype, it's not as wild as the early 2000s, but it's the same recipe.

Now if only I were ruthless enough to pitch a bullshit business plan to a room full of idiots with money. :-(