When Kickstarter Projects Go Missing

On Friday, we posted about Kickstarter's new rules of engagement, including some new rules under which some of the most popular Kickstarter projects to date might never have surfaced. But what about ones that make it to the site, then disappear? Wired takes a look at what happens to those Kickstarter projects that for one reason or another get yanked from the site. (DMCA complaints apparently are often that one reason.)

Comments

I've got the solution

[wonkey_monkey]

But it'll cost, ooh, I dunno, let's say $100,000 to do it.

I don't get the point of Kickstarter

[GeneralTurgidson]

Call me a scrooge, but the idea of donating money to projects that will eventually charge you to purchase the product they produce seems ridiculous to me. On top of that, there is no guarantee that the project you donate to will see the light of day. Honestly, can someone tell me why this is such an appealing option?

Re:I don't get the point of Kickstarter

[Bieeanda]

Most Kickstarters for digital or physical goods include pledge tiers that offer the item under development at a below-release cost. It's a risk either way: there's the possibility that the project won't come to fruition (and you're out twenty bucks), or it will and it'll cost you fifty post-launch.

In a lot of cases, the Kickstarter project will be their only big sale as well-- a lot of the stuff being touted is seriously boutique, to say the least.

Re:I don't get the point of Kickstarter

[supersloshy]

Nearly every project I've seen gives you a copy of said product for pledging a certain amount. Also, have you heard of the term "investing" before?

Re:I don't get the point of Kickstarter

[Intrepid imaginaut]

The most successful KSs I've seen are from established companies/people with a track record using it largely as a preorder tool, that's where it works best really. And as you say, you generally get the product with your pledge. Yes, its harder to get people to give you money when you have no track record and no product, that will never change no matter what platform is used, that hard grind has to get done first.

Re:I don't get the point of Kickstarter

[Sir_Sri]

It's like investing, but without the prospect of cash return, it's more 'investing in future entertainment' than future financial rewards. You may get goods (most of which will have more sentimental value than actual value). It's 'better' in some sense, because you know you're losing the money you give - there's no risk, you're just out the money - but it allows you to support a product that might not otherwise get made, and no one should give more than they can afford to lose, because they will definitely lose everything they give.

Also, it stabs at a lot of pricing models. I'm a games guy so I think in terms of games. If I look at games I've played the most those happen to be the paradox strategy games and the X series (I'm not linking because I'm not pitching them just take this as a statement of fact, as I am an expert in the games I have played the most), now those games have given me personally quite a lot more value than other comparably priced titles. I would have been quite happy with those products at double the price, and if I can be reasonably sure of another one in the series by offering to pay more then I'm 'investing' in my future entertainment, not my pension plan, but future entertainment.

It has the side benefit of being able to extract astronomical amounts of money (10 grand for a game) from people who have astronomical amounts of money and nothing to do with it. That money won't trickle down on it's own in some supply side voodoo, you need to create a product (fly out to meet the developers, get a statue of yourself in the game!) to sell at an extremely high margin. The rich guy gets some novelty and ego padding out of it, and the rest of us might get a game.

Re:I don't get the point of Kickstarter

[Kjella]

Of course it is a lot simpler if you wait for a finished product to show up for purchase, you'd know exactly what you get and when you get it. But the reason these projects are on Kickstarter is that they need/want funding. If they don't get it, well there's a good chance the project won't happen and the finished product never shows up. If you want it badly enough you're willing to pay risk money to make it happen. To take a simple math example, assume the Kickstarter project will make a thing that'll cost $100. The value to you - not the market, just you - is $200. With $50 in Kickstarter funding the chance of it happening is 80% - without it 20%. Let's do the math on the utility to you:

No kickstarter:
($200-$100) * 0,2 + 0$ * 0.8 = $20

Kickstarter:
($200-$150)*0,8 + ($0-$50) * 0,2 = $30

Guess what? That $50 is worth it to you even if you don't get a cent in reduced price just by increasing the odds of it happening from 20% to 80%. Of course you run a risk of being out $50 so the worst case is worse but if you're averaging over many small projects you gain in the long run.

Re:I don't get the point of Kickstarter

[fm6]

Kickstarter actually started out as a way to fund arts projects. Like somebody wanting to create a sculpture, do a fancy mural, put on a play, even make a low-budget movie. These are all things that will probably never make back their costs and have traditionally depended on the generosity of donors. These have traditionally been people with deep pockets — businesses looking to generate goodwill, rich people who've gone philanthropist — but with the whole online crowd-whatever phenomenon, there's no reason ordinary people can't do this too.

Like you, I'm bothered by the fact that Kickstarter is now dominated by startups who use it to get seed capital. There's something just plain messed up about a for-profit business that might well make its founders rich starting out by passing the hat. Still, I'm forced to admit that some intriguing projects (Pebble, Ouya, and even the much-maligned Orbit) might never have gone anywhere without the generosity of "backers". I guess there's nothing really wrong with it, as long as people understand that the money they're offering is a gift, not a purchase or investment.

But to answer your question: this is one of those weird online enthusiasms, like that Korean guy with the weird dance moves. My favorite example is this Halaal restaurant I used to live near which for no obvious reason has hundreds of 5-star reviews on Yelp. Now this is a decent restaurant, the food is OK, and the staff is very hospitable to everybody who comes in. But they seem very confused by all the non-Muslims trooping through the door. Why pay extra to eat Halaal if your religious beliefs don't require it?

Yelp is full of stuff like this, and let's not forget the bus monitor whose bullying incident earned her almost $700K. Very silly, but not that big a deal, except maybe for the potential fraud.

Re:I don't get the point of Kickstarter

[dubbreak]

It depends on the project. I "donated" money to a friend that was publishing a book (book already written). The kickstarter gave him enough capital to self publish enough books so they could be produced at a reasonable price. In return for the "donation" I got a personalized signed copy and some luggage tags (since the book is about packing). I was guaranteed to get something out of it if the project went ahead (i.e. enough people funded it) and if I didn't have enough for a book I could have thrown a few bucks his way to help him publish his first book (which as a friend I'd personally get some value out of that).

I also helped fund a 2d animation tool. A little higher risk, but they already had a working prototype and there seemed to be no reason they wouldn't be successful. Stuff is progressing nicely and for my modest donation I get a copy of the final pay-for tool. Without the kickstarter promotion it would have had to be a side project for the developers. The funding allows them to focus on the tool. What better way to fund something than the end users? It validates that there is a market for the tool and is super low risk on the business side (as opposed to loans or venture capital).

I'd definitely help fund a band that wants to do a vinyl pressing of an already produced album (if I like the music). That's another example of something low risk (they have something they can definitely produce) but need an initial capital investment and confirmation of interest to go forward.

Re:I don't get the point of Kickstarter

[Rich0]

Agreed. When I go to invest in a kickstarter project the only thing I have to go on is reputation and the promise of a return. That return is usually VERY limited. So, reputation is almost everything.

Kickstarter is basically useless for somebody with a good idea but a week resume. A venture capitalist can discuss plans in detail and put somebody on the inside to see how money is being spent and give you the money in drabs as you make progress, and they stand to reap a ton of rewards if all goes well. Note of those things apply to Joe Smith who wants to donate $20 to something on the internet.

Re:I don't get the point of Kickstarter

[arkane1234]

Also, have you heard of the term "investing" before?

I do not think that word means what you think it means...

Re:I don't get the point of Kickstarter

[MaskedSlacker]

I'm sure you also find giving to charity and paying your taxes ridiculous too. In other news, no one cares that kickstarter's not for you.

Re:I don't get the point of Kickstarter

[pubwvj]

"Call me a scrooge, but the idea of donating money to projects that will eventually charge you to purchase the product they produce seems ridiculous to me. On top of that, there is no guarantee that the project you donate to will see the light of day. Honestly, can someone tell me why this is such an appealing option?"

I don't think you're Scrooge but how about not quite clear on the concept.

You aren't donating. You are buying into.

We have a Kickstarter project which successfully funded to help our farm build an on-farm USDA inspected meat processing facility for our pastured pigs. See:

http://www.kickstarter.com/projects/sugarmtnfarm/building-a-butcher-shop-on-sugarmountainfarm

Our project was successfully funded.
We're building our butcher shop. (We're about to make the next pour of concrete.)
People who were 'backers' got to choose 'rewards' which which in almost all cases are meat from our farm.
They are paying a price for product created by the project.
It's a pre-buy.
Think CSA.

It's isn't a donation.
It isn't tax deductible.
It isn't charity.

It is people backing a project that they want the product from because they feel confident in the creator's ability to produce the product.

It is important to understand that a Kickstarter project is not a store in the sense that you are not buying an existing product off the shelf but helping a creator bring a product to market. Generally you get some special aspect such as being first in line, special colors or features, added goodies like T-shirts, etc as well as satisfaction in being part of something. Most people who pledge to a project already know the creator.

So, if you're feeling Scroogish, be sure to back projects you feel confident in getting your 'reward' from. Check out the creator to see if you think they can produce.

Re:I don't get the point of Kickstarter

[statusbar]

It can be looked at as a investment to the larger eco-system, where the benefit to you is more abstract.

Re:I don't get the point of Kickstarter

[Seumas]

Kickstarter has a lot of established businesses taking advantage of it. Sometimes that's reasonable. Just because it's a "company" doesn't mean that they could do the project without support. There are a lot of interesting new game projects that probably would never have a shot without the crowd-funding solution. Of course, there's some shady shit, too. Like the Eternity project whose lead recently discussed how an unnamed AAA publisher came to them awhile ago and proposed that they be the "front-men" for the project to gather funding on Kickstarter . . . and the AAA publisher would give them the project to do. And keep most of the raised money and profits. And all the IP rights.

But there are a hell of a lot of "so I had this idea and I've researched how I can do it, but I need to know there are enough people that would want it to go forward and I also need funding to get it off the ground" projects. A ton of these in the board games section. Also, the technology section. And the Fashion/Design section. Oh - and some really cool web series and documentary projects.

Kickstarter will only become over-run by commercial companies using it as a cheap source of extra cash, if people support that. The great thing about Kickstarter is that if people don't buy into the idea and don't care about it, you won't succeed. This is why a guy with an idea for a new machined aluminum pen casing raised a million bucks instead of the $20,000 he was asking for and the video game with nothing to show for it except a couple of high school-looking kids talking on a shitty web-cam about the game they'd like to make failed with like nine total dollars raised.

Re:I don't get the point of Kickstarter

[Confusador]

Kickstarter is not the job market. It's a way for creative types to avoid the job market. You want a resume full of creative projects? Create things, and show them off. If they're good enough, people might just pay you for copies.

Re:What?

[Samantha Wright]

Forgive me, but I'm pretty sure that if we didn't have the DMCA, the safe harbour provisions would be unnecessary. I don't think it can be called a "godsend" just because infrastructure providers are protected from being harassed.

Ones that Never get Delivered

[Anonymous Coward]

I'm actually more concerned about projects that never get _delivered._ Kickstarter puts some distance between themselves and "investors" based on just being a facilitator, but I'd be curious about the ratio of projects that never see light of day or--as I suspect is even more frequent--see it so late that the original Kickstarter pledge should be considered broken.

This specific example is interesting to me:
http://www.kickstarter.com/projects/airshipambassador/wollstonecraft
because I know the *author*, and believe that its persistent delays are symptomatic of his personality. I doubt it will ever see light of day, and the 90,000 dollars handed over has already been largely spent.

There's not much difference between this and showing a "simulation of a product" and yet one is banned while the other remains acceptable.

An obvious step would be to hold funds in escrow but that would seriously impact Kickstarter's minimalist business model and increase costs of funding...which might be a good thing.

Re:Ones that Never get Delivered

[Sir_Sri]

I'm actually more concerned about projects that never get _delivered.

Unfortunately most of the major press kickstarter projects are a ways out from being due to be delivered.

In the case of the one you linked, the 90k handed over is considered revenue for the calendar year it's received and is taxable and stuff afaik, which is one of the big downsides to kickstarter.

The difference between the 'simulation of a product' and the link you have is that the 'simulation of a product' could be for something that won't ever work. The author could write a book, it might be terrible, but he can definitely write a book. A physical product (the example I have seen often used about this would be a water purifier) that doesn't actual do what they say it might poses a problem. If you give me 100k for a water purified odds are the water purifier won't ever actually purify water. If you give me 100k to write a book on water purifiers it might be the worst book ever written, but I can definitely produce a book.

Re:Ones that Never get Delivered

[Immerman]

Escrow is an interesting idea, but not really relevant to what Kickstarter is doing - i.e. making the projects possible in the first place. Having money in escrow doesn't help you fund tooling and production of physical goods, nor keep your bills paid and/or hire outside resources while pursuing artistic endeavors. All it does is provide incentive to finish the project, which in the absence of ability is utterly useless.

And there is a major difference between art/design projects and physical products - for physical products there is an immense amount of time, labor, and expense involved in going from working prototype to mass-produced product. Art projects on the other hand incur almost all of their costs during creating - the "prototype" basically *is* the final product in the case of pure digital goods, and even things like physical books have a large and streamlined industry already in place to convert your digital version into a run of physical products with minimal difficulties - one book is basically identical to another except for minor details like dimensions, material types, and what's printed on the pages.

That said, for something like a book or other product where investment costs are minimal I think contributing to a Kickstarter project is rather ridiculous - practically every author on the planet manages to write on their own dime and gets paid if/when they sell copies. Proven authors may have the option of getting an advance from a publisher, but the bulk of their payment still only comes after the project has been completed. If that model is good enough for Shakespear, Dr. Seus, and everyone in between you've got to ask why project X is so special.

Re:Ones that Never get Delivered

[Anonymice]

I was under the understanding the money was only withdrawn once the product had reached its funding target? An all or nothing kinda' thing?

Re:What?

[Xacid]

Don't like it? Submit your own story. Vote for submitted stories. Contribute instead of being a fuming leech.

Re:Call it "Project 54"

[hawkinspeter]

Wouldn't a project be removed before it reaches funding and thus no money is taken?

I pledged $60 to project Giana

[anss123]

And for that I get the game, soundtrack and art book in a jewel case. Shipping is free, and had I pledged more I could have gotten more stuff. Had the kickstarter failed to be founded, I would have paid nothing.

This particular project has a good chance of delivering, having already made a working demo of the game, so the $60 was not much different that preordering some limited edition of the next CoD game. Without kickstarter this game would never have been made, so in my eyes kickstarter have served a purpose that no other service I know of could have managed.

Naturally there's always a chance they will take their money and run, but the last $60 CoD game I bought was absolute garbage (despite stellar reviews), so there's always a bit of risk involved no matter how you spend your hard earned coin. It may not be a risk you are willing to take, but fortunately plenty of folks are, and thus project like Giana can see the light of day.

Re:I pledged $60 to project Giana

[Seumas]

In the universe where that game couldn't get made without funding and simply waiting around for it to be made before buying a couple would result in there never being a game made for you to buy. . . ?

You do realize that many/most of the game-related Kickstarter projects are just a dude with some experience making a game on his own, right? Or a couple or so dudes. Or a handful of dudes out of their bedrooms across the globe (often with professional backgrounds) moonlighting on a project with no funding at all. Just because you've seen a few very popular places blow the doors off with their crazy Kickstarter fundraising doesn't mean that's representative of most of the projects.

Kickstarter has some flaws and it's going to hit some major speed-bumps down the road when some high profile projects inevitably go to shit, but the only thing I'm growing more tired of than all the Kickstarter hype is having to explain how Kickstarter works to people when it has been around for years and they could just go visit the website and figure out how it works in a couple of minutes.

Re:Call it "Project 54"

[damnbunni]

If a project is removed before it's completed, then there's no refund to issue; no money was sent.

After the project's funded, delisting it from Kickstarter would be kind of pointless.

Deliver of offer refund

[QuasiSteve]

'Deliver of offer refund' is one of KickStarter's tems of service for Creators. If you, as a Backer..

1. feel that the product has not been delivered and there's no hope of it being delivered.
2. want a refund (as opposed to just writing it off as a donation / loss)
3. are unable to get a refund from the Creator

Then:
A. Talk to your credit card issuer. Explain the situation - have them void the charge. It's then Amazon's problem to square out with KickStarter. This may not be an option available to you.
B. Talk to a lawyer. Basic contract law is likely to apply - but, again, talk to a lawyer. If you or your lawyer would need assistance, go google Hanfree and Neil Singh.

I do very much implore you to consider whether you want to go down that road. There's quite a few projects I backed who have not (yet) delivered, some going for a year now. But most of the Creators tend to be communicative and explain what the speed bumps are and what the timeline looks like. Others I pledged such a small amount that it's simply not worth it for me to bother with it. ( In the Hanfree case, the Backer is a lawyer and sued out of principle because it wasn't just his $$, but a combined total of $$,$$$ apparently being lost that rubbed him the wrong way. )

Re:What?

[QuasiSteve]

I don't know if they would be unnecessary. The situation would fall back to standard copyright fare. You'd then have to consider whether sites such as YouTube can be held accountable ("contributory" or "vicarious" liability) for the claimed material being available through their service.

I'd imagine those sites that cite compliance with the DMCA do feel it's a godsend given that there's very little burden on them.
I'm sure it doesn't feel like a godsend for the next mother making a video of their child dancing to some music and getting hit with a DMCA complaint.
The rights holders - I'm not sure, they seem to have a love/hate relationship with it.

I'm not a lawyer, and certainly not a U.S. lawyer, though - you'd have to check with one to figure out if the DMCA on the whole has been a positive or a negative influence on copyright / free dissemination of information.

Re:Haven't been watching...

[Seumas]

I don't think they've ever put out the numbers on that, but since there have been something like 30,000 to 40,000 Kickstarters in the last few years, I'd say the failure rate is pretty low or else it would have a shit reputation and nobody would use it anymore.

Only a few kickstarters that I've backed are older than a year and all of those have paid off. Two for albums and one for Diaspora... Erm. Well, "paid off" is pretty questionable, there, actually -- at it at least fulfilled what it was going to do (launch the product and distribute the code).

Most of the other stuff I have backed only in the past year, so while some are fulfilling every couple of weeks or so, others are a long time off from reaching their estimated deadlines (and I assume most will miss those deadlines, which is fine as long as it's kept reasonable). In the more recent ones, I've received another album I backed. I've received a few games that have completed and launched. I've received access to participate in the creative and testing processes of many of the games not yet released (though I don't really care to do that). I was even able to arrange lunch for my younger brother with John Romero and Will Wright.

Out of the 200 kickstarters I've backed, about 40% (85) succeeded funding. About 10 were canceled (either by kickstarter or the project itself). Of the 40% that succeeded, about 12% (10+) have fulfilled their promises. The others remain as works in progress -- most offering fairly regular updates via Kickstarter or through the forums on their own site. In the next six months, most of these should start reaching their delivery dates and we'll see how things really pan out. I expect some outright failures and I have to take that into account when I chip in my support.

There's only so much that Kickstarter can be expected to do. However, I do think they should perform more vetting. Especially if they want to continue to grow and remain relevant. Their entire revenue is built on maintaining a place of trust. If that means they need to do more than get a credit card number and tax identification number from someone before they post their project, then that's what they'll need to do. Not because of legal concerns -- but due to the need to maintain themselves as a place the community feels comfortable with.

Basically you invest for creative return

[Sycraft-fu]

Rather than financial return. There may be some financial aspect to it as well, you figure "I can get the game for $20 now rather than $50 when it comes out," but it is largely creative.

The projects I've backed on Kickstarter (all video games) have been because I want to see the game made. They are games that are otherwise not likely to be made. They are games I want to see though. So my money help allow them to exist, I get creative return on my investment.

Now is there risk? Of course, as with all investments. There is a risk people won't deliver. Most of the games I've back I'm pretty confident will deliver, they have small game studios behind them. However there's a couple of smaller ones. There is a risk they won't be able to deliver.

Also there's a risk that if they do deliver, you won't like what they do. I'm quite sure I'm going to dislike at least one of the games I've backed. Bound to happen, I've bought plenty of commercial games I didn't like. Again, it is a risk I have to be willing to take.

That's what people need to understand. Yes there's a risk with KS. You just have to decide if you are ok with that risk. Why do it? Well to get something you otherwise might not be able to.

In terms of games Wasteland 2 would be a pretty famous example. I really want that, I love that kind of game. The creator, Brian Fargo, already tried to get a publisher to back it. Guy is a game industry veteran, he knows the deal. However nobody was interested. Well, I (and others) backed it on KS because we want to see it. If we didn't back it, it wasn't going to happen.

It allows for more niche things to get funded. A publisher may say "Well this looks like something very few people would buy, so we won't fund it, even with a low budget." People on Kickstarter say "I don't give a shit, I'm not getting financial returns, I want it that's all that matters." So more niche products can get some funding.

Also when a project is backed 100% by people with no financial stake, it allows things to be done differently. For example all the games I've backed have pledged a no-DRM version (and the one that has launched has delivered a no-DRM version). They don't have to worry about it since there isn't a publisher to make happy, or a bank loan to pay. The backers got their game, they have nothing more they owe anyone.

So it isn't The One True Way(tm), or how everything will be done in the future or something like that. But it is cool for some things. You just have to be ok with risk. You have to accept that yes, there's a risk when you back a project. As with ANY investment, don't go in for more than you are willing to lose, and understand your potential gains are creative, not financial.

Re:What?

[circletimessquare]

there's also a lot of bad movie critics

in general, there's a lot of mindless useless negativity in the world, and especially on the internet