Let’s be 100% clear about what this is. This isn’t fans helping the little guy out. This isn’t charity. It’s not the townsfolk banding together to save the local community theater. It’s a for-profit company that just had a very successful product placing the financial risk of their next product on the people they’re going to be selling the product to. Once upon a time, in ye olden days, corporations that wanted a chance to make profits also had to accept the risk of a failed product. Now, hey, just crowdfund; place the risk burden on the very consumers that you want to wring profits out of in the first place! What could go wrong? Typically, criticism of crowdfunding turns on the possibility of failed product launches, such as in this great Gideon Lewis-Kraus piece on an overly ambitious coffeemaker, or the ubiquitous risk of out-and-out fraud. But I find these successes more disturbing: why not just keep going back to the well, no matter how profitable your company is, and reap the profits free of risk?No, not free of risk; we don't know, specifically, how much (if any) of their own capital they're putting into the product. But even if that figure is zero, deBoer's argument comes around, essentially, to "for historical reasons", i.e. because a thing has always been done a certain way, it must always be done in the future the same way. But even this utterly ignores the existing real-world examples in which customers put up risk capital in exchange for future goods and services: magazine subscriptions, community supported agriculture, even good faith money on building construction. Instead of Kickstarter supporters being patsies, as deBoer asserts, they're helping the creators mitigate risk and thereby aid in the creation of products those customers want. A great example of this mitigation was the highly successful Exploding Kittens card game; as Ben Kuchera in Polygon wrote,
If Exploding Kittens' creators wanted to print 420,000 copies of the game and ship them, hoping they would sell, the project would cost around $6.3 million, with no guarantee of return. Using Kickstarter allowed them to not only promote the project, but use sales to fund the game's creation, removing that risk and allowing them to increase the profit margin.Now, is that to say Kickstarters always work? No, of course not. One particular example that some friends got burned on was a proposed biopic of the dog trainer Dick Russell, Dog Man; reading the team's biographies, the title "producer" nowhere appeared at the time. (It is a separate job for a reason.) There's clearly interest in highlighting such failures, as for instance this spreadsheet documenting all game launches funded for $75,000 or more, or Kickfailure, a website dedicated to documenting notable failures. But none of these mean that Kickstarted projects are intrinsically fraud, or amount to exploitation of the customer (save for cases of fraud or incompetence).
While everyone involved with Exploding Kittens will likely earn a very nice payday, the number of copies sold and the profit made from them won't be ridiculous; a better word is meaningful. Kickstarter allowed them to scale expectations and sales while removing much of the upfront cost and risk. It's not a perversion of the crowdfunding model; it's a great example of a team using it well.