This week more troubling news came out of the Kickstarter community as Mike Nystul from Axes and Anvils and Cairn announced that he had “screwed up” and was “out of money.” This has, of course, stirred up the backers of those projects, as well as observers in the Kickstarter community. Yet beyond these two small groups (less than 1000 people backed the two projects) has this caused any ripples into the larger Kickstarter community? Doing a quick Google search I found only about 15 articles about these two projects failing. Between them they raised only $50,000 so maybe the money is too low? Then again when Haunts: The Manse Macabre fell on hard times the internet was abuzz about “Fully Funded Kickstarter Game Goes Belly Up.” A similar Google search pulled up over 100 articles before the search started pulling up unrelated information. So why the disparity?
Was it the money involved? As I said Cairn and A&A raised over $50,000 collectively yet Haunts raised only half that with $28,000. From a money point of view this latest story would seem to be raising the stakes. Could it be that there are more people involved? Haunts had over 1200 backers while Cairn//A&A had just under 1000 so does a few hundred more people equal ten times the coverage? Probably not.
The simplest answer is that video games are more visible to the public at large and even the larger Kickstarter community. Cairn/A&A are actually break-out successes in their fields raising thousands more than their original goals while Haunts barely squeaked by. Yet at their core Cairn and A&A are just very small niche projects in the smaller community of pen and paper role playing. Haunts is very much a niche video game, but by the mere fact that it is a video game it allowed writers to try and extrapolate the problems of one project to the whole of Kickstarter.
The community has been weighing in on the Cairn/A&A issue all week. Zach of Lesser Gnome Games has openly worried about the future of his own role playing Kickstarter thanks to these issues. He worries that some of the cache that Kickstarter has built up in the community is lost by this development. Fred Hicks from Evil Hat Productions weighed in saying, “This is perhaps an illustration that you can't just dive into Kickstarter without having a real business plan -- and at times a real, pre-existing, successful business -- to handle all the maybes.” He also brought up a comment from the Kickstarter Best Practices Facebook group saying, “Kickstarter is not a Credit card.” All of these are good comments and bring to my mind the overarching issue: businesses fail.
As much as Kickstarter states and emphasises that Kickstarter projects are not for starting a business, a project very easily becomes a business especially in the gaming sections of the site. As most entrepreneurs and business followers will tell you lots of startups fail, at least half of them will never make it to year five.
Source: Created from data from Longitudinal Business Database 1977-2010, Census; Business Employment Dynamics 1994-2010, Bureau of Labor Statistics
In the end it sucks that these projects are failing. Just as much as it sucks when a local restaurant fails, but does that mean all restaurants are failing? Most likely no. So I suggest all Kickstarter creators take this event as another example of what not to do and plan for it accordingly! Make a business plan, prepare, seek outside help and consult those who have gone down this road before. There are plenty of ways to succeed, but there are far more ways to fail and the surest way to fail is to not prepare.
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Good points all, but its backers--not project creators--who should take away the biggest lessons from this fiasco.
ReplyDeleteMr. Nystul's mishandling of this whole affair went well beyond "I made some bad business decisions." He flat out abused KS and the signs that something was wrong were there almost from the very beginning.
1. Be extremely suspicious of anyone running multiple Kickstarters simultaneously. A well-established publisher with a solid track record *might* be able to pull this off (simply running a KS takes a considerable amount of time and effort).
2. Be ESPECIALLY suspicious of anyone who openly talks about launching a new KS project to raise funds to help complete an earlier project.
3. Be EXTREMELY suspicious of anyone who talks openly of intermingling funds raised through KS with personal and/or general business finances. Each of Nystul's backers was funding a *particular project,* not a company, not a convention, not some other project.
4. Pay careful attention to product status and deadlines before you pledge. If the project pitch swears the product is "nearly finished" but the creator isn't willing to share more than skimpy "playtest document" with backers, that should raise a red flag. A project that promises to deliver a finished book just a month or two after the KS ends should raise a red flag (unless art and editorial were complete before the KS began and the creator is willing to prove it by sharing a PDF with early backers, etc).
5. Any KS that commits to too many pieces of swag too quickly--t-shirts, mugs, plush toys, miniature figures, et al--should raise a red flag. This is particularly true if the creator is not part of an established company that has fulfilled these types of items in the past.
Oooh very good points and fits quite well with your "Buyer Beware" title! That should be a whole different video/post... *Adds to List* Thanks!
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