My friend sent me a link to a new book that an author we both love is planning on writing. They’re on Kickstarter and want us to buy the book before she even writes it. Seems like a scam! What is Kickstarter and how safe is it to back a project on the site?
Pre-Internet, if you wanted to raise money for a venture or project, you were generally limited to your previous customers or, more likely, friends and family. Who wanted to invest in a new coffee shop in town that might not end up raising enough to open the doors? The only people who would take that sort of speculative move were investors and they lived with high risk but, hopefully, also the chance for high returns. Nowadays in the business world, they’re known as angel investors and they’ve helped launch some of the biggest companies in the world.
But if you’re an artist, designer, writer, game developer, or musician, what are your options? Enter crowdfunding, and no one does it more successfully than the enormous company that is Kickstarter. Kickstarter went live on April 28, 2009, created by company co-founders Perry Chen, Yancey Strickler, and Charles Adler. Since then it’s seen the successful funding of almost 250,000 different projects, a combined value of $7.7 billion dollars. Yes, that’s billion dollars.
THE BASIC IDEA BEHIND KICKSTARTER
Crowdfunding is a simple concept: instead of asking one person to support you for the full cost of your creation or development, why not ask dozens or hundreds? While they’re not investors, per se, they have the fun of pre-purchasing your product or service in return for a discount on the final pricing. Some Kickstarter projects are even more ephemeral, helping fund a music festival or street fair, where your reward is knowing that you were able to contribute to the betterment of a neighborhood or the happiness of thousands.
A first-time book author might find it tough going because, reasonably, people might question if their “pre-purchase” of the book is every going to be delivered, but if it’s an author who already has a string of great novels? Or a filmmaker who already gets their films into the theater with success? Or a consumer electronics company that already sells dozens – or hundreds – of popular and well-rated products?
The main variable to consider is time: When you go to Amazon.com and buy a pair of headphones, they’ll probably show up in a day or two, but if you back a headphones project through Kickstarter, it might take a year or longer to have them actually show up! Sometimes they never show up!
WAIT, KICKSTARTER PROJECTS CAN FAIL TO DELIVER?
Because you’re backing a project that’s generally funding the creation, development, or production of a product, there is a non-zero chance that it will fail along the way.
Insufficiently funded: One way it can fail is that the creator might set a minimum amount they need to raise in order to proceed; if they don’t raise that much money through Kickstarter, the project will fail (and you won’t be out any $$: You only pay your pledge if the project is successfully funded).
If you’re worried about this, you can choose not to “back” projects until you see that they’ve already attained their funding “goal”, but Kickstarter is very good about not charging if a project fails to fund.
Underestimated development and production costs: I back a number of board game projects. It’s fun and there’s a huge amount of creativity among the development community. Some designers, however, have no experience with the cost of production and shipping (particularly since most games are printed in China), which can lead to problems. Most (in)famously, people can pay pretty big amounts for a massive, epic board game with tons of miniatures, boards, and story, just to get an email from the developer a year or two later explaining that they underestimated costs and need another $20, $50, even $100 per backer to actually produce and ship the game.
As you can imagine, backers go rather ballistic and many will just cancel, making the financial side of the project even more chaotic. Kickstarter doesn’t refund monies in this instance, however, because they’re just the funding platform, it’s up to the creator to decide if they can afford to issue refunds or just live with a lot of angry people.
They’re just scammers: While Kickstarter does some screening on its end, there’s a very small chance that the project creator is just a scammer and is going to take the proverbial money and run. Fortunately, this happens quite rarely. I’ve never experienced it.
HOW MANY PROJECTS HAVE BEEN SUCCESSFUL?
That’s the dark side, all fitting into the category of caveat emptor (or “buyer beware”) but what about the upside? Well, Kickstarter has some pretty impressive stats:
If you do the math, that means that approximately 22.6 million people have backed 249,410 projects, meaning that a typical project might see around 90 backers. Some projects seek backing of $10-$20 while others might be looking for $400-$750 or much more per pledge. However you slice it, that’s an amazing set of stats and shows just how successful Kickstarter is as a crowdfunding platform!
Also, if you’re curious, the two most funded projects in Kickstarter history are the Pebble 2 smartwatch (66,673 backers pledged $12,779,843) and the Baubax Travel Jacket (44,949 backers pledged $9,192,055).
SO IS KICKSTARTER SAFE?
This brings us back to your original question: Is it safe to back your favorite author’s new book project on Kickstarter, or is it a scam? It’s impossible to guarantee that it’s legit and that she’ll write the book, but if you already know and love her work, that’s an excellent sign that she can indeed deliver. Books are relatively inexpensive to produce too, so it’s really helping fund her writing efforts more than the publication itself, so it seems like a reasonable thing to consider backing.
Again, if you’re not sure, remember that if you pledge support and the creator fails to raise the minimum funds required, you will not be charged your pledge and will walk away scot-free.
I really love Kickstarter and find the creativity of people who can work direction with crowdfunders to be amazing. Some of the projects are stupid, some are destined to fail, some are clearly mispriced, but the others can be just terrific. I have many great games and products – I’ve backed 67 projects! – that were originally through Kickstarter.
Pro Tip: I’ve written about lots of basic computer and Internet topics like this and invite you to check out my extensive Computer & Internet Basics Library for more material. Also, you can find me on Kickstarter too, if you’d like to see what I’ve backed. I’m @d1taylor there and am happy to have you check out my profile!