New Kickstarter projects fall 35%, layoffs planned

[midian182]

In a nutshell: Few businesses are safe from Covid-19 disruption—even the crowdfunding industry is suffering. Kickstarter has seen its number of new projects fall by 35 percent year-over-year, and things don’t appear to be getting better anytime soon. As such, the company is discussing ways of saving money, including potential layoffs.

In an internal memo seen by The Verge, Kickstarter CEO Aziz Hasan revealed the drop in new projects, adding that there was “no clear sign of rebound.” Discussions are now taking place with Kickstarter’s union organizers about potentially laying off staff.

Hasan wrote that while Kickstarter made $1.27 million in pre-tax profit last year, that money has already been reinvested back into the business.

Some of the cost-cutting measures Hasan is considering include reducing senior execs’ salaries—including his own—restricting the number of new hires, not automatically filling newly vacant positions, and cutting the budget “wherever we can.” But even with these changes, it seems layoffs are likely to happen soon.

“We must look more broadly at ways to restructure the business, including potential layoffs across teams and at all levels of staff,” Hassan wrote.

Kickstarter has launched initiatives to try to get more creators to post projects on the site, including the Inside Voices program that encourages small, home-made projects.

As it has done with so many areas of life, Covid-19 has caused plenty of problems for Kickstarter campaigns. Many projects can’t be completed remotely, deliveries and supplies are often affected, and with unemployment at an all-time high, many simply don’t have the spare money to become a backer.

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https://www.techspot.com/news/84912-new-kickstarter-projects-fall-35-layoffs-planned.html

 

[Uncle Al]

Considering the number of Kick Start failures and their refusal to make these companies include Performance Bonds on their projects, this isn't necessarily a bad thing. From the comments in the past, a majority of people don't understand the risk of these projects and the fact that there is nothing protecting their investment. In addition, I think the start up companies should not be allowed to form under an LLC, which makes it far easier for them to embezzle the funds or enrich themselves personally with investors money, which has also happened in the past.

 

[mbrowne5061]

Considering the number of Kick Start failures and their refusal to make these companies include Performance Bonds on their projects, this isn't necessarily a bad thing. From the comments in the past, a majority of people don't understand the risk of these projects and the fact that there is nothing protecting their investment. In addition, I think the start up companies should not be allowed to form under an LLC, which makes it far easier for them to embezzle the funds or enrich themselves personally with investors money, which has also happened in the past.

At least an economic downturn is finally being allowed to prune some of the dead weight from the economy. Some. Too bad it took a global pandemic to do it.

KickStarter won't be missed. Other crowd sourcing companies will happily take their place - like CowdSource - which actually works with their projects to set them up to succeed, as well as filtering out the people who don't have a clue what they are doing before they ever 'launch' their campaigns.