August 2, 2022: The Danger Of Undercharging On Kickstarter

[RoboAdmin]

August 2, 2022: The Danger Of Undercharging On Kickstarter

Read this article on the Illuminator.

[kkc]

I remember back in the 90s I had a mild argument with someone on the Internet about LCD display panels. Because these things are grown from crystals rather than constructed, they're not always perfect and the manufacturer has to decide what defect rate they have to tolerate. Put another way, they have to decide if they're going to throw away the fifty percent that have one bad pixel, or just the five percent that have many noticeable bad pixels.

What I learned from this argument is that individual consumers are naturally going to view these costs from an individual point of view. The person I was arguing with was making the case that no defects were acceptable at all, and when I countered that discarding all defects would double the price of the display component that assertion was met with disbelief since the cost was already qualitatively 'high'. It might almost be unreasonable to ask customers to flip their understanding and view the costs at scale, rather than just the costs they have to purchase a unit.

But crowdfunding isn't just a base seller/buyer relationship like we had in medieval times. The reason both parties share the risk is so that unlikely or unpopular projects stand a decent chance of happening. What I'm afraid of is that we've reached a peak crowdfunding state where buyers are less willing to take those risks.

[johndallman]

Originally Posted by kkc

But crowdfunding isn't just a base seller/buyer relationship like we had in medieval times. The reason both parties share the risk is so that unlikely or unpopular projects stand a decent chance of happening. What I'm afraid of is that we've reached a peak crowdfunding state where buyers are less willing to take those risks.

If this is the Blacklist Miniatures Fantasy Set 1 fiasco, the buyers seem to have a strong case for the seller having created the problem through wild over-optimism. Blacklist also have other lines of business, so it does not seem to be the result of simple inexperience. The Go Fund Me attempt to raise funds was trying to borrow against the funding of future projects, and looked impractical; it's just as well that GFM shut it down.

[kkc]

Originally Posted by johndallman

If this is the Blacklist Miniatures Fantasy Set 1 fiasco, the buyers seem to have a strong case for the seller having created the problem through wild over-optimism. Blacklist also have other lines of business, so it does not seem to be the result of simple inexperience. The Go Fund Me attempt to raise funds was trying to borrow against the funding of future projects, and looked impractical; it's just as well that GFM shut it down.

I wasn't citing any particular crowdfunding failure in my previous post, but that's a pretty illustrative example, if not a typical one. The vast majority of the projects that I've been willing to fund have come from SJG, and one of the reasons for that is that Steve's people are sharp enough to pull the plug early rather than past the point of no return. The Illuminati video game and the recent Pathfinder Revolution rethinks are good examples of things that failed in ways that could be corrected.

SJG is really transparent about crowdfunding ups and downs, in a way that most companies are not. And it's meaningful to me that they own and own up to those failures, because that makes me want to continue the relationship with them.

I get the feeling I've strayed from the original topic a bit.

[DeadParrot]

I am a fan of the 'Faster, Smaller, Lower Cost' KS project format. I have participated in the SJG Ogre Designer's Edition and Car Wars and a few Reaper Bones KS and all of those were many months or years behind schedule for 'reasons'. While all of those did fully deliver, it is kinda sad when they are so late that you have forgotten all the bits in your pledge. Plus the longer a KS takes to fulfill, the larger chance it gets bit by something going wrong in the supply chain or more recently, inflationary pressures.

An example of a Faster Smaller Lower Cost KS is the Gaming Ballistic one for Till Death do us Part. Pledged on June 7, received print book in late July.

[RogerBW]

Originally Posted by kkc

But crowdfunding isn't just a base seller/buyer relationship like we had in medieval times. The reason both parties share the risk is so that unlikely or unpopular projects stand a decent chance of happening. What I'm afraid of is that we've reached a peak crowdfunding state where buyers are less willing to take those risks.

The most recent So Very Wrong About Games (podcast) has a segment on this: some publishers are very good at playing "yes, it's just a storefront with a long delay" when they want your money, and then "oh, no, you're an investor" when things go wrong. (For clarity: I do not think Steve Jackson Games is such a publisher!)

[DouglasCole]

Originally Posted by DeadParrot

An example of a Faster Smaller Lower Cost KS is the Gaming Ballistic one for Till Death do us Part. Pledged on June 7, received print book in late July.

Thanks for calling this out: I'm proud of it.

...and yet, everything that could go right, went right on that one. I tried to plan for the usual "friction" in the system, and while I ran into a few issues, mostly it went "best case."

1. The manuscript was pretty much done. I had what I needed from David early in the process, and we leaned heavily on prior expert TFT players with a history of valuable feedback to actually play the scenario.

2. My art team is top-notch, and I caught them at a good time. They all were pretty much on or ahead of schedule, something you can't always count on with art.

3. I rolled the dice and came up lucky with my printing. Mixam, who over the last few years the industry turned to as "the" print source for certain types of books, had started to stumble. I was hoping that ordering 10 books from them for re-stock on low-count projects didn't bite me. It almost did, though...but I had a fortunate contingency there. [1]

4. There were very few international orders, and those that were there were books. I was able to order copies from Mixam UK and have them delivered to GamesQuest...but those books have been sitting for over a week not checked in. Only 16 orders, but project ain't done until it's done.

5. Pretty good survey completion

6. The Backerkit "charge shipping later" beta was uneven but worked out well, and I feel like I'm going to be very, very nearly break-even on shipping. That's unusual.

The project also came in with almost double the per-pledge income than I thought it was going to...though all the King's marketing and all the King's men didn't push the new project past the "usual" 500-600 backers for one of my projects.

[1] What went wrong? My Vampire Hunter Belladonna reprint that I ordered from Mixam was a hot mess. Terrible fidelity on the maps, and the maps are rather key to TFT play. I was able to provide sufficient evidence that this was not up to snuff, and got a reimbursement...but that process took WEEKS. However, I'd forgotten I had several boxes of VHB from the original Latvia printing of 1,000 copies in a warehouse in TN. So I "just" paid to ship all of my surplus stock from there to my home, except 1,000 copies of Dragon Heresy, literally a ton and a half of books, because my house ain't that big.

So, I got lucky.

My Nordlond Bestiary was NOT lucky. I wound up fulfilling just before my promised date...and I usually publish "everything goes wrong" dates. Shipping on that project, which includes postage and staging (moving things from manufacturing to shipping locations), was $11,000 for 600 books, 450 of which were actually sold. I also printed and shipped cards. Manufacturing costs on those same two items was $9,000. Shipping was way way worse than budgeted, and while many folks pitched in to make it work, it was still a painful red spot.

Then we have the "GB is charging too much for their stuff anyway; they're third-party and ergo need to lose money" feedback I see here and there.

So...yeah. Smaller and "faster" Kickstarters are excellent when they work. You can also play with "feathering" projects so that your turn rate (how many projects per year you can pull off) is high. That runs into buyer fatigue pretty quick, though.

Anyway...happy to share more insights here, but a lot of the "good deals" that I'm tempted to offer run smack into the face of "can I afford to offer a deal if the cost is me going out of business? Can I afford NOT to offer a deal when folks are legit-for-good-reasons price sensitive about entertainment hobbies? How can I get my backer count into the sustainable 1,000-1,500 range instead of the always marginal 500 zone?"

I'll either answer these questions well...or fold. No other options.

[philreed]

Originally Posted by DouglasCole

Thanks for calling this out: I'm proud of it.

So far, my best speed on a personal project for delivery of physical rewards was backers receiving their packages before Kickstarter delivered funds. I wish all projects were that fast.

[DeadParrot]

A couple hours after my first post, Munchkin Batman arrived. Exactly 5 months after my pledge. Compared to many KS, Batman falls into the smaller, faster, lower cost realm.

[Prime Evil]

I would be happy to back 3-4 kickstarters per year because SJ Games has a proven track record for delivery. The reliability of their Kickstarters is high. My main interest is GURPS and TFT, but I pay attention to other product lines too. My biggest gripe is the lack of physical products outside of the US. I understand the current cost of international freight makes this prohibitive, but it's a shame nonetheless. I know Gaming Ballistic has been bitten by this issue too. It's a pity SJ Games can't offer international fulfillment via a PoD service, but I imagine this introduces quality control issues.

I did use a freight forwarding service for GURPS Girl Genius. This was slow and expensive, but got the product to me in excellent shape. I'd consider this again for future kickstarters. (Incidentally, the printer did an amazing job on this book - I think it is far better than normal GURPS hardcovers).