Trouble in Crowd Funding Paradise

Since it's beginning, Kickstarter has been largely loved for it's innovative strategies, helping unusual, unorthodox and innovative projects crowd source funding where large companies wouldn't. It hasn't been all roses along the way though, and one of the points of contention has come from Kickstarter's decision to use Amazon Payments as their payment provider.

Besides Kicking Wikileaks off their server space, at times Amazon has occasionally caused some headaches for projects with potential backers outside the US. Backers in Germany, for example, often prefer to give money directly rather than with a credit card, which Amazon Payments doesn't allow. Some countries, Amazon Payments won't accept at all, even when Paypal does.

Another issue has been the inability to update projects after the campaign has ended, successfully or unsuccessfully, leading to some cases where people have ended up using the question and answer section as a de facto customer service area, generally to disasterous result.

 

The Solution... or a New Problem?

These kinds of problems, and a bunch of other benefits, have convinced a number of (fairly prominent) projects to offsite their project. We'll avoid naming names to protect the innocent / guilty. Besides, the projects doing this advertise it directly in their project description, in one way or another, often in the website listed in their profile.

So what do we mean by “offsiting”?

For the purpose of this article, we're defining offsiting as running part of your campaign, on your own website rather than on Kickstarter.com. Notice that I said running part of your campaign, not promoting.

I'm not talking about people using social media to promote the campaign they're currently running on Kickstarter.com. I'm talking about setting up a website, specifically for the campaign, that takes over all or part of roles like taking and processing donations, creating mailing lists of backers, releasing exclusive updates etc.

You know. The stuff that you're supposed to be doing through Kickstarter.

 

Why DIY?

There's no denying that offsiting has benefits to offer. For example, with offsiting, you can:

  • Offer people more (and cheaper) payment opitions than Kickstarter

  • Stay in contact with backers after the campaign ends

  • Change and update project information as needed

  • Provide a more customized web presence for (potential) backers

  • Build SEO for your own business rather than Kickstarter's

In web marketing speak, it's the difference between running a home base that you control absolutely, and an embassy which is really just an outreach of your business on someone else's turf.

 

Opening the Doors to a Kickstarter Scam?

The problem is, that many of the benefits, come out of side stepping restrictions, and many of those restrictions are for the good of the crowdfunding model as a whole. There are no cookie cutter answers here, just questions worth asking yourself if you're looking at offsiting.

For example, by side stepping Kickstarter for payments in favor of straight Paypal, you're paying Paypal fees, but not Kickstarter, or Amazon.

Is it really OK, to avoid paying Kickstarter their cut on your campaign? Is that the image you want to give your project / business in public? Is that really helping to grow the system that is helping you fund your dream?

And what about the ability to change project information on a whim? Yes, there's probably quite a few typo's in reward levels that would get fixed, but how long would it be before backers get scammed? If that kind of story gets splashed across the internet a few times, what is it likely to do to people's willingness to back projects in future?

Even the ability to stay in touch with people could be abused, as spammers have shown us again and again.

 

Kickstarter's Take on This

So far, the folks over at Kickstarter.com have taken a surprisingly lenient stance on the issue, especially when compared with the aggressive policies and policing of sites used to source income like Elance and Ebay. I can only imagine that sooner or later, they're going to need to take a stricter stance.

 

The Future

At the same time, if you, as a project leader, are careful to do things in an ethical way, that supports your project, your backers and Kickstarter, are there ways of getting the benefits listed above and still “doing the right thing” by everyone involved?

Maybe. If so, it would take a great deal of creative, out of the box thinking to do completely. But then, that's what the Kickstarter community have always excelled at.

 

What do you think?

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