risks and failures in crowdfundings

case study 1

Many people seem to treat Kickstarter pledges as a kind of advanced preorder system, a way to register intent to purchase an intriguing project when it's still in the incredibly early stages of development. But investing in a Kickstarter project is really more like buying into a crazy dream that might not actually come true. That risk was highlighted this week with the unraveling of the development for Kickstarted multiplayer horror game Haunts.

Over 1,200 backers helped Rick Dakan and the development team at Mob Rule Games raise nearly $29,000 through Kickstarter this summer, enough to help recoup some of the $42,500 already invested to that point. But that money apparently wasn't enough to get Haunts across the finish line. As Dakan notes in a detailed Kickstarter update, the two main programmers on the game have been forced to move on to full-time jobs and will have minimal free time to devote to the final debugging and polish needed to get the game from its current threadbare version to a releasable state. Coding the game in the relatively obscure Go programming language means there's a limited pool of new programmers who could be brought in for that final push as well.

"This has been an emotionally rough couple of months for me, as I’ve invested almost all of my time for the past year or more in Haunts, along with my own money and reputation," Dakan writes. "It’s been terrible to watch it fail despite best efforts, but the failure is mine."

Dakan says he's still determined to get Haunts released in some form and is in talks with former colleagues at publisher Blue Mammoth Games, which might scoop up the game and finish development. Though the Kickstarter money the team raised has long been spent, Dakan says he'll personally offer out-of-pocket refunds to any backers who want to reconsider their support at this stage, and he'll give up any future revenue from the game to the publisher that eventually releases it.

Kickstarter, for its part, makes it clear in its FAQ that it doesn't guarantee the success of the projects it lists and can't directly offer refunds to backers of funded projects that are never completed. That said, the Kickstarter terms of use do put project creators under a legal obligation to deliver on their fundraising promises, and backers can theoretically sue.

Legal requirement or not, Haunts is the first in what's likely to be a wave of Kickstarter-funded games that simply fall apart before they become viable products (many non-game Kickstarters have already faced similar post-funding meltdowns). Much bigger games with much more traditional funding methods are delayed and cancelled all the time, sometimes publicly and sometimes quietly behind the closed doors of a developer. Getting money directly from potential players, and keeping them involved and updated in the development process, doesn't change the basic risks and uncertainties of the development process, as Haunts aptly demonstrates.

Projects with much bigger funding hauls than Haunts aren't any less likely to fail, either. Just because games like Double Fine's Adventure Game Kickstarter or Obsidian's Project Eternity have millions of crowdfunding dollars behind them, there's no guarantee that they will actually come out on schedule (or that they will be any good if they do).

Of course, the added press attention and big-name development teams for these massive projects do increase the pressure for the developers to make good on their promises. As Kickstarter notes in its FAQ, "launching a Kickstarter is a very public act, and creators put their reputations at risk when they do." But as Double Fine's Tim Schafer admitted up front in his project's first Kickstarter video, "either the game will be great or it will be a spectacular failure caught on camera for everyone to see. Either way you win."

If and when one of these massive Kickstarter games does become such a spectacular failure, the bloom may come off the rose for Kickstarter as a popular game-funding mechanism. Any really high-profile disaster is likely to make backers a lot more gun-shy about throwing their money at a project, no matter how safe and surefire it seems. In other words, people might stop seeing the service as a fashionable preorder boutique and more as what it is: an inherently risky investment in a still unproven idea.

2013-4-23 20:27:49

Posted by DoctorZ | 阅读全文 | 回复(2) | 引用通告 | 编辑

Re:risks and failures in crowdfundings

There's no question Kickstarter does a lot of good. Just last month, the world's largest and most popular crowdfunder released their "Yay Us!" statistics for 2012. In the package they revealed that they successfully funded 18,109 projects with $319,786,629 from 2, 241,475 people this year.

They also, among other things, pointed out that 10% of the films at Sundance are Kickstarter funded, a Kickstarter backed film won an Oscar, Kickstarter is taught at Stanford, Kickstarter projects have topped the Amazon charts and The New York Times Bestseller List, Kickstarter funded operas have premiered at The Kennedy Center and Publisher's Weekly calls Kickstarter the number two publisher of graphic novels in the world.

But now, The Ontario Securities Commission is seeking input from the public regarding crowdfunding over concerns that sites like Kickstarter pose too much of a financial risk to investors. Others are raising questions about failed campaigns and the fact that some backers are treating incentive rewards as if they are guaranteed pre-orders.So, just in case you've been living under a rock for the past year or so, let's review: Kickstarter, and other crowdfunding websites such as Indiegogo and Gofundme, allow anyone to essentially put their money where their mouth is and financially back those artistic projects that they want to see get made. As an incentive to donate, project organizers provide backers with rewards that get more elaborate the more money they donate. When, and if, a project is successfully funded, the backers receive the particular reward that corresponds with their pledge level.

Failure is Hard to Find

However, for all the projects they fund and all the good that they do, Kickstarter makes it extremely hard to find failed projects unless you're looking for a specific project through their search page. From a business perspective, this makes a lot of sense. Kickstarter makes a 5% commission on every successful project and no one can donate to a failed project. Plus, it looks bad when you're trying to convince the world that anyone can fund anything through crowdfunding and you point out that 56% of Kickstarter projects don't meet their funding goals.

Still, learning everything you can about Kickstarter, from both sides, is becoming increasingly important -- both for entrepreneurs that see it as an increasingly viable funding source and the U.S. and Canadian governments who have paved the way (some provinces, like Ontario, are considering doing so) for exempting crowdfunded securities from registering with their respective Securities Commissions. (See The U.S. JOBS Act)

Kickstarter didn't even publicize it's failure rate itself, until articles started appearing in the summer of last year with their own statistics comparing Kickstarter's successes and failures and pointing out that Kickstarter did not index failed projects on their discovery pages and that these failed projects didn't show up on Google.

The Facts of Failure

Statistics uncovered by Jeanne Pi of AppsBlogger , as of June 23, 2012, revealed the following:

Although 44% of Kickstarter projects are successfully funded, nine out of 10 failed projects didn't even reach 30% of their funding goal.
97% of failed projects didn't even reach 50% of their funding goal.
One out of four successful projects only raise 3% or less over their funding goal.
Two out of four raised only 10% over their funding goal.
A project's chance of not just succeeding, but doubling their funding goal is less than 5%.
Failed projects receive an average of $900 versus $7,825 for successful projects.
There are overacheivers. Large projects of over $10,000 in gaming, hardware, software and product design have received ten times their goal by the end of the campaign.
The Secrets of Success

Pi and her research partner, Professor Ethan Mollick of the Wharton School at the University of Pennsylvania, also discovered what makes a project most successful. Something those considering funding future projects through the crowdfunding model should pay close attention to.

A shorter campagain slightly increases your chance of success. An average $10,000 project at 30-days in length, has a 35% chance of success, while a 60-day project has a 29% chance of success with the same funding goal.
Increased goal size is negatively associated with success, so choose a realistic funding goal that will allow you to complete your project.
You can actually predict your odds of success based on how much money you've raised so far. The example given by Mollick and Pi is, if your funding goal is $100K or more, your odds at 60% funds raised are 78% that it will be successful.
Popularity matters. For every magnitude increase in Facebook friends, your chances of project success also greatly increase. For example, For a $10,000 project, holding the duration constant at 30 days, if you had 10 Facebook friends, you would only have a 9% chance of succeeding. If you had 100 Facebook friends, your chance jumps to 20%. Then, if you have 1,000 Facebook friends, your chance of succeeding is now 40%.
Those Kickstarter campaigns featuring videos, featured by Kickstarter, or exhibiting many signals of quality and professionalism (length of pitch, number of videos, number of photos, etc.) have a greater chance of success.
Do everything you can to be featured by Kickstarter. Projects that are featured have an 89% chance of being successful, compared to 30% without.
Campaigns with videos have a 37% success rate, compared to a 15% without one.
Set your project to 30 days instead of 60 days.

Delivery Delays Daily

Perhaps the most alarming statistic that Pi and Mollick uncovered is that even if you back a Kickstarer project, you do so without any guarantee you will actually receive your perk or reward by the listed estimated delivery date, even if the project is successful. Shockingly the two researchers found that only 25% of successful Kickstarter projects deliver the project on time. After an eight month delay, then 75% of projects will have been delivered.

If you are as scared as we were by those stats, perhaps this tip based on what Pi and Mollick discovered next will make your next bid to get in on the groundfloor of a Kickstarter project more cautious.

The larger the project, the more likely it will be delayed and the longer it will be delayed. Also, the more a project is over funded, the more likely there will be project and reward delays and the higher the amount of money over the inital funding goal, the longer it will be delayed. Projects that have reached a funding amount that's ten times above their goal are half as likely to deliver the project on time.

What You Can Learn from All This

Now that the JOBS Act has made equity-based crowdfunding legal and exempt from registration with the Securities and Exchange Commission and the Ontario Securities Commission is considering it, the risks of an unfunded project are even more risky, especially when you take these stats from its Kickstarter icousin into account. As a consequence, SEC and OSC will have to adjust their rules so it can still hold businesses accountable to their investors in the event that they fail to reach their goal.

Sherwood Neiss, one of the architects of the equity-based crowdfunding model, says that these businesses will have to be legally obligated to their shareholders and not working towards their promised goal could have legal ramifications. They will have to update their investors on how close or how far away they are from acheiving their goal. Obviously, this will help disuade fraud from happening, but it still does nothing to address businesses that legitimately don't meet their goal and what happens to the investors money. A system needs to be in place that balances the model with proper investor protections.

As for Kickstarter itself, just know that your project will either barely make its goal, or fail spectacularly. There is never any happy medium -- end of discussion. Whether your project succeeds or fails depends on the following three things:

The quality of your project.
The size of your social network.
The magnitude of your marketing.
Keep these in mind the next time you consider funding a project through Kickstarter and the next time you want to back a project, keep in mind the duration of the campaign and the size of the funding goal and the bigger it is, be prepared for delays. The rest is all at your own risk and don't forget, they don't get your money if the project fails.


2013-4-23 20:40:40

Posted by doctorzhang | 个人主页 | 引用 | 返回 | 删除 | 回复

Re:risks and failures in crowdfundings

Go programming language

Go aims to provide the efficiency of a statically typed compiled language with the ease of programming of a dynamic language.[9] Other goals include:

Safety: Type-safe and memory-safe.
Intuitive concurrency by providing "goroutines" and channels to communicate between them.
Efficient garbage collection "with low enough overhead and no significant latency".[10]
High-speed compilation.
[edit] DescriptionThe syntax of Go is broadly similar to that of C: blocks of code are surrounded with curly braces; common control flow structures include for, switch, and if. Unlike C, line-ending semicolons are optional, variable declarations are written differently and are usually optional, type conversions must be made explicitly, and new go and select control keywords have been introduced to support concurrent programming. New built-in types include maps, array slices, and channels for inter-thread communication.

Go is designed for exceptionally fast compiling times, even on modest hardware.[11] The language requires garbage collection. Certain concurrency-related structural conventions of Go (channels and alternative channel inputs) are borrowed from Tony Hoare's CSP. Unlike previous concurrent programming languages such as occam or Limbo, Go does not provide any built-in notion of safe or verifiable concurrency.[12]

Of features found in C++ or Java, Go does not include type inheritance, generic programming, assertions, method overloading, or pointer arithmetic.[2] Of these, the Go authors express an openness to generic programming, explicitly argue against assertions and pointer arithmetic, while defending the choice to omit type inheritance as giving a more useful language, encouraging heavy use of interfaces instead.[2] Initially, the language did not include exception handling, but in March 2010 a mechanism known as panic/recover was implemented to handle exceptional errors while avoiding some of the problems the Go authors find with exceptions.[13][14]

[edit] Type systemGo allows a programmer to write functions that can operate on inputs of arbitrary type, provided that the type implements the functions defined by a given interface.

Unlike Java, the interfaces a type supports do not need to be specified at the point at which the type is defined, and Go interfaces do not participate in a type hierarchy. A Go interface is best described as a set of methods, each identified by a name and signature. A type is considered to implement an interface if all the required methods have been defined for that type. An interface can be declared to "embed" other interfaces, meaning the declared interface includes the methods defined in the other interfaces.[12]

Unlike Java, the in-memory representation of an object does not contain a pointer to a virtual method table. Instead a value of interface type is implemented as a pair of a pointer to the object, and a pointer to a dictionary containing implementations of the interface methods for that type.[15]

Consider the following example:

type Sequence []int
func (s Sequence) Size() int {
    return len(s)
type Sizer interface {
    Size() int
func Foo (o Sizer) {
These four definitions could have been placed in separate files, in different parts of the program. Notably, the programmer who defined the Sequence type did not need to declare that the type implemented Sizer, and the person who implemented the Size method for Sequence did not need to specify that this method was part of Sizer.

[edit] Name visibilityVisibility of structures, structure fields, variables, constants, methods, top-level types and functions outside their defining package is defined implicitly according to the capitalization of their identifier. If the identifier starts with a capital letter, the identifier is visible from outside the package.[16]

[edit] ConcurrencyGo provides goroutines, small lightweight threads; the name alludes to coroutines. Goroutines are created with the go statement from anonymous or named functions.

Goroutines are executed in parallel with other goroutines, including their caller. They do not necessarily run in separate threads, but a group of goroutines are multiplexed onto multiple threads. Execution control is moved between them by blocking them when sending or receiving messages over channels. Channels are bounded buffers, not network connections.

[edit] ImplementationsThere are currently two Go compilers:

6g/8g/5g (the compilers for AMD64, x86, and ARM respectively) with their supporting tools (collectively known as "gc") based on Thompson's previous work on Plan 9's C toolchain.
gccgo, a GCC frontend written in C++,[17] and now officially supported as of version 4.6, albeit not part of the standard binary for gcc.[18]
Both compilers work on Unix-like systems, and a port to Microsoft Windows of the gc compiler and runtime have been integrated in the main distribution. Most of the standard libraries also work on Windows.

There is also an unmaintained "tiny" runtime environment that allows Go programs to run on bare hardware.[19]

[edit] Examples[edit] Hello worldThe following is a Hello world program in Go:

package main
import "fmt"
func main() {
    fmt.Println("Hello, World")
Go's automatic semicolon insertion feature requires that opening braces not be placed on their own lines, and this is thus the preferred brace style. The examples shown comply with this style.[20]

[edit] EchoExample illustrating how to write a program like the Unix echo command in Go:[21]

package main
import (
    "flag"  // Command line option parser.
var omitNewline = flag.Bool("n", false, "don't print final newline")
const (
    Space = " "
    Newline = "\n"
func main() {
    flag.Parse()   // Scans the arg list and sets up flags.
    var s string
    for i := 0; i < flag.NArg(); i++ {
        if i > 0 {
            s += Space
        s += flag.Arg(i)
    if !*omitNewline {
        s += Newline
[edit] ReceptionGo's initial release led to much discussion.

Michele Simionato wrote in an article for[22]

Here I just wanted to point out the design choices about interfaces and inheritance. Such ideas are not new and it is a shame that no popular language has followed such particular route in the design space. I hope Go will become popular; if not, I hope such ideas will finally enter in a popular language, we are already 10 or 20 years too late :-(
Dave Astels at Engine Yard wrote:[23]

Go is extremely easy to dive into. There are a minimal number of fundamental language concepts and the syntax is clean and designed to be clear and unambiguous. Go is still experimental and still a little rough around the edges.
Ars Technica interviewed Rob Pike, one of the authors of Go, and asked why a new language was needed. He replied that:[24]

It wasn't enough to just add features to existing programming languages, because sometimes you can get more in the long run by taking things away. They wanted to start from scratch and rethink everything. ... [But they did not want] to deviate too much from what developers already knew because they wanted to avoid alienating Go's target audience.
Go was named Programming Language of the Year by the TIOBE Programming Community Index in its first year, 2009, for having a larger 12-month increase in popularity (in only 2 months, after its introduction in November) than any other language that year, and reached 13th place by January 2010,[25] surpassing established languages like Pascal. As of March 2012[update], it ranked 66th in the index.[26] Go is already in commercial use by several large organizations.[27]

Bruce Eckel stated:[28]

The complexity of C++ (even more complexity has been added in the new C++), and the resulting impact on productivity, is no longer justified. All the hoops that the C++ programmer had to jump through in order to use a C-compatible language make no sense anymore -- they're just a waste of time and effort. Now, Go makes much more sense for the class of problems that C++ was originally intended to solve.

2013-4-23 20:37:24

Posted by doctorzhang | 个人主页 | 引用 | 返回 | 删除 | 回复


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