6 ms·

The $100M Deal for Kickstarter to use Blockchain

52 points by bmm6o 3y ago

bmm6o 3y ago
Archive link: https://web.archive.org/web/20240311163832/https://fortune.com/crypto/2024/03/11/kickstarter-blockchain-a16z-crypto-secret-investment-chris-dixon/ https://web.archive.org/web/20240311163832/https://fortune.c...
ceejayoz 3y ago
https://www.web3isgoinggreat.com/?id=kickstarter-continues-with-blockchain-plans https://www.web3isgoinggreat.com/?id=kickstarter-continues-w... Back in 2022: > Kickstarter's COO, Sean Leow, did an interview with The Beat to discuss the announcement. He seemed to be a little bit confused on the whole concept throughout, and seemed to believe that "open source" is some sort of competing idea to blockchains. At one point he stated, "We believe that that data can be structured in a way through a blockchain where it ... can move in a much more efficient and effective way between services ... in a way that open source doesn't allow". Later in the interview he spoke about governance, saying, "our understanding is that [governance] is done more effectively with blockchain then with open-source."
- yieldcrv 3y ago
  the files are in the computer!? so people are validating their own feelings on blockchain based on an incoherent ignorant executive trying to shoehorn blockchain into something to stay relevant? fascinating addendum: its funny that the investors were trying to use this ignorance to shove Celo EVM down their throat, but even funnier that there are waaay more EVMs now, with another one launching every week
edent 3y ago
I think this is what a lot of people don't get about taking funding from a VC: > The grand but improbable plan called for shifting its entire platform onto a blockchain called Celo, another a16z portfolio company (emphasis added) I was at an advertising startup which got a massive investment from SoftBank. One of the people involved in signing the deal told me that the main benefit wasn't the $$$; it was that the other companies which were funded by SoftBank would be encouraged to use our services. And, of course, we in return would use our stablemates' services where we could. Yes, money is nice. But becoming part of a mutually-reinforcing collective is the real prize. In this case, it was obviously an attempt to stimulate a market into existence. We should all be grateful it failed!
- lupire 3y ago
  It's a terrible idea (for the companies) that sounds clever. It's one thing to offer your product to "friend" companies for dogfood feedback. But pressuring stablemates to use the product creates a fake product market for that distracts from building good product, and invites the investor to sacrifice your company to help a different one. But you don't have stock in that other company, do you? If you want the companies to share fate, merge companies.
rsynnott 3y ago
> The blockchain plan seemed impossible—and that would soon prove to be the case. As is tradition. (Did any company _ever_ launch anything borderline successful with The Almighty Blockchain(TM) that wasn't just some sort of token?)
- pavlov 3y ago
  > "Did any company _ever_ launch anything borderline successful with The Almighty Blockchain(TM) that wasn't just some sort of token?" No. But that only makes the goal more alluring: "We could be the first company to make this work and unlock the untold riches of Blockchain as foretold by prophecy and the iron will of cryptographic destiny!" Enough venture capitalists seem to have the faith too, to keep the money flowing despite lack of traction. Blockchain is really the Philosopher's Stone for people who believe software is some kind of alchemy.
  - corytheboyd 3y ago
    > Enough venture capitalists seem to have the faith too, to keep the money flowing despite lack of traction. They only need to win once. When you’re the chip leader, you can afford to throw down some big bets and lose.
- wlll 3y ago
  I knew a guy who was trying to launch a DAO backed space based solar company. I'm pretty sure it went absolutely no-where.
  - roomey 3y ago
    That was a book as far as I know. Daniel Suarez's critical mass. If it was done in real life too I'm actually at the point where I think that guy is a prophet ;)
- yieldcrv 3y ago
  The answer to your question is yes, but you didn’t notice because there was no token, the answer to your next question is no, it probably doesn’t match your definition of success and it doesn’t matter that you weren’t the market for it as the point is that tokens are very effective advertising engines
CM30 3y ago
Ah Kickstarter. I see why they tried the blockchain thing, but it probably wasn't the best decision for that particular company given their audience's utter disdain for crypto and web 3 in general. As for this: > The biggest problem for Kickstarter, though, may be that time has simply passed it by. “I feel like they just were left in the dust culturally" I'm not sure that's really the whole story. The story (at least from what I can tell) is just that crowdfunding has developed a terrible reputation due to all the scams and failed promises from big name projects there, so people don't really take it seriously anymore. The rise in popularity for things like Patreon isn't a replacement for that, it's a move to a setup where creators are expected to show their work on a regular basis and provide an actual return on investment on a shorter timeframe than 'whenever it's ready'.
- gafferongames 3y ago
  "The story (at least from what I can tell) is just that crowdfunding has developed a terrible reputation due to all the scams and failed promises from big name projects there, so people don't really take it seriously anymore." Sounds like a great fit for crypto!
  - lostmsu 3y ago
    [flagged]
    - the__alchemist 3y ago
      There are historically many scams associated with both, so it's a fair analogy. My recollection was that Kickstarter was a mix, and Indiegogo was 90%+ scams.
      - lostmsu 3y ago
        There's a different level of association though. It is nearly impossible to see if Kickstarter project will flop or not and if you will see your money back ever. In crypto you can at least make reasonable judgement based on technology merits. All good projects are 100% transparent and developed in the open.
Mistletoe 3y ago
When will Kickstarter pivot to AI?
- rsynnott 3y ago
  When it wants to drive away the last three remaining users, I assume.
helsinkiandrew 3y ago
Didn't know that the original Fleabag Edinburgh show was funded on Kickstarter. The video is worth watching if you've seen it/the TV adaptation: https://www.kickstarter.com/projects/drywrite/fleabag https://www.kickstarter.com/projects/drywrite/fleabag
- eterm 3y ago
  Over 10 years ago, back when Kickstarter was having it's moment.
  - lupire 3y ago
    Pre-profitability, in the charitable phase of VC startup, before it collapsed under the chase for return.
drdrek 3y ago
Years ago I backed two computer games. They both took about 5 years to be made and by the time they were ready I have already forgotten buying them. (They were good tho) Never felt the need to do that again. Its a niche idea, unsuitable for VC money. On the other hand, non financial goals for companies almost always end badly. When you have more than one goal there is always an excuse for management to do what ever they want. Want to do something for profits? we need this for the company survival. Want to do something financially irresponsible? Its aligned to our values. Unrelated to the core business? Social responsibility. Leave creative outlets to creative syndicates, leave charity work to non profits and leave money making to for profit companies... don't be another one of those that break the mold only to discover that people that came before you where not as dumb as you thought. Basically don't be Crypto.
- nottorp 3y ago
  > They both took about 5 years to be made and by the time they were ready I have already forgotten buying them. (They were good tho) Never felt the need to do that again. What's wrong with that? I've backed more than two games. Some were good, some were bad, some failed completely. But I knew that from the beginning. And I just prepaid for the games at a discount, I didn't buy $5000 packages or anything like that. I might do that again, but every game I picked was mentioned in the gaming press, so was promising enough to get their attention. I haven't seen that lately. No mention of kickstarter, indiegogo, gofundme or whatever else is out there. Is it because game makers don't crowdfund any more, or because the press only covers AAAs now?
  - Goronmon 3y ago
    What's wrong with that? For me it comes down to numbers. I don't want for games to play. I already lack the time to play all the games I am interested in. And that's for games that have been released that are a relatively known result. What advantage is there for me to throw money at hypothetical games that in the future may result in something I am interested in playing? Especially when there is a decent chance nothing gets released at all?
    - 3y ago
nottorp 3y ago
The article oozes an obsession with growth. Even before the blockchain incident. Which ruins any Kickstarter credibility btw. Wouldn't Kickstarter have been fine if they just didn't take outside investment and just stayed a small entity bringing financing to some small projects and making some extra money in the process? Why compete with Patreon? Personally I would and have thrown a one time few $ to computer game projects I was interested in on most crowdfunding platforms. But I'll never pay for a subscription.
nazca 3y ago
If I needed to launder money, I would think running crypto through a Kickstater project would be a good way to do it. At least below a certain threshold where you don't create significant scrutiny.
paulgerhardt 3y ago
Kickstarter was and will always be beholden to their credit card processors and a painful lesson in picking one’s payment provider carefully. It’s your payment processors fraud risk department which dictates which products and services you offer not your own team. This decision is a 100% dictated by pigeonholing themselves here and losing out to gofundme. After Philips caused a stink about LifX[1], it was the threat of losing their payment partners that caused Kickstarter to ban all sales of hardware [2]. They would later walk back that decision but not before we launched our own open source competitor that went on to do $100m, including Bitcoin support in 2012 [3]. Which is to say decentralized payment systems solve a lot of problems for crowdfunding platforms. Specifically Kickstarter missed out on the explosive growth that GoFundMe captured because Kickstarters payment processor said “no” and GoFundMe’s said “yes”. But switching to Celo or some other platform in 2021+ feels too little too late for a platform whose culture has ossified. [1] https://www.npr.org/sections/alltechconsidered/2012/09/03/160505449/when-a-kickstarter-campaign-fails-does-anyone-get-their-money-back https://www.npr.org/sections/alltechconsidered/2012/09/03/16... [2] https://techcrunch.com/2012/10/07/the-story-of-lockitron-crowdfunding-without-kickstarter/ https://techcrunch.com/2012/10/07/the-story-of-lockitron-cro... [3] https://github.com/apigy/selfstarter/pull/22 https://github.com/apigy/selfstarter/pull/22
- mecredis 3y ago
  You’re making a lot of assumptions about what was happening behind the scenes with a payment processor agreement you weren’t privy to. Kickstarter was always and devoutly uninterested in medical fundraising, so missing out on GoFundMe’s growth was a feature, not a bug.
  - paulgerhardt 3y ago
    I’m referring to the period between 2010 and 2013. I suspect we were both privy to a lot of conversations we can’t share here. I am familiar with those processor conversations. GoFundMe didn’t pivot to primarily medical fundraising until later. But as this is all ancient history why did Kickstarter walk back their anti-tech / anti-hardware position? At the time it felt like they really wanted to double down on artistic creators.

52 points by bmm6o 3y ago

Archive link: https://web.archive.org/web/20240311163832/https://fortune.com/crypto/2024/03/11/kickstarter-blockchain-a16z-crypto-secret-investment-chris-dixon/ https://web.archive.org/web/20240311163832/https://fortune.c...

ceejayoz 3y ago

https://www.web3isgoinggreat.com/?id=kickstarter-continues-with-blockchain-plans https://www.web3isgoinggreat.com/?id=kickstarter-continues-w... Back in 2022: > Kickstarter's COO, Sean Leow, did an interview with The Beat to discuss the announcement. He seemed to be a little bit confused on the whole concept throughout, and seemed to believe that "open source" is some sort of competing idea to blockchains. At one point he stated, "We believe that that data can be structured in a way through a blockchain where it ... can move in a much more efficient and effective way between services ... in a way that open source doesn't allow". Later in the interview he spoke about governance, saying, "our understanding is that [governance] is done more effectively with blockchain then with open-source."

yieldcrv 3y ago
the files are in the computer!? so people are validating their own feelings on blockchain based on an incoherent ignorant executive trying to shoehorn blockchain into something to stay relevant? fascinating addendum: its funny that the investors were trying to use this ignorance to shove Celo EVM down their throat, but even funnier that there are waaay more EVMs now, with another one launching every week

edent 3y ago

I think this is what a lot of people don't get about taking funding from a VC: > The grand but improbable plan called for shifting its entire platform onto a blockchain called Celo, another a16z portfolio company (emphasis added) I was at an advertising startup which got a massive investment from SoftBank. One of the people involved in signing the deal told me that the main benefit wasn't the $$$; it was that the other companies which were funded by SoftBank would be encouraged to use our services. And, of course, we in return would use our stablemates' services where we could. Yes, money is nice. But becoming part of a mutually-reinforcing collective is the real prize. In this case, it was obviously an attempt to stimulate a market into existence. We should all be grateful it failed!

lupire 3y ago
It's a terrible idea (for the companies) that sounds clever. It's one thing to offer your product to "friend" companies for dogfood feedback. But pressuring stablemates to use the product creates a fake product market for that distracts from building good product, and invites the investor to sacrifice your company to help a different one. But you don't have stock in that other company, do you? If you want the companies to share fate, merge companies.

rsynnott 3y ago

> The blockchain plan seemed impossible—and that would soon prove to be the case. As is tradition. (Did any company _ever_ launch anything borderline successful with The Almighty Blockchain(TM) that wasn't just some sort of token?)

pavlov 3y ago
> "Did any company _ever_ launch anything borderline successful with The Almighty Blockchain(TM) that wasn't just some sort of token?" No. But that only makes the goal more alluring: "We could be the first company to make this work and unlock the untold riches of Blockchain as foretold by prophecy and the iron will of cryptographic destiny!" Enough venture capitalists seem to have the faith too, to keep the money flowing despite lack of traction. Blockchain is really the Philosopher's Stone for people who believe software is some kind of alchemy.
- corytheboyd 3y ago
  > Enough venture capitalists seem to have the faith too, to keep the money flowing despite lack of traction. They only need to win once. When you’re the chip leader, you can afford to throw down some big bets and lose.
wlll 3y ago
I knew a guy who was trying to launch a DAO backed space based solar company. I'm pretty sure it went absolutely no-where.
- roomey 3y ago
  That was a book as far as I know. Daniel Suarez's critical mass. If it was done in real life too I'm actually at the point where I think that guy is a prophet ;)
yieldcrv 3y ago
The answer to your question is yes, but you didn’t notice because there was no token, the answer to your next question is no, it probably doesn’t match your definition of success and it doesn’t matter that you weren’t the market for it as the point is that tokens are very effective advertising engines

CM30 3y ago

Ah Kickstarter. I see why they tried the blockchain thing, but it probably wasn't the best decision for that particular company given their audience's utter disdain for crypto and web 3 in general. As for this: > The biggest problem for Kickstarter, though, may be that time has simply passed it by. “I feel like they just were left in the dust culturally" I'm not sure that's really the whole story. The story (at least from what I can tell) is just that crowdfunding has developed a terrible reputation due to all the scams and failed promises from big name projects there, so people don't really take it seriously anymore. The rise in popularity for things like Patreon isn't a replacement for that, it's a move to a setup where creators are expected to show their work on a regular basis and provide an actual return on investment on a shorter timeframe than 'whenever it's ready'.

gafferongames 3y ago
"The story (at least from what I can tell) is just that crowdfunding has developed a terrible reputation due to all the scams and failed promises from big name projects there, so people don't really take it seriously anymore." Sounds like a great fit for crypto!
- lostmsu 3y ago
  [flagged]
  - the__alchemist 3y ago
    There are historically many scams associated with both, so it's a fair analogy. My recollection was that Kickstarter was a mix, and Indiegogo was 90%+ scams.
    - lostmsu 3y ago
      There's a different level of association though. It is nearly impossible to see if Kickstarter project will flop or not and if you will see your money back ever. In crypto you can at least make reasonable judgement based on technology merits. All good projects are 100% transparent and developed in the open.

Mistletoe 3y ago

When will Kickstarter pivot to AI?

rsynnott 3y ago
When it wants to drive away the last three remaining users, I assume.

helsinkiandrew 3y ago

Didn't know that the original Fleabag Edinburgh show was funded on Kickstarter. The video is worth watching if you've seen it/the TV adaptation: https://www.kickstarter.com/projects/drywrite/fleabag https://www.kickstarter.com/projects/drywrite/fleabag

eterm 3y ago
Over 10 years ago, back when Kickstarter was having it's moment.
- lupire 3y ago
  Pre-profitability, in the charitable phase of VC startup, before it collapsed under the chase for return.

drdrek 3y ago

Years ago I backed two computer games. They both took about 5 years to be made and by the time they were ready I have already forgotten buying them. (They were good tho) Never felt the need to do that again. Its a niche idea, unsuitable for VC money. On the other hand, non financial goals for companies almost always end badly. When you have more than one goal there is always an excuse for management to do what ever they want. Want to do something for profits? we need this for the company survival. Want to do something financially irresponsible? Its aligned to our values. Unrelated to the core business? Social responsibility. Leave creative outlets to creative syndicates, leave charity work to non profits and leave money making to for profit companies... don't be another one of those that break the mold only to discover that people that came before you where not as dumb as you thought. Basically don't be Crypto.

nottorp 3y ago
> They both took about 5 years to be made and by the time they were ready I have already forgotten buying them. (They were good tho) Never felt the need to do that again. What's wrong with that? I've backed more than two games. Some were good, some were bad, some failed completely. But I knew that from the beginning. And I just prepaid for the games at a discount, I didn't buy $5000 packages or anything like that. I might do that again, but every game I picked was mentioned in the gaming press, so was promising enough to get their attention. I haven't seen that lately. No mention of kickstarter, indiegogo, gofundme or whatever else is out there. Is it because game makers don't crowdfund any more, or because the press only covers AAAs now?
- Goronmon 3y ago
  What's wrong with that? For me it comes down to numbers. I don't want for games to play. I already lack the time to play all the games I am interested in. And that's for games that have been released that are a relatively known result. What advantage is there for me to throw money at hypothetical games that in the future may result in something I am interested in playing? Especially when there is a decent chance nothing gets released at all?
  - 3y ago

nottorp 3y ago

The article oozes an obsession with growth. Even before the blockchain incident. Which ruins any Kickstarter credibility btw. Wouldn't Kickstarter have been fine if they just didn't take outside investment and just stayed a small entity bringing financing to some small projects and making some extra money in the process? Why compete with Patreon? Personally I would and have thrown a one time few $ to computer game projects I was interested in on most crowdfunding platforms. But I'll never pay for a subscription.

nazca 3y ago

If I needed to launder money, I would think running crypto through a Kickstater project would be a good way to do it. At least below a certain threshold where you don't create significant scrutiny.

paulgerhardt 3y ago

Kickstarter was and will always be beholden to their credit card processors and a painful lesson in picking one’s payment provider carefully. It’s your payment processors fraud risk department which dictates which products and services you offer not your own team. This decision is a 100% dictated by pigeonholing themselves here and losing out to gofundme. After Philips caused a stink about LifX[1], it was the threat of losing their payment partners that caused Kickstarter to ban all sales of hardware [2]. They would later walk back that decision but not before we launched our own open source competitor that went on to do $100m, including Bitcoin support in 2012 [3]. Which is to say decentralized payment systems solve a lot of problems for crowdfunding platforms. Specifically Kickstarter missed out on the explosive growth that GoFundMe captured because Kickstarters payment processor said “no” and GoFundMe’s said “yes”. But switching to Celo or some other platform in 2021+ feels too little too late for a platform whose culture has ossified. [1] https://www.npr.org/sections/alltechconsidered/2012/09/03/160505449/when-a-kickstarter-campaign-fails-does-anyone-get-their-money-back https://www.npr.org/sections/alltechconsidered/2012/09/03/16... [2] https://techcrunch.com/2012/10/07/the-story-of-lockitron-crowdfunding-without-kickstarter/ https://techcrunch.com/2012/10/07/the-story-of-lockitron-cro... [3] https://github.com/apigy/selfstarter/pull/22 https://github.com/apigy/selfstarter/pull/22

mecredis 3y ago
You’re making a lot of assumptions about what was happening behind the scenes with a payment processor agreement you weren’t privy to. Kickstarter was always and devoutly uninterested in medical fundraising, so missing out on GoFundMe’s growth was a feature, not a bug.
- paulgerhardt 3y ago
  I’m referring to the period between 2010 and 2013. I suspect we were both privy to a lot of conversations we can’t share here. I am familiar with those processor conversations. GoFundMe didn’t pivot to primarily medical fundraising until later. But as this is all ancient history why did Kickstarter walk back their anti-tech / anti-hardware position? At the time it felt like they really wanted to double down on artistic creators.