Sep 242015
 

Between the Fate Core Kickstarter’s later stretch goals and our ongoing Fate Adventures & Worlds Patreon campaign, we’ve had a pretty killer development budget for a bunch of games over the past couple years. That’s not the same as having a killer manufacturing budget, though.

I should perhaps define some terms first.

In this context, when I say development I’m talking about all the stuff that’s needed to get a book written, edited, art-directed-and-acquired, indexed if appropriate, proofed if appropriate, and laid out. All the stuff, in other words, to produce a digital release of that book. When I then talk about manufacturing I’m talking about the stuff needed past that point, to turn something you’ve got as a ready-to-go digital asset into a physical item you can hold in your hands, flip through, ship, and sell into retail.

What those various crowdfunds did, for the portions of them that I’m talking about, was give us a healthy-sized budget for developing the digital versions of various projects — all our Fate Worlds of Adventure, and approaching-the-final-few-laps books like Do: Fate of the Flying Temple and Young Centurions. But that’s about as far as the associated goal-driven crowdfunding took us on a number of those. If we want to turn those things into printed physical books, we’re looking at an out-of-pocket expenditure to make that happen.

Which is all well and good — to an extent. I manage Evil Hat’s risks and budget to make sure we’ve got money in the bank when we need it, especially when it comes to paying our bills. And yet, recently, as I constructed a more detailed company budget, a few things became clear.

One, based on what most closely fits a “standard” year for us (2014) under our current company model, that about 25% of our budgetary income comes from crowdfunding efforts. In 2015, we’ve been pretty light on our crowdfunding efforts, and that’s unlikely to change for the rest of the year (luckily, other outflows have reduced somewhat in proportion to this, so we’re on track to break even for the year).  In 2016 we’re going to need to push to correct for that, running one or two more Kickstarter campaigns than we normally would.

Two, crucially, while we’ve got a solid foundation in our bank balance, the new projects we’re eager to get underway in 2016 (or which we already have underway) are looking to draw on some of the same funds that would be needed to take those prior projects from digital (development) into print (manufacture).

Three, we’ve been putting a lot of content out digitally, but that doesn’t have the same earning potential as a physical product (digital is great, but you can’t sustain a company at the size we’re trying to be on digital alone). On the physical product side, our output in 2015 has been a bit sparse, with a proportionate drop in income for the company. And that suggests we need to produce more physical products in order to better support our company’s ongoing cash-flow. And while we don’t need to take our digital releases into print — and without a budget to do so we might have to leave them as such — I think all our interests would be better served if we got those suckers into print.

So as we contemplate how we want to structure our crowdfunding efforts for 2016, all of that budgeting-driven thinkery is a part of the analysis. And I think that it’s pointing at one of our first being a “from digital to print” campaign to make it possible to take a bunch of items into print.

If fully funded through all its potential stretch goals, this would cover producing a few full-color hardcover volumes compiling three or four of the Fate Worlds of Adventure each, a combination of Venture City Stories and the upcoming Venture City Powers into its own book, as well as a couple of Fate Core’s digital-only stretch goals (I’m looking at Do: Fate of the Flying Temple and Young Centurions RPG there, tho much depends on how the timelines for those behave in the remaining months of 2015), and the currently-intended-as-digital Majestic 12 supplement for the Atomic Robo RPG (again, timeline behavior dependent).

But therein exists a bit of a dilemma. As noted before, these are all (well, these are mostly, but close enough to all) things that have had their development budget crowdfunded already. Folks may have assumed (consciously or otherwise) that that funding covered everything that would be needed to take the books to print. And regardless of that assumption, it may simply appear that we are “double dipping” on those various projects, rather than seeing this as a follow-up funding effort covering a separate segment of what these products could be.

So, it’s tricky. I’m pretty sensitive to the double-dipping thing — it’s a real thing, where two or more crowdfund campaigns are run to fund essentially the same thing, like a second crowdfunding campaign to pay for printing costs that the first campaign was supposed to pay for. But in this case we never positioned those goals as oriented on printing costs.

The question is whether or not we can convince the backing public of that. 🙂

And, relatedly, the question that the campaign itself is intended to help us answer: should we be putting these things into print? Or will digital-only releases be enough?

Hit me with your thoughts in the comments. I’m listening.

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  22 Responses to “Development vs Manufacture Budgeting and the Need for Follow-Up Crowdfunding”

  1. I’m thinking you go for it.

    First, your openness, which this is a classic example of, gives you a lot of goodwill I think.

    Second, you make your case. If people accept it, they’ll fund you. If not, well, you just used KS for what it’s supposed to be used for…making sure something has demand before you sink money into it.

    Third, it seems to me that the only real drawback is that people won’t like you as much, but…#1 again.

    I think that by being up front and open, “this is why we’re doing this” totally will reduce that potential impact of #3.

    • That’s definitely the hope. If we do this we’ve got to lead up front with a very clear why, or it’s just offering much too fertile ground for some misassumptions.

    • “If we do this we’ve got to lead up front with a very clear why”

      Pretty much this exactly. Companies get themselves into image crises over a lot of things, but a perceived betrayal of trust is usually a pretty massive part of that. Note that a given individual doesn’t have to have any personal stake for that to be the case.

      In your case, a perceived double-dip would likely negatively impact people who didn’t contribute to the original Kickstarters as well.

      Frankly, your communication style does a lot to head this stuff off at the pass. You put stuff out in the open for the public to see, and here’s where that strategy can really pay off. Many would try to avoid any associations with double-dipping by just not mentioning it, by clearly stating what they’re trying to do, and hope that by not mentioning it, it won’t occur to people.

      This is not what I would advise.

      Just stick with your existing communication style; be upfront and honest about what’s been paid for, and what you’d like to do now. It can be exciting! All you need to do for a lot of this is cover the cost of physical goods – the content is already paid for and developed/developing. That can do a lot to build confidence that you’ll ship, and ship on time.

      Anyway, sorry if that’s a bit long-winded, but that’s my 2 FP.

      (Source: Master’s degree in Communication Methodology, with a focus on Strategic Communication, and a personal focus on Crisis Communication.

      Reason: A desire to use my degree today)

  2. I’d love to see these all in print.

    Would print-on-demand be an option for some of the World books or are those options not up-to-snuff yet? (I’ve had middling success with some of the POD books I’ve received: Lulu was pretty good, One Bookshelf books were mostly OK)

  3. I spent like 90 bucks on the Fate Core Kickstarter, and I certainly didn’t expect that to pay for physical copies of anything except the books that were advertised as physical copies. I’m not sure which of the digital only products I’d kickstart a physical copy for, except Dresden Accelerated, I know I’d kickstart a physical copy of that, but that is the joy of Kickstarters, I can choose not to back one if I’m happy with the digital copy I already own.

  4. While I usually only do digital because of shipping costs, a recent development made by Magpie showed they can do international shipping for 15 dollars to my country and it arrives at my home, withouth any extra costs as long as it’s clearly labelled as a book. So if you use the same system I might be tempted to get into print some of the things I already have from the Patreon in a printing only KS.

  5. Its totally not “double dipping” if you crowdfund physical print runs of currently-digital-only products; /especially/ if you’re open and honest about “hey, you can go buy this PDF today”

  6. I put no small amount of money into the Fate Core Kickstarter, so here’s a data point of one, that is hopefully representative of those that feel “invested”:

    * I paid for FC and the immediate FC products (successfully, and the most satisfying KS experience of dozens)
    * I paid to get stuff on the development schedule (In truth, that was a reward that came “free” for me, so my reaction if any of it sputtered out is more disappointment than resentment, but others might be more attached to them )

    So:

    * If you ran a “publish this” KS for, say, FAE Dresden, I’d not be bothered, particularly if we got to see drafts as we did with FC.
    * If you didn’t run such a KS, or such a KS ran and didn’t make goal, I’d expect FAE Dresden to be “development done” and thus perhaps have to wait for later release when budget became available.

    In particular:

    * You made it very clear on those goals in FC that it was development – at least, it was quite clear that we as backers wouldn’t get anything special regarding them – so I expect the public’s sense of violated expectations would be low.

    One area of potential disagreement though: My understanding of “development done” means the product is written, art is acquired, editing and layout are MOSTLY done, save for those back and forth cycles with printers or electronic publishers that require adjustment. My understanding may be wrong, and others might have understandings that are even more wrong, so what they think they can “get” at the _start_ of a “publish this” KS may vary. This seems pretty minor to me, but worth mentioning.

  7. You’re going to piss off some people. Probably not many here (since the sort of people who are going to be posting here are the ones most likely to hear you out before getting pissy), but you’ll always have someone get pissed off. I imagine some will say “I already backed this! Why do I need to pay more to get it in print?!” However, you were pretty open about what stuff people got in the last Kickstarter, and I think you won’t have too many people upset, and the ones who do get upset won’t have too much sympathy.

    The main concern I have is that some people may take the position (and this is a reasonable position, to be honest) that they’ve already paid for it, received it, and they’re not that interested in buying it twice. Obviously, their choice on how to spend their pretendy-fun-time-game money, but it does raise the question of how much you get. But so long as you plan for what to do if you don’t fund, for if you barely fund, and if you fund beyond expectations, I think you’ll be fine.

    So, the worst case I see here would be a failed Kickstarter, which is demoralizing, but not the end of the world. And frankly, I consider even that a fairly low probability. Evil Hat has a good reputation for delivering things on time and to spec. That goes far with Kickstarter.

  8. I’d love to get many of the excellent worlds of adventure products in print and wouldn’t mind funding another kickstarter for that. But the shipping cost to my country (Austria) is jarring, and the reason I really dislike funding kickstarters for physical products based in the US. That really is an unsolved problem. Any chance you could join a collaboration with a print on demand service in Europe or an established distribution player (like amazon)? Sorry if the suggestion seems stupid, but paying 30 bucks in shipping for a 15$ product is something I only do if I can’t get the PDF.

  9. I suspect many of the people reading this blog would support the decision to run a second kickstarter, however I completely understand the hesitation of the process. If you were open I think you could manage it. Personally however I don’t really do hardcopy.

  10. I’ve seen this as relatively common in Kickstarters, although more so in indie computer games. Kickstart 1 runs, and runs very successfully, but the more the designers work on it, the more they realize that they want a few more features in the game that were specifically addressed by Kickstarter 1. So they run a second Kickstarter.

    The advantage you have is that you have actually produced a product from the first round, whereas a computer game that takes this approach typically takes another round and another few years before the game is released. So I look at double dipping as a reality of the process, and as others have pointed out, your particular case is either not double dipping or at least the most benign form of it.

    That said, I’m shifting more and more towards digital copies to reduce clutter in our small apartment, so I don’t buy print RPGs nearly as much as I used to.

    And as always, thanks for the transparency. I’m working towards a Kickstarter for my first RPG and your posts have been invaluable.

  11. Speaking only for myself: I’m not much interested in print RPGs. I don’t have space in my life for a large physical library now that I can carry around 100’s of RPGs in my iPad, and store even more in the cloud.

    From my view Evil Hat prices their digital content too low. I think if you didn’t give away so much digital content in your Kickstarters, that digital revenues would be a larger portion of your revenues, and could reduce the need to make that up with printing books.

    I don’t mean to tell you your business – you are way more successful a small business person than I ever was. I hope you find these comments a useful datapoint.

    I’ll be a customer as long as you continue to produce great products.

    Cheers!

  12. Fred –

    So, the real question is: when do you get into the printing business?

  13. Hi Fred, I think going for it is reasonable.
    My logic goes that nobody (for a sufficient value of “nobody” given this is the internet) is thinking that funding something in the FC kickstarter would get them a PHYSICAL copy of that book at the end of it all.
    Thus, the Kickstarter is a way to get access to those things, while also raising funds.
    I’m sure it might irritate some people, but no more than “I kickstarted this, why do I gotta pay for it at a store?” would – and I’m hoping there are few enough of those.
    As others have said, the transparency gets a lot of goodwill, and that hopefully that keeps feathers unruffled.
    I’m just sad that if the kickstarter is sensible for shipping costs, I probably can’t get involved much – but I’d far rather get shut out than have the kickstarter cause more financial problems than it solves!

  14. Hi Fred

    I think your openness about things like this is great. It surely made me trust you with my money before. Thanks for that.

    So, the question at hand. You really need to look into having a shipping coordinator in Europe, and maybe other parts of the world, if you are going to keep producing more physical books. I’d suggest talking to others who have done such deals for their kickstarters, like Rick Loomis. That will be key for you to get the backers from outside the US in on this.

    I think you have the trust established for more campaigns, but the economic realities of shipping, that is a killer.

    Thanks for the great games, give my regards to the rest of the team.

  15. […] were for development and this kickstarter is for manufacturing. Fred Hicks, wisely, has shared a blog post with a lot more […]

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