Questions about Kickstarter

[waysoftheearth]

I'm looking for a bit of an education re Kickstarter.

I've read their online FAQ a couple of times, but it seems to not answer some fundamental questions for me. Perhaps some of the folks here with some KS experience can help me understand how it actually works?


A couple of questions:

#1 Does a creator have any obligation to include a statement/acknowledgement of any KS contribution to development of their product?

#2 Are KS backers "pre-paying" for something (e.g., a copy of the end product)? Or are backers funding the development of the end product with no stake in it? Assuming the end product is a TTRPG book, would backers subsequently expect to pay for a copy of the product they helped to fund--or would backers expect to get a copy of the product as recompense for their contribution?


Any wisdom of the boards appreciated...

[kipper]

I'm by no means a Kickstarter expert (I've only backed one product), but it is my understanding that:

1) No, although most choose to do so.
2) Backers are only funding the development of the end product, they are not pre-purchasing a product. The product creator may choose whatever method of rewarding their backers they see fit, most often this includes a completed product, but it does not have to. However, once the kickstarter creator does promise a certain reward, they are obligated to deliver it if their Kickstarter is successfully funded (or at least make a good-faith effort to do so), as the reward is part of the contract.

[Desparil]

To add to #1, many KS projects for video games include "thanks" credits to individual backers above a certain level of contribution, e.g. everyone who backs for $20 or more gets their name (or a chosen pseudonym) in the end-of-game staff roll. Print projects tend to restrict this more since even 500 names is a LOT to have to print, but may include a "special thanks" section for top-tier backers who kick in hundreds of dollars.

To add to #2, to hedge against backer fears - at least in the gaming miniatures and board games fields - a lot of KS project runners are shifting to running a Backerkit page after the end of the Kickstarter, which the KS pledge rewards being converted into credits on Backerkit. This has a few benefits for them:

1. If any particular item fails to materialize, they can provide substitute products for the backers to spend their Backerkit credit on
2. They can run a "late pledge" campaign for people who missed the original Kickstarter or could only commit to a small pledge at the time
3. Shipping costs for physical products can be determined at the time of shipping and payments handled through Backerkit

[waysoftheearth]

Thanks kipper and Desparil.

So... more questions about the idea of a Backerkit page.

Is this something like a limited-access website for backers only to see what's happening behind the scenes during the product development, and then continuing after the product is developed?

Is a Backerkit site provided/hosted by KS, or is it handled separately?

Is a "Backerkit credit" essentially credit related to a backer's KS pledge that they can then "spend" on the products, as they materialise, at the backerkit site? In which case, is a backerkit page also something like an online store?

[Desparil]

Backerkit is a separate thing not affiliated with Kickstarter. It's totally up to the KS project runner if they want to set up a Backerkit page. Anyone can view the Backerkit, but it's up to the project runners whether non-backers can interact with it at all. The "late pledge" idea that I mentioned is one way that non-backers can be provided for. Personally, I recently took advantage of that for a KS that I simply wasn't aware of at the time it was running. You can take a look at it as an example (outside link): forged.backerkit.com/hosted_preorders

They also fulfill backers' orders through this page, so any pledge rewards were given as credit on the Backerkit store. Backers would have received emails notifying them when it was ready to finalize their orders, at which point backers provide their shipping addresses and any relevant taxes (US sales tax, European VAT, etc.) would be calculated and paid. Then when they're ready to ship, they'll send another email to solicit payment for whatever the final shipping costs end up being - as mentioned in the previous post, most KS runners do their best to estimate shipping charges and list those on the KS page, but with the shipping fluctuations the past few years it's now standard practice to only calculate and collect shipping at the time of shipment.

Edit: As for letting people see what's happening behind the scenes during the product development, conscientious KS runners do that right on their Kickstarter project page. If you look at the original campaign for the project that I linked above, you can see that aside from the main description on the Campaign tab, there is a FAQ, an Updates tab, and backer comments (the forum wants to embed the a KS summary if I include the kickstarter.com part of the URL, so just including the suffix): /projects/bamdungeondelvers/forged-adventure-series-1/description

[waysoftheearth]

Looks like backerkit is actually a KS competitor?

www.backerkit.com/

[Desparil]

I actually didn't know they had gotten into the actual crowdfunding portion of things, but according to their Wikipedia page that does appear to be the case:

BackerKit began in 2012 as a logistics solution for Kickstarter creators to manage shipping, add-on products, payment processing, and customer support after the completion of campaigns. Its largest clients included Kingdom Death: Monster, Fidget Cube, and Bears vs. Babies. In 2018, BackerKit established The Creative Fund, with the goal of donating one dollar to a wide range of projects on Kickstarter.

BackerKit announced its own independent crowdfunding platform in June 2022, with the launch of campaigns by Cephalofair Games, creators of Gloomhaven, Monte Cook Games, and Greater Than Games, creators of Spirit Island. The BackerKit crowdfunding service's beta launch came fully integrated with its existing post-campaign services. The company's expansion to full crowdfunding service began six months after Kickstarter's announcement that they would invest in Blockchain technology.

[waysoftheearth]

So, to close the loop on this with a real example, consider the Knave kick starter discussed recently on these boards here.

With 20 days still to go, it appears a (scary!) $475,000 has been pledged of a targeted $10,000 (presumably, the minimum needed to make the project viable).

What happens at the KS campaign conclusion?

I am right in assuming:

1. KS pays the creator the pledged $ amount---so, in the above case, $475,000 less any KS fees,
2. The creator fulfills the promised rewards at their own expense (i.e., using the KS funds),
3. Any KS funds remaining post-fulfillment are essentially the creator's payday---in the above case several hundred thousands,
4. The creator continues to sell the product(s) in the open market as "usual", including to backers who may wish to buy something they didn't get as a reward, or to buy another copy of something they already got as a reward.


Is that roughly how it goes?

[Vile Traveller]

May 11, 2023 18:25:52 GMT -6 waysoftheearth said:

So, to close the loop on this with a real example, consider the Knave kick starter discussed recently on these boards here.

With 20 days still to go, it appears a (scary!) $475,000 has been pledged of a targeted $10,000 (presumably, the minimum needed to make the project viable).

What happens at the KS campaign conclusion?

I am right in assuming:

1. KS pays the creator the pledged $ amount---so, in the above case, $475,000 less any KS fees,
2. The creator fulfills the promised rewards at their own expense (i.e., using the KS funds),
3. Any KS funds remaining post-fulfillment are essentially the creator's payday---in the above case several hundred thousands,
4. The creator continues to sell the product(s) in the open market as "usual", including to backers who may wish to buy something they didn't get as a reward, or to buy another copy of something they already got as a reward.


Is that roughly how it goes?

Roughly, yes. But the creator usually only gets a small percentage of that per book after KS fees and printing costs, so it's not all money in the bank.

[waysoftheearth]

May 11, 2023 23:23:33 GMT -6 Vile Traveller said:

the creator usually only gets a small percentage of that per book after KS fees and printing costs, so it's not all money in the bank.

Thanks Vile Traveller; I'm not 100% clear on what you mean by "per book". Do you mean (broadly) that fulfilling the promised rewards usually accounts for the lion's share of pledged funds, so the creator is usually left with a small portion of those funds as a payday? Or do you mean something else?

[Desparil]

Yep, I'm sure there's a bit more behind the scenes, but that's pretty much how it goes. Kickstarter charges a 5% basic fee, plus an additional payment processing fee. The creator is also responsible for paying any sales tax or VAT on any products that are being offered as rewards, as well as the costs of shipping/distributing rewards (though many pass that on to the backers through Backerkit or other means).

It's important to know that the creator's reward fulfillment is on the honor system. Delayed shipping dates are somewhat common, mostly it's not a big deal but there have been some major ones with significant delays - the intersection between this and products that don't live up to their hype is where infamy lives. Well, that and failing to deliver at all, which is rarer but it does happen; a big one in the board games and miniatures world was a game called OrcQuest, where the creator finished development but ran out of funds to actually produce copies of the game. That one did get a somewhat happier ending recently, as a different company (with an established reputation) acquired the assets from the previous Kickstarter and ran a "resurrection" campaign recently, using part of the money raised by new backers to fund a large enough production run to provide the unfulfilled rewards from the previous campaign. That's the exception rather than the rule, however, usually if a creator mismanages things that badly there's not really any recourse for the backers. Kickstarter will revoke the offending creator's privileges and ban them from running future campaigns, but that's the maximum extent of the repercussions.

Final thing to note that if a project fails to reach its goal, then all pledges are refunded and the creator gets nothing.

[Vile Traveller]

May 11, 2023 23:53:16 GMT -6 waysoftheearth said:

May 11, 2023 23:23:33 GMT -6 Vile Traveller said:

the creator usually only gets a small percentage of that per book after KS fees and printing costs, so it's not all money in the bank.

Thanks Vile Traveller; I'm not 100% clear on what you mean by "per book". Do you mean (broadly) that fulfilling the promised rewards usually accounts for the lion's share of pledged funds, so the creator is usually left with a small portion of those funds as a payday? Or do you mean something else?

Yes. Generally, nowadays books are ready to go at launch - they even have art and layout done. The initial goal is designed to cover that as well as the cost of printing, Kickstarter fees, and often Backerkit or the like. You have to set the levels so your margin is less than retail, as backers expect something above-and beyond. Once that is surpassed, everything over the cost of printing + fees could potentially be profit.

But - to keep momentum going on those big Kickstarters stretch goals are a must, so you again have to fund the writing, editing, layout, art, printing, and fees for those. Not many backers go for PDF-only, so you need to calculate printing costs for everyone, just in case. You have to allow a healthy margin to ensure you don't go into the red, no matter how high your KS goes.

Shipping is generally calculated later and charged on top of your pledge.

So it's really hard to judge how much of that windfall will end up in your pocket. I imagine Shadowdark was a pretty good moneyspinner - the art doesn't look too expensive, ditto for the stretch goals, and the unit price was set pretty high.

May 12, 2023 0:00:34 GMT -6 Desparil said:

Final thing to note that if a project fails to reach its goal, then all pledges are refunded and the creator gets nothing.

And that's the big risk these days, given you've probably already had to put in the hours and pay contributors up front. If you don't fund, you have to publish normally and hope you recoup the cost either, or try for another KS with better marketing (it's all about the marketing) - but with the bad publicity of a failed Kickstarter holding you back.

[waysoftheearth]

Thanks Vile Traveller

Sounds like the whole thing is a finely tuned balancing act.
Hmmm.

[aldarron]

May 12, 2023 5:38:21 GMT -6 Vile Traveller said:

Yes. Generally, nowadays books are ready to go at launch - they even have art and layout done.

Highly recommended from my own bumpy experience. The art and layout can take waaay longer than you anticipate and life has ways of throwing in monkey wrenches. Kevin Crawford of Sine Nominae runs very efficient KS if you want to see some examples.

Regarding money though the $10,000 minimum that Knave was asking might just have been enough to get a couple hundred books published with art and layout expenses factored. Depending on the artists, you can expect to pay between 50 to $300 per piece. Let's say you have a 150 page book and you average 1 illustration per 3 pages (you probably want more), that's 50 illustrations at lets say an average cost of $150 each - so ballpark $7,500. Add $2 grand for layout and your budget is already blown. Yes, you absolutely can find folks who will work for less but you tend to get what you pay for... I do know a couple people though...

The above of course does not take into account shipping costs - which in my case ate through all the "profit" I made (and then some, if I'm honest) so having it set up so the shipping is added to the pledge later is a big big big option.

You also have the option of offloading all that printing, storing, and shipping stuff onto a PoD service. That's what Crawford does IIRC and was the recent case with Rookroost. In this case, the fulfillment will be a coupon for the book from the PoD service. I'm not entirely sure how it works but basically you get a code and log in (to Drivethru, for instance) and pay whatever shipping costs and they print and send the book.

The last thing I would say is cut out all the stupid pledge goals. They're stupid. Did I mention pledge goals are stupid? 'cause they are. You will see KS projects offer all kinds of complex and ridiculous swag as pledge goals. These things can take more time and effort than the project itself and are a major PIA. NOBODY joins a KS because they just have to have the pledge goal. So for pledge goals you should only have a couple and make them very manageable things - like adding a new character class or hiring a particular famous artist to do the cover or at most, maybe offering a tee shirt with your logo on it - things that don't require you to hire a specialty company to create expensive custom product.

[geoffrey]

May 29, 2023 7:50:49 GMT -6 aldarron said:

The last thing I would say is cut out all the stupid pledge goals. They're stupid. Did I mention pledge goals are stupid? 'cause they are. You will see KS projects offer all kinds of complex and ridiculous swag as pledge goals. These things can take more time and effort than the project itself and are a major PIA. NOBODY joins a KS because they just have to have the pledge goal. So for pledge goals you should only have a couple and make them very manageable things - like adding a new character class or hiring a particular famous artist to do the cover or at most, maybe offering a tee shirt with your logo on it - things that don't require you to hire a specialty company to create expensive custom product.

Yeah, if I were ever to do a kickstarter, the stretch goals would be as follows:

1st stretch goal: an additional full-color plate (Erol Otus, please!) in the book

2nd stretch goal: a second additional full-color plate in the book

3rd stretch goal: a third additional full-color plate in the book

etc.

Full-color plates do not require any changes whatsoever to a book's layout, so they can be added willy-nilly.

[Deleted]

I take it you like full-color plate! The embossed yellow plate of the hell riders of Norg comes to mind. And also the Blood Red (Plate) Reavers of Targal (modeled after Count Dracula as Christian defender at the start of the film, Brom Stoker's Dracula). And everyone likes the chrome plate of the knights of the film Excalibur. Etc... More full color plate I say for the campaign and the kickstarters!