Crowdfunding

     A Guide to What Works and How


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Should Penny Arcade Have Turned to Kickstarter?

Penny Arcade, an outfit that produces two videogame-related comics among much more, launched a Kickstarter campaign a few days ago that had some people scratching heads, even as the project moved rapidly towards its $250,000 goal. (It’s a few dollars away as I write this.)

Penny Arcade started as two guys with a comic strip and, they admit, little business sense. They met a savvy business fellow, launched the PAX conference, and have become a power in the gaming industry. They have a charity for children that’s raised millions, produce multiple events each year with 10,000s of participants, write and draw two comic strips (one with another popular webcomic artist), have an ongoing reality video series of sorts, and apparently have time to play games to keep up on the field.

I’m not a videogame player, but I’ve always found the strip hilarious (even when I sometimes scratch my head like an 80-year-old and say, eh, sonny, what?), and respect the integrity of their approach to an industry that is full of editorial conflicts and douchebaggery towards players and subscribers.

The Kickstarter project still seems a little weird, and I’ve been trying to wrap my head around why. Kickstarter’s own guidelines say that you should launch a fundraising effort not just to raise funds; rather, there should be a goal of something that is made at the end of the day after funding is achieved. You’re not raising money to pay the bills.

Penny Arcade’s project states bluntly that their goal is to replace revenue from advertising on the site for a year and allow them to go ad free. But not just for donors: for everyone. The more money they raise above $250,000, the fewer ads. Enough pledges and they will ultimately produce some new creative work, such as reviving a podcast, and could switch to a Creative Commons licensing model for their work, which is currently protected under more restrictive copyright terms. The rewards are quite good (although having Jerry say your name during sex is possibly not a reward as such) for those who are fans of the strip and Penny Arcade’s events.

Their point is that the strip started and ran for years really on user support, and that they make decisions today that are designed to increase page views. In the absence of ads, the site could serve visitors’ desires better.

What they’re describing is very much like a membership model in which people join and are rewarded with an ad-free site along with premiums, as in the pledge rewards in the Kickstarter. But membership-based sites typically provide benefits only to the members. Penny Arcade’s goals are all public; the rewards may be to individuals, but the results of the fundraising are for everyone.

While the folks behind the company say they are using the money to pay salaries and the rest of the bills, technically the money is used to create a year’s worth of work, and thus it fits Kickstarter’s guidelines: the deliverable is, in fact, that work.

There is sometimes a confusion between pledge rewards being the deliverable item or the main thrust of the product being the deliverable. Often, there is a one-to-one relationship (a hardware product), but sometimes the rewards are all special items and intangibles that are separate from the primary work being created.

Right around the time Penny Arcade launched its project, Roman Mars of the 99% Invisible podcast (one of my favorites) also started a crowdfunding campaign to provide the fees for season 3 of production. Some of the reward levels are quasi-advertising: underwriting spots in a which a sponsor is briefly thanked in the program, typical in public radio.

Nobody raised a stink around Roman’s effort (a nice fellow with a million-dollar voice who I met a few months ago) because he was doing something seeming precisely like the general public-radio pledge drive, only for a single show and entirely via a web site.

Roman’s fees go to cover a year’s production, just like Penny Arcade’s cover a year’s production. Roman is replacing traditional fundraising routes in this manner, where Penny Arcade is replacing its traditional advertising sales process. (Its ad sales guys aren’t being fired, by the way. They’re moving into making new things instead of selling the site.)

At TidBITS, the Mac publication for which I run the back-end systems and write, we decided well over a year ago to pursue a membership model that is in many ways like Penny Arcade’s. We rely on sponsorship and some advertising to fund the site. By turning to members, we pursued the public radio/TV model of saying, “If you like the kind of journalism we produce, support us and we can keep doing it and more.”

Our readers came out in droves, and we met our loose targets. (We would have continued nonetheless, but this certainly gave us a more stable and consistent future.) The benefits are for all visitors: we can write more and offer more to everyone. Members get ad-free pages and a few modest benefits, but most benefits are public.

I started out seeing Penny Arcade as misusing a model: right idea, wrong platform. But over a few days, I’ve come to see that they have a choice of funding options. By offering crowdfunding, they reduce their dependence on other methods, even though their work could continue without the Kickstarter campaign.


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Keith Knight on Crowdfunding

One of the lovely people I talked to in preparing my project was Keith Knight, a cartoonist whose work I’ve loved for years. Keith writes and draws a large-panel strip and a daily comic, as well as performs in a band and illustrates on the side. It’s all in a day’s work for a cartoonist.

Keith offered up several pieces of advice and self-discovered wisdom from his campaign for “I Was a Teenage Michael Jackson Impersonator!“, a graphic novel he’s creating from his own life. True stories! Keith set out to raise $40,000 and brought in $42,843.

I happened to pledge to his campaign when he was a few dollars short of $40,000, so I claim to have technically put him over the top for funding!

Here’s a few nuggets of wisdom:

  • Kickstarter dies on the weekends. Don’t launch or have a project complete on a Saturday or Sunday. People don’t pledge on those days.
  • Schedule time a few days in to a project to start emailing the folks who already know your work and get them on board.
  • Put up samples of your work. Keith somehow managed to launch without including any cartoons! He quickly rectified that. This would be true for any writer, musician, or artist; videos would suffice for people making products to show work they’d already created.

Keith’s breakthrough in funding came when he had neared $20,000, and figured he wasn’t going to make it over the top. But a friend of his said, “All you have to do is get people to double down.” Many contributors had given relatively small amounts from $5 to $40. They had already committed to the project, and clearly wanted it to happen.

Keith sent out a backer update asking people if they’d consider upping their pledges in order to make it a reality. Many did. He shot to nearly $40,000 in a few days, and then reached funding not long after that.

I’ll be meeting Keith in person in Los Angeles as part of my storygathering tour for the book.