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Reasons to Question Whether to Crowdfund

There was a great G+ post from Epidiah Ravachol this past weekend about crowdfunding[1] that started with:

As a producer, I’m in love with crowd-funding.

As a consumer, I might hate it.

And from there, talk about how some people didn’t see a reason to not crowdfund as a producer. Now, having crowdfunded something[2] and been a “bridesmaid” to several other campaigns, I do see reasons to not crowdfund a given project.

Caveat: these are “hey, think about this and decide if it’s right for you” and not “fuck you if you just crowdfund.” They’re reasons I won’t crowdfund everything I think of, not reasons to shame others who are. Also, this assumes you’re a person doing a crowdfunding campaign with little infrastructure (and thus handling much of that on your own) rather than a business built to handle such things.

Managing the event that is your campaign. I talked a little about the event aspect in an earlier post, but it’s worth repeating: a crowdfunding campaign is a multi-week affair where you’re shouting from the soap box about your next thing. You’re telling people it exists, you’re providing new information about it over time in order to make your announcements about your project look new (and to give your backers, some of whom will become your sales force, more selling points to tell others). And at the end of it, you’re doing that thing where you remind people that if they don’t pitch in now, they’ll miss the bus on whatever deals you have baked into this campaign.

All of that is really, really exhausting to do, especially the first and last 48 hours. Unless you have a job where what you do doesn’t matter, you might as well call in sick those days because you won’t get much any other work done, between the job of being a crowdfunder and the emotional rollercoaster involved.

And even during the middle, it’s still stressful — “Do I post an update today or tomorrow?” “How much is too much promotion?” “Ohh, can I get X person to interview me and also have it come out in time for my campaign?” etc. Any one element can be handled, but because of the compressed factor of the campaign, you’re dealing with many of those issues at a given time.

So, if I don’t have the mental bandwidth to deal with that over a given month[3], it’s not a good time for me to seek crowdfunding, regardless of the project. Sort of like how NaNoWriMo is always during a month that sucks for me to do it, so I don’t engage in that activity then. :)

Coming up with and fulfilling additional rewards. There’s the Kickstarter thing of kitsch, and while stuff can be cool — both as actual things and as tokens of thanks — that comes with two forms of overhead. Some of it’s mental: what would make for good stuff? How can I make these things affordable? And some of it’s actual cost overhead, as you’re working out the various math models for how much X or Y amounts of your additional rewards are.

And that’s all work & energy being put into getting money for the project that doesn’t actually have anything to do with the original idea. If I have that energy to spare and want to put it there, awesome. But I don’t always have that or have the desire to do that. And I don’t feel like everything I make needs additional rewards.

Coming up with stretch goals. Combining the first two elements is the beloved stretch goal. Stretch goals give you something to talk about and promote that will continue to bring in more money during that window, and they’re things you have to plan out just as with additional rewards from the outset. I talked a bit about how making content-based stretch goals can be treacherous if you’re not farming out that content, even though new physical rewards or outsourced rewards are more expensive on paper.

So, in addition to all the elements above, I have the stress of analyzing a new point of failure for my project. And since it’s the recurring theme: maybe my project doesn’t require stretch goals and so it doesn’t require my additional effort spent on what’s effectively brand & project management.

Screwing up the math. This is short, but crucial: before you engage with your campaign, and at each point where something drastically changes (including stretch goals), you need to analyze your various worst-case successes, where you just barely make a goal via the rewards of least return. If that money isn’t enough to do what’s needed, then you have a problem. And the more variables you put in, the harder it is to successfully analyze that (unless you’re a math whiz or can develop algorithms to solve for that–to be fair, I do the latter).

You know what’s a harsh part of that math? Shipping & packaging costs.

So, this means I’m going to worry about the financial elements throughout the campaign as I get more data on what’s being pledged. That’s on top of the other various elements, whereas with a straight pre-order system, I would know what amount I’m getting for X number of copies ordered.[4]

Crowdfunder expectations. I’m just going to point to talking about that earlier, and say that in addition to those points, this is where the above stuff gets weird. I technically could elect to do none of those extra things — no additional rewards and no stretch goals. However, that would look really off as not being worthwhile as a crowdfunding campaign, and might cause it to fail as a crowdfunding attempt when it might success using that same scheme in a different environment (like just manually taking pre-orders).

Stress & guilt of money-before-work versus money-after-work. Far smarter people than I have talked about this topic, where there is a dramatic difference in how the mental & emotional processes of working function when you have already been paid versus when there’s money waiting at the table. If this is the sort of thing that affects you, then crowdfunding as a patronage thing is probably not for you. It certainly isn’t for me if I’m going to do more than one at a time — I can only take being on the hook for so many things at once before I fail at all of them.

This is also an argument for using crowdfunding as more of a pre-order thing, if your disposition with that means you’ll have a easily and mentally healthier time with the campaign and time after.

Also, once you’ve taken money for something, there’s a whole new set of expectations that you’ll have to deal with. This is something that Adamant Entertainment is unfortunately dealing with regarding Far West. And unless you can be utterly certain of the future, you may run into similar issues.

More success than you want or can handle. This partly gets into taxes and partly gets into added personal stresses of scale, and I don’t give tax advice, so I’ll just say that if you’re expecting a small success and suddenly get a bigger one, you might accidentally screw yourself based on what you’re offering.

For instance, maybe your reward involves signed copies of a book — which means you’re probably planning to ship the books to you, sign them, and mail them yourself. That’s not to bad for 75; I’ve done 75 before. But if you suddenly have to deal with 500 or 1000 instead? Now you’re talking about the books taking up much more of your home while they’re there, longer time with signing (and more signing fatigue), and either multiple trips to the post office or sourcing a company to do the fulfilling for you, which still means getting the books to that company.

That, of course, assumes you were just going to order the amount for backers. If you’re planning to, say, order twice as much and hold half for later fulfillment, you still have to deal with those books.

And while economies of scale mean that you can get a better per-unit cost, that means more time shopping around for quotes, wondering if printing overseas is worth customs delays, warehousing remain stock, etc.

Also, if you’re waiting on some awards to arrive, you have to deal with holding those that already have. Was easy enough for Master Plan, because those that had already arrived before I moved fit into a grocery bag. And I just was waiting on the dice bags, so physically no big deal. But then I wasn’t shipping books or boxes.

Finally on that, there’s dealing with the timing on taxes versus expenses. If you time it for crap and don’t have an accountant assist you, your tax liability may, to put it gently, fuck you.

Looking to provide a different experience. At this point, everyone and their mother is crowdfunding. It’s almost novel now to just release a game for sale that you get right away, that doesn’t require pressure to buy into in a given timeframe. That it starting to be a selling point for some people.

 

Anyway, those are elements that make me wonder about whether a given project I work on is worth being crowdfunded, or if I should look at an alternative (by which I mean “old-school”?) sales & distribution model. Sometimes, the answer will be to totally crowdfund. Other times, the answer is to not. It all depends on what it is I want out of a given experience.

After all, it’s not like these’s so much money here that I should expect to live off of my little game ideas here and there.[5] So I’d better make sure that I’m creating an experience that I want, as a producer.

– Ryan

[1] Which I would link to, but it’s limited.

[2] Post about that soon.

[3] And that’s one of the reasons I tell people not to make their campaigns longer than 30 days.

[4] I recall the P500 pre-ordering scheme, where certain board game companies wouldn’t do a print run until 500 copies were pre-ordered, and those pre-orders got bonus stuff — but 500 copies of a single bonus thing isn’t the same as managing various additional rewards.

[5] Been there, failed to do that.

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3 Responses to Reasons to Question Whether to Crowdfund

  1. Jared Nelson says:

    One of the trends I’ve noticed with projects I’ve backed on Kickstarter is the growing number of projects running into unexpected delays in fulfilling rewards.

    Going forward, I realize that, as a consumer, I need feel absolutely convinced that the project creator understands the risks/costs/process of delivering their product/project.

    I have to start thinking of myself as a one-man venture capital firm, in other words. I want to know more than just how awesome a project *can* be. I need to know in concrete terms that the proposed project can be delivered.

    One more observation on crowdfunding: it’s not, in my opinion, the right place to launch a career. And I think in the case of game design that’s particularly true.

    While this may come as a shock…I have a zero in my Fame stat. I think I’ve got a great product in the works. I believe in it. Playtests have been positive. But if you, Fair Netizen, have only my word and a flashy Kickstarter presentation to rely on when making a buy decision, would you? I probably wouldn’t. And that’s because I’ve got no cred to stand on. I’m going to have to break in the old fashioned way first. And I’m cool with that.

    • Ryan Macklin says:

      Jared,

      Some good stuff here!

      One of the trends I’ve noticed with projects I’ve backed on Kickstarter is the growing number of projects running into unexpected delays in fulfilling rewards.

      I’m definitely one of those creators. :/ There are loads and loads and loads of problems that can arise on a project, from staffing issues to technical ones to financial ones that plague these projects. The trick now is that those are very visible, whereas they were once not as visible because you had a different form of control of when you announced a project. So, nothing’s really changed; things are just out in the open.

      One more observation on crowdfunding: it’s not, in my opinion, the right place to launch a career. And I think in the case of game design that’s particularly true.

      Heh. Avoid explicitly trying to make “a career,” just make games. :) Much, much better output in that process, including sometimes a career.

      And that’s because I’ve got no cred to stand on. I’m going to have to break in the old fashioned way first. And I’m cool with that.

      Various recent Kickstarters would beg to differ; however, that’s still your call to make. I am somewhat fond of saying that everyone has a limited amount of crowdfunding mojo, and to apply it wisely.

      Also, blogging, posting on forums, etc. are how people seem to break in today, and those are certainly not “the old fashioned way.”

      – Ryan

  2. Jared Nelson says:

    Thanks for the feedback, Ryan!