CROWDFUNDING
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Not your mama’s bake sale… and yet, it is
A heated debate is happening over the internet focused on crowdfunding. The strongest question is: Who’s allowed to use this tool? From there an avalanche of questions follow ranging from the idea of scarcity, panhandling, gatekeepers and taking advantage of the those funding a project.
The momentum has been building since Amanda Palmer’s Kickstarter explosion in May 2012 where she raised just under $1.2 million dollars in one month, twelve-times her goal of $100,000. It was widely covered, it even resulted in an invitation to speak at TED, where she gave her talk on “The Art of Asking”. This lecture got to the core power of art in relationship to its audience and including the pre-production aspect of art funding.
Though not as widely publicized, this was not Palmer’s first Kickstarter project. As of May 13, 2013, Palmer has backed 33 projects and created three additional projects:
- In 2011, a collaboration with author Neil Gaiman asking for $20,000 and raising $133,341)
- In 2010, helping a teenage Berklee College of Music student record his first cd, asking for $3000 and raising $8,581). This pattern is important because she was building trust within her community with both this new form of fundraising but also for the types of projects, incentives and level of funding requested.
- And in 2011, headed by artist Kim Boekbinder, a collaboration with Palmer asking for $6,000 and raising $13,074).
Seth Godin, also a successful Kickstarter backer and project creator, termed this measured building of your ensemble “permission marketing.” In his book of the same title he uses the analogy of dating in order to find your life-partner as a way to show the difference between what we normally do as people and what corporations do when making connections. Corporations pay lots of money to find out what is the latest style of suit, most flattering haircut and hottest singles bar. Then they go up to the first person they see and say, “Will you marry me?” If they’re turned down, they go to next person and the next and the next. If it all fails, they fire the stylist, clothing designer and start again in the next hottest bar.
But in real life, we put ourselves together the best we can and go into a bar where we are connected with crowd. We find someone who makes eye contact with us and start up a conversation. We work towards a drink together, then maybe a first date. Each date isn’t to close the deal and propose, it’s to hopefully get another date with this person building trust, a common vocabulary and familiarity.
Seth once told me that Kickstarter is not your first connection with your ensemble but your absolute last. It is when you push all your chips in to the center of the table and see exactly how much trust you have created and how much it can be leveraged.
The press’s isolated focus on Palmer’s most recent Kickstarter success supports a corporate idea of marketing, as if this was an amazingly ambitious shot in the dark. But that’s not the truth. Palmer has worked for years to develop her fan base, far beyond 2010 when she first started a Kickstarter project. A project, it should be noted that was not for her but for a teenager who’s music she loved and who didn’t have a way to get it out there.
Now, let’s jump ahead to the latest controversy – Zach Braff’s project. Braff is crowdfunding $2 million to finance the sequel to his indie film, Gardenstate. With 10 days to go (as of 5/13/13), he has reached his goal plus an additional $592,213. His Kickstarter page goes into great details on why he is choosing this route to raise funds as opposed to a more traditional producer or movie studio route. Gardenstate was backed by one person who gave him complete control over the project. After directing and writing films post-Gardenstate, Braff experienced the downside to movie studio or multiple producer funding: “Financing an independent film the traditional way often means having to give away your right to ‘the final cut,’ casting choices, location choices and cutting down your script to make it shoot-able on the cheapest budget possible.”
Braff is asking for funding, being transparent with the freedom this type of funding would allow, being vulnerable enough to publicly ask for help and designing reciprocal experiences people can choose as a thank you for their contribution. So what’s fueling the heated debate?
IS HE ASKING FOR TOO MUCH MONEY?
His funding goal is not the largest on the site. And we’re talking a lot of projects and a lot of fundraising. In the world of crowdfunding, Kickstarter alone has facilitated $610 million in fundraising over 98,111 projects since it started in 2009. $517 million of that total was successful (delivered to the project), $66 million unsuccessful (returned to the backers) and $28 million are currently live in the system (within the project fundraising window) giving it a 43.93% success rate.
Fully funded projects in the categories of Technology, Games, Film and Design had goals in the millions and, every single one of them, were overfunded. The most remarkable was the Pebble Watch “a customizable watch. Download new watch faces, use sports and fitness apps, get notifications from your phone.”
This was the creator, Eric Migicovsky’s first project but he had backed 29 previous projects. The goal was set at $100,000 and within the month the project had raised $10,266,845. Within 24-hours the project had raised $1 million. It needs to be noted that the pledge incentives could easily be seen as merely advanced sales of the product since the watches were the only ‘things’ offered in exchange for backing the product. But here’s where the importance lies. People who choose to participate in crowdfunding are not solely in it for the incentives, if at all. This can be seen with Pebble Watch because even after the pledge levels that included watches had sold out, an additional 2,615 backers pledged $1 just for updates on the product development.
Which leads to the next issue…
IS HE TAKING ADVANTAGE OF THE BACKERS?
Many people, including The Guardian blogger Lisa Marks, are raising issue with the fact that backers will not see any percentage of the profits if Braff’s movie does well.
Pebble Watches are now on the market globally. The Kickstarter backers will not receive any interest or return on their contributions no matter what type of profit Eric Migicovsky makes. Same is true for Amanda Palmer’s cds and tours, or Seth Godin’s books, or any of the projects on Kickstarter today. That is part of the agreement in this type of crowdfunding. It is not uncommon. The are digital pledge drives on a global scale.
When giving to PBS, I know I am not doing it for the coffee mug or limited edition DVD. I am giving as a thank you for what PBS brings to my life. I am giving as a way of connecting and supporting something I choose to be important. I am doing this without the need for a financial return on my investment. I am getting a different kind of return, one much more important but extremely harder to define. My dividends come in information, inspiration, awareness and community.
So what is the issue here?
DOES HE HAVE THE RIGHT TO ASK FOR MONEY FROM THE ‘WORKING MAN’?
This has become the big point of contention in the debate. TV writer Ken Levine in his popular blog post, attacks Braff for taking money away more “deserving artists”:
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Zach Braff has contacts. Zach Braff has a name. Zach Braff has a track record. Zach Braff has residuals. He can get in a room with money people. He is represented by a major talent agency. But the poor schmoe in Mobile, Alabama or Walla Walla, Washington has none of those advantages.
So someone who otherwise might have funded the Mobile kid instead will toss his coins to Zach Braff because he figures it’s a better bet and he gets to rub shoulders with show business.
Yes, it might take Zach Braff a year of knocking on doors to get his money, so now he figures, hey, just show up, sit back, and let the cash come to me. This is not an option Walla Walla kid has. I’m throwing my support to those who really NEED it.
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This sentiment has been the crux of the issue. Who is deserving of our support? What’s amazing to me is the aggressive anger this has raised and the audacity to tell people how they should spend/make their money. This is not forced upon anyone. People are free to self-select the projects they back and the projects they mount.
Radical theories propelled into action on the global digital stage, like crowdfunding, are shaking the foundation of how we think projects are created, backed and distributed. Many are still holding on to the idea that there are gate-keepers, like Harvey Weinstein or Warner Bros., who ultimately hold the key to whether you create your art and get it into the hands of the public.
THIS IS NO LONGER THE CASE.
In his address to the 2012 graduating class at Philadelphia’s University of the Arts, Neil Gaiman observes: “The gate keepers are leaving their gates. You can be as creative as you need to be to get your work seen… The old rules are crumbling and nobody knows what the new rules are. So make up your own rules.”
Trying to shut out Braff, and others ‘inside the gates’, is keeping the divide in place. It is making a gate where there is none. It is holding on to the one thing that has been keeping us down.
If there is no gate, or gate-keepers, then all is accessible. All is up for evaluation. All is up for funding. All is up for creation. We are truly free to choose.
The shouting against Braff and others ‘inside the gate’ reminds me Amanda Palmer’s experience as a living statue on the streets of Boston. She speaks in her TED talk about having:
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The most profound encounters with people, especially lonely people, like they hadn’t talked to anyone in weeks, and we would get this beautiful moment of prolonged eye contact being allowed in a city street, and we would sort of fall in love a little bit. And my eyes would say, ‘Thank you. I see you.’ And their eyes would say, ‘Nobody ever sees me. Thank you.’
And I would get harassed sometimes. People would yell at me from their passing cars. ‘Get a job!’ And I’d be, like, ‘This is my job.’ But it hurt, because it made me fear that I was somehow doing something un-joblike and unfair, shameful.”
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Shame is still prevalent in choosing an independent way of living, including the work you do, the people you love, the risks you do and don’t take, how you spend your money, ask for money… the list goes on and on. They are individual choices in the moment often railed not for the act itself, but because the observer doesn’t understand or relate to the choice.
Yes, if a backer wants to gain dividends on their investment in the event of profits made, then go to a forum that makes that possible or create one! Say Kickstarter with an artist arranged payback deal. Warp the general model to fit your needs. Find a group with similar needs. Launch the platform.
Micro-loans were created under the same circumstances. Money loaned at KIVA, an organization that facilitates micro-loans to those who can not get loans from traditional sources like banks, is given back to the individual as soon as it’s paid back. It is the lenders choice on how much and to whom that money goes. There is no interest on the loan, that is part of the agreement.
With Kickstarter the agreement is clearly stated on their website:
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Everything on Kickstarter must be a project. A project is something with a clear end, like making an album, a film, or a new game. A project will eventually be completed, and something will be produced as a result.
Every project on Kickstarter must fit into one of our categories. Our categories are Art, Comics, Dance, Design, Fashion, Film, Food, Games, Music, Photography, Publishing, Technology, and Theater.
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There are a handful more guidelines below showing it is not the platform supporting a charity or a store and there are restrictions on the types of products allowed to be offered like food, alcohol, firearms, etc. These additional guidelines are Kickstarter’s prerogative to set, defining how they would like to play.
We are all constructing our own rules to play the game. Even when you “follow the rules” and succeed, there will be those that find fault, shouting from their cars ‘Get a job!’ Palmer experiences this in the aftermath of her third and most successful Kickstarter project. In her 2013 TED talk, she remarks:
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And I got a lot of criticism online after my Kickstarter went big for continuing my crazy crowdsourcing practices, specifically for asking musicians who are fans if they wanted to join us on stage for a few songs in exchange for love and tickets and beer, and this was a doctored image that went up of me on a website.
And this hurt in a really familiar way. And people saying, ‘You’re not allowed anymore to ask for that kind of help,’ really reminded me of the people in their cards yelling, ‘Get a job.’ Because they weren’t with us on the sidewalk, and they couldn’t see the exchange that was happening between me and my crowd, an exchange that was very fair to us but alien to them.
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For those railing against the more prominent individuals and companies using Kickstarter for the purpose it was intended, I say this to you with love:
- Spend your money where you chose.
- If you want a forum that combines crowdfunding with interests or percentage returns, create it.
- Do not reinforce a divide between the haves and the have-nots that no longer exists. The internet can close this gap as fast as our imagination can handle.
We are free to choose a our platform for crowdfunding. Whether that’s Kickstarter, Indiegogo, Warner Brothers or creating a Paypal button and doing a complete self-started campaign. And in this way, today’s crowdfunding is exactly like your mama’s bake sale.
Pick your reason. Set your goal. Gather your ensemble. Make your cupcakes. Get the word out. Collect the pledges. See it through.
Everyone has the right to choose how they connect with their community, their art and themselves.