Episode 98 - Funded By The Crowd
Published August 21, 2014
There's a revolution in how new and innovative ideas are funded. It's also reshaping charity and other big civic projects. Rather than a directing agency, it relies on the "wisdom of the crowd". We're big fans of this CROWD-FUNDING. It's already reshaping the relationship between fans and creators. The chance to become a part of making the creative works that we love become reality is just too good to pass up. On this episode, we talk about some of those projects specifically. Recorded 8/18/2014.
You can download the episode here.
Mike & Matt's Recommended Reading:
Wikipedia article on Crowdfunding
GoFundMe, a personal fundraising site
Kickstarter, one of the biggest crowdfunding sites
Wikipedia article on Kickstarter
IndieGoGo, an international crowdfunding site started in 2008
Wikipedia article on IndieGoGo
Trying To Rebuild A Company With Crowdfunding: Nooka, by Karsten Strauss (Forbes, 8/13/2014)
Star Citizen's crowdfunding total shoots past $50 million, by Phil Savage (PC Gamer, 8/18/2014)
Internet of Bling: Samsung Buys SmartThings for $200 Million, by Kara Swisher (ReCode.Net, 8/14/2014)
Oculus VR, the company
Oculus Rift: Step Into The Game, the crowdfunding success story
Oculus Acquisition is a Rude Awakening For Kickstarter Backers, by Jack Smith IV (BetaBeat, 3/26/2014)
Ouya, the company
Ouya: A New Kind of Video Game Console, also a crowdfunding story
Ouya's best-selling game has sold 7,000 copies, by Ben Parfitt (MCV, 4/29/2014)
RISE, a short film about a robot uprising
Robotech Academy, continuing a classic 80s animated TV series
Of By For, a documentary about political representation
Future Of Money TV Series, which still hasn't come out with any episodes
Mike Johnston: Welcome to another episode of Robot Overlordz, episode number 98. On the show, we take a look at how society is changing, everything from pop culture reviews to political commentary, technology trends to social norms, all in under 30 minutes every Tuesday and Thursday. I'm Mike Johnston.
Matt Bolton: And I'm Matt Bolton.
MJ: Tonight, we wanted to talk a little bit about crowdfunding, and crowdfunding, if you don't know, according to Wikipedia is the practice of funding a project or venture by raising monetary contributions from a large number of people via the internet, and one of the first sites to do that was a site called Artist Share, which started in 2003. Now, it tends to be more sites like Kickstarter or IndieGoGo. There's a whole slew of them, actually, but Matt, since I think you and I were talking about this, this was actually your idea originally to talk about. Do you have a particular favorite crowdfunding site that you like?
MB: I go through Kickstarter quite a bit, and IndieGoGo. I have a friend who was hit by the tornado in Washington, Illinois. Her sister used GoFundMe, which is another site for helping people out, and they were able to raise so much money just from her friends on Facebook and things to help her out that she was able to take some of the money that was donated to her and give it to some of her neighbors to help them out.
MJ: Oh, nice. Yeah, I funded a couple of Kickstarter projects. I think, obviously, we'll probably mention a couple of them, but, you know, I sent you those links, so I, personally, as a fan, I'm somewhat obsessed with this idea of crowdfunding. I really like it because I think it disconnects the people that are the traditional money men that decide what can and can't go, and as a fan, I've always been frustrated that the stuff they decide that goes, half the time, it's stuff that I hate, I mean, a la reality TV, and all the things that I do like, they seem to very quickly cancel in the entertainment sphere. So, there's a lot of entertainment stuff in general on Kickstarter. I think the couple that I funded - actually, one of mine just cleared. It was a short film about a robot uprising called Rise that I thought looked pretty cool. But, I think they have a really interesting, Kickstarter has a really interesting model for allowing fans to contribute back to things.
MB: I totally agree. It's, like you said, you're cutting out, there's probably one studio had, or one or two people who made these decisions, and now, instead of that, you're cutting them out and you're taking your idea straight to the fans, and it's, if the fans like it and it's a good idea, you're gonna get funded because people wanna see it. You know, I don't know how many ideas were out there for things that we would've liked to have seen but that just got pushed under the rug because there's one or two people who just decided that there wouldn't be enough of an audience to fund something like that, and now, you're taking this right to the audience. You know, you can do it on a smaller scale. I think this is awesome for documentaries and things like that, where people are, you know, maybe there's some small project you wanna know more about, some guy's gonna do a Kickstarter on it, and you can go fund, you know, for $10 or $15. Maybe you get a DVD or a Blu-Ray of the thing when it's done, but you're also supporting some guy's dream of making a movie or a video game or whatever it is, and you're getting something in return because you're getting to see the completed project. So, I think it's just, it's an awesome idea, and I think it's, you know, I wish it had been out - you kinda wonder what movies or shows or whatever we could've seen, you know, ten years ago, if this had been around.
MJ: Oh, definitely, definitely. Actually, it's funny you bring up documentaries because one of the projects that I funded was a documentary about the, I guess, lack of representation by the folks in our government, and it was called Of, By, For. It was about politics, but they had people from all different sides across the country just voicing their frustration, and it was amazing to watch. You know, I got a Blu-Ray of it. I tend to look for the tiers that offer Blu-Rays, just because, you know, that gives me physical media, which we've talked about before, but, you know, it gives me something that I can rip myself. And I don't share this stuff with, you know, the open internet or anything. I just rip it for myself so that I have a copy that I can watch off my, at, well, in my case, the Apple TV, but that's just because that's where I've concentrated all my media. I think a lot of those independent projects, they don't put some of the DRM and crap, they don't play the games that the major studios do, and I certainly appreciate that as a fan.
MB: Yeah, no, I agree with you. Half the time, you're only funding one person, or one or two people, so that you're getting the very basics, but you're getting a passion project. It's not just somebody throwing money around, and a whole team of people. You're getting somebody who's gotten to the point where, hey, I really, really wanna make this project. I'm gonna make it happen, and you're basically just getting advance payments from the fans, from the people who are gonna go see this anyhow, so I think it's a win-win for everybody.
MJ: Well, and nowadays, it's started, those projects are starting to attract some bigger-name talent. I mean, one of the projects that I was reading up on when we were kinda researching this topic a little bit was a film that, a short film, I think it was - I don't remember if it was German or not - but, anyway, a short film that they actually got one of the actors from 2001 to be in, and it's not 2001, by the way, but it is a science fiction film, it's a short film, and the fact that they were able to, you know, kind of afford an actor that had been in a major movie, obviously your mileage may vary for 2001, but it's generally regarded as a classic, and, you know, as science fiction films go, it's definitely a thought-provoker, and to be able to have a crowdfunded project that is in that league, I think that just speaks to kind of the level that these projects are functioning at.
MB: And we're starting to see some projects that are really, really taking off. I mean, you know, you go back to the Oculus Rift, which was a crowdfunded thing to begin with, and now there's this Star Citizen crowdfunded video game, which has eclipsed $50 million in donations. So, some of these things are getting huge. There was another article that I read through about a company called Nooka that makes, they make weird watches, basically. They've been around for a while, and they just, they needed money to get some newer products and things, so there are companies now that are established companies that are using this crowdfunding to bring out new devices, or update old devices, or whatever. So, I think it's, there's really no limit. You're basically just cutting out the bank or the middle man, but there's really no limit on the things that you can do.
MJ: Well, and you bring up Oculus. You know, I think there was some backlash in the community, and I think there still is, that people feel negatively about Facebook buying them, but on the other hand, and we talked about this a little bit when we talked about Oculus, you know, I mean, obviously, that's a lot of money for them to be able to play with that just jacks up the level that they're able to put out. But, you also have a company like Smart Things, which Samsung just bought for $200 million. You know, I mean, that's a smart home controllers company, and that's another one that got its start on Kickstarter. These are becoming viable companies. These are viable ways to launch things and, you know, I've seen a couple other articles about that accountability, maybe, to the community that supported you, particularly around the Oculus thing, because so many people felt just so betrayed when they sold out to Facebook. I think it is a fine line. We're still, because crowdfunding is still so new, there's bound to be a couple rough spots, but you know, I think as it's gone along, I hesitate to endorse Facebook because I really don't feel that great about them, but at the same time, I'm so excited for the Oculus. I mean, everything I read about it, you know, and there are a number of other projects sort of around the Oculus that have been on Kickstarter that I think are really just gonna heat up, particularly the gaming space. You know, I mean, in terms of, like omnidirectional treadmills, or haptic gloves, just all kinds of control interfaces. Things like thought controlled devices that people are coming up with, and that they're going to crowdfunding to kick off those companies.
MB: Well, the other thing that I, when you were talking about Oculus, you have to wonder, had it not been for Kickstarter, would Oculus even be, would it even exist, because if that guy hadn't been able to crowdfund it, would a bank, or would - I mean, obviously, he couldn't have gone into Facebook and begged them for money. They never would have given it to him, and, you know, I'm not even sure a bank or anybody else would've given him any money, and especially not the amount of money he got through Kickstarter, which in turn led to the sale to Facebook. You know, I'm not thrilled about Facebook buying Oculus either, but I think it infused them with enough cash that they should be able to come out with a really cool product in the long run. My big fear is after the really cool product comes out, how is Facebook gonna screw around with it, but in the meantime, I think it's, so far, it seems like it's been a good thing, but time will obviously tell.
MJ: Yeah. Yeah. It doesn't always work out, though, for crowdfunding. I mean, one of the projects that I went to contribute to was, there was a cartoon that I watched when I was a kid, about probably 7 or 8, and it was on really early in the mornings on channel 50 in Chicago. At the time, it was still channel 60, even. Robotech was the name of the cartoon, and it was three Japanese series that an American company had bought the rights up to. They had three different series, and they decided to make it all into one series, because with that, they hit the number of episodes you needed for syndication, so they created this epic Robotech. I always loved it. It became this alternative universe to the original Japanese version. There was a Kickstarter to bring it back, basically. One of the guys who had been involved in it had died, but he left behind a ton of notes for a new project, and at various times, you know, the entertainment studios that own this have tried to bring it back and it's never taken off. But, they launched a Kickstarter, and this sounded like it really had possibilities. So, you know, I contributed to it. It was going along, it was making a decent amount in contributions, but it was starting to look like it wouldn't make it, and it got to be just under a week from the deadline and they cancelled it. I think I mentioned this to you at lunch the other day, you know, I was really upset with them that they didn't go the distance, you know, because who knows what would've happened? They might have made it. And yet, they just kinda called it quits before they crossed - even got near the finish line. And, admittedly, they might not have made it, because they were off by quite a bit, but, you know, a lot of times, well, at least some of the time, there'll be a huge influx. I mean, I remember, you know, we've talked before about Larry Lessig's Mayday PAC, super PAC. When they were trying to raise the $5 million for the second round, it looked really like they weren't gonna make it. I mean, they, going into the last week, they were at like a million and a half dollars, and they were trying to raise $5 million. So, it's like, yeah, they're not gonna make it. And I had given, actually, to that round twice, myself, so I was starting to get a little depressed, and all of a sudden, they did a really hardcore press to get this funded, and it crossed the finish line, actually a couple hours, I think it was at least eight hours before the deadline. They got over $5 million, but it was all within that last week practically. I mean, I would say easily 60% of it was that last week. And so, I was really disappointed in the Robotech Kickstarter that they didn't go the distance.
MB: Yeah. I think that's the one thing you have to, that people have to be, when they are deciding to send money to these Kickstarters is, there have been some that have been funded too, where the product just never comes out because, you know, they run out of the money that they got from Kickstarter, or the product comes out and it's way crappier than what you were told, and I know there's a couple of video games that have come out that have been so awful, and not anywhere near what they were supposed to, what they had basically advertised. And there's no refunds at that point, so, you know, you have to, it's definitely one of those things where you have to do your due diligence and make sure that whatever you're giving to is gonna be something decent, or don't give so much money that you get yourself broke from trying to fund something, and then it comes out and it's garbage. I know the video game console, the Ouya, was at the time the biggest crowdfunded thing ever, and they finally, they released it, and they released it and it did basically everything they said it would do. The problem is, nobody's ever really developed any software or anything for it. I read an article not too long ago that their biggest selling piece of software for the Ouya has sold 1,300 copies, so -
MB: - so, you know, all these people were basically sending in $100, and they were crowd... for Kickstarter, and in return they were getting a system, once it was funded. And they all got their systems and everything. It was just, now the system has kind of failed, so you're basically stuck with this $100 paperweight.
MJ: Yeah. Well, I think it is important to treat it like it's a gift, really. It's a charity donation that may pay off. You know, one of the projects that I gave to was, it was billed as a TV series, but really, it's a web video podcast, basically, on the future of money. I was excited about that one because one of the sci-fi authors that I like had pitched it. That's how I found out about it, and it, you know, it seemed on the up and up. I can't say it's not on the up and up, but at the same time, they haven't really ever put out any episodes yet, and, you know, the Kickstarter is still issuing updates that they've shot all kinds of footage, but nothing has come out yet, and it's been, I mean, I think that one funded - I'd have to look to be sure, but I think it funded last fall, even, and it's still not out at all. So, you know, I mean, I think the topic is really interesting and really neat, and I kinda wanted to see it, so I'm a little disappointed in that one. But, you know, most of the short films and things like that that I've funded, they've been very good at putting something out, and like I said, I tend to look for the Blu-Ray, so that I actually get something that I actually have, that I can rip myself, and I really don't need to rely on downloading, or, you know, if they have a good host, or any of the things that can go wrong there. But like you said, I think you just, it's something to be aware of, that it's not like buying products at the store. But, at the same time, it gives you a lot different relationship with the creators than being a consumer in a store does.
MB: Yeah. I think that's probably the coolest thing, is you're, like I said, you're going straight to the creator of whatever it is, and yeah, you're right, it gives you a different relationship, and I think it's kinda cool that way. It keeps you more invested, almost, so you're gonna check back. You know, maybe they do need more money, or whatever, but, you know, it keeps you more involved in what they're doing, and I think that's kinda cool.
MJ: Yeah. One of my favorite creators, the guy who created Babylon 5, just recently kind of sounded off on crowdfunding, that he thinks that the fan community, particularly sci-fi and fantasy fans are one of the most taken-advantage of communities, so he was not going to go the crowdfunding route, and I gotta admit, as a fan, I was a little annoyed at him with his pitch on that, because it seems like he just doesn't really wanna be accountable to the fans particularly. He seems to somewhat have this attitude that, you know, the author or the creator just needs to do his thing, and, you know, I don't disagree with that. I mean, we've talked about some of that with George R. R. Martin and Game Of Thrones, but at the same time, I think it does need to be somewhat a two-way street, and even just putting your material out there, you have some responsibility to your fan community, and I think crowdfunding, where it fits, it makes that a little bit more of an overt relationship. It kind of gives you some of those channels to communicate back with the creators and, to be honest, I'm a little disappointed when the creators I like don't go that route because, you know, to me, they're saying, 'yeah, I don't really wanna hear from you guys, you silly internet people. I'm just gonna go and continue to do my art and kiss up to the studio people'. Really, of the two - I mean, I think you alluded to this with things that might've been killed by the studios - you know, I think the fans are a lot nicer, so, you know, that, to me, is like, it's just backwards, so, okay.
MB: This is our 98th episode. Starting with our next episode, we are going to start having some really cool guests on, and you're gonna definitely wanna tune in. We're gonna have guests for a lot of our upcoming, probably ten episodes or more. So, definitely you wanna tune in, get some really cool people coming up. I think you'll learn a lot, I know I learned a lot, I think you did, too, Mike.
MB: Yeah, so definitely gonna wanna tune in for those.
MJ: Thanks everyone for listening.