Kickstarter website is a scam!

I checked out a website called Kickstarter. The entire premise implied by this site seems quite bogus to me. They claim to be a website that attracts funding to help people with creative projects. They claim the site is meant to help artists, writers, designers (of all kinds!), filmmakers, musicians, journalists, athletes, adventurers, inventors, bloggers, illustrators, explorers, curators, promoters, performers, and others.

The idea is that a person wants to do something (make a movie, produce a music cd, publish a book… whatever. You come up with a project plan to attract donations, funding, pledges. You provide rewards to contributors based on how much they pledge. Lets say you want to create a line of products (calendars, t-shirts, bumper stickers) for a specific theme (nature, politics…). What you do is offer rewards to people who contribute to your project. Maybe they give $10, and you reward with a bumper sticker, $25 and they get the t-shirt… and so on.

Nice idea right? Sure, if they actually had an environment that provided an audience of potential donors…. but they don’t. Absolutely no where on their website do they say “bring your own donors”, but that is exactly what they will tell you to do. They want you to have a healthy size list of contacts. This includes social networking sites like facebook, friendster, myspace, message forums… you get the idea. Then…. they want you to encourage dozens or even hundreds of your contacts to join kickstarter to view, and (you guessed it) fund your project.

What do they provide you ask? They will accept your pledges (through Amazon’s payment system), but they will not charge anyone until you reach your goal amount. If you don’t reach your goal, no one gets charged. If you DO reach your goal (or exceed it), everyone’s pledge is processed on Amazon, and THEN…

Kickstarter takes 5% of all donations as a fee on successful projects! Amazon, which processes Kickstarter donations, also charges up to five percent.

If you raise $5000, Kickstarter gets $250…   $10,000, they get $500…     That doesn’t even count what Amazon will charge for processing the payment.

My question is, what did they do to deserve that fee? Nothing! You join the site, you plan and organize your own project, you create a reward system for donors, you bring your own donors, and if you beg enough of your own contacts for money to reach your goal, kickstarter will take 5% of it plus what you lose in processing fees to Amazon.

So… I bet you are wondering… “couldn’t I just have my contacts, friends, and family write me checks, or use a free basic paypal account (without fees) to collect money for my wonderful project?” Yes you could! You could even promise the same rewards & gifts to people.

So what does kickstarter actually provide? They offer a website for you to show off your idea to everyone you already know, with video or pictures. You could accomplish the exact same thing with a blog, and a basic paypal account. If some of your contacts are local to you, they could just hand you checks.

Are the 5-10% in fees worth it? Only if you are really lazy, which doesn’t make sense if you have a great idea, plan, or project in mind. That in itself takes a lot of effort, so do the work and collect the money yourself.

So I say again, what do they really offer? Nothing!

You do all the work, you bring all the people, they collect all the money and they keep some of it. That is what Kickstarter is all about.

What the internet needs is a site similar to this, but marketed better to truly attract random and anonymous donors to well thought out projects that offer decent rewards to contributors. This would work for anyone, including non-profits. All that would be needed is basic verification of projects seeking larger donation goals. A little fraud prevention, and some simple follow up (to make sure people get their rewards), and THEN I could see charging a small fee for the service.

So… before you get excited about kickstarter, or any site like it… if it sounds too good to be true, it probably is. Be optimistic, but be careful too. Trust but verify!

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