Sunday, November 16, 2014

Kickstarter broke the Internet!

Now that I have your attention... So, Kickstarter is breaking the internet, and destroying the wargaming industry by filling it with a whole bunch of undeliverable products and sketchy business practices. Or... is it?  Let's look at the situation objectively. 
We're Done With Kickstarter
So, this article from Gizmodo has been circulating a lot this week.  And by a lot, I mean I ran into it in no less than four different industry forums or webpages, all posted up by people that weren't directly communicating in the other conversations.  Could be that one started it, the rest carried it elsewhere, and the next thing we know it's pandemic. 

I'm not going to get into a blog vs. blog war of words.... while that sort of thing is actually very good for readership, it's not my cup of tea. I don't know Joe Brown, he doesn't know me, I generally respect Gizmodo for their stance on certain topics, and he even acknowledges this was a rant.  (Btw, for the record this article is also thirty-two months old.... which I will address in a bit.) Any company or publication has the right to set- and even change- their own guidelines. What I want to address really is a lot of the conversation points that have come up in the discussions about Kickstarter. 

(Disclaimer:  My adult life has been spent in business and finance.  I have worked for two of the top five lending companies in the world, am currently/have been management in four different fortune 100 companies, and currently aside from my writing career have a management position with the largest company in its industry. As far as the Wargaming/RPG industry goes, I have been a store owner, an employee of the Big Guys, a Tournament Organizer, a Blog Organizer, a contributing author to two industry leading magazines, a rules designer, a playtester, a Consultant, a freelance author, and an avid collector of multiple genres and scales.  Basically, I can't sculpt.)

Kickstarters never deliver on time
Yes, there are projects that fall off timetable.  In wargaming, some do so for looong stretches of time.  I know it seems like it took an Ice Age for Relic Knights to fund, and yes I have an outstanding Kickstarter that's a year dusty right now.  Sorry folks, those are the extremes.  While it is not uncommon for Kickstarters to ship late (I even made the joke with one producer that he was going to get in trouble with Kickstarter because shipping on time was against their policies), the fact is all of my data collected looking at gaming Kickstarters within the past two years (ones I've backed and otherwise) that the strong majority ship within 90 days or expected date. Considering many Kickstarters wind up far outstretching their intended supply lines, that's actually really good.  Nothing can kill a business faster than unexpected success, ironically enough. The fact that such success can be managed within a reasonable turnaround time is impressive. Additionally... I hate to break it to a lot of folks, but product delays have always existed in the industry.  The difference is the audience never heard about them before, because you didn't heard about what was in the pipe until it was ready for preorder- after all the problems had been dealt with. 

Kickstarter needs to police projects better
Enforcement is always an issue, and enforcement costs money.  Which means to add enforcement Kickstarter would need to raise fees, which hurts the little guy you're trying to protect.  The current policy is the best compromise they could come up with- a program with checks the hundreds of Kickstarters that launch per day for obvious red flags, and a team that reviews projects that get complaints.  Cost effective, and allows the Marketplace to police itself.  So, hit that button and tell Kickstarter if a project isn't valid or legal. I do- and I've seen them take ones down that I've reported. 

Potato Salad makes it impossible for anything on KS to be taken seriously
Hey, I didn't back Potato Salad.  Or some down on their luck actor's movie idea, or a lot of other things. I'm guessing you didn't either. Sure, some people did.  Some people like a joke. Others like biting a thumb at the establishment.  Still others literally want to throw money away.  A few bad projects don't affect the credibility of the platform. Nor do they affect the credibility of anything other project on the platform.  Assuming may make an ass out of you and me, but being an ass only makes an ass out of you.  Isn't the whole point of the Free Marketplace to find a niche, and find someone to buy your product?  Those niches fill really fast.  And then they're over.  The only reason Potato Salad Guy is still relevant is people keep discussing it. Even Gizmodo posted three separate articles about it. Face it, he's the Voldemort of Kickstarter. Get over you-know-who and go pledge. 

The Big Guys make it impossible for my project to get noticed
Actually... you're wrong.  I don't come out and say that often, but here it is.  This one is Collective Market theory.  Ever notice that restaurants and theaters and museums shoe stores and all sorts of businesses clump themselves together locally?  That's because the more of a market, the bigger the draw.  This one's proven. It gives people the illusion of more choice.  So, the big guy isn't actually making it harder for you to be seen- in fact, he's probably making it easier.  Because which one do you think causes more people to start a Kickstarter account for the first time: Big Guy's Newest Kickstarter Supergiveaway, or Johnny Newguys Ten Model Startup?  After they get done pledging on the the Big Guy, they're gonna want more. Because they're a gamer, and that means it's likely they're an addict. So now they go looking for their next fix, and they find you. It's Sales by Association, and it's wonderful. 

I'm tired of funding projects that don't deliver as intended
I can see your frustration.  You should do yourself a favor and stick to only backing projects showing you completed work. If it's concept art, no matter how cool, you know things could change so steer clear.  If it's showing you greens- or better yet, proper casts- than crack that wallet open and enjoy.  The problem here isn't Kickstarter, or the Marketplace. The problem is you're pledging outside of your comfort zone, and unhappy about the results.  What you pledge is controllable- by you. Stick to your comfort zone. You'll be happier.  And if that other guy releases his models and it matches the concept art, it'll still be available on the market- just buy it then.

Kickstarter is full of scam artists
Sure, there's a few.  There's also a few in every industry.  There's always going to be people you shouldn't buy from, and people that get one over on you. Kickstarter didn't create that. They've been on forums and search engines since the dawn of the internet, and were in wargaming magazines  for decades before that. People being rotten to each other is a human problem, not a Kickstarter problem.  However, an informed consumer is the safest consumer.  If you don't recognize a company, check around, ask questions, look at blogs. Someone somewhere has heard of them, and will tell you if they're good or bad.  If they're brand new and you just don't know?  Don't back them.   What you pledge is controllable- by you. Stick to your comfort zone, you'll be happier. If they're legit and the models hit the market, you'll be able to still get them at retail- or maybe even their next project. 

Kickstarter is supposed to be about building ideas, not preorders
Oh, you and the "not as intended" guy don't get along, I can tell.  You need to do the opposite of what he does: look for small market projects that really need the support, and support them.  Avoid the big name guys who have the money to get their projects halfway (or more) finished. What you pledge is controllable- by you. Again, comfort zones. 

Kickstarter is killing the LGS model
Ah, the LGS. The perennial underdog.  A lot of you might not believe this, but the LGS has been under siege since the Reagan administration. First it was the death of RPGs was going to kill your local hangout. Then it was CCGs. Then the Evil Empire. Then the Evil Empire opening its own stores. Then Barter Bay. Then the collapse of the economy. Then E-bay. Then webstore sales direct from the manufacturer. Then webstores selling for 10-30% off list. Really guys, Kickstarter's so late to the party all the beer's gone, the cops have already shown up, the band is packed up (all except the drummer who's passed out on the sofa), and someone's already made a pass at the host's girlfriend.  The last nail in the coffin doesn't get all the XP in this game, only a single party share, and there's a lot going around.  Whether or not the LGS model is still relevant in the 21st Century or not isn't the point- regardless, Kickstarter is a straw in the haybale here. 

But Kickstarter is taking sales away from LGSs.
Okay... sort of.  This one's a little wonky, so bear with me a moment. We're gonna ramble around the tracks for a minute, but we'll make it around the mountain I promise. So, let's look at the small market guy with a board game/miniature line/rpg/whatever. He's got a killer product, great art, he's hired the best writers and rules designers he could find, and he has a full project ready to go if he can cover the expenses.  Which means he needs to pre-sell 250 copies.  Now, unless his name is Alessio Cavatore, or one of a very small handful of people with that name recognition, no LGS or Distributor is going to order copies sight unseen.  Also, unless he has that kind of name recognition, an existing business operating in the black, and collateral, no bank is lending money on it either.  The days of speculative lending and Venture Capitalism are so far gone their fossils, folks. So, how does he get that project funded?  By selling 250 copies one copy at a time.  Realistically, the Kickstarter didn't take those sales from the LGS... the fact that the LGS operates on too small of a margin due to its business model to take advantage of the sight unseen sale did. This is the time where whether the LGS model is relevant in the 21st Century is precisely the point. Because that used to happen folks. These guys from a company called Heartbreaker drove sight unseen to my store one day with models in the hands- I took a chance, and they became one of my biggest sellers for years. My sales agent for my distributor back in my LGS days literally had a bag that had "Games You've Never Seen Before" written on it, and he's plop that messenger bag down and try to get me hooked on this or that game that Avalon Hill turned down.  By the way, that's assuming Avalon Hill didn't buy the rights to the game from a designer and mass market it, because that doesn't happen the same way anymore either. 

Kickstarter is not a store
Allow me to correct that statement. "Kickstarter didn't used to be a store."  There ya go.  See, about six months ago, Kickstarter changed it's policies.  You used to not be able to sell pre-manufactured product in pledges or stretch goals. I understand why- the whole idea is to help you start something new.  Guess what folks- Kickstarter is evolving, changing, becoming something new.  Our little interweb facehugger is a full blown acid dripping two-mouthed monster, and it can't be undone. I understand why- just because a company is pre-existing does not mean it has the capital for a new product line, and the easiest way to tease pledgers into their new thing is with their old thing.  The little guys do that too, so only pointing fingers at the front runners isn't fair to them (so stop making me defend them, I don't like it). 

The Big Boys who don't need Kickstarter to launch projects are raking in millions of dollars and keeping my small project from funding
Two separate but inexplicably linked problems- so I'm going to rapid fire them together. First, unless you have access to a company's financial records, it's really hard to know for certain that A) they didn't need Kickstarter, and B) they actually raked in millions of dollars.  I know a lot of Kickstarters that quietly don't cover the spread.  You never hear about it because Kickstarter successes breed later success for a company, so it's good for the image to keep those things quiet.  However, Reaper publicly gave figures on Bones I, and the net profit wasn't seven figures. If I remember right, it just squeaked into four. I know another (which will remain nameless) where after completing their seven digit Kickstarter, they needed to borrow over $200,000 to complete the project and ship to their backers. So... why are these successes?  Because it would have been years or never for them to slowly stockpile the capital to release those lines.  They make nothing now of the premise of having those product lines free and clear going forward. It's leverage capital at it's finest.   

But they're still keeping my small business from funding
I said I was going to cover that, didn't I? So, "that guy" making three million is the reason you couldn't make thirty grand, eh?  I'm not sure I follow the logic there. Sure, wargamers only have so much allowance to throw at their monitors month to month. Competing with the big guys means competition for customers. Problem is, it's always meant that. At one time Citadel couldn't pry wall space away from Ral Partha in hobby stores. Then Privateer Press and Mantic couldn't pry it away from Citadel.  Right now small market games have trouble prying it away from all three... but that's a fundamental law of business that the existing powerhouses have more money, more marketing, more customers, and more everything than you do.  For you to take what's theirs, you have to show people something new and creative, or show them something cheaper and derivative. Those are the only to gameplans that work: undercut, or circle around. Then accentuate what makes you different.  Then capture your own audience. Rome wasn't built in a day, and Ral Partha wasn't toppled in a year.  Nobody said this industry was easy. 

I got burned on a Kickstarter, so now I'm not backing any more ever
I'm glad you're still dating your high school sweetheart, still working at your first job, and your first car is still ticking away. Oh, that's not the case?  Yeah... see, the thing is, life is all about opportunities and disappointments.  Not everything works out the way we want, which is why I'm not a former starting linebacker for the Pittsburgh Steelers. The funny thing about life though is that it keeps going, and the thing most likely to stop you from finding more joys in it is sadly you. Sure, not all of my projects turned up roses...but an informed consumer can avoid most of the pitfalls.  They can still get great deals on soldierdolls in mass quantities.  They can still make a difference to a small company that has no other chance of making it in this economic environment. Because at the end of the day, that's what Kickstarter was- and still is- all about. 

Questions? Comments?  Death threats?  Drop them all down below, you're entitled to your own opinions too.

I'll see you on the other side of the table
The Second Class Elitist


  1. Bravo on the article. The only bad experiance I have had so far is iello and guardian Chronicles. Wished i never backed, and will never back another one of their projects and will never buy anything with iello on it. On the other hand, I have had great experiences, from Comfy Chair games (only complaint was more communication was needed but it was ran very well) Mantic (Deadzone, mars attacks) to terrain with impudent mortal.

    All in all I like kickstarter and I am more selective now as my mountain of plastic and lead grows.

  2. Thank you for a very comprehensive article.

  3. Some interesting points. About the only thing you don't cover is the sometimes incomprehensible behavior of the Kickstarter Owners when things don't go their way at first including insulting their backers, not communicating with their backers, directly lying to their backers, etc...

    In terms of on-time delivery, I'm going to point out, as I have in the past on my own blog, that if you've ever been to Gen Con, doesn't matter if it's this year or when it was in Wisconsin, companies were always having goods miss the show or having material flown in at enormous cost. Having said that, years going by without product is silly.

    Next, in terms of 'policing' Kickstarer, they could do a better job without direct involvement. For example, having some bios about the owners of Kickstarter with some simple metrics when clicked. Things like "Number of projects, estimate date, delivery date, and customer satisfaction." ranked of course by backers. Preventing companies from launching multiple kickstarters when they have material outstanding would also go a long way in preventing pyramid schemes like Center Stage Miniatures seems to have done.

    1. Incomprehensible behavior on the part of owners is not new, either. I'll point you to Lorraine Williams, Kevin Siembieda, and the meltdown of WEG. Also Amy's Baking Company, of Kitchen Nightmares fame.

  4. Like Joe said, I don't want to see multiple campaigns by a company running, either. Wyrd had their Evil Baby Orphanage card game, Through the Breach rpg, Jetpack Unicorn card game, and, although technically a separate company, Drawn By Clouds, Fall Schematic, where most of the backers were for just the Malifaux models levels, all running around the same timeframe. Through the Breach was heading towards a year undelivered when they launched Fall Schematic. They'd also played bait and switch with the funds from the Through the Breach Kickstarter campaign, using them to launch a second edition of Malifaux and rereleasing first edition models in plastic, despite having already switched to plastics in the fourth book of the first edition.

    It was a poorly handled, very poorly communicated mess, that still hasn't delivered its deluxe hardcover books or painted versions of the special edition Hannah models (due to concern over proper shipping for those painted models with the initial shipments of the other books and models).

    Had they launched a Kickstarter campaign to launch their second edition, we would have gladly thrown our monies at the screen. Instead, they campaigned for an rpg and hired a guy with a degree in game design to make it for them. Somewhere along the line, the excuse of "we need to redesign the tabletop game to make the rpg compatible" came into play, despite the final product of the rpg now being compatible with both and neither edition.

    But, they do finally seem to be learning from at least some of their mistakes. Now if only we can get them to stop using insane Flatrate FedEx shipping prices, we, their customers, might be able to afford more of their actual product during both their Gencon and Black Friday through Cyber Monday sales as well as any other time of year.

    1. This actually made me stop playing Malifaux. Through the Breach was getting close to not funding (if memory serves), so it really felt like we were all a tight, tough little group, helping Wyrd out. Then they started with the 2nd Edition, they stopped communicating via KS (which was not cool), and at the end it just felt like they didn't care. This wasn't a product they liked anymore, more of a speed bump they needed to get over. I have my stuff, but it still feels like a loss. Haven't picked up Malifaux since.

  5. Wow guys, thank you for the amazing and educational posts. I learn more from your posts in a day than in the last month of painfully searching the Web for answers. Thank you for your time and sharing this priceless information :)

    I am very nervous about launching my campaign on Monday due to it now running into the holiday season but I must, we can wait no longer. I put off the launch date month after month because we to make 100% sure would CAN and Will deliver high quality rewards on time as promised.

    It breaks my heart to learn that now that I've made the decision to think of our soon to be supporters and put them before ... it is possible we may have very few in the end due to our campaign running through the month of December.

    Regardless, myself and the team will make the best of it and hold our heads high knowing we already succeeded because we are one of the very few who did it the right way.

    Thank you guys again for your posts and information, I wish I ran into your posts months ago. ANYBODY who plans on launching a KS campaign would be fortunate to learn from you months before hand.

  6. The current pitfalls of Kickstarter are not that different from the cycle that eBay went through. It started out shiny and democratic. Then a few people found the cracks in the system and started exploiting them. So there were crackdowns and freakouts. But it still pretty much does what it started out to do.

    I've backed about a dozen Kickstarters. All but one have delivered (and I actually need to check on that one, because they said everything had been shipped). I've had buyer's remorse on a couple, but no more than I would have if I'd purchased the stuff in a shop.

    Incidentally, if you want to really see what goes on during a Kickstarter, check out Evil Hat and Fred Hicks. Fred has frequently lamented the lack of actual detailed examples of the business of RPGs on the net. So he's made a point of frequently posting his financials. He's done some pretty detailed post-mortems of their KS campaigns, showing exactly where all the money went. And, most tellingly, why a flood of international buyers is the worst thing that can happen to a campaign.

  7. Nice to see an article from someone who understands both the games industry and basic economics. A significant part of why you can get "deals" on Kickstarter is that it's a high-risk investment/purchase. Risk means that sometimes you crap out. Suck it up or get out of the game. (Which is largely a ruder way of saying, "What he said." 8-)

    BTW, I worked in the industry for over 8 years (editor of the Games Quarterly Catalog, among other properties) and I fully concur both that the adventure games industry has always had scams, incompetents, and liars at every level, and that there's a real question about the viability of the LGS without major changes in business models. And even without that, 20 years ago game stores came and went faster than "innovative" restaurants.

    Good stuff, sir.