Kickstarters, good or bad?

[Luddite]

Cloud funding's an interesting proposition.  It seems a bit like micro-scale venture capitalism to me.

I guess the problem i see is the problem with established suppliers.  The niche market figures are never going to sell well enough to make the ranges viable, which is why traditional sellers don't do them.

Also, i'm struggling to see the incentive for someone to pledge money. 
So you get a one off batch of figures at 25% discount? 
But now you've potentially kicked off the career of someone else who will go on to make lots more money - including presumably money out of you as you buy future product? 
Wouldn't the capitalist in you prefer to 'buy shares', or 'invest' for a better long term return in this venture?

I'd prefer to see a cooperative financial model.

That said, anything that gets funding to small start-ups in the hobby is a good thing surely? 
Or is it? 
After all, we already have a very large number of companies supplying a niche hobby.  Are there too many already?  Wouldn't it be better to consolidate all those into perhaps 1 supplier per scale? 
Who knows...

But it's moot as it won't happen.  And we as hobbyists don't want it to.  Look what happens to the 'big players' who corner a market - scorn, bile and hate in torrents is poured on them by the hobbyists.

Um...

I'm rambling aren't i?

OK, i'll stop.

[i_am_win]

I'm not sure there'd be enough people pledging for any 10mm range to be viable.  

Let's say a range was 20 codes, 2 figures per code.  With the sculpting and moulding, you've got about £1200 ($2000) of investment needed.  With a full army pack currently costing £25, combined with the need to be offering people something at a discounted rate to get them to pledge, the average pledge might only be £20 or even less.  So we'd need to find at least 60 people willing to pledge into an Aztec range before it hit the goal?

Don't forget that you could tempt potential supporters with any items from your back catalogue of minis with your support levels, I think as an established firm you'd be fine to get funded in this way, only thing is, your going to have to have mass appeal, and not everyone wants or needs 10mm Aztecs.
To get around this you could offer a choice of different figure packs and option other than just aztecs. I myself wouldn't support it if all I was going to get aztecs, but I would if there were other goodies from your ranges...

From my past Indiegogo campaign I have learned a great deal, and even though I failed epic (yeah, I suppose I underestimated what was needed in the first place, etc.....) I am still going to relaunch with a kickstarter next year. I am in the process of getting the sculpts done one at a time as and when I can afford it (Getting the greens done first would have probably got more support in the first place)

http://thegrinningskull.wordpress.com/2012/09/14/15mm-oggam-sculpt-almost-final/

The sculpt has certainly added some support for getting them done and by the time the greens in the line are done, I should have enough for a win (and I am win!!)
Im doing loads of market research next time to make sure that everything is right and hopefully it'll be a success.

There is a good report here about crowdfunding and the RPG market with stats, its a good read if you want to gauge success Vs fails etc, best strategies and so on....

http://qitsune.wordpress.com/2012/05/06/a-great-market-study-on-kickstarter-success/

[crossover]

Also, i'm struggling to see the incentive for someone to pledge money.
So you get a one off batch of figures at 25% discount?

Let's look at it.  You've been given what you want at a discount.  Let's not forget that product would not have been created if it were not funded in this way.  So you have helped create the product as well.

But now you've potentially kicked off the career of someone else who will go on to make lots more money - including presumably money out of you as you buy future product?

Talk about presuming.    I think "lots more money" is a possibility, but in my case you will just do your part to insure more models.  So what you are doing is helping to insure that the toys you want will be available. 

Wouldn't the capitalist in you prefer to 'buy shares', or 'invest' for a better long term return in this venture?

I'd prefer to see a cooperative financial model.

That just isn't what this is.  It's a reward system for folks backing a project.  Not an investment, if you are going to look it as an investment without an investors reward, you will certainly be disappointed  in the process.  Many people that have a problem with Kickstarter are trying to compare it to oranges.  It's new and different, you have to judge it on it's own merit.

An investment or 'buy shares' arrangement just isn't going to work.  It's too complicated and you need lots of lawyers to make it work. 

I always find it interesting how supportive folks are of the current way of doing things.  A larger company says "this is what is available, take it or leave it."  They have no problem with that company spending the piles of money they make on hookers and blow in the Caribbean.    But offer someone the opportunity to get a very niche figure produced for a discount, and the questions of 'what's in it for me?' pop up.  Or, 'you want me to help you out?' seems like a reasonable response suddenly.

I don't mean to sound harsh with the last paragraph as I'm enjoying the debate Luddite, just trying to get quick responses out at work.   

[i_am_win]

They have no problem with that company spending the piles of money they make on hookers and blow in the Caribbean.

Wow, if i had known that miniature companies had this in mind with the proceeds, I really hope that my next campaign gets 100%, although I think Amsterdam would be a better bet with the Hookers and the Blow....I would have started a minis company years ago...

[Leon]

After all, we already have a very large number of companies supplying a niche hobby.  Are there too many already?  Wouldn't it be better to consolidate all those into perhaps 1 supplier per scale?  
Who knows...

Very possibly, and I think we'll see a lot of consolidation in the next 10 years.  There are many companies which have sprung up on the UK circuit, in my mind, due to the economic situation, and people starting their own businesses as regular jobs are so insecure.  Unfortunately, not all of these will be able to survive beyond the 'honeymoon' period, and I think they'll slowly get bought up by the bigger guys.

This is probably a separate discussion though!

But offer someone the opportunity to get a very niche figure produced for a discount, and the questions of 'what's in it for me?' pop up.  Or, 'you want me to help you out?' seems like a reasonable response suddenly.

That's something I'd not considered actually, and it does ring true.

From my past Indiegogo campaign I have learned a great deal, and even though I failed epic (yeah, I suppose I underestimated what was needed in the first place, etc.....) I am still going to relaunch with a kickstarter next year. I am in the process of getting the sculpts done one at a time as and when I can afford it (Getting the greens done first would have probably got more support in the first place)

I was surprised that your project didn't get off the ground, and as I followed it, I did wonder whether it would have received a more positive response through Kickstarter?  

So they're just not going to happen?

They'll happen, just not through this method.  Our requests method is similar, the only difference being that we don't ask for any money up front!

It's got to depend on the overall popularity of 'the period' with so many other ranges available at present.

I think that's the key for us, in that we've already covered all the popular mainstream stuff now, that any new range only appeals to a smaller group anyway.  That's the theory behind the requests, where we can see how viable it is to create something.  There are still ranges/items we've never turned a profit on, and some we never will do, but they can be balanced out against the solid sellers like WW2, Naps, ACW, AWI, etc, etc.

[i_am_win]

I was surprised that your project didn't get off the ground, and as I followed it, I did wonder whether it would have received a more positive response through Kickstarter? 

Although it didn't do so well, I did get loads of positive stuff from it and it's getting better support now as we speak  (also many possibilties of stocking my line when they're done form retailers I contacted and such) I think because people don't quite yet grasp the concept of crowdfunding, coupled with the fact like you said about niche products (as mine is) and Indiegogo isn't as popular as Kickstarter (I had to use them as Kickstarter needed a US account, this will change however this autumn when they allow european projects)

I will have another go at it though, but with Kickstarter this time after the new year when I have the first load of greens done. If that fails, I'll probably try and sell the line on or shelve it until I can raise more funds....

[Orcs]

I'm not sure there'd be enough people pledging for any 10mm range to be viable.  

Let's say a range was 20 codes, 2 figures per code.  With the sculpting and moulding, you've got about £1200 ($2000) of investment needed.  With a full army pack currently costing £25, combined with the need to be offering people something at a discounted rate to get them to pledge, the average pledge might only be £20 or even less.  So we'd need to find at least 60 people willing to pledge into an Aztec range before it hit the goal?

Ok I am not interested in Aztecs at all.  However I could be tempted into helping a kickstart program with someone or a company I trusted. Particuarly if the discount was given an a range I am interested in rather than the new range.

I think we all agree that we can trust Pendraken to the tune of £20.

Yes this does mean Pendraken get a new range of figures "on the cheap".  But those who have invested  also get some figures on the cheap. Thats a Win/Win situation.

You could argue Pendraken may win more in the long term as they have another range.  Bur the more ranges Pendraken has the more viable it is as a company, the more likely it will stay in business  and we get the very good service from Leon and co. 

How many of us have pre-ordered stuff for collection at a show and paid up front as someone else was collecting them.

All you are actually doing is pre- ordering the figures in the same way .  Its just a longer wait to get them

 

[Duke Speedy of Leighton]

Now that sounds reasonable!
Maybe there is a funding option, where you can choose 'aztec' or whatever new rhe range is as your reward, or you choose an equal value from another range.
If you have a look at the Kickstarterfor Order of The Stick, Richard did much the same thing.

[crossover]

I like the way the conversation is going, however you have to be careful.  Kickstarter is intended as a way to produce new projects, not a way to source income for income's sake. 

People on kickstarter seem to be dubious of projects that try to resell current items, and they should be.  It is intended to bring new projects to light.  If you have something you already sell, that's what sales are for.  Kickstarter is for bringing things to life that wouldn't see life if it weren't for Kickstarter. 

[fred.]

Kick starter failures - I'm sure these will happen, but this happens with current company structures, many of whom have taken customer money, but not delivered a product. To say nothing of supplier's left out of pocket. The only advantage with a kick starter project, that gets funding but fails to deliver is that each person is only out a small amount. Also due to the nature of the funding, a lot of people need to believe in the company before it can start, so it is harder to have a weak plan. But I'm sure some will fail, probably more likely due to underestimating the work / costs involved rather than fraud.

For established companies - I think for established companies it should be easier for them to use Kickstarter to cover new ranges / products. I think the reasons for this would include; Reputation, customers have already seen that the company can produce product. Less costs to be covered by kickstarter - the company is probably already covering its overheads, it only needs to cover the extra costs of the new range, whereas a startup has to cover everything with the new product. Marketing - the company already has customers who are likely to buy a new product, they have a market presence, etc.

Reward levels - this is quite interesting, I assume a kickstarter can offer anything in return for a pledge. There could be a low value pledge that is essentially a gift, there is the product being produced (with or without a discount) there could be all sorts of other rewards. The idea from Crossover of allowing design choice, is good as it is high value to the customer, but costs the company very little as they would have had to do the design work anyway. I'm sure a company could offer a 5% discount voucher (against any product) for a pledge level - though it would be hard to judge where to price this.

Why pledge money - well the main answer has to be to get something that won't happen otherwise. If you think that the product will appear anyway, then you can wait. But I think generally the idea is that the level of risk for an individual customer is so low that they will be willing to put in their 10-50 quid. Whereas a conventional investment model would be looking for 10s of thousands per investor. I think kickstarter is more of a method of buying something, rather than investing in the traditional sense, were you are looking to make a return on your money, though at a potentially high risk.

Any way, lots of words...

[sultanbev]

Hadn't heard of Kickstarters until this thread, I think I understand it now.
I do have a question or two though.

Example
Lets say Pendraken get £1200 in pledges to make a 10mm Aztec range. This then goes to the top of the requests 'tree' as it were. Now then, the sculptors Pendraken currently use are already busy making the existing stuff on the requests tree, on top of stuff that Pendraken might want to see themselves.

The question then is, are their other sculptors out there that can do the work, that are available? And if so, does Pendraken have the extra mould-making capacity to make the moulds (or if they are contract made, are their the mould makers out there who can do the moulds) or would they use that Kickstarter money to hire extra staff for that production run?

In general, is there the logistic ability, if you will, to take advantage of the Kickstarter money?

On a separate note, how does the pledge money work for tax purposes? Is it taxable income in that tax year? Is it capital investment that is tax-deductable? Or does it 'go under the mattress@? 

Mark

[Leon]

Lets say Pendraken get £1200 in pledges to make a 10mm Aztec range. This then goes to the top of the requests 'tree' as it were. Now then, the sculptors Pendraken currently use are already busy making the existing stuff on the requests tree, on top of stuff that Pendraken might want to see themselves.

The question then is, are their other sculptors out there that can do the work, that are available? And if so, does Pendraken have the extra mould-making capacity to make the moulds (or if they are contract made, are their the mould makers out there who can do the moulds) or would they use that Kickstarter money to hire extra staff for that production run?

In general, is there the logistic ability, if you will, to take advantage of the Kickstarter money?

If it was us, we'd probably give the extra work to our current sculptors I'd think.  Like others in the current climate, most of them are always on the lookout for more work.  The moulding might cause a slight issue, but only in that we'd have to knock other stuff down the queue slightly, as we do churn out a lot of moulds for ourselves and other companies now.

On a separate note, how does the pledge money work for tax purposes? Is it taxable income in that tax year? Is it capital investment that is tax-deductable? Or does it 'go under the mattress@? 

I'd assume it just goes down as an income stream, like a regular sale, and would then be offset against the sculpting / moulding / casting bills at the end of the tax year.

[FierceKitty]

Can't agree with you, Luddite (with respect to your rank, sir). Monopoly is dangerous for all manner of reasons; stifles the creative aspects, limits you to one maker's interpretation, and is very vulnerable to financial abuse.

[sebigboss79]

I think this is how many folks felt about eBay when it started, but it works, even though many people are dishonest, many more people are not. 

I wasn't an established company, just a guy with a plan who knew folks in established companies.  Everyone else who took part in producing the miniatures, sculptor, mold makers, and casters are all very well established, but it was my first rodeo.  I think we did rather well.

Respectfully, I think the word donor couldn't be farther from the truth.  All the donors to my Kickstarter received exactly the minis the wanted at 75% retail cost.   

You may also be an exception from the rule. There are many many ways how the "donor" can be rewarded. Some shemes only rewarding pledges over a certain limit. Lets say, pledge 20 and you get 12 worth of figures.
Others like yourself will give figs at a discount, the ways of handling this are basically endless....

Don`t get me started on ebay. Yes I still use it but just because the alternatives do not draw the crowd ebay still does. Now call me a pedant but publicly announcing you did not know you needed a banking licence for ebays latest sheme (taking money from buyers and forwarding it to sellers after confirmed delivery) you should not be in business because of stupidity.

Yes you do have dishonest people and if you do not know the ways to escalate with ebay and paypal you can get burned. But it happens also offline and has happened before.


Kickstarters - like I mentioned before - do have advantages and disadvantages. One should always question themselves "Do I trust this person for X amount of money". Every business decision should be made with this in mind.
Agreed you do have lots of fantastic ideas out there but some of them are just interesting for a limited set of people so they are not becoming reality.

Mentioning monopolies: See it from the other side people. GW currently looses customers on all sides. I do not wish to analyse this in all depth but they have acqired a quasi monopoly in 28mm gaming and alienated their clients (>75 % of them) with several "bad moves" over the last 4 or 5 years. Yes they are not dead yet but looking strictly at numbers and the fact that the average 12 year old buyer spends rather on the newest videogame than to actually build and paint those figs I predict massive problems for GW in the next few years. A loyal customer base of 25 % or less just isn`t good enough especially if you price thiose people out by raising your prices time and again.

Empirical evidence? Here I am - I switched my scifi gaming to other companies including Pendraken. For me there is simply more value there.

And that is another point for/against Kickstarters. Is there VALUE for you?

The donor mentality can also help there and hence I used that word. Donating you also get something in return, maybe not even phisically (Blood donor, organ donor...) or you "donate" your time in volunteering. You cannot argue that some people who do these things do not feel energized or "happy" when they can do something good.

[sultanbev]

If your sculptors have spare sculpting capacity, refer them to Andy Kirk at Heroics & Ros, he might have work for them if they can do 6mm. Although he is off on honeymoon until the end of the month...

http://www.heroicsandros.co.uk/contact.html

Mark