A few days ago I had started to write a piece speculating as to whether we’d reached Peak Kickstarter – the argument being that we’d probably reached a point where the fact that a new product is being funded by crowdsourced donations is no longer interesting. I should know – as a tech writer I get press releases nearly every day announcing a new product, with a weird name, that doesn’t exist yet… nor does any signs of a viable company… but they’ve just launched a crowdfunding drive so want attention.
My speculation was going to be that we’ve reached a point of Kickstarter fatigue. Early successes for the format – like, for example, the Pebble smartwatch – is partially due to the product being a cool idea, but partly because when it was one of the first. Wow – a cool new thing that you can help make exist! Awesome!
But now everything is Kickstarted, are you really inclined to fork over your cash, unless the product is really special? It’s a bit like charity fatigue – whilst everyone likes to think they support good causes, if you were asked to sponsor someone or put some cash in a bucket every single day, you may eventually be inclined not to.
And this brings me on to the Oculus Rift. Like the Pebble, it has proved wildly successful at raising money. They only asked for $250,000 but ended up raising nearly ten times that amount. The Rift again seems to hit that sweet-spot of being a slightly quirky, bleeding edge piece of technology that whets our nerdy appetites.
So it’s no wonder people starting throwing money at them. The pledgers got different rewards depending on how much they donated: a minimum of $300 netting you an actual prototype Oculus Rift. This said – many backers – nearly 2000 pledged less which got them either nothing, or a meaningless token like a t-shirt.
So it must be pretty frustrating to have handed over your cash, not getting a toy, and then watching the founders of the company walking away with $2billion.
With normal companies like this, the way it would work is that Oculus would raise money from investors in exchange for equity – a share of the profits. So if the business is wildly successful, everyone who took the risk and gambled their cash in the beginning would get a share of the rewards. Sadly for Oculus backers, this is not the case.
I’m wondering if this move could act as a wake-up call to harsh truth: ultimately, Kickstarters aren’t a fuzzy community project that we can all feel nice about supporting, but is just another way of doing business. Perhaps the best thing to do is to approach them like my friend Tracy suggested last night when reacting to the news: that Kickstarters should be treated not as an investment, but as a pre-order. You’ll get your gadget a year or so down the line – but don’t expect anything greater.