I’m an indie making Archmage Rises, an open world RPG mage simulator (it’s like Skyrim meets FTL). I have been asked many times by friends, fans, and devs if I will do a kickstarter.
As a serial entrepreneur I find Kickstarter, or even the concept of crowd funding, fascinating. Strangers can just give me money on the promise of likely getting something in return? Wow! In my past I’ve always had to figure out how to build the good/service first and then collect the money second!
Today I read Gamasutra’s report of a 54k judgement against Asylum Playing Cards for failed kickstarter delivery and 112k judgement against another kickstarter dev for failure. It made me realize something. Something from my past.
Everyone celebrates crowd funding or early access as awesome ways to leap over the traditional barriers between creators and the audience (or more specifically between the creator and the money). The implication is that a creator (say, some young indie dev) KNOWS WHAT TO DO WITH THE MONEY. But what keeps coming up over and over again is THEY OFTEN DON'T. Asylum Playing Cards is just today’s evidence that in bypassing traditional barriers of entry (say publishers, or steam curators), they have missed valuable (life) lessons, and this creates a dangerous experiment where people get money they may lack the knowledge/experience in how to handle.
I liken it to a really great football player skipping high school and college ball (pesky traditional barriers!) and going straight to the NFL. Maybe their talent is so great they can perform well in the big leagues, but it isn't likely. There are pesky reminders of what happens when the money/maturity tips the wrong way. 80% of NFL players are broke within three years of retirement.
I’m not just throwing stones here. See, I have personal experience with this particular problem.
I was a pretty good salesmen at 19. It was the mid 90’s and I managed to get a high ranking job at a web start up. Due to my powers of persuasion I was able to land several big contracts and convince my boss that I could build a team to do the work.
I was 20 years old, had an annual budget of 300k, with about 15 people working under me.
Sanity check: Think of a 20 year old that you know. Maybe they are in their second or third year college.
Are they struggling just to balance tuition, grades, friends, and a love life?
How prepared do you think they are to manage 300k and 15 people?
How prepared was I?
I think about this phase of my life often. In hindsight I lacked the maturity to admit what I couldn't do. I confused thinking I could with knowing I could. I fell into that lie where the way to get ahead is to keep pushing forward and the naiveté that things will just work out. I do think my boss, the owner of the company, bears some responsibility in this. He shouldn't have doled out so much responsibility so quickly to someone so young. He gave me enough rope to hang myself. I don’t bring him up to excuse myself, just to mention how easy it is for any of us to forget the money/maturity scale when you hear a really great pitch.
So what happened? We did some good work. We did some terrible work. We churned through some staff. We had a lot of revenue. But I didn't know anything about managing costs so we didn't make much (or any) money. Based on our experience we landed a large 7 figure multi-year government contract. The owner thought this was a great opportunity to focus all our resources on that client only. That meant getting rid of most of the staff. I remember telling him “I won’t stick around to watch you dismantle everything I’ve built.” I quit. With nothing to go to. Oops!
I heard several years later that government contract ran its course and the company folded. In some sense, I got out scott free. I did a bunch of stuff with other people’s money, then quit.
But this is what I think about: Did I sink the company?
I believe my successes and failures set the course of the company even after I left.
I must admit I learned a ton in that short period [a metric ton, which is 200lbs larger than an imperial ton :-)]. I’m sure these people involved in kickstarter failures learned a lot to. I admit I laugh to myself when I read “cost of setting up the company” in the kickstarter failures. I’ve been in those meetings where we don’t have a cent of revenue but for some reason nailing down the shotgun clauses for the four shareholder agreements seems to be the most important thing in the universe. :-)
It’s been about 20 years since that time, 11 of which I’ve been running my own business (several now). Over those years I have grown revenue from the miniscule to significant. But what’s important is really not where I am at, but how I got there: incrementally.
Small increases (10-20%) year over year over a decade. Each year about 80% of the problems I face I’ve encountered before. Only 20% “I have no freaking clue even how to start!” I believe the winner of a windfall experiences the reverse: 80% unknown and at best 20% familiar territory.
One of my companies has been pursuing a large project (almost 7 figures) with an existing client. We are up against a competitor about 400x our size. It’s been 13 months of careful, methodical salesmanship. Making plans for what we do if we win and if we lose. As I was writing this post (I write pretty slow) an email popped up from the president that we won the job. 5 years ago a project this size would have killed us. Today it makes us very strong; the money definitely strengthens our future.
We all want the overnight success. The kickstarter windfall. We worship those who get it. But maybe getting it isn’t what is best for them. Or best for us. Maybe those traditional barriers to success I/we scorn are actually helpful. They force us to slow down, learn, grow, and prepare for success when it finally comes our way.