Crowded Out: Will the competition for crowd-sourcing dollars shut out small projects the platform was originally designed to help? | News | Pittsburgh | Pittsburgh City Paper

Crowded Out: Will the competition for crowd-sourcing dollars shut out small projects the platform was originally designed to help? 

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As of Feb. 14, the PSO's Kickstarter campaign had raised $21,293 of its $30,000 goal, with two weeks to go before the Feb. 28 deadline. (On Kickstarter, projects receive funding only if the entire goal is reached.)

Meanwhile, on Kickstarter alone, about 20 other Pittsburgh campaigns are clamoring for funds. Among them is Mojo Game Studios, a local independent video-game studio founded by former Carnegie Mellon students. Mojo is seeking funding to develop an open-world fantasy role-playing game called Cradle.

"As an independent game studio, we'd like to maintain as much creative control and freedom as we can," says Mojo President Hank Zwally. "That means finding other means of funding. [Crowdfunding] gives people like us an opportunity to do what we want to do. It also gives us a medium for testing community input: Do people really want to see this game?"

So far Mojo has raised slightly more than $118,000 of its $350,000 goal, with just a few days remaining before its Feb. 20 deadline. That fundraising target is meager compared to others: Established game-developer inXile Entertainment, for example, raised more than $4 million last year for its newest project.

Zwally, who expressed doubts about whether Mojo's campaign will reach its goal, isn't happy with the appearance of established firms on the crowdfunding scene. Some of those companies already have investors, he contends: That makes them better equipped to show more game content upfront, which makes them more attractive to other potential backers.

"I think it's pretty clear part of the reason we've suffered is because other campaigns have more content to show," Zwally says. "We don't have that because we don't have the funding. And you can see how they can take away from the available funds on Kickstarter."

Maggie Negrete is another Pittsburgher who was hard up against a fundraising deadline as this issue went to press. She's been seeking $3,000 to publish the first in a series of feminist fairytale comic and coloring books. She too doubts her campaign will be fully funded — she had about $2,300 with just a few days to go — and was critical of bigger names who use crowdfunding.

"It really upsets me because there are corporations or celebrities who have funding or have people they can ask," Negrete says. "I think it's a little exploitive. I think it distracts people from finding projects that might be worth those $10."

Kickstarter spokesperson Julie Wood doesn't see the website's growing popularity as a bad thing. In 2013, three million people donated $480 million to Kickstarter projects.

"We see lots of different projects on Kickstarter," Wood says. "We see projects from people who don't have the means and people who do. But the great thing is, backers get to decide which projects they want to support."

In any case, Wood adds, "It's a misconception that it's some sort of competition or that others are getting overshadowed. When a well-known person uses [a crowdfunding site], it actually brings more attention to the site and to other causes."

Local chef and restaurateur Kevin Sousa tends to agree. His campaign to open a restaurant in Braddock was the best-funded restaurant in Kickstarter's history, raising more than $300,000. The restaurant, Superior Motors, will offer discounts to local residents, feature a workforce-development component and be the only restaurant in the economically depressed Mon Valley town.

"Every Kickstarter campaign creates their own business plan and in turn kind of creates their own market," Sousa says. "Nobody is taking anything away from anyone else.

"There are plenty of folks out there who want to support these things, and the genius of crowdsourcing is that now those ideas have a platform and vehicle to reach their target audience."

Sousa says that crowdfunding can also help encourage risk-taking even among better-known sponsors. "Established brands and organizations — myself included in this category — aren't necessarily flush with capital," Sousa says. "Some projects simply cannot get the funding needed through traditional avenues. When the risk is high and there is no precedent, banks and investors are not generally willing to get behind an idea." Superior Motors itself, he says, was not attractive to bank lenders.

But even on a site like Kickstarter, it sometimes takes money to make money. Companies have begun hiring consultants who specialize in crowdfunding to help capitalize on this growing market.

"Unfortunately I don't think there [is] a whole lot platforms can do about that," Davies, of MIT, says. "You might hear some people say, ‘It doesn't matter; if your campaign is deserving people will find it.' But we all know the competition is fierce, and if you have a slick campaign team behind you, your chance will be better."




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