Should I Contribute to Crowdfunding Campaigns (Like Kickstarter?)
I've seen a lot of Kickstarter campaigns lately that promise great rewards and have awesome ideas. Some of them are already fully funded, others need a little help. Is it safe to give them my money if they're already funded? How can I tell if the end result is going to be as awesome as they promised?
It's tricky to be sure, and while we've explained how to vet a Kickstarter project before you back it
Remember: You're Not Shopping, You're Investing
Even those crowdfunding campaigns that are completely funded and then some by the time you get to them may wind up crashing and burning by the time the money is all gone, so don't assume that just because a project is overfunded by the time you see it, it's bound for success. It's easy to look at Kickstarter and the array of other crowdfunding sites on the web
The problem with that mindset though is that you're not shopping. You're investing, and that comes with risks that aren't necessarily obvious at first, although they should be. To their credit, none of the major crowdfunding sites like KIckstarter or Indiegogo pretend you're doing anything different. They make it clear that you're not ordering a product, you're contributing money in the hopes that a product or service comes to life. Kickstarter is a little better at this by nature, since if a project isn't funded, no money changes hands-but other sites offer flexible funding, where everyone who contributes is out the money, even if the project misses its goal. Either way, it's a gamble, and remember, you should never gamble with money you're not prepared to lose.
Read the Terms of the Crowdfunding Site Before You Contribute
Wherever the campaign is hosted, make sure you read up on when your money will leave your pocket and when it'll hit the bank account of the fund creator. Some people get angry when a campaign fails but they're still out the money they chipped in-if that matters to you, make sure of it before you contribute and go in for the extra perks. Remember, giving $45 for extra perks like stickers, or your name in a short film's credits, won't make a difference if the campaign fails, the movie never gets made, and the creator just takes the money and walks away.
See What Everyone Else is Saying Before You Contribute
At this point, it may go without saying, but you should check the web before you contribute. A catchy promo video, a good looking prototype, and a fully-backed project with money to spare is no excuse for not doing a couple of Google searches to see if major publications have highlighted the Kickstarter you're thinking about funding. Equally important, you can see if the campaign looks great and has tons of money, but no one is talking about it. That should also be a cause for concern.
We've mentioned before that looking up the people behind a project is a good way to start your research-you can learn if they have the right backgrounds and skills to make the ideas they're pitching a reality. That's another great step. If you find there's a lot of buzz about the campaign, or if you-like me-usually discover great campaigns because some other website talks about them, some of this may already be done for you. However, it's important to keep digging. One video game blog may talk about a campaign as the next great platformer, but another may notice that the people involved were also involved in a dozen failed campaigns in the past, and may not be quite so trustworthy with your investment dollars.
Read the Updates, and Don't Be Afraid to Change Your Donation Level
Every crowdfunding platform allows the creators of the campaign to keep in touch with their investors by publishing updates or posting notices to the campaign page. Make sure you read those updates-preferably before you contribute (and if the updates are closed and only visible to backers, that should be a red flag.) You can see the type of tone they take with their investors, how they're currently spending the money, what information they're giving out about the project, and most importantly, you can see how committed they are and regularly they communicate with their investors. You don't want to back a project that's been up for 20 days with no updates from the people behind it.
Some campaigns launch to huge fanfare and praise, but as the team behind it realizes exactly how much work is required to make their idea a reality, they may bail on it. Don't toss your money in after they've left the building. For example, previously mentioned FitRPG
If you find yourself having already backed a Kickstarter-or any campaign-that seems to be going south, remember you can always adjust your pledge amount down to the lowest tier. You're still out for that money, but it won't hurt so hard, and best case everyone else doing the same will result in the campaign failing, so no one gets any money. Then the founders are free to get their act together and try again later.
Don't Expect The World
When Adam Dachis and I talked about the mercurial nature of crowdfunding on a recent episode of Supercharged, we pointed out that part of the problem with crowdfunding campaigns is that there are so many resources designed to help people get rich by doing it that it's inevitable that splashy campaigns will result in disappointing or lackluster results. Even successful projects, like the much hyped Ouya, for example, wound up being a pretty big disappointment after launch. To be fair, the Ouya in't bad, per se. It's useful for lots of things
Keep in mind that all of the promo materials, the extra backer gifts, the shiny perks--all of it is designed to make you contribute your money, and at the end of the day, the result of the project will be what it'll be. You need to be prepared for disappointment even if you have high hopes for the campaign. That awesome looking video game may play terribly and wind up being less fun than it looked in GIFs and video, and that shiny new sous vide temperature controller may only last six months before breaking down or needing to be repaired. Keep those things in mind when you put your money down. There's no way to see into the future and make sure that a successful campaign's product will be everything you hoped it would be-if it appears at all-so the best thing you can do is to try and stay off the hype train and be realistic.
Between those tips and our more logistical guide to vetting a project
Sure, it can be fun to support and back some of those projects, and some of them are one-time things, where the people behind them build their product, get it to the people who helped make it happen, and then move on to the next big thing, but don't let artificial scarcity or shiny bonuses trick you into throwing your money into a bottomless pit. Invest wisely.
Have a question or suggestion for Ask Lifehacker? Send it to email@example.com.