There's a one in 10 chance that the Kickstarter you back will bust

By Shawn Knight ยท 6 replies
Dec 8, 2015
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  1. It's common knowledge that backers of Kickstarter campaigns take on a certain level of risk when funding a project. Even those with the best of intentions aren't always able to bring their creative projects to life due to a myriad of reasons.

    Despite each campaign facing its own unique set of challenges and obstacles, it'd be nice as a backer to have a ballpark figure on the likelihood of a campaign coming to fruition. That's exactly what motivated Kickstarter to reach out to the University of Pennsylvania for some answers.

    For the better part of 2015, Professor Ethan Mollick has surveyed nearly half a million Kickstarter backers regarding project outcomes and overall backer sentiment. The results of the largest study ever to examine the Kickstarter community may surprise you.

    Mollick found that nine percent of Kickstarter projects fail to deliver rewards and that eight percent of dollars pledged went to failed campaigns. Along those same lines, only 65 percent of backers said their reward was delivered on time.

    Mollick urged creators to plan for ways in which to work with backers should a project ultimately fail. It's also a good idea for creators to explain how pledged funds were spent and to generally remain as transparent about the process as possible.

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    In conclusion, Mollick said there doesn't seem to be a systematic problem associated with failure or fraud on Kickstarter and that the vast majority of projects do seem to deliver. What's more, the professor observed that failure rates are consistent across categories and that projects that raise less than $1,000 are most likely to fail. Because other crowdfunding platforms have different policies, he added, the findings are exclusive to Kickstarter and can't accurately be applied to crowdfunding as a concept.

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  2. fl21289

    fl21289 TS Booster Posts: 60   +40

    What happened to the time where if you come up with an idea you find your own money and ways to make it work.... I'm 26 and our new generation just wants everything to be spoon feed and given to them.
    p51d007 likes this.
  3. SirGCal

    SirGCal TS Maniac Posts: 365   +137

    I'm all about ignoring the spoonfed. At the same time I'm more apt to support kickstarters then AAA 'developers' and 'publishers' anymore who keep putting out the same garbage. The best games I've played lately has been indie games anyhow. Plus there are quite a few quality kickstarters going out there. I've seen them fail like the rest but some are going and showing results just the same. I still would support a kickstarter over the AAA crowd.
    stewi0001 likes this.
  4. psycros

    psycros TS Evangelist Posts: 1,877   +1,298

    Can't really disagree. Nearly everything from the mainstream gaming studios has been rubbish of late - all eye candy, no substance, no replayability, dumbed-down or PC-unfriendly console experience, very little single-player content, focus on cash shops and "season passes"'..all the usual suspects. I'm glad Witcher 3 got GOTY simply because of the studio's great attitude and realization that milking gamers for every dime and burdening them with complex DRM schemes only drive more people to piracy. All the games I play are either more than six yrs old or from indie developers.
    SirGCal and Reehahs like this.
  5. Cycloid Torus

    Cycloid Torus Stone age computing. Posts: 3,025   +665

    10% flop rate is really very, very good. In 20 years as a commercial lender producing SBA backed commercial loans, I saw a flop rate closer to 20%. A friend in the VC (venture capital) business has a flop rate of over 50% - and he is a multi-millionaire now.

    Kickstarter works so well because it often ties to advanced funding of initial sales. This avoids the frequent management error of overestimating the market for the business.
    Reehahs likes this.
  6. Jeff Re

    Jeff Re TS Enthusiast Posts: 40   +13

    This doesn't take into account all the projects that ship flawed merchandise and then refuse to do anything about it. My rule for awhile is to only back bands as they seem to be the only honest people on Kickstarter.
  7. wiyosaya

    wiyosaya TS Evangelist Posts: 1,945   +765

    Innovation does not necessarily mean success or finding money. No different with Kickstarter.
    Anyone can fail at bringing a product to the public. Failing does not necessarily mean that the person(s) who failed are dishonest. If I understand things correctly, investing in a Kickstarter project explicitly means that the investor agrees to a probability of failure.

    Failure is part of innovation. Look at Thomas Edison's effort to create electric lights. As I understand it, Edison said that they tested some 10,000 different materials in the process until they found the one material that worked. 10,000 tries and one success amounts to a 0.01 percent success rate. If there is truly a 10% failure rate for Kickstarter projects, then that is phenomenal, IMHO.

    And I agree about some people's attitudes to being spoon fed. As I see it, if you think that you are guaranteed a working product when you invest in a Kickstarter project, then perhaps it is time to wean yourself from that spoon.

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