published Sunday, July 7th, 2013

Crowd-funding advocates say Kickstarter levels the playing field for independent creators

Goldie Blox, available at Mountain Top Toys on Signal Mountain, was funded through a Kickstarter campaign.
Goldie Blox, available at Mountain Top Toys on Signal Mountain, was funded through a Kickstarter campaign.
Photo by Angela Lewis.
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    Local blues musician Lon Eldridge performs at Summit View Senior Community. Eldridge funded two albums with Kickstarter.
    Photo by Angela Lewis.
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WHAT YOU GET

In a Kickstarter campaign, backers receive rewards based on the amount they give, with larger amounts generally including the rewards available at lower levels plus extras. Here's a sampling of what they would have received for supporting the Ouya video game console last year:

$10: Reserve a user name to use once the console goes live and receive exclusive updates on the development process.

$95: An Ouya console at a discounted price before the retail launch.

$225: An Ouya with your name etched into it, plus an additional controller.

$699: Access to the Ouya development tools and a year of exclusive promotion for a game you develop.

$1,337: Access to an exclusive email address that connects directly to the Ouya team with priority placed on your questions; also attend the Ouya launch party in Los Angeles.

$5,000: Hang out for a day in San Francisco with the console's designer and team to discuss the console's development.

$10,000: The first production run of Ouyas will be engraved with your name, you can attend a special private dinner before the launch party with the entire Ouya team and receive their eternal love and admiration.

BACK IT UP

The following have been the most-funded Kickstarter campaigns to date. [Note: Only campaigns that have ended are listed.]

Pebble: E-Paper Watch -- $10.26 million

Ouya: A New Kind of Video Game Console -- $8.60 million

The "Veronica Mars" Movie Project -- $5.70 million

"Torment: Tides of Numenera" -- $4.19 millio

"Project Eternity" -- $3.99 million

Reaper Miniature Bones: An Evolution of Gaming Miniatures -- $3.43 million

Double Fine Adventure "Broken Age" -- $3.34 million

"Wish I Was Here" -- $3.11 million

FORM 1: An Affordable, Professional 3D Printer -- $2.95 million

"Wasteland 2" -- $2.93 million

Source: Kickstarter.com

JUST THE LOCALS

The following have been the most-funded of the 53 successful Kickstarter campaigns in Chattanooga to date. [Note: Only campaigns that have ended are listed.]

NODE: A Modular, Handheld Powerhouse of Sensors -- $76,340

Retro Game Crunch: Six Games in Six Months -- $66,694

NODE Chroma, A Wireless Color Scanner for iOS and Computers -- $39,473

Retronix Guitar Project -- $34,500

Pure Sodaworks: Taking Our Sodas from Fountain to Bottle -- $23,111

Reopen the Warehouse Venue -- $12,225

Chatype: A Typeface for Chattanooga, Tennessee -- $11,476

Chattanooga Whiskey: The Return -- $11,427

"Build Me a World: The Story of Howard High School" -- $11,384

"A Brain Is For Eating" -- $10,181

Source: Kickstarter.com

BY THE NUMBERS

104,870 -- Number of Kickstarter projects launched since April 28, 2009

4.4 million -- Number of pledges Kickstarter projects have received

$593 million -- Amount of successful pledge dollars awarded to proposals

44.03 percent -- Success rate for Kickstarter projects

44,366 -- Number of successfully funded Kickstarters

34,056 -- Number of projects that have raised less than $10,000

39 -- Number of projects that have raised $1 million or more

10,722 -- Number of project proposals that receive no pledges

Source: Kickstarter.com

A floating pool in the middle of New York's East River? The "American Psycho" musical? Color-changing workout attire? Backlit computer keyboards with wooden keys?

Yeah, there was a Kickstarter for that.

Since its launch in the spring of 2009, Kickstarter has become the online poster child for crowd-funding, through which individuals and companies seek micro-investments from large groups of people to develop an idea or project. To date, more than 100,000 proposals have been made for everything from novels and 3D printers to lightweight running shoes and virtual-reality headsets.

A proposal's success is based on meeting or exceeding a predetermined funding level. Kickstarter backers vote with their wallets, pledging funds in exchange for rewards based on their level of investment once the project meets its funding goal.

If funding meets or exceeds that level within a specified deadline, the campaign's creator receives funds through an Amazon Payments account they establish and connect to their proposal. If it doesn't, no funds are collected, and backers receive no rewards.

Kickstarter fans say the process allows ideas -- big or small -- to circumvent middleman agencies, leveling the playing field for projects that might struggle to raise money through more traditional sources.

"Kickstarter is the place where people go to fund things you wouldn't necessarily go to an 'angel' investing group for," says local freelance technology writer Matthew Sims. "What does that say, when you can be like, 'Does anyone have interest in this?' and ... not only will people pay for it when it comes to market, they'll pay for it to be made.

"That's insane."

THINK GLOBAL, PLEDGE LOCAL

The first local Kickstarter to be successfully funded was a documentary film about Chattanooga's historic ties to the iron industry, "And the Iron Did Swim," which met its $6,000 goal in July 2010. Since then, dozens of Chattanooga-based proposals across a wide range of media have been greenlit through the service.

In May 2012, Chattanooga Whiskey raised $11,000 to help purchase bottling equipment and to pay some of its initial manufacturing costs. Last fall, authors Dan and Amelia Jacobs and illustrator Scott Brundage attracted $10,000 to publish "A Brain is For Eating," a "children's book written for zombies and their little undead."

On June 28, Sewanee-based librarian and technologist Jason Griffey launched a Kickstarter to fund the second stage of development for the LibraryBox, an inexpensive digital file distribution system. With more than three weeks remaining in the 30-day campaign, Griffey's proposal already had received more than $16,000 in pledges, 500 percent higher than the $3,000 minimum goal.

"[Kickstarter] is way better than doing a market survey," says Jonathan Bragdon, the chief business officer for local tech startup Variable, Inc. "If people actually pay money in support of an idea or a company that's new ... that's true market traction."

In February 2012, Variable initiated the city's most-successful Kickstarter campaign, which over the course of one month raised more than $75,000 for development of the NODE, a smartphone-based wireless sensor platform that can detect carbon monoxide levels, radiation and atmospheric conditions. A second Kickstarter last fall raised an additional $40,000 for the Chroma, an add-on sensor capable of detecting and identifying colors.

Bragdon became Variable's chief business officer in May, but he says he has long been a fan of company founder George Yu's work and pledged funds to the second NODE Kickstarter campaign. Variable recently completed its first round of capital fundraising, but Bragdon says it owes much of its growth to the support it received at the grassroots level through crowd funding.

"I think it [Kickstarter] is viable at pretty much any stage [of development]," he says. "I could see us doing it again, at some point."

NOTHING NEW UNDER THE SUN

Locally and nationally, crowd-funding represents a revival of a centuries-old method of supporting the arts, a fact lost on neither Kickstarter nor those who have used it to fund their artwork.

"Mozart, Beethoven, Whitman, Twain and other artists funded works in similar ways -- not just with help from large patrons but by soliciting money from smaller patrons, often called subscribers," reads the "What Is Kickstarter" web page.

Many local musicians have turned to the platform to finance their projects. Last year, Christian artists Sarah Trotter Tullock and Christus Victor, Brit-rock singer Ryan Oyer and singer/songwriter Josh Gilbert paid for albums through Kickstarter campaigns.

During the last three years, Chattanooga blues artist Lon Eldridge successfully funded two albums and a recent European tour, using about $5,600 raised through Kickstarter campaigns. He says he thinks fans, especially non-musicians, enjoy the sense of involvement they get from contributing to the artistic process.

"It's the satisfaction of knowing you helped art to be made, something that wouldn't otherwise be there," he says. "That's their way to support it ... instead of putting their hands around a guitar neck."

The artistic support isn't limited to music. Kickstarter campaigns also have funded multi-disciplinary dance performances, designer fashion lines and coffee table books of photography.

Some Kickstarter artistic projects have even seen success in the mainstream.

In January 2012, "FUBAR: Empire of the Rising Dead," a graphic novel about a zombie outbreak in the Pacific theater of World War II, reached the New York Times Best Selling Graphic Novel list several months after a Kickstarter campaign raised $6,000 to fund its publication.

CRITICISMS

But some Kickstarter campaigns have drawn flak in the past when their originators fail to deliver on the promises of their proposal or when unexpected issues lead to production delays.

The most-successful Kickstarter campaign so far has been for the Pebble smart watch, which raised more than $10 million through a month-long campaign in April 2012. On July 7, the Pebble will be available at Best Buy, but some of the tens of thousands of Kickstarter backers who preordered a watch by pledging to the project say they have yet to receive one, according to an ABC News report that came out this week.

After a similarly successful Kickstarter last year that raised more than $8 million, the Ouya video game console hit retail shelves on June 25 after selling out at outlets such as Target and Amazon. Like the Pebble, however, the Ouya's Kickstarter supporters reported that they didn't receive the units they were promised as early backers, even after the console arrived at brick-and-mortar stores.

Many of those angered by such problem are confusing investing in a project with purchasing a good, says Matt Rogers, the co-owner of Chattanooga's Pure SodaWorks, which last April raised $23,000 through Kickstarter to help pay some of the cost for a custom-built bottling machine.

"People look at it like online shopping and it isn't, which has caused some problems," he says.

Since a proposal only receives funding if it meets a minimum level, Kickstarter campaigners say they often must play a balancing act between requesting the amount they need and the amount they think the public will actually pledge. As a result, Rogers says, the available resources may not account for unexpected issues during production, leading to missed ship dates and other issues.

"I think every single Kickstarter misjudges what they need," he says, laughing. "There's no way of knowing what's going to go wrong, what's going to happen and what's going to go better than expected."

CELEBRITIES NEED NOT APPLY

Although Kickstarter largely has been embraced by small and independent creative types, the service recently has seen high-profile use by celebrities. This trend has been as hotly contested by some people as it is embraced by others.

In March, Rob Thomas, the creator of high school drama "Veronica Mars," announced a Kickstarter campaign to fund production of a movie based on the show, which was cancelled after three seasons. The proposal quickly became one of Kickstarter's most successful, attracting more than 91,000 backers who contributed $5.7 million, almost three times its $2 million goal.

Soon after the success of the "Veronica Mars" campaign, Emmy Award-nominated "Scrubs" star Zach Braff initiated a Kickstarter in April to finance a follow-up to his 2004 film "Garden State." Braff was seeking $2 million as well, but his proposal received $3.1 million in pledges.

Some critics have spoken out against what they see as celebry abuse of an avenue of funding that seems custom-tailored to independent artists. Earlier this year, director/actor Kevin Smith reportedly almost used Kickstarter to finance a third entry in his "Clerks" film series but opted to self-fund after deciding that crowd-funding was inappropriate for someone with his notoriety.

"I'm feeling like that's not fair to real indie filmmakers who need the help," he says, according to an April transcript excerpt on ComicBook.com. "Unlike back when I made 'Clerks' in '91, I've got access to money now, so I should use that money and not suck any loot out of the crowd-funding marketplace that might otherwise go to some first-timer who can really use it."

For his part, Matthew Sims says he doesn't mind celebrities using Kickstarter and contributed to Braff's proposal. By its nature, crowd-funding serves as a direct-line connection between fans and content creators, a relationship that traditional funding makes next to impossible, he says.

"[Celebrities] can pitch to a guy in a suit who only cares about making profits, or [they] can pitch to people who absolutely love what [they] do and the universe that [they're] creating," Sims says. "You don't have to worry about the profits you make for them or about someone pulling funding halfway through the film because their name isn't in the credits."

THE NEW PROVING GROUND

In the business community, Kickstarter has become a way to gauge public interest and viability for nascent ideas.

In addition to mainstream toylines, Mountaintop Toys on Signal Mountain also stocks Goldie Blox, a line of engineering toys designed for girls and funded by a Kickstarter campaign last year. Store co-owner Patrick Holland says he also was impressed with a second Kickstarter-funded product, Storytime Toys Fairytale House Collection, which will be on his shelves by late September.

After seeing these products on display at toy fairs in New York and Nashville, Holland says he was won over by their appeal to a niche audience and the fact that they emerged through the crucible of independent development.

"We're a small toy store, so for us to stand out, we have to take risks to survive," he explains. "We want to be the hip, cool toy store and, to do that, you have to look different places. Kickstarter is a great way to do that."

Following the success of Kickstarter, many other crowd-funding platforms have emerged, including specialized services such as Fundable, which funds small businesses, and Quirky, which finances inventors and tinkerers.

If companies are smart, Holland says, they'll begin treating crowd-sourced platforms the way pro sports franchises treat the farm leagues.

"My gut would say that [crowd funding] will never surpass the way that business is done now, but I do see larger companies paying more attention and using Kickstarter as ... their recruiting method," he says. "If they see that kind of success, to me, I'd be calling them up the next day to say, 'Congratulations. We want you.'"

Contact staff writer Casey Phillips at cphillips@timesfreepress.com or 423-757-6205. Follow him on Twitter at @PhillipsCTFP.

about Casey Phillips...

Casey Phillips has worked as a features reporter in the Life department since May 2007. He writes about entertainment, young adults, technology and people of interest. Casey hails from Knoxville and earned a bachelor of science degree in journalism and a bachelor of arts in German. He previously worked as the features editor for Sidelines at Middle Tennessee State University. Casey received the East Tennessee Society of Professional Journalists Award of Excellence for Reviewing/Criticism in ...

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