I don't think it's accurate to call this a price. You are not purchasing a product when you fund something on Kickstarter. You are investing in them, and if they succeed, you get the thing you signed up for. I think that most people who invest in projects on Kickstarter now understand this, but I'm not sure that will continue to be true as it grows in popularity.
I think Kickstarter can be either a purchase, or an investment, or both. From their site:
Copies of the thing: the album, the DVD, a print from the show. These items should be priced what they would cost in a retail environment. ...
Kickstarter isn’t charity: we champion exchanges that are a mix of commerce and patronage, and the numbers bear this out. ...
So what works? Offering something of value. Actual value considers more than just sticker price. If it’s a limited edition or a one-of-a-kind experience, there’s a lot of flexibility based on your audience. But if it’s a manufactured good, then it’s a good idea to stay reasonably close to its real-world cost.[1]
So their platform is flexible. It works as a way to take pre-orders for a speculative new product (with no guarantee product development will succeed), or as a way to seek patronage for your art. As far as I can tell they're not too opinionated about which of those you go with, as long as you're creating something.
I think the key when you're running a project is to be clear about how you're using the platform. People think very differently about buying products and patronizing art, so you need to structure your offers and your story differently.
As I said in the last thread, I think the Light Table project got off on the wrong foot because it wasn't clearly positioned as either a product or an artistic endeavor -- it was more like, support my cool project, and then I'll own a nice product I can sell to you later. Offering a license at every contribution level went a long way to clarifying the message. I threw in $50. :)
My point is that Kickstarter is not a store, and it's not a simple money-for-goods-or-services exchange. People who give money need to understand that. If they don't, they'll feel cheated if the project fails and they don't get the item that they feel they "purchased."
That's a fair point -- it'll be a problem if people get involved in Kickstarter who don't understand that there's no guarantee the project finishes. But I still disagree with your original point -- often on Kickstarter you are purchasing something for money. Conditional purchases happen all the time. For example, you could pay me $500 up front for any valuable items you find while cleaning out my grandmother's basement, and you would have purchased something -- ownership of 0 to N valuable items. Or suppose I give you $20 to bring me a pizza through a war zone, with the understanding that if you get shot you can keep the $20 and don't owe me a pizza. I've purchased a pizza -- just one I might never get to eat. (My life is tough this way.)
I know this sounds nitpicky, but it's actually important to think about if you're running a Kickstarter campaign with inherently valuable rewards. You need to bear in mind that at least some of your backers will (correctly) think of themselves as purchasing a product, just one that they realize may never be delivered. That establishes a particular kind of relationship, and you won't hit the right notes if you don't know it exists.
I find your responses confusing - you state that you disagree with me, then proceed to explain what certainly seemed to me like my point. I think we're just disagreeing over the meaning of the word purchase. I'm assuming that it means a non-conditioned, absolute thing, which is how I also assume most people think of it. You're including it to include conditionals, which is fine, but it's not how most people think of it.
This is a good summary of our confusion. :) Sorry to be a pain about it. Would you agree that I can "purchase" the contents of a suitcase on a gameshow without knowing what they are? Or that I can "purchase" next year's wheat crop from a farm without knowing how large it will be? Or I can "purchase" 100 shares of Facebook stock to be delivered in a year? I think most people would. And this is true even if it turns out that the suitcase is empty, or the wheat crop is a bust, or the stock is worthless -- it's not that I haven't purchased anything, it's that I have purchased nothing.
But the point isn't really the word. The point is that if you're offering a valuable reward on Kickstarter, some backers will think of it as a plain old financial transaction, where they put some money down and they get to have one of whatever you're trying to produce if you succeed. And that's totally fine as far as Kickstarter is concerned. So if it's not how you want people to think of your Kickstarter project, you have to be careful how you position it.
Another way to think about this -- when I get my copy of Light Table, will I be allowed to give copies to my friends? If not, then I'm buying a product. I may also be supporting an artist (I think so), but I'm buying a product.
The Kickstarter distinction between investment/purchase is a bit blurry sometimes. What if I pledge $80 and Light Table becomes vaporware or development ceases? Do I still get the t-shirt?
At some point its inevitable that a big Kickstarter project will fail spectacularly. Those who gave money will be understandably angry. People will demand action from Kickstarter when in reality they have nothing to do with it. Will this change pledging habits and reward structures? Undoubtedly.
Kickstarter themselves seem to be still testing the waters when deciding what projects are appropriate for their site. The approval process is done manually in house. Will this scale? I think eventually we'll see a number of smaller crowdsourcing sites pop up that are particular to certain product niches or investment types. GameKickStarter, MusicKickStarter, TravellingCircusKickStarter, MyStartupKickStarter.
If this comes to fruition I think it will be great and allow consumers a better understanding and flexibility about how they want their money to be used. I look forward to seeing how new startups innovate in the crowdfunding space.
This already happened (not the biggest of projects, but still). The guy took $80k after asking for $6k, and completely blew it. One year later and he is still "doing research" and hints at not having any money left.
Invest? Hardly. If it is an investment then I'm a VC and should have a stake in the resulting company.
Frankly, I think that Kickstarter should head towards this model and fund companies and give equity rather than being an oversized tip jar for projects. I could imagine a Kickstarted financed feature film that paid the investors. They could call it The Producers...
even with Light Table it's been a bit of a battle fighting that mentality. I think that's why the physical products are doing so well - it feels like a natural "shopping" experience where what you get is tangible.
This talk about being an "investment" is a bit misguided. Being an investment would suggest that you are expecting a return greater than what you put in, sharing the project's success, so from this view point you should be even angrier when a project tanks...
And considering that the majority of successful kickstarters are for physical products, and pricing is naturally always higher than market price, it wouldn't make sense anyway. You're paying above market price; you can consider the early access/support as having a greater value, but then you're still buying that status. For me it's clearly a donation slash purchase that involves lots of risk - crowd-sourced patronage. The words patronage or sponsorship should be given the spotlight, not investment.
