Oct 142012
 

I’m putting this down mainly as a “note to self” — these are the key attributes I’d want to see in an ideal-for-my-needs crowdfunding site:

  1. A social networking component to encourage discovery
  2. Accessibility (in terms of payment processing) for international backers
  3. Ability to adjust pledges while project is live
  4. Separation of money put towards project goal vs. put towards shipping

There are other things that are good — metrics to help understand where funding is coming from and to gauge the effectiveness of specific promotional effort, etc — but these would be the real, foundational core for me.

Right now, crowdfunding sites that exist seem to be able to do at best two of the four things on this list. Kickstarter hits #1 and #3 neatly (which I feel forms the core of their success), but fails at #2 and #4. IndieGoGo is the leader for #2, but is weaker on #1, and outright fails at #3. And so on.

The advent of selfstarter.us makes me think at some point someone might build something that hits 2-3-4 based on that chassis, but any Selfstarter-utilizing crowdfund effort will have a hard time with #1 — at least until someone figures out a good clean way to provide a central clearinghouse for Selfstarter campaigns that people can use to browse an otherwise spread out and decentralized population of crowdfunding opportunities.

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Jul 312012
 

EDIT: Kickstarter has clarified: http://www.kickstarter.com/blog/bulk-quantities — Kudos for getting specific and responding relatively quickly. I’m preserving the rest of my post as is, though I think their definition addresses many of the concerns.

I rarely post about things with a negative bent, because that’s not really my style. But hot on the heels of concluding a second successful Kickstarter campaign, this bit of news seems worth putting under the microscope. It was recently brought to my attention that Kickstarter has added (maybe it’s been there a while, maybe it’s a new addition) a bullet to their prohibited rewards list:

  • Rewards in bulk quantities

So, that feels pretty ill-considered.

For game producers using Kickstarter, it’s a salvo fired right at the heart of our efforts to support and promote the participation in Kickstarter projects by the retail tier.

Our recent Race to Adventure kickstarter had two retail tiers, offering 6 and 12 copies respectively, and we sold a couple hundred units that way along with the rewards we were sending to our non-retailer backers. Those couple hundred units showing up on shelves early into the product’s lifecycle will be a vital and necessary part of making sure that our product is a success post-kickstarter. If we’d had to heed this prohibition, we’d have had to institute less-obvious ways for retailers to participate, or remove that option entirely. Not to mention it would have cost the project all of its $50k-and-up stretch goals, as those retailer backers represented over $2,600 in pledges.

It’s also a display of poorly defined language. Should we be considering “bulk” to mean “anything more than a single unit”? Or is there some number down the line that counts as bulk? In essence, is it bulk if I have a reward tier for getting 2 or 3 copies, maybe at a mild discount, so folks can save on shipping & buy for friends? Not at all clear. Wiggle room is kinda bad in these situations, because it creates uncertainty, and uncertainty is the root of fear and inaction. Put those into play, and you end up with fewer kickstarters, less ambitious kickstarters, and people taking their intended-for-kickstarter crowdfunding projects elsewhere (or giving crowdfunding a pass, period).

I get why most of the other stuff is on their prohibitions list. A lot of it makes sense. But this? Without a good explanation, without a great many cases made for why it’s more than an occasional problem, it’s a message to me, and perhaps to others, that maybe it’s time to stop making use of the site for our projects. Which is a real pity; we were just getting started.

I’d certainly welcome a good explanation, and hope we’ll see one soon.

(Then again, if someone could produce a crowdfunding site that separates money to be spent towards shipping from money to be put towards the project’s goal, so someone could pay $40 for $10 ship and $30 that goes towards the actual goal tally, I’d be pretty damn tempted to move my business even without this gaffe on Kickstarter’s part. It’s a pity Kickstarter isn’t putting more effort into solving that sort of problem.)

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Jul 252012
 

I’m going to dig into some of this a bit more in another post — particularly the Board Game Geek stuff — but I thought you might be interested to see what the Kickstarter dashboard is telling me.

REFERRERS

via Kickstarter: 46%
via External: 54%

Dollars pledged via Kickstarter

$23,714

Dollars pledged via external referrers

$28,402

Average pledge amount

$58.96
Referrer Type # of Pledges % of Dollars Dollars pledged
Direct traffic (no referrer information) External 216 24.44% $12,739.44
Board & Card Games (Discover) Kickstarter 133 13.18% $6,869
Search Kickstarter 88 9.65% $5,030.99
Twitter External 57 6.68% $3,482
Facebook External 45 5.01% $2,612
Embedded widget External 42 4.17% $2,174
boardgamegeek.com External 41 4.01% $2,088
Kickstarter user profiles Kickstarter 41 8.92% $4,648
A project’s backer confirmation page Kickstarter 36 3.80% $1,979
google.com External 21 2.12% $1,104.50
Friend backing email Kickstarter 17 2.71% $1,411
deadlyfredly.com External 15 1.40% $730
plus.url.google.com External 12 1.19% $619
mail.yahoo.com External 10 0.91% $475
48-hour reminder email Kickstarter 9 0.92% $480
Activity feed Kickstarter 9 1.55% $810
Recent history bar Kickstarter 9 0.86% $449
Recently Launched (Discover) Kickstarter 8 0.90% $469
Home spotlight Kickstarter 7 0.59% $305
Popular (Discover) Kickstarter 6 0.56% $290
trictrac.net External 4 0.35% $180
Home location Kickstarter 4 0.42% $220
kicktraq.com External 4 0.35% $180
Staff Picks (Discover) Kickstarter 3 0.30% $160
sjgames.com External 3 0.40% $210
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Jun 262012
 

(Click to enbackenate.)

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Jun 192012
 

At Evil Hat, with our kickstarter campaigns, we believe in sharing the cost. We’re not coming to our backers asking them to carry 100% of the costs on a project, pure and simple.

With that in mind, the Dinocalypse kickstarter was conceived as someting that’d be in the red at pretty much every stretch goal, with each book needing to generate a few thousand bucks in sales outside of the kickstarter as each got funded. And that’s fine; we want our kickstarted products to take on a life beyond the kickstarter, or it’s not much of a starter after all.

And if we fail to make that additional green to get us into the black — well, that’s on us, and it should be on us. Because we’re a commercial company, dagnabbit.

So that same thing’s been true as we come to our Race to Adventure! kickstarter. We said as much on the project page that even if we hit $40,000, we’re still in the red. How much in the red? Well, about $20,000. Mind you, that’s $20,000 we have and are willing to spend in addition to the funds raised, so no harm no foul there. But I’ve gotten some questions about this on Twitter made with concerned faces and intentions to see Evil Hat prosper, so I figure I owe you some more detail.

Now, first off, let’s check an assumption at the door. If, at $40k, we’re $20k in the red, that means that if we raised $60k, the project would be fully in the black, right?

Nope.

The reality is that as each new pledge comes in, new costs come along for the ride, too — shipping, for example, as well as the costs of producing the game. Same can be said of each stretch goal, since that triggers the need to produce additional materials. So while at $60k we’d be less in the red, we’d still be in the red. With each pledge that comes in, some goes towards “the red”, and some simply goes towards the cost.

Very generalized, based on our past experiences, we’ve structured things such that about 25% of any pledge is going towards shipping costs & other incidentals. We also know that as much as 10% goes to amazon and kickstarter combined. Together, that’s a third. So we could say that for every 3 bucks pledged, we’ll net about 2 bucks to apply to the actual costs of the product and the spiffs.

I’m gonna use multiples of $3,000 here because that makes the 2/3rds math easy. In essence: $36,000 = $24,000 actual; $51,000 = $34,000 actual; $72,000 = $48,000 actual; $99,000 = $66,000 actual. Dig?

The trick to making this all work out is to make sure that with each stretch goal, it’s only adding a little more cost for us; that way, as the funding busts through stretch goals (fingers crossed!) it’s moving faster than the growth of “the red”, allowing us to reduce it.

To use those numbers again: at $24,000 actual, we’re about $20,000 in the red (and again — that’s as planned, designed, etc; all good!); at $34,000 actual, we’d be about $12,000 in the red; at $48,000 actual, we’d be about $4,000 in the red; and at $66,000 actual, we’d be only about $1,000 in the red.

So when someone asks me “You say you’re still in the red at $40,000; at what point are you not in the red?” and I say “$100,000!” — it’d be easy to walk away and think “holy crap, if this project only makes $40,000, Evil Hat will be $60,000 in debt for this project!” But that’s really far from the truth ($40,000 far, in fact).

The math is a moving target. We took the time to chart it. We know its trajectory. And it’ll be a smooth ride all the way.

As a footnote, here: if the project doesn’t fund? We still produce the game — but without spending money on all those extras, without the burden to ship out a bunch of copies, etc. So our “failed to fund” scenario potentially has us less in the red than our “just barely funded” scenario, assuming the game sells (we’d also do a smaller print run in such a case, another way to keep costs down). This failure scenario is also by design.

In all, this is the kind of number crunching, dig-in-the-details financial work that’s best done well in advance when planning a kickstarter. I worked up these figures back in April, two full months before we launched, as one of our first steps in designing the Race to Adventure kickstarter.

When it comes down to it, I’ll say it again: Kickstarter is a business. We’re treating it like one. And most businesses have a period of taking a loss, of living in the red, before they can succeed.

It’s all good, and with even modest success, we’ll be doing just fine. Sure, we’ll definitely need your help — whether as a backer or eventual purchaser — to see that success with Race to Adventure and honestly any other product we make.

But Evil Hat is not in any kind of trouble here, in any of the possible outcomes. By design.

While we are taking on more risk in 2012 than we have in prior years, as with everything Evil Hat’s done, we’re making sure all those risks are calculated ones.

We’re just as interested in making sure Evil Hat sticks around as you are. 🙂

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