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Need money? Ask the crowd - online

Business Maverick

World, Business Maverick, Media, Sci-Tech

Need money? Ask the crowd – online

Kickstarter, the website which allows artists, designers and inventors to crowd-source funding for their projects, seems to be coming of age. In the past few weeks, two major cultural figures have taken to the site to raise money in order to bypass record labels and film studios. By REBECCA DAVIS.

Do you have $700 burning a hole in your pocket, and a passionate interest in being able to control your own dreams? If so, you might want to hurry over to Kickstarter, where two young gentlemen are touting for money to produce the ‘Remee’, a sleep-mask which will shoot little lights into your eyeballs at a critical point in your REM sleep cycle. These lights will not be distracting enough to wake you, but they will serve to alert your brain to the fact that you are dreaming. From there, the idea is that you can take control of what you’re dreaming. Your $700 will ensure that the Remee actually gets produced, and as a token of thanks for your faith, you get 10 Remees delivered to you so that you can “bring lucid dreaming to everyone in your house, on your block, or in your cult”.

To tell you the truth, though, the Remee lads don’t even need your cash at this stage. They were hoping to reach $35,000 in funding, but they’ve already netted themselves a whopping $460,706 from 5, 286 backers, and there’s a full five days to go before the funding deadline. Turns out a lot of people want to be able to fly in their dreams.   

Welcome to Kickstarter, the website where people ask for money to fund particular projects. The website is now three years old, and making headlines with increasing rapidity. Depending who you listen to, the site is either only just reaching its potential, or plummeting downhill. It’s either about to change the means of cultural production forever, or it’s past its best – a kind of digital printers’ tray for weirdos wanting someone to fund their first volume of poetry.

The way it works is simple. First, you need a project. It has to fit within Kickstarter’s categories, which are generally arts-y or design-y. There’s no Science, Sport or Business category, for instance, but there are categories for Food, Comics, Fashion, Film, and Technology, to name a few. You can’t use Kickstarter to fund a charity or awareness campaign, and you can’t just ask the Kickstarter community to buy you something, like a pair of new shoes.

Once you’ve settled on your project, you have to create a little campaign, generally video-based with an accompanying text blurb, to be posted on the site. You’ll need to think about the amount of money you’re asking for, too. There are two schools of thought here: one which holds that requesting a more modest sum is greeted with greater favour by the Kickstarter community (and is also more likely to be reached). The other school of thought suggests that asking for an extravagant sum can imply great confidence, which in turn may beget confidence in your project. 

Then you’ll need to settle on rewards: what people (“backers”) get in exchange for pledging money to you. There are generally tiers of rewards – a pledge of $1 may only get a backer a thank you email, but as the pledges get more generous, the rewards need to be adjusted accordingly too. At the top end, a band may offer to write someone a personalised song for a pledge of $10,000 (the highest allowed by Kickstarter), or an author may promise to host a dinner party for a high pledge. You need to make it worthwhile for a backer to lay down the big bucks: successful projects invariably offer good rewards for backers.

Next, you apply to Kickstarter to have your project uploaded. Their community guidelines claim that 75% of projects are accepted. When you’re successfully up on the site, you need to start marketing the hell out of your project, which probably involves spamming your social networks and hoping your friends do the same. The success of your funding plea is determined largely by how well you market it. The Holy Grail is to get your project picked up by a popular blog or website, who will tout it on your behalf.    

And then you wait and see. In general, the success rate for projects achieving their funding goal is around 44%. If you fail to meet the goal, none of the backers has to pay any money, so it’s an all-or-nothing situation here. Research has shown that if projects can achieve 20% of the funding they’re asking for, there’s a 90% chance they’ll go all the way. By the time they’ve collected 50% of the requested funds, they are almost guaranteed to succeed – because at this stage, backers start sharing the project among their own networks, because they are eager for it to see the light of day, and for them to receive their rewards.

The useful thing about Kickstarter is that in addition to funding your project, you’re also able to get a sense for the commercial appeal of an idea before you’ve shelled out to make it reality. If you weren’t able to capture people’s imaginations sufficiently to get them to fund the thing, it’s highly probable that nobody would have bought into it anyway. For the backers, in addition to the tangible rewards, there’s the chance to feel part of a process they might never otherwise be able to feel involved with. A man who had contributed towards funding a band’s CD on Kickstarter told the New York Times two years ago: “I’m a petroleum engineer. How else could I join the music business?” Another described it as “micro-patronage”.

In February, Kickstarter announced that two projects had achieved the record for most money ever raised on the website, within the same 24 hour period. The first was for an iPhone docking station called the Elevation Dock, which reportedly allows for “smooth, hassle free undocking with a single tug”. The second was a video game called Double Fine Adventure, which achieved its goal of $400 000 funding within only 8 hours. Only a few days later, the first book project to reach a million dollars happened – The Order Of The Stick Reprint Drive by comic book artist Rich Burlew.

Since then, other projects have outstripped this. Tech projects tend to achieve the most funding: there is a project to make a “smartwatch” currently being advertised on Kickstarter which has so far attracted over $10 million in funding, with five days still to go. It is within the spheres of art, literature, music and film-making that Kickstarter’s game-changer potential is really being hailed, however, because the platform offers artists of various kinds the chance to break away from the demands of publishers, record labels or film studios and get their work done the way they want to.

At the beginning of this month, singer Amanda Palmer called Kickstarter “the future of music” after raising well over $400 000 to fund her new album within four days. (Palmer was looking for $100 000 over a period of 27 days.) Palmer, the former lead singer of the Dresden Dolls and wife of author Neil Gaiman, took the Kickstarter leap after splitting with her record label, Roadrunner, after claiming that the label wanted to edit one of her music videos because they said she “looked fat”. The rewards Palmer promised were impressive – at the top end, she offered to fly out to paint a portrait of the relevant backer.

Last week a new entry hit Kickstarter which the Huffington Post suggested “might just be the biggest project to plant a banner at Kickstarter yet”. Bestselling author Bret Easton Ellis (of American Psycho fame) is teaming up with director Paul Schrader (best known for Taxi Driver) to create a movie called The Canyons – a “thriller about the quest for love, sex, success and power in contemporary Hollywood”.

Explaining their motivations for funding the film via Kickstarter rather than the studio system, producer Brandon Pope said: “We decided to be autonomous and take control and not have to push dates. Not have to hire actors that might not be best for a given role. That we could just make it and tell the story the way we wanted to tell it.” The project has been criticised for the extravagance of the rewards they are offering. For a pledge of only $5,000, poor old Bret Easton Ellis will have to read and review your novel, with the review appearing on an international website. You get an Associate Producer credit on the film, an autographed hardcover of every novel Easton Ellis has written, two tickets to the wrap party, a handwritten thank-you letter from Ellis and Schrader, and more. The team may regret these lavish packages when it actually comes to delivering on them.

Of course, what Amanda Palmer and the Easton Ellis-Schrader team have in common is existing, dedicated fan bases. This is also why funding for video games and comics in particular tend to do well on the site: there are close-knit subcultures backing them. Mainstream book-publishing on Kickstarter seems to be taking a while to catch up, though last year two former Gawker and Tumblr employees successfully used the platform to raise money to produce a sex-themed story anthology, Coming and Crying.

Responding to this at the time, MIT’s Technology Review raised concerns about one potentially troubling aspect of self-publishing through patronage: “the precedent it establishes for authors to become beholden to authors.” The article explained: “Sometimes I wonder whether young writers, especially young women, realise what they’re getting into when they establish a relationship with online donors. Having patrons can be at odds with unfettered self-expression. It might also create inappropriate expectations on the part of those patrons.”

This is not the only criticism levelled against Kickstarter. At the end of March, tech website Gizmodo announced a new policy of not giving any airtime to Kickstarter projects. While the website once seemed like “a genuine font of unfettered expression”, they wrote, it has now become “a sea of bad videos, bad renderings, and poorly made prototypes…at this point, Kickstarter is little more than spam”.

It’s true that there is a lot of nonsense on the website. Buzzfeed recently published a list of the 37 Saddest Failed Kickstarters, ranging from a “frisky gay board game” to a lot of people seeking funding for their first poetry books. But it’s equally valid to say that the platform clearly has potential to bring exciting projects to the light of day. In New York City, Kickstarter is being used as a tool for job creation and urban regeneration, with the City Council launching a page to market projects in certain neighbourhoods which locals can make financial contributions to.

Kickstarter is currently only available to individuals with US bank accounts. But two South Africans who successfully harnessed the power of Kickstarter are photographers Stan Engelbrecht and Nic Grobler, who were able to receive funds thanks to an American friend offering up a bank account. They used the network to crowdsource the funding for their series of Bicycle Portraits books, eventually raising over $35,000 in three instalments. When the Daily Maverick chatted to Engelbrecht a fortnight ago, they were preparing to make good on a reward promised to a major donor – the chance to participate in a four-day cycle tour with Engelbrecht and Grobler.

“I was reading about this platform, and it was very new at the time, but we thought we might as well give it a try,” Engelbrecht explained. “So we did. We launched our appeal, and it was a lot of work, promoting it online, but it worked.”

Pledgers to the Bicycle Portraits project received rewards ranging from a copy of the books, to signed prints of the photographs, to the aforementioned bicycle trip. The majority of their funders were from overseas. When asked if they would recommend the use of Kickstarter to other South Africans, however, Engelbrecht was hesitant.

“We get three or four people a week asking how we did it, as South Africans,” he explained. “It isn’t easy for a South African to do it. Doing it from over here there were a whole lot of other costs associated with it. It’s not an easy way to raise money. But it’s definitely possible.”

There is, however, a new South African site built around a similar concept to Kickstarter: Crowdinvest.co.za, which is still in beta testing until the end of May. It offers a Kickstarter-like model which sees individuals contribute to funding a creative project, and receiving rewards like branding in return, but it also offers two further arms: one which allows you to invest in a business or asset (such as a property), and one which is philanthropic, allowing you to donate to some charitable endeavour or organisation. Like Kickstarter, Crowdinvest will take 5% of the funds generated as a management fee. It remains to be seen whether Crowdinvest will manage to replicate Kickstarter’s success in a local context. DM

Read more:

  • American PsychoTaxi Driver Writers Team Up for Film Kickstarter, on Huffington Post.
  • Crowdinvest brings group investing to SA, on Tech Central.

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