The value of inspiration: notes on kickstarting App Store projects

My father-in-law, who is in his eighties and an absurdly successful entrepreneur, was trying to get his head around Kickstarter. The conversation went something like this: 
“So – you say you’re going to make a game, and then people give you money to do it? And in return, they get a copy of the game when it’s made, and some other things that you made? Why would they do that? Why not just save their money and wait until the game is released?”
“Well – people like backing things on Kickstarter. It makes them feel part of a journey, and that they are helping out creative people at a crucial time.”
“What do you think your game is going to cost when you release it?”
“Well, it’s going to be free. But the backers will get a version with all the content unlocked, which non-backers will have to pay £3.99 for.’
“Wait. the app’s going to be free?”
“People don’t like paying for downloads from the App Store”
“But you’re charging eight pounds for it on Kickstarter! So as well as having to pay for the app six months in advance of it coming out, assuming that it does come out, they also pay double for it, assuming that they want all the content in the app, which many of them presumably won’t.”
“yes, and that’s assuming that they have an Iphone. If they don’t, they might not even get that.”
(with increasing bafflement) “And look at this. Someone gets a T-shirt, a set of coasters, a mug and a teatowel for £75!? What does that cost you in real money?”
“Er (making something up because I’m not as good with the details as my 83-year-old father in law) well factoring in labour & fulfilment, maybe £25?”
“That doesn’t make any sense to me. I can’t believe 32 people have done that.”
My father-in-law backed the Kickstarter campaign very generously. But I’m not sure he was ever convinced… What this conversation really brought home to me is just how *illogical* Kickstarter is. It’s not a marketplace that functions according to normal rules. I think of Kickstarter as an extension of the experience economy. People are buying a feeling of being part of making something happen – choosing to help you on your incredible journey and change the world. In Hide&Seek’s case, I think some people were backing it because they’d come to one of our free events, and had a great time, and felt this was a way of repaying some of that. People are also buying the experience of being first to get something – both in terms of having it, but more importantly in terms of *understanding* it. What’s interesting about Kickstarter is that anyone with a bit of time and some knowledge of printing costs can work out the difference between the costs of the actual goods being shipped at any reward tier versus the cost of buying them. The remainder is the price that person is willing to give you to actually make your thing, and the value that they set on the set of inspiring feelings that they get for taking part. I think it’s remarkable that some people value the price of feeling inspired at tens or hundreds of pounds.
We had a pretty good run on Kickstarter – we got loads of great coverage and feedback, and had a huge upsurge in interest towards the end – and we thought it boded well for our release. In a way, it did – we got featured by Apple in a number of countries and had 150,000 downloads in a very short time. But here’s the important thing. There’s no inspiration gap in the App Store. People don’t know your story, they aren’t invested in you, they don’t care about the immaterial things. Our app monetised really, really badly. App Store players weren’t buying our content at half the price that Kickstarter backers did. I’m not saying that the App Store is a marketplace that functions according to ‘normal’ rules, but it’s definitely a marketplace that functions according to different ones.
Tiny Games was a hard lesson for me as an entrepreneur. I learnt a lot about the difference between optimism and reality, between the world of Kickstarter and the world beyond it. My recommendation to anyone who’s thinking about it? Before you think about videos and reward tiers and media strategies and all the rest, plan your actual commercial release and build your confidence in it. Seek investment and support from people experienced in releasing on that platform. Only once you’ve figured out what that stage looks like should you plan a crowd-funding phase.

One Comment

Charles Beckett

Alex, very interesting post.

I like your idea of Kickstarter backing as an extension of the experience economy. From the point of view of a traditional investor it certainly doesn’t make a lot of financial sense. But as you say, the whole ethos and reward structure of Kickstarter is totally different.

I think it’s also important to say though that backing a project in this way is more than just making a donation. Thinking of crowdfunding as one or the other: investment or donation – is just applying an old binary paradigm to something that doesn’t fit. The relationship between maker and supporter is more complex than that between either an investor and a company’s board, or a funder/donor and a charity or individual charitable project.

Kickstarter combines a hopeful feeling of return on investment (you get something for your money afterall, even if financially it has a much lower market value that what you put in) with a sort of broad feeling of generosity and participation that goes beyond worthiness.

The paradox of investing in something that you could easily buy much more cheaply is dissolved when you understand that the real motivation for crowdfunding a project is about feeling part of something – but precisely not taking/claiming ownership of it – for ends that may seem altruistic. The satisfaction comes from feeling good about what you’ve done (and it is helped by receiving something tangible that you actually want, too – even if you pay over the odds for it).

The ‘inspiration gap’ is crucial. I think that crowdfunding’s motivation is partly at least a sort of dejection with capitalism as it is largely practiced at the moment. An unconscious feeling that there ought to be greater connections between makers and their financial supporters, much closer than the distance and impersonality of equity investing. In this respect (indulge a little pretentiousness) it’s a manifestation of a desire to escape Karl Polanyi’s Market Society, or for something akin to Michael Sandel’s Communitarianism.

Anyway, my point (before I disappear up my own backside) is: you’re right and I think this distinction isn’t well understood yet, but thinking about crowdfunding as a simple mater of investment or charitable giving is not helpful.

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