View Full Version : Kickstarter, etc?
I've been wrestling with this one a bit. It's an odd one.
I'm not against crowd funding, really, but I think it's best reserved for service-oriented, non-profit or low-profit endeavors, creative endeavors that struggle for funding through normal channels, and so on.
Recently, I've noticed a lot of small business owners using this as a method for garnering start up or continuation capital. I had to ask myself about the ethics of this.
I feel like, if you are a business owner, it's your responsibility to run your business well and fund it as necessary with a good budget. If you can't afford something, you save up for it or you go to a bank and use your line of credit or loans and pay that back. You don't go and ask for alms.
I keep running into yoga studios who are asking for funding in the $12-20k range for things like new floors for their studio or "general maintenance" like washing the windows or printing schedules -- all things that would be a normal part of their budgets.
They seem to be able to raise these funds, but I consider it. . . tacky? crass? possibly unethical? I can't quite figure out why it bothers me.
Perhaps I'm just too proud to just ask for help? LOL
IDK, I figure that if people are paying money for their services (yoga classes, workshops, etc), then they are already "giving" enough. It's my job to manage that income effectively and take care of business. That is, after all, how business works. And if it's not profitable enough to do whatever I need it to do, then it's. . . well, it's my problem, isn't it? Why should i ask my clients or friends or family to "rescue" me?
Am I just being cranky?
I think you are being cranky.
Anybody can use kickstarter and similar platforms to raise funds for whatever people will contribute to. Obviously in the cases you cite, the community that supports those businesses is not offended by the request and wants to help. Or more precisely, some members are willing to help. Others may be put off by the request, as you are. Some may choose not to patronize a business that can't fund its own expenditures reliably. I would fall into that camp.
I did give to a kickstarter campaign for a documentary film on a major figure in the Tibetan studies field. I got a nice tshirt, a poster and a magnet for the fridge and the film got made/shown to good reviews. Warm fuzzies all around.
obviously, they "can" and of course, people can choose to give -- that's not the question. i'm wondering if it's appropriate for these sorts of businesses.
since you assert "Some may choose not to patronize a business that can't fund its own expenditures reliably. I would fall into that camp." To me, this would assert that you find this use of kickstarter, etc inappropriate for this sort of business as I do. To me, it smacks of unprofessionalism in just that way.
overall, i think the site is great -- particularly for community or artistic endeavors, humanitarian efforts, helping with medical bills, etc. And, it's an easy way to be able to give.
I just think that there are other ways for businesses to get money (from their own profits, grants, loans, lines of credit) to do what they need to do OR they could simply wait.
I've been waiting 2 years to redo my floors. A client of mine just brought us a new contract -- a big, profitable contract -- and I'll be using that income to do the work that needs to be done for the studio: some work on our marketing end (web updating, etc) as well as work on our physical site (fixing the floors).
I've given on Kickstarter for 1) friend making movie on Buckminster Fuller 2) friend who was raising fund for local film festival 3) friend producing their first album. And another fundraising sight for a project to provide cheap light source to replace kerosene lamps in third world.
The way I see it there's nothing wrong in asking - and nothing wrong with saying no. But I suppose some of it is more like fundraising and some of it is more like panhandling.
And anyone who gives has to either assume "trust" or already trust the person/group asking for funds.
There are probably far more frauds than there are authentic requests or will be soon. We don't have the kind of society or internet that provides any measure of safety in such requests (unless you already know the person/group).
As you can tell I am a pessimistic person but probably due to my age and experience. For 30 years I heard about people suckered into all kinds of "deals" who lost all they invested or gave. Enron and Madoff who pushed their deals out in the open also color my perspective. I do not give to anything that we don't have a good knowledge of and contact with.
I don't mind Kickstarter and I can pick and choose what I want to support.
My favorite crowdfunding site is Kiva, because you get the money back (at least I have), and the small businesses are people who are really trying to get ahead. It's a way to support entrepreneurship in situations where bank loans are just not likely.
Zoebird, I have similar feelings, but that may be informed by having been a small business owner in the past. And, my business circumstances were different than yours, so I am thinking that my experience may not apply so well. It was fine arts, commissions, fairs and mail order for established and referred customers.
One of the tenets of my personal experience was that for the business to be worth it, it had to support itself. Asking for help of any kind was something that would not have worked for me. I was never wildly successful, but the business did well, and it put my daughter through university, at least until she dropped out.
IDK, I figure that if people are paying money for their services (yoga classes, workshops, etc), then they are already "giving" enough. It's my job to manage that income effectively and take care of business. That is, after all, how business works. And if it's not profitable enough to do whatever I need it to do, then it's. . . well, it's my problem, isn't it? Why should i ask my clients or friends or family to "rescue" me?
That is pretty much my assessment of how my business needed to be.
That said, I agree with the ideas that people should be able to do whatever they want, whether it is asking, giving or receiving. I am a huge proponent of staying local, and I have directly contributed to people and projects involving the arts. I think that I might not do the same were I solicited for raising building or working funds.
I believe that a huge part of having a successful business is being able to develop a business plan that covers every possible aspect of starting and supporting one's business. Maybe it is the statistics about how many new businesses fail that is inspiring people to go to fundraising as a resource.
I worked really hard at my business, and whilst it is not officially over, it is dormant because of the changes that took place in my life. I have been offered exhibit opportunities, including a state event, as well as some financial assistance to restock some of my materials, but if I am going to do this, it has to be because I am putting the work and financial investment into bringing this thing back to life. I have never accepted help, and I think that part of it is because I know that I will work harder, be a better steward of my resources if they are my resources that are at risk.
SteveinMN
6-29-13, 11:43am
I think much depends on how the campaign is being handled. A Kickstarter campaign for something like "new floors for the yoga studio" would get a thumbs-down from me, too, because I feel that maintenance is an ongoing cost of business -- equipment is going to wear out, success will dictate larger spaces, etc. Now, if the yoga studio wanted to set up, say, a demonstration kitchen to show people how to prepare more healthful meals -- something outside of their normal business -- I might contribute to a Kickstarter for that.
I think it also depends on what's in it for me. I contributed to a campaign for an indy band I like to create their first CD. In return for my support, I got a copy of the CD signed by all four band members. In essence, I bought the CD early. But my commitment to it (as well as thousands of others) let them record and produce it, and the incremental cost of using up a few Sharpies and mailing me a CD still let the band use most of my contribution for the album. It's much easier than producing something on spec and hoping people like it.
I also think that if a few thousand people each sent me twenty bucks to get something done, I wouldn't be messing around and disappointing so many people. Crowdfunding like that simply indicates early that people are willing to buy what you've created -- kind of a guaranteed market. If a crowdfunding campaign fails, then the product likely would not have been a success anyway.
ApatheticNoMore
6-29-13, 12:22pm
It would irritate me being asked to fund something like that and I wouldn't end of story. I mean what am I getting for it 1) interest on my investment? 2) partial ownership of what I'm investing in? 3) charity? planting trees in the community, feeding the homeless, starting a local community garden? stuff that may not by itself be profitable but I think should be done.
Wait you mean I'm getting none of the above, just paying someone else's business expenses for free? Why again? It doesn't mean that I'd hold such a grudge that I wouldn't be a consumer of the yoga studio, I just I wouldn't fund it is all :) I could see making an interest free loan to a friend or something (even then you have to be careful). I could see if there was a dire shortage of some type of business in the community, funding it that way (even then wouldn't the co-op model work better that having socialized funding and privatized profits?). However yoga studios are about as prevalent as Starbucks.
I'm not terribly keen on funding investments in the 3rd world. Sometimes the last thing they need is Western money and it's corrupting influence, and I'm not necessarily familiar enough with their situation to know. Pure charity like the lamps if it's very targeted could work - much more efficient ways to meet basic needs there are necessary.
I've given to many small business Kickstarters. It's a fabulous way to raise capital; nothing unethical or irresponsible about it whatsoever. The businesses I give to are transparent, and offer their product to those giving at a reasonable level. I love it!
treehugger
6-29-13, 2:14pm
I just read a really interesting article about crowdfunding (http://www.modernluxury.com/san-francisco/story/generation-ask?page=2) in San Francisco magazine. This is a burgeoning "industry" and the ethics and conventions are ever-evolving. I have lots of different opinions on it, depending on who is asking, what are they asking for, how they are asking. It's a complex, shades of grey topic for me.
Kara
ToomuchStuff
6-29-13, 5:04pm
In post 1, you have a problem with them, but in post 3, you mention grants as a way to get business funding. I am not sure how you make a distinction between these two, since both are grant requests (with a few exceptions, like the autographed cd, or OUYA campaign that was successful, etc.)
You can also complain about panhandling as well, doesn't mean people will stop doing it, or people will stop giving to them. Get over it as this shouldn't be anything to stress about, as the only control you have is to give, or not.
"Appropriate" is whatever the market will bear, in my opinion. If individuals choose to fund an endeavor, that's their choice, and the start-up succeeds. If they don't wish to send funds, it does not succeed. Since no one is forcing anyone to send their money to a start-up venture, I don't get the concerns here. If you don't like Kickstarter, don't visit their website. If, on the other hand, you get excited about innovative thinking & fascinating new projects, definitely check it out!
First, as an overall idea, I think kickstarter (etc) is great, and I spend a lot of time on the local sites looking at different projects. A lot of projects are worthwhile and I have donated to and supported several campaigns. I'm not against it in principle.
Like grants, these are generally quite specific: community focused, serving niche markets, non or low profit endeavors (that need start-up or expansion capital), or working in the arts. Businesses do qualify under both of these.
Second, I'm not "stressing" about it. I'm trying to understand the ethics and process of this, because I'm starting to see campaigns that seem outside the bounds of this sort of ask.
Here are three campaigns that I noticed recently:
1. established yoga studio wants to replace the floors (has revenue and a large profit margin);
2. established, long-trained yoga teacher wants to study in india (earns $100k per annum with her studio, husband is a lawyer);
3. established studio asks for year's worth of costs so that the teacher can take a step back and focus on teaching while her revenue already covers costs plus her income (around $50k) -- so she's effectively asking for costs plus costs plus $50k. Why?
Most of these do actually have funding -- some of them are almost complete. Having read the article that treehugger posted, I can assume that part of this is about social heirarchy -- people give out of goodness, care, generosity, and also social pecking order (which is seriously intense in the yoga community. it's A Big Deal in most yoga cultures).
But beyond why people give, my concern is *why is it ok to ask?*
I mean, it's sort of like going "sure, I have all the money in the world, but I guess if I can get other people to fund it, why not?"
Is that just good entrepreneurship, or is it taking advantage of people's generosity?
And, FWIW, we have looked into and carefully considered whether or not we would want to use this sort of crowd funding for various projects that we have. Our Kids Yoga program, for example, could do to have some funding -- so we applied for a grant.
We are looking at developing the farmer's market -- so we are looking at grants and crowd sourcing because it's likely to be a community-focused, low-profit endeavor (we figure it won't be a big profit maker for us as organizers, but we do plan on including our time as part of the expenses of the business).
Certainly, I think these projects are worthwhile, and would probably do well on the site.
I just question the ethics of asking for money for something as blatant as "actually running the business for a year" when you already have the revenue to run the business.
My husband gave me this article (http://www.hollywoodreporter.com/news/kevin-smith-why-clerks-3-577315?fb_action_ids=10152022848997501&fb_action_types=og.likes&fb_source=other_multiline&action_object_map=%7B%2210152022848997501%22%3A599 003166797203%7D&action_type_map=%7B%2210152022848997501%22%3A%22og .likes%22%7D&action_ref_map=%5B%5D) that's related, too. Basically, if you have money (or access to money), why are you asking for money?
Why is someone asking for money? Because they can. It's a free & open market.
Uhm. Yes. It's obvious that they can. It doesn't answer if they should.
To me, it's in poor taste at best and unethical at most.
I think that it comes by way of personal responsibility. I take responsibility for my business -- it's my responsibility to manage the income (and to manage the business period) so that I can cover the costs of that business. It is not the responsibility of the crowd/community to manage the income of my business, to rescue my business when I don't manage that income, etc.
Uhm. Yes. It's obvious that they can. It doesn't answer if they should.
To me, it's in poor taste at best and unethical at most.
I think that it comes by way of personal responsibility. I take responsibility for my business -- it's my responsibility to manage the income (and to manage the business period) so that I can cover the costs of that business. It is not the responsibility of the crowd/community to manage the income of my business, to rescue my business when I don't manage that income, etc.
My dear, how does this actually impact you? How is what anyone else puts out into the free & open marketplace of ideas affecting your life at all?
It's not a zero- sum game. You take care of your business... Good for you. Someone chooses to crowdsource funding for their trip to the moon, and they get supported from willing people... Good for them! Their choices are in poor taste or unethical to you, you choose another way. Their standards are not yours; yours are not theirs. Why are you so attached?
Here is the most recent one I supported:
http://www.kickstarter.com/projects/1602987887/socklock-hang-12-socks-out-to-dry-with-one-easy-cl/posts/465416?ref=email&show_token=494d6a832d220791
I pledged a small amount, and will get a sample of their product when they're up to speed. It sounds great, and I was happy to do it. Conversely, a friend ran a Kickstarter to self-publish a book of photos, and I thought it was a ridiculous project, so I did not pledge anything, even after a personal appeal.
The other projects I have supported were a community kitchen in Detroit (got a cute
apron from them), a cookbook project in Portland, a brick bread oven on Lopez, & a documentary film project. Like all Kickstarter supporters, I am a capable adult with the ability to make my own decisions about supporting a project -- or not. Can't wait to taste that bread!
It is all about how we are raised and perhaps somewhat generational.
Just because we can, does it automatically mean we should?
However, I agree it is a personal choice. I just find it distasteful and like begging in an upscale technological way.
ps: I should have taken more time to read everything as my comments are exactly what Zoebird said.
You mean triggered? ;)
I think there are lots of reasons. On the one hand, my daily life is just as you say.
It's really hard to explain the frustration that I have with my professional community and their overall lack of professionalism. To me, this is one more way that they are manipulating their clients, eschewing personal responsibility, and ultimately putting the blame of their own failures onto others.
FWIW, when a bid is successful, the wax poetic about how amazing they are as people such they are blessed in this way, and when the bid is unsuccessful, they attack the whole community with great impunity for being unsupportive and unyogic -- without looking at the fact that perhaps what they are doing is simply not appropriate, or unprofessional, or even at the most basic level, not what the market requires or demands.
I'll also say this: this is no commentary on *givers* this is merely focusing on *askers*. So focusing on to whom you gave and why isn't relevant to the question. It's ok to give to whatever project you'd like in whatever way you'd like -- or to forgo as you see fit. I have also given to crowd-sourced campaigns, as I said before. And, I think that there are great campaigns out there and that this is a perfect resource for those campaigns.
In my mind, I'm thinking that microlending might be a better, more viable alternative. like Kiva, but works with all kinds of entrepreneurs. Here's one (http://communitymicrolending.ca) in Canada, and I know a group here to whom I might be able to pitch this as an idea.
It runs very similar to both Kiva and the crowd-sourcing sites -- but it's made for a specific region and local support of small businesses. To me, this makes sense.
ApatheticNoMore
6-30-13, 1:00am
Maybe people should just send me all their money. Why? Because I think I deserve it. All sizes of donations are accepted but I admit VERY LARGE donations are especially welcome.
ANM,
You need to do the right language for these things. First, you want to really inspire people with your unique talents and abilities of simply being. Second, you require these funds in order to really focus on your calling, rather than anything as earthy and difficult as managing your basic finances to live, so that you can better inspire others with your unique talents and gifts. And of course, any and all amounts of so gratefully welcomed, and even the smallest donation gets the giver a lovely gift such as a sticker or you'll say their name while you light your candles before dinner and stuff.
And if a person donates the most do you, you'll think of them while you paint a mural about the interconnectedness of being on your wall -- the mural that helps guide you to your spiritual center so you can better inspire others -- such that their very essence will be a part of your spiritual essence, and the abundance that they so graciously and generously gift to you can reverberate back to them.
There, i ultaimtely got into the swing of it. lol
simplelife4me
6-30-13, 12:17pm
I've seen people get ripped off on kickstarter, so avoid giving money. It's more a crowd begging website.
rodeosweetheart
7-1-13, 10:43am
I've seen people get ripped off on kickstarter, so avoid giving money. It's more a crowd begging website.
I agree. I would never give anyone a penny on Kickstarter or any other Internet begging site.
So no, Zoebird, you are not alone in a feeling of revulsion for Kickstarter.
iris lilies
7-1-13, 8:30pm
IT seems ridiculous for business owners to ask for money for normal business repairs. I would think less of anyone I knew doing this.
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