Friday, 17 April 2015

Are backer rewards worth it?

Do backer perks kill or at least bog down creative projects funded through Kickstarter or other crowdfunding sites? If I were attempting a project like that, I'd be surprised if I didn't spend half my time signing things and shipping them out, rather than doing the actual project. And a significant amount of the funding would have to go to those backer rewards, too, which leaves less available for the actual project. That could easily be a trap that creative people fall into when asking for crowdfunding money. If you think you'll need $100K to complete your project, and you reach that goal, but you have to spend $50K on backer rewards, you're going to fail, because you're really only half-funded. Or if you're making some new device and you promise one to every backer, then you fund your whole first production run, send them all off to backers and you're back to square one.

While I realise that backer rewards are something people can easily comprehend, I think crowdfunding should probably work more like ordinary venture capital. I invest in your project, you make it happen, I get dividends in return from your sales. If I want a copy of the movie, TV show, nifty gadget, I can buy one like anyone else. Freebies for backers work pretty well if you've got two big investors. Throw them a bone to sweeten the deal. Why not? But if you're funded by ten thousand of your biggest fans, then you give away the work to them afterwards, I think the money would all just form a complete circle and cancel itself out.

Mokalus of Borg

PS - Presumably, though, you learn some stuff.
PPS - And are in a good position to start a second run, if you made any profit.

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