Lessons In Social Capitalism

By now you may have heard about Kickstarter.com, the web site where entrepreneurs with compelling ideas but empty pockets can go to crowdsource the financing they need to make their crazy dreams a reality.

The site calls itself “a new way to fund and follow creativity,” and it functions as a platform for “patrons,” or backers, to pledge direct financial support for projects in technology, music, film, art and many other fields. Backers contribute relatively small amounts in return for a “reward” of some sort, usually a copy of the product or artwork they are helping bring to fruition. The site has been a huge success, so far. 

Kickstarter made headlines recently when Scott Wilson, founder of MINIML Design in Chicago and creator of high-profile projects for Nike and Microsoft used it to raise nearly a million bucks for his latest brainchild, “TikTok + LunaTik Multi-Touch Watches,” two clever watch band designs that turn Apple’s sixth-generation iPod Nano into an eye-catching, Dick Tracy-esque timepiece.

While Wilson never had a problem working with multi-national corporate behemoths, like many designers his dream has always been to make his own stuff (and retain the rights to it), and that dovetailed quite nicely with Kickstarter’s mission. He posted a slick concept video on the site, offered a series of tiered reward packages to potential backers, set a funding goal of $15,000 and crossed his fingers in hopes that enough early adopters would be interested to get his baby past the prototype stage.

Were they ever! Thanks to his elegant design and Apple’s legendary halo effect (as well as a few high-profile blog mentions), customer interest far exceeded Wilson’s wildest dreams, and by the project’s close in mid-December he’d collected pledges to the tune of $941,718, shattering previous Kickstarter records.

Fascinated by the process and desirous of some badass wrist bling myself, I signed on as one of Wilson’s 13,112 backers, pledging $70 in return for a copy of each watch band. My purchase gave me a front row seat for this noble experiment in “social capitalism,” and left me pondering its implications.

Here are some of the high (and low) points I noted while joining Wilson’s excellent adventure:

Careful What You Wish For.

Overwhelming success is . . . overwhelming. “We are blown away by the support,” said Wilson in an interview with FastCoDesign.com, when the project closed, but truthfully he was completely unprepared for it. He had assumed an initial run of a few hundred copies; virtually overnight he was forced to increase that by a factor of 10, and logistical challenges mushroomed, pushing his original early-January delivery date back by several weeks.

Of course most backers could see how big the project had grown and understood it would therefore take longer to receive their rewards, but many still expected Wilson to hit his original delivery date, and they were not shy about letting him know it.

Meet The New Boss.

Being freed from the shackles of venture capital and big-company politics may mean not having to answer to The Man, but having 13,000 backers means having to answer to The Many.

Wilson went out of his way to keep everyone informed, posting updates and videos as things progressed, but that was not enough. The chattering masses demanded complete, utter transparency of the project they’d committed their tens of dollars to, and they were vocal on Kickstarter’s message boards.

When it was clear the ship date would slip, some complained bitterly, accusing Wilson of slacking off once the money was in hand. When he went several days without posting a project update due to a family emergency, others were ridiculously harsh, going so far as to say the whole thing was a “scam” and that he had taken the money and run. So quickly they turn on you!

Don’t Go Changin’.

The TikTok is the cheaper of the two products, but it employs the same metal “strap keeper” as the pricier LunaTik. In the midst of manufacturing, Wilson decided to make the TikTok strap keeper out of plastic to streamline production and lower costs. Unfortunately he neglected to mention this detail to his backers, and when the first TikToks arrived with the substituted plastic piece the message boards lit up again, with some backers accusing him of “putting more money in his pocket” by producing an inferior product.

Certainly an announcement should have been made, no matter how minor the change, but in this case the backlash was disproportionate and silly.

The World Is Your Oyster, And Also Your Responsibility.

After manufacturing, fulfillment became a big issue. Wilson’s backers were scattered literally around the globe, some in countries with opaque customs procedures and confusing import tariffs. As the products at last began shipping, Kickstarter’s message boards were once more filled with whining and wailing.

Wilson was soon being blamed for everything from the shortcomings of DHL’s tracking system to the ineptitude of the Malaysian postal system. One backer complained that his precious package had been delivered and signed for by an officemate but had then somehow been “lost.” Was Wilson going to replace it for him?

There was more: A cease-and-desist order filed against a Hong Kong distributor prematurely selling the bands on the Internet. A controversy over fit, finish and color. Screws breaking, plastic cracking. The backers reported every insignificant development as if it were a threat to the very future of humanity.

Maybe that’s the big lesson of social capitalism: if you’re going to take money from the masses to fund your dream, be prepared to take their criticism, too. It’s not for the thin of skin.

Me? I’m happy. I think the final product exceeds expectations, and I certainly get a lot of compliments on it.

I have the same perspective as another backer, whose post put the whole experience in much-needed perspective. “It’s not like we’re taking delivery of a jet,” he wrote. “It’s a watch band, people!”

Related articles

• Scott Wilson on TikTok/LunaTik’s huge Kickstart (core77.com)
• How Entrepreneurs Are Using Kickstarter to Fund Their Dreams (mashable.com)
• LunaTik Kicks Crowdfunding into High Gear (gearfuse.com)