Let me put this in the words of
effing "alleged"-kiddie-rapist covering-up a-hole* I mean totally swell and okay guy Mark Diaz Truman, of Magpie Games. If you're wondering the context, I'm 90% sure that these came from the Indie Game Design Network internal mailing list.
TRUMAN:
"When I design a Kickstarter project, I estimate that 30-40% of the money I take in is profit. That's because 80%+ of Magpie's revenue is Kickstarter projects. We can't operate as a business if we have a 10% profit margin. That (as I see it) is the new reality of the industry. We're not in distribution yet. We don't sell enough at cons. We don't have some other source of revenue. Kickstarter is our bread and butter."
At End Transmission Games, we were in distribution. We were AWESOME at selling at cons (we broke even or better, including lodging but not travel, I think every year we were at Origins; on the whole about 50% of our income came from the four conventions we attended a year and the other 50% came from our online sales all year round, which is an insane business model, and we knew it). In spite of being in distribution and mastering selling at cons, we were still hemorrhaging money and losing tens of thousands every year running the business.
The ironic thing is that...idk if any of you are aware of the KS that Magpie was running about that point in time, but they were overfunding so extravagantly that actually, Magpie could EASILY have kept operating as a business on a 10% profit margin with 10% of those numbers, and put the rest of the 30% of THE BACKER'S money into releasing a better product, or more product, or anything but just putting it in their pockets, if they weren't so damn greedy. Well, at least the company is
aptly named (actually, I hate that they called their company that, because I'm an ornitophile and they ruined that bird for me, I just wanted to make the MTG joke).
Here's another Mark Trumanism:
"In addition, giving Kickstarter backers a discount is crazy to me. Why would I give the customers who believe in my product so much that they are giving me money months (or years) before I deliver a product a 30% off discount?"
My answer to this rhetorical question, which I think I might have actually screamed out loud the first time I read this text off of a computer screen was:
"
BECAUSE THEY BELIEVED IN YOUR PRODUCT SO MUCH THEY GAVE YOU MONEY MONTHS (OR
YEARS) BEFORE YOU DELIVER A PRODUCT, YOU MONSTROUSLY UNGRATEFUL EXPLOITATIVE SELFISH (EXPLETIVE starting in c and ending in t DELETED)"
I found this attitude so wrong disgusting and toxic and totally against the spirit of Kickstarter that it made me physically ill as well as furious. It made me so angry that I took it down in writing four or five YEARS ago and have kept it ever since.
Personally, I always did everything I could to award as much extra stuff to our backers as I could because I ACTUALLY WAS GRATEFUL TO MY BACKERS AND WANTED TO REWARD THEM. If I were to reword his repugnant statement to reflect my own personal ethics, it would say:
"In addition, not giving Kickstarter backers a discount is
EVIL to me. Why
WOULDN'T I give the customers
who believe in my product so much that they are giving me money months (or years) before I deliver a product a 30% off discount?"
But his statement makes sense, if you assume all he cares about is making money. And my company failed, and his is, I presume, thriving (I don't bother keeping tabs on old enemies and other bad actors). And frankly...making money is pretty damn important to succeeding in business. So I looked at his attitude on this and I looked at these Kickstarters that Magpie and companies LIKE Magpie ran like clockwork for naughty word ApocalypseWorld clones (not that there's any other kind of ApocalypseWorld clone, but table that for a rainy day discussion) that were consistently raking in six figures and I thought...you know what, no matter how much I HATE it, this is the new reality, Magpie's thriving, we're barely keeping or heads above water, time for a paradigm shift. So I looked at the way they (and companies like them) did their Kickstarters and it was clear even at a glance that their actual goal was only a tiny fraction of what they wanted, needed, and were reliably getting. In other words, for them, revenue meant Kickstarters massively overfunding. And I saw how they did that, too, or at least I thought they did. Key parts of the game--character classes, I think *World calls them Playbooks?--were cut out of it to make Stretch Goals. "Just $15,000 more dollars to unlock the whatever playbook" ... when their "goal" was $5,000. Basically, just like when a videogame developer takes out core content from a game to sell it as DLC.
So, I compromised my ethics and I tried to do it their way, which was clearly working, at least for them. We spent more than $5,000 promoting a Kickstarter with a goal of $5,000. Which again seems insane but you gotta understand at that point in the time, jokers to the left me, clowns to the right
were making it work like clockwork and there I was stuck in the middle with poo. BTW if you don't feel like clicking that link, Bluebeard's Bride made $129,820 from a 5,000 goal.
Clearly, spending enough on your KS campaign to make it look like a million bucks was not the recipe for overfunding to the tune of 2596% of the original goal. What I had failed to consider was how horny RPG consumers were for crappy *World games that signalled progressive virtues obnoxiously and loudly, and how little interest they had in anything even slightly new, different or original.
My campaign--the one I spared no expense to
make look like a million bucks and tried to apply Truman's gross business model to--received $8,600 in funding well exceeding its $5,000 goal, and was a miserable failure fiscally and a net loss. By midway through it seemed like we wouldn't "even" clear $10,000, and I think that's the point where I became desperate enough to do "break" this not-yet-extant rule, or instructed one of my employees/freelancers to do it for me.
You really need to think about the mindset one would have to be in to be
CRUSHED AND DEVASTATED by asking strangers for $5,000 and them giving you $8,600. Really think about the utter insanity in that: you asked strangers for $5,000 to make a game, they gave you almost twice that, and you wind up bemoaning how you didn't "even" overfund by 1000%.
* I searched and searched the forums for a rule against personal attacks. I could not find one. Whatever I might have said in the past about my utter disdain for rules and regulations generally being equal to that of Mr. Rick Sanchez as seen on my avatar, I intend to follow the rules here because I like and respect this place.