Kickstarter: Crowdfunding Platform Or Reality Show?

From Fast Company:

It’s QVC for the web generation, the new Thunderdome, Off Track Betting for ideas addicts. Whatever you call it, Kickstarter’s becoming less about funding widgets than pouring gas on creative sparks just to watch them ignite.

You’ve probably heard about the latest Kickstarter darling, OUYA: “a new kind of video game console” that connects to your HDTV like an XBox but allows anyone to publish games like the Android Marketplace. The company behind the device raised their $1 million target in eight hours, and have reached $5 million with more than three weeks left in their campaign. Proponents of Kickstarter’s populist commercialism see OUYA as an unmitigated success.

The notion of “success” for a Kickstarter project has evolved. According to Kickstarter’s stats, 44% of projects succeed–but “success” in this case refers to reaching their funding goals, not completing the proposed work or thriving in the marketplace. Only 25% of 471 projects in a sample taken from Kickstarter’s technology and design categories were delivered on time, according to research conducted by website entrepreneur Jeanne Pi and Wharton professor Ethan Mollick. (Kickstarter doesn’t yet track this statistic itself.) And even after an eight month delay only 75% of successful projects deliver at all according to the sample study. That’s just delivery, never mind viability–a matter some industry critics have found unconvincing in the case of OUYA. As games industry critic Ben Kuchera put it, OUYA is “selling a dream, not a solution.”

Kuchera is right, but for the wrong reasons. Kickstarters are dreams, and that’s their strength rather than their weakness. People back projects on Kickstarter to fund the development of a new creative work or a consumer product that might never see the light of day via traditional financing. But what if Kickstarter is more about the experience of kickstarting than it is about the finished products? When you fund something like OUYA, you’re not pre-ordering a new console that will be made and marketed, you’re buying a ticket on the ride, reserving a front-row seat to the process and endorsing an idea. It’s a Like button attached to your wallet.

The fact that OUYA raised so much money so fast speaks more to our fantasies than the market reality. Whether or not OUYA will disrupt the console business is beside the point–no one could predict such a thing anyhow–the pleasure we get from imagining that possibility is highly valuable.

Continue reading the rest of the story on Fast Company