I’m a Molly Crabapple fan – one who gratefully received a preview of her not-yet released Art of Molly Crabapple Volume 1: Week in Hell
A lot of people probably won’t like this because they won’t be impressed by the whole Octopi Wall Street-as-Burlesque aesthetic. But who cares! Don’t give money! Anyway, it’s already fully funded. You don’t like it? Sit n’ spin on your sense of aesthetic superiority!
But maybe there is a slight problem: how to denounce a new Gilded Age while indulging a taste for gilding and, frankly, indulgence. Then again: nope. Not a problem. Because there’s no problem liking to make/look at this sort of stuff while disapproving of a lot of things going on in the world today. There’s no hypocrisy or error I can see. The tension, if any, is not between Crabapple’s hotsy-totsy illustration aesthetic and her political message; rather, between her message and its medium, in light of the fact that the financial medium for the aesthetic medium is a patronage model. If the medium of the medium were a ‘we need the 1%!’ message, that would tend to undermine the message. But Kickstarter kicks her loose from that.
What I wanted to figure out was a way to create work that was funded neither by rich collectors, nor by grant committees, nor by someone’s supportive sugar daddy. I wanted to make giant, fancy, glittering art, paid for by small donors, all of whom, even if they couldn’t afford the pieces I was making, got something of value in exchange. I wanted to make and fund art with the democracy and speed of the internet.
What do you think about Kickstarter? Obviously, it’s mockable. Here’s a game we can play in comments. Write Kickstarter-style proposals for classic works of literature. Mock-proposals, obviously – these works all being fully-funded, indeed long-since already made at this point. The joke shall, of course, consist in the composition of the pitch. William Shakespeare proposing to write Hamlet. James Joyce proposing to write Ulysses. How would Jane Austen have pitched Pride and Prejudice for Kickstarter? Devise an appropriate, ascending ladder of swag plus (perhaps) spiritual attainment. “$50 gets thou a bobble-head mannikin, like unto the Danish Prince himself, a PDF ‘fair copy’, and an ironic sense of the tragedy of existence.” More money buys more. For example, for $1 you get a sense of righteous indignation that Nabokov’s Lolita is smut about a dirty old man and underage girl. For $10 you get the smut. For $25 you also get fridge letter magnets L-O-L-I-T-A. For $50 you get that it isn’t smut. Plus magnets, plus a set of synaesthetically author-approved colored letter blocks, with which you can compose short passages from the text, seeing them as the author himself would. And a sense of superiority. So on, up the critical ladder. For $5000 Nabokov will kill and pin a butterfly for you, plus send you a PDF, explaining what the hell is going on in Pale Fire. Lots of artists could offer up empty alcohol bottles, if nothing else. Van Gogh could have sold that bit of ear rather than just giving it away to someone who, frankly, probably didn’t want it.
A Kickstarter proposal for Hegel’s Phenomenology of the Spirit or for Nietzsche’s Thus Spoke Zarathustra could have exquisitely ramified levels of swag. Dante’s Divine Comedy? The Bible as Kickstarter project? (The rewards could be great, indeed.)
Also, great works of (non-literary) art and architecture. And historical events. Write a Kickstarter proposal for the Enlightenment, or The French Revolution, say. For $5,000,000 you get … it’s still too soon to tell what you get. But for $50 you definitely get a Rameau’s Nephew action figure.
All kidding aside. It’s very nice that artists like Crabapple have this more populist market model, so they don’t have to sell only to the wealthy and/or rely on public funding. (Why should the taxpayers be funding gilded denunciations of gilding? That is an excellent question and I, for one, would not care to take up the other side of the argument.) I do wonder whether Kickstarter is running largely on self-reflexive wonder at the fact that Kickstarter is running so well. I hope it is still running as well in 5 years.
{ 59 comments }
Glen Tomkins 03.16.12 at 4:03 am
The basic problem with the business model this would involve is that the people that the highbrow stuff would appeal to already have tons of better highbrow available — for free! If Shakespeare pitches Hamlet as “The Iliad for our times”, anyone who would be jazzed by that pitch would just reread the Iliad and save their shillings. Shakespeare wouldn’t have been able to write Hamlet had he understood that he was writing the Iliad of his time.
You can’t write anything really first rate except in ignorance — yours, your reader’s, and better yet, both’s — of the first rate stuff that’s already out there. This is one reason the present age offers such rich opportunities; the fact that no one reads the good stuff anymore leaves the field wide open. Of course, the only people who get that can’t profit thereby — they have emptied the cup and seen the spider!
ben w 03.16.12 at 4:51 am
Ok, here’s my pitch for Joyce’s Work in Progress. It takes the form of several essays on the material already published in journals; the hope is that doing so can bring more positive critical attention to the work as it currently exists and to generate the support necessary to see it through to its completion.
ben w 03.16.12 at 4:58 am
The basic problem with the business model this would involve is that the people that the highbrow stuff would appeal to already have tons of better highbrow available—for free!
Right—I can get a cheapo Dover Lear, so why would I buy Wittgenstein’s Mistress?
You can’t write anything really first rate except in ignorance—yours, your reader’s, and better yet, both’s—of the first rate stuff that’s already out there.
This strikes me as an extremely strange opinion, and I am not referring to the question of how I could write anything in my reader’s ignorance of something.
ben w 03.16.12 at 5:06 am
Also, it occurs to me that many works from the age(s) of patronage must have had actual proposals, if not precisely “pitches”. No? Or was every patron a Maecenas (was Maecenas thus?) just giving money to poets?
The rewards could even be similar. Give enough money to keep me for a year, you get dedicatory verses, or a dedicatory letter, at the beginning of each volume.
Aulus Gellius 03.16.12 at 5:40 am
@ben w: Roman poets did brag about the value of their work to their patrons, though usually not with reference to one particular future work (in fact, the bragging that we know of is generally part of the work). There was certainly some of the reverse, patrons making particular requests of poets: Cicero asked a lot of people to write an epic on his consulship, before finally giving up and doing it himself.
But of course, in our own time, at least in the US, “pitches” to patrons of fine art are a whole industry. That’s what development offices at non-profit arts organizations do: they convince rich people and foundations to give money, sometimes (though not always) for making particular proposed works. I think the novelty in what John’s looking for is pitches like that directed at a broader set of patrons, and seeking relatively small donations.
quanticle 03.16.12 at 5:43 am
I haven’t seen anyone yet tackle the Bible as a Kickstarter project, so I’ll have a go.
One word: indulgences.
Hey, they funded St. Peter’s Cathedral. They may as well fund the work that inspired St. Peter’s Cathedral.
Salient 03.16.12 at 6:33 am
I haven’t seen anyone yet tackle the Bible as a Kickstarter project, so I’ll have a go.
I tried to kickstart a ‘living word’ translation of the Bible that I was going to call the Revised American Standard, with suggested donor funding of $11.99 in honor of Innocent III.
I learned from the failure that I might be the only human being in the world to think of “New Revised Standard Version” as a hilarious accidental punking of Protestantism by the NCC. There are only so many times you can patiently point out to someone what a ‘revised standard’ is before you decide to sigh and take down the webpage and scrap your version of Genesis in which God created Eden so that Man could have Liberty and the serpentine Lucifer played the role of the universe’s first illegal immigrant.
Salient 03.16.12 at 7:20 am
For $5000 Nabokov will kill and pin a butterfly for you, plus…
I would settle for a copy of Lolita in which the printer follows the damned instructions right there on the damned page instead of printing ‘Fill the page, printer’ verbatim like a damned fool.
The real prize is going to have to go to the person who does a bang-up job pitching Rawls’ A Revised Theory of Justice. (For $10000, you get to be one of the angel-advocates! You can sponsor an advocate, for less than a dollar per day!)
dsquared 03.16.12 at 7:34 am
I would offer a proposal for a cultural work of great advantage, but nobody to know what it is.
Seriously, what is this thing other than a basically totally unregulated securities exchange? Presumably people are getting ripped off to a fare-thee-well.
The Raven 03.16.12 at 7:42 am
A song of great social and political import…
Phil 03.16.12 at 8:07 am
It’s been done, in the form of Unbound. On which, Jenny Diski:
Unbound suggests itself as a radical move away from commercial publishing, but instead of an alternative, it’s the concentrated essence of marketing. No one is taking any risks or making a leap of faith. This is a crowdsourcing model that is as crowd-pleasing as populist publishing, but on a smaller, safer scale. Readers control what the authors can write. In the past, libraries and bookshops were places you went to to find excitement. The excitement Unbound offers is that of a horse-race with a chance to feel up your horse’s fetlocks before it runs.
phosphorious 03.16.12 at 10:58 am
Here’s the pitch for Atlas Shrugged:
“For $50 dollars, you get to have lunch with the author; for $500 dollars, you get lunch without the author.”
I expect it to reach its goal within a few hours.
Ginger Yellow 03.16.12 at 11:32 am
Not really Cro0ked Timber’s bag, but the recent spectacular success of game developer Double Fine’s Kickstarter fundraising points to the sort of creative endeavour where it could be a really good thing. Most game publishers aren’t willing to finance old-fashioned adventure games, because it’s a really niche genre. But the fans of that niche are very devoted and they don’t have a lot of alternatives. There’s Telltale Games, but their business model relies on churning out games according to a formula and heavy re-use of art assets – not so satisfying for the fans, even though they’ve made some very good games. So Double Fine, which is headed by the creator of some of the greatest adventure games of all time, told their fans they want to make a classic adventure game and ask for $400k to finance it, in exchange for copies of the game, a documentary on the making, and various other rewards based on the financing level (including a photo of one of the developers smiling, or for a bit more money, a non-doctored photo of one of the developers smiling). They reached that target in a couple of hours, and by the end of the fundraising period they made over $3m. Everyone’s happy. Assuming the game gets made and is good, of course, but if anyone can do it, Double Fine can.
Ginger Yellow 03.16.12 at 11:33 am
For obvious legal reasons, Kickstarter is carefully designed not to be a securities exchange. Projects aren’t allowed to offer funders a share in the profits. Though reportedly they are thinking about going through the regulatory hoops to allow them to do that.
Tim Wilkinson 03.16.12 at 2:25 pm
As a democratic model of art procurement, isn’t this kind of ‘charity will sort everything out’ all over again? Just to keep utopia in clear view.
I have to add too, that the art is neither good nor big. (Kept that as slight as possible, since I’m going to have to sit and spin on it.)
Glen Tomkins 03.16.12 at 2:28 pm
“Right—I can get a cheapo Dover Lear, so why would I buy Wittgenstein’s Mistress?”
Of course there are all sorts of alternatives to the really good stuff. Lear is, in fact, a really, really unequivocally bad choice if what you’re looking for is a bit of escapist distraction. It, and all of the good stuff, tends to annihilate escapist distraction, it gives escapist distraction the third degree. You can only take so much Lear in your life if you have any feeling for what it’s about. Dr. Johnson can almost be pardoned for thinking that giving Lear a happy ending was a good idea, considering that as a critic, he had to sit through productions of Lear with some frequency.
Never having read Wittgenstien’s Mistress, I can’t claim to to know if it’s the good stuff, escapist distraction, or, as is true in most cases, escapist distraction gussied up with enough patina of truth-seeking to allow readers to wallow in escapist distraction without having to feel guilty about it. The spectrum of exactly how much gussying a reader requires in order to settle for the deception is pretty much the gradient of high to low brow.
“This strikes me as an extremely strange opinion, and I am not referring to the question of how I could write anything in my reader’s ignorance of something.”
Exposure to the real thing tends to destroy the effectiveness of the patina that producers of high brow escapist distraction need in order to move their product.
If the reader has no pretensions, if he or she is open about wanting escapist distraction from a work, then the author doesn’t need to rely on gussying and fake patinas. That person doesn’t need his revenge movies to be any sort of incongruous “revenge tragedy”, that reader doesn’t need that dishonest “tragedy” tacked on to hide the escapist id-feeding of seeing the bad guys blown away by our avenging hero.
But if you’re going to move escapist revenge fantasies among the sophisticated, you need something like the “revenge tragedy” concept. Let your product be a single-minded glorification of the hero blowing away the guys in black hats, and the sophisticated reader feels guilty about feeding his or her id. So you throw in a bit of complexity — the hero dies in achieving his revenge, the hero destroys something he values in the process of blowing away the bad guys, or the bad guys have some attractive features, etc., etc.– to assuage the super-ego. These complexities make it “tragic”.
The problem you have as reader or author of this high brow escapism, is that some Shakespeare has already exploded things like “revenge tragedy” with things like Hamlet. You simply can’t do another revenge tragedy in a post-Shakespeare world, because he already wrote the last viable such, the one that exploded the genre. Well, you can’t write another except insofar as you and the reader haven’t digested your Shakespeare.
Ignorance is indeed vital to the industry.
ben w 03.16.12 at 2:41 pm
Exposure to the real thing tends to destroy the effectiveness of the patina that producers of high brow escapist distraction need in order to move their product.
… which is quite distinct from your claim that authors can only produce first-rate stuff in ignorance of the first-rate stuff of the past.
Were that true, we would be forced to conclude that there has been much less first-rate stuff than previously thought in the last several hundred years.
ben w 03.16.12 at 2:42 pm
Also, I recommend Wittgenstein’s Mistress.
Michael Mouse 03.16.12 at 4:24 pm
It’s worth noting that Kickstarter (and similar things, including those available for non-US projects) are not fundamentally new models. Groups of ordinary (and not-so-ordinary) people have banded together to pay for things for … well, a jolly long time. Certainly British settlement older than, say, Milton Keynes will have at least a handful of constructions funded “BY PUBLIC SUBSCRIPTION”. It was also an established (if somewhat eccentric and archaic) way of getting books published until print-on-demand turned up.
You might argue, of course, that doing the same thing faster and with a broader (potential) reach is in practice to do a different thing, and I wouldn’t disagree. Sufficient quantitative change is a qualitative one, and all that.
Manta1976 03.16.12 at 4:41 pm
Why stopping at art? You could also fund scientific and political work, that way.
Galileo: for 10€ you get a dedication on the sidereus nuncius.
For 100€ your name is used for Salviati in the Dialogue.
Machiavelli: for 10€ you get a dedication on the Prince, and for 1000€ the book is about your political exploits (but, caveat emptor, you might not like the result).
Glen Tomkins 03.16.12 at 5:11 pm
“Were that true, we would be forced to conclude that there has been much less first-rate stuff than previously thought in the last several hundred years.”
Well, I reached that conclusion some time ago. Not centuries, but still pretty long ago.
“Also, I recommend Wittgenstein’s Mistress.”
Hmmm. What’s your 15-second elevator pitch, or your Kickstarter pitch, if we don’t want to stray too far off-topic, for Wittgenstein’s Mistress?
The reason I ask, is that for the good stuff to work, for it to actually succeed in destroying a genre and its pretensions and illusions, it has to first make the opposite movement, involve the reader as deeply as possible in those pretensions and illusions. You’ve got to hook the readers’ ids, engage them totally in the illusion, before you can smash the illusion and have the lesson take. What’s the hook in Wittgenstein’s Mistress?
What I have heard and read about Wittgenstein’s Mistress makes it sound like a very stereotypical “anti-story” story, and this by people who imagine that they are praising it. If these people are right, then the thing very properly looks down its nose on hooks, narrative drive, etc, and all that machinery of illusioneering. If these people are wrong, what’s the thing’s hook? If it doesn’t have a hook, if it isn’t going to sucker an old cynic into believing enough in the importance of its story to haul his tired old bones up that wellworn staircase again, why do I take the time, of which I have less and less left every day, to read the thing? Is it a better anti-story story than The Republic?
ben w 03.16.12 at 5:12 pm
It was also an established (if somewhat eccentric and archaic) way of getting books published until print-on-demand turned up.
Is my vague memory that Ulysses was first published by subscription correct? (It is also my vague memory that this used to be not merely established but extremely common, or even the default way of publishing a book?)
James Reffell 03.16.12 at 5:32 pm
A list of subscribers for Fanny Burney’s Camilla, or A Picture of Youth. You may recognize some of the names.
Kickstarter primarily funds arts projects (defined broadly) and I suspect won’t change their model (it’s working spectacularly well, and the founders are arts-oriented). It is, depending on the specifics of the project, either the old-fashioned subscription model (you pay for a thing, you get a thing) and/or the NPR model (pure donation but you get a gift).
The example of Kickstarter was in part the inspiration for the crowdfunding of the current Jobs act that recently passed in the House. This would allow for an investment/securities model, at relatively low levels ($10K or less).
James Reffell 03.16.12 at 5:59 pm
Also, there is indeed a Kickstarter for science.
Tim Wilkinson 03.16.12 at 7:44 pm
Actually ‘swivel’ is better I reckon (pron. ‘swivw’, as in “si’on nissun swivw”).
dbk 03.16.12 at 8:49 pm
In an effort to do what the OP suggested we try our hand at:
Subscribers sought for a kick-ass architectural project atop spectacular geographical site, centrally-situated near major city and international port. The project architect is already experienced from building a similar monument at an equally-spectacular geographical location. Estimated cost: +/-500 talents. One (1) talent entitles subscribers to a faithful copy of the architect’s very own drinking cup (original found at that second spectacular location); five (5) talents entitles subscribers to a faithful copy of the architect’s chryselephantine colossal statue located within the monument, based on a faithful miniature copy of the original. Ten (10) talents will enable subscribers to ~1% of the proceeds accruing to a major world museum from the display of large segments of the original over a period of two centuries. Fifty (50) talents or more will entitle subscribers to a cut (~5%) of anticipated future profits from sale of entire monument to another entity enamored of the monument, but not of its builders’ current representatives.
Keith Edwards 03.16.12 at 9:03 pm
ben w@22:
Is my vague memory that Ulysses was first published by subscription correct? (It is also my vague memory that this used to be not merely established but extremely common, or even the default way of publishing a book?)
True. A few years back I saw a show of artwork inspired by Ulysses (at UT Austin) that also had an original edition and the subscription ledger. The ledger was open to a particular spread showing how half the subscribers that funded the first ed. were pretty much the literati of the time (or everyone who had a cameo in Midnight in Paris). This would seem to imply that at some point Joyce had a pitch for the work to convince everyone to subscribe, so it was in effect the analog of what Kickstarter is doing now. And it was pretty much the standard procedure for anyone who wasn’t wealthy enough to pay the publishing costs themselves.
It’s only been since the mid 20th century that this changed to the corporate publishing model of submitting manuscripts to an editor, who acts as a gatekeeper. Previously, low literary rates and limited access to expensive equipment was the gatekeeper.
Aulus Gellius 03.16.12 at 11:00 pm
For the Iliad, of course, $50 got one of your ancestors into the Catalog of Ships, $100 got him a moving death in battle (limit two per donor), and for $1000 you could insert into the poem an entire episode, of your own composition, describing a night-raid not to affect the overall plot.
For the Aeneid, $50 got your gens a Trojan progenitor in the games of Book 5, $100 got you an ancestor among the Roman heroes in the underworld in Book 6, and for $500 you could fill up one of the many available half-lines (first come, first serve; a number of slots were still open when Vergil died).
ben w 03.17.12 at 4:09 am
The reason I ask, is that for the good stuff to work, for it to actually succeed in destroying a genre and its pretensions and illusions, it has to first make the opposite movement, involve the reader as deeply as possible in those pretensions and illusions. You’ve got to hook the readers’ ids, engage them totally in the illusion, before you can smash the illusion and have the lesson take. What’s the hook in Wittgenstein’s Mistress?
What in the world is wrong with you?
What I have heard and read about Wittgenstein’s Mistress makes it sound like a very stereotypical “anti-story†story, and this by people who imagine that they are praising it. If these people are right, then the thing very properly looks down its nose on hooks, narrative drive, etc, and all that machinery of illusioneering. If these people are wrong, what’s the thing’s hook? If it doesn’t have a hook, if it isn’t going to sucker an old cynic into believing enough in the importance of its story to haul his tired old bones up that wellworn staircase again, why do I take the time, of which I have less and less left every day, to read the thing? Is it a better anti-story story than The Republic?
Why don’t you pick it up and see for yourself? It’s very engaging; I don’t know if that means it doesn’t look down its nose on hooks and narrative drive.
jim 03.17.12 at 12:39 pm
Christo and Jeanne-Claude basically funded their landscape installations by selling ancillary and preparatory works. I believe you can still stop by Christo’s loft and buy an autographed copy of the Environmental Impact Statement for his project to roof a river in Colorado.
What Kickstarter does is it democratizes this process. You need no longer be a collector who knows where Christo’s loft is (and who Christo knows is safe to let in) to buy ancillary/preparatory materials. And you need no longer have the reputation that Christo and Jeanne-Claude developed to fund an artistic project this way.
tomslee 03.17.12 at 5:01 pm
A sceptical view of Kickstarter can be found at Mr. Teacup’s very pretty site.
tomslee 03.17.12 at 5:52 pm
About This Project
Dinnae kid yourselves. Ah’m goan tae write this fuckin book masel, nae matter if ye radges hand over the poppy or nae. Ah’ve just goat tae finish wi this Jean-Claude Van Damme video. There’s a man knows how tae fuckin kick start, that’s for sure.
Shite. Who am ah kidding? Ye’re the ones in the chair, and ah’m just launchin ma bullshit spiel. Ah have a need for the poppy like ah’m gittin sick and need to score, so don’ haud oot oan us. Ah can take ma fair share ay crass humiliation.
Pledge $5 or more
Yis are a cheap cunt. Ah’ll see ye aroond.
Pledge $10 or more
That’s maer like it. Fae this kind ay dosh ah’ll see tae it that heidbanger Begbie doesnae kick yis teeth doon yir neck.
Pledge $20 or more
Now ah’m cookin. Ah’m full ay the milk ay human kindness now. But seriously, is ye daft or wha? The balance ay power between me and yis has fundamentally shifted, likesay. Maybe ah’ll burn through this dosh, but then again, part ay me doesnae want tae. Ah might need yis again. so ye jist wait and see, likesay?
ben w 03.17.12 at 7:22 pm
A sceptical view of Kickstarter can be found at Mr. Teacup’s very pretty site.
His view of Kickstarter is pretty naive (and downright inaccurate in an important point—it isn’t a hosting site that charges you more than other hosting sites, it’s a hosting site that only conditionally charges you at all).
John Holbo 03.18.12 at 4:01 pm
Thanks for the great comments. This thread has been most entertaining.
Harald Korneliussen 03.19.12 at 2:05 pm
dsquared: “Seriously, what is this thing other than a basically totally unregulated securities exchange?”
Quoted in order to be used (thrown back) at a later date. Kickstarter is doing wondrous things, and it’s the way things are going. It’s the sensible way to fund projects with positive externalities – right now, just cultural projects, but just you wait.
tomslee 03.19.12 at 3:18 pm
Harald. Could you be more specific than “wondrous things and it’s the way things are going?”
It looks to me like Kickstarter is aggregating funding of startups, with most people bringing their own networks to provide the bulk of the money. So I’m sure you will see some great things get funded on Kickstarter, but I haven’t been convinced you’ll see many projects funded that wouldn’t have got off the ground some other way. Of course, there will be heart-warming anecdotes, but while a list of ten or a hundred great projects sounds impressive it’s a drop in the ocean statistically.
James Reffell 03.19.12 at 6:22 pm
Once again, Kickstarter is not primarily about “funding of startups,” at least if you mean technology startups. This issue gets confused because in some cases that is (sort of) what is happening, and also because policy people are using Kickstarter as a model of why small-scale funding of startups might work well. But that is not what Kickstarter was built for, nor what it mostly does. It was built to be an arts funding mechanism, at which it has been very successful.
See this piece by a Kickstarter founder which goes into this in more detail, when this subject came up re: the “Kickstarter biger than the NEA” meme.
Partly this confusion happens because some of the Kickstarter projects that have garnered the largest amounts have been technology projects (e.g. an iPhone dock and a video game) — but even so one of the recordholders is for a reprint of an online comic which involves stick figures and D&D.
tomslee 03.19.12 at 6:30 pm
Thanks for the correction. Elsewhere I did say “projects” but I guess somewhere in my subconscious this misunderstanding was lying in wait.
I accept that Kickstarter has been successful, but it’s still difficult for me to see whether it is generating new funding for arts projects or aggregating existing sources. I find it hard to know what data would help evaluate the question either way.
Martin Bento 03.20.12 at 7:48 am
Tomslee, Kickstarter takes a commission and is a bit of a bother. You have to distribute all these gifts and are expected to kind of babysit your donors. So no one would be doing it if it did not add value. And that’s not just in aggregate: each individual project must think it is worth the bother, and most are probably correct.
Without getting into a tangent on the definition of “art”, Kickstarter funds a lot of the kinds of creative projects that don’t get much love from the NEA: comic books, computer games, rock albums. They also fund the kinds that do: installations, performance art, though perhaps not at the same level. Some things could probably be otherwise funded, but Kickstarter is a better deal for the creators. For example, some bands that have had record deals in the past have nonetheless funded albums through Kickstarter. This way they retain all the profits and the creative control. The guy who was head of design for the Obama 08 campaign funded the initial printing of a coffee table book on the use of design and art in the campaign, both by the campaign itself and by supportive amateurs. I’m sure he could have found a publisher for this (especially in 09, when he did it), but decided to keep all the money for himself and whomever he was licensing stuff from.
Martin Bento 03.20.12 at 8:13 pm
To me the interesting question here is what happens when the micro-securities market that some have ignorantly hallucinated in Kickstarter actually emerges. As James mentioned in 23, the house has passed a bill to legalize, even encourage, this. Typically for Republicans, even when they have a good idea, they blow it by going hog-wild. Ten percent of income is too high a maximum investment for something this experimental. Should be about 2%. So I’m hoping the Senate passes it, but waters it down.
Bloomberg (I think it was) calculated that if Americans put 1% of their current investments (I’m assuming sans real estate) into this market, it will increase venture capital by a factor of 15. One of the problems of supply-siders seems to be the assumption that the economy can productively deploy any level of investment. False of course, and the marginal return on investment declines like anything else. Such a surge in investment, destined to go mostly to tech probably, will do more than create another 90s style bubble. It will reduce the bargaining power of investors so that they can claim much less of an ownership stake in exchange for money. Since these investments mostly fail, investors need to make a lot on the successes to make up for the failures, and I don’t see that happening in a flooded market. So the micro-capitalism model will create a general problem for the viability of venture capital, which no doubt will be blamed on the populism of allowing the ignorant hoi polloi into the elite venture game, but which is predictable from the magnitude of investment (I’m so predicting it now), and therefore has nothing to do with mass stupidity.
One thing likely to happen is that this alternative market stays a bit Kickstarter-esque, or reverts to Kickstarter mode following initial failure of a more purely capitalistic model. People will be funding things they want to see, rather than just things they want to make money off of. The startups that have gotten funding from Kickstarter have gotten it for this reason, and there is, in my view, not a thing wrong with this. As a model of pure investment, though, I worry that micro-capitalism will be too much for the industry to absorb in the short-term.
dsquared 03.20.12 at 8:26 pm
To me the interesting question here is what happens when the micro-securities market that some have ignorantly hallucinated in Kickstarter actually emerges.
I don’t think it actually is all that “ignorant” or a “hallucination” to say that a public forum where current cash is exchanged for promises of future benefits is a securities exchange in all but name. (I particularly like “This issue gets confused because in some cases that is (sort of) what is happening”. Yeah, really confusing, the idea that something actually is what it very much looks like).
So the answer to your question is that, as this currently largely unregulated exchange grows bigger, one of two things will happen:
1) It will develop some form of regulation to protect the funders/investors against scams
2) It will become a scammer’s paradise.
ie, it will either grow like the US curb market and NASDAQ, or it will grow like the Vancouver Stock Exchange.
Once upon a time in a pub, when someone was starting one of these things up for indie bands, me and Alex Harrowell came up with the idea of writing a script that would scrape Myspace for generic photos of teenagers staring moodily across a car park while wearing eyeliner, and scrape the SXSW website for equally generic emo rock, then use a version of the Postmodernism Generator to post band biographies, then get rich on the Nigerian 419 principle that if we created a million fictitious indie bands a day, we’d only need a hit rate of 0.1%.
ben w 03.20.12 at 8:27 pm
I take it that it was you and Alex coming up with the idea that Alex would do those things?
dsquared 03.20.12 at 9:08 pm
Odd you should ask that Ben – we both realised that the ethical and legal risks (particularly given the new extradition treaty with the USA) were too great, so I had kind of marked you down for that post.
Martin Bento 03.21.12 at 1:22 am
Ordering on Amazon is buying on a public forum where current cash (well, credit or debit cards, but that’s how most exchange is handled on Kickstarter as well) is exchanged for the promise of future benefits. The benefit may not even yet exist (books can be preordered). By your definition, anything where payment precedes delivery is a securities market. However, actual securities markets would not qualify, as the benefits are hoped for, but explicitly not promised. In Dsquared’s world, bonds are securities because they promise a benefit, Best Buy gift cards are securities, subscriptions to the NYT are securities, but stock in Apple – not a security, because nothing is promised.
Martin Bento 03.21.12 at 1:57 am
Daniel also wrote:
“I particularly like “This issue gets confused because in some cases that is (sort of) what is happeningâ€. Yeah, really confusing, the idea that something actually is what it very much looks like”
This is an abuse of pronouns. “That” in the sentence from James #37 that Daniel quotes refers to the funding of startups, not the selling of securities. There are many ways to fund startups, but if “security” means anything, it means a claim on equity, and people cannot get equity through Kickstarter.
dsquared 03.21.12 at 7:57 am
In Dsquared’s world, bonds are securities
Bonds are securities, Martin. If you think that “securities” only means equity shares then you might want to dial the condescension level down quite a lot. The bond market is a securities market, regulated by the SEC.
You might be interested to know that prepaid funerals and season tickets (for transport and for sports teams) both have a specific carve-out from UK securities law because they would otherwise fall within the legal definition of a securities market. Kickstarter is, pretty visibly, providing investment capital for projects (and like the iPhone docks, a lot of these “projects” look very much like small businesses) via public subscriptions. I’m sure that it has received legal advice that it is not currently doing securities business within the definition of US regulations, but I am equally sure that it is in constant ongoing need of such advice because what it is doing is very very like regulated securities business indeed. If you’re in the funding market, you’re either doing it privately or via appeal to the public, and if you’re doing it via public appeal, then there’s a strong rebuttable presumption that what you’re doing is securities business.
(I do hope that nobody’s getting hung up on the word “securities” here. Venture capital trusts aren’t securities and nor are private equity limited partnerships, but they’re also heavily regulated businesses. The important thing is that if Kickstarter grows or starts funding startups, it is going to have to either put in place a massively more costly regulatory apparatus, or it will become scamapalooza.)
dsquared 03.21.12 at 8:13 am
The example of Kickstarter was in part the inspiration for the crowdfunding of the current Jobs act that recently passed in the House. This would allow for an investment/securities model, at relatively low levels ($10K or less).
currently being referred to as the “Just Open Bucket Shops Act.
Martin Bento 03.21.12 at 2:42 pm
Daniel, the point is that Kickstarter is not providing a share in the profits to the donors, so the donors are not investing. The closest analogue is PBS and other institutions that have pledge drives and provide “gifts” to donors. One could argue that they are simply selling things, but they are clearly not providing investments. If you don’t want to get hung up on the literal word “securities”, fine, but then it doesn’t matter that prepaid funerals need special carve-outs to not fall under that word – prepaid funerals are not investments, and if there needs to be a bit of special provision in the law to keep them from being treated as such, that’s neither here nor there. If you’re talking about literal securities, no, Kickstarter is not that, but if you’re talking about the essence of the thing, which is investment, no, Kickstarter is not that either.
Daniel 03.21.12 at 3:15 pm
I think it’s very very similar to investment along the relevant dimension, which is that it would be very easy for a fraudster to exploit it. Kickstarter (like a number of similar sites before it) is trying to say that it can bring two people together and facilitate one of them marketing to the other, but disavow any responsibility for the eventual transaction. That’s a very difficult legal tightrope to walk – also in general the law is there for a reason, and these marketplaces always (as eBay did) end up having to invest in anti-fraud and buyer protection systems if they want to scale.
Martin Bento 03.21.12 at 3:48 pm
There are many things subject to fraud. That doesn’t make them investment markets. People are giving money to projects on Kickstarter primarily to see the projects enacted. This is true even for the straight-forward profit-making enterprises like fancy iPhone stands. If it’s a ripoff, you could be denied the iPhone stand or whatever, but it’s not like losing an investment because you did not invest. You did gamble that these people would be willing and able to deliver. I could perhaps see a requirement that Kickstarter projects be bonded for the value of the gifts or something.
As for HR3606, well, that obviously is intended to create a microsecurities market. And, as I argued above, in its current form, it is a mess. But the status quo is not acceptable either. The notion that ground floor investment in things like Google should be limited to the wealthy (and close personal contacts of the founders) is something that should offend anyone concerned even with equality of opportunity, much less equality of results. Being able to fund a startup with myriad small donors, each of whom is risking little, helps to level the playing field. And we’ve all been ripped off to a fare-thee-well by the existing financial system as it is. There is no collection of Nigerian scammers who could do the damage that the reputable established institutions privileged by the law based on their supposed expertise and ability to undertake risk did.
Daniel 03.21.12 at 3:54 pm
There is no collection of Nigerian scammers who could do the damage that the reputable established institutions privileged by the law based on their supposed expertise and ability to undertake risk did.
CLICK brrrrrrrrrrrrrrrrrr.
tomslee 03.21.12 at 5:10 pm
Martin: You did gamble that these people would be willing and able to deliver.
…The notion that ground floor investment in things like Google should be limited to the wealthy (and close personal contacts of the founders) is something that should offend anyone concerned even with equality of opportunity, much less equality of results.
As you say, there is no “investment” here in the sense of making money and hence no equality of anything. Also, the Kickstarter accountability guidelines are entirely consistent with Daniel’s concern that it “is trying to say that it can bring two people together and facilitate one of them marketing to the other, but disavow any responsibility for the eventual transaction”, which is a major issue with any community-driven initiative that goes mainstream.
Martin Bento 03.21.12 at 5:21 pm
Tomsless, the paragraph you quoted begins “As for HR3606, well, that obviously is intended to create a microsecurities market”. So I am very explicitly not talking about Kickstarter in that paragraph, but about the microsecurities bill passed by the US House of Representatives.
Tim Wilkinson 03.21.12 at 5:34 pm
CLICK brrrrrrrrrrrrrrrrrr
Too late, we heard it ringing.
Martin Bento 03.21.12 at 8:34 pm
PS, welcome to the Internet. If I go to a site called “Amada’s Sporting Goods” or “Tom’s Bookshop”, how do I know these are legitimate businesses and not just scams to get my credit card number? Even if I go to Amazon, how do I know the site has not been hacked? Two hours of control of Amazon’s site will net you a lot of CC numbers. Unless I do a lot more diligence than is easy or than most do, I don’t. And the early days of the Web saw some hand-wringing about how it is a paradise for scammers, and so it is. But the benefits of the open system far outweigh the costs of having novel avenues for scammers. Yes, you do what you can about scammers, but you still let Joe Blow open a website without going through a central authority.
Jake 03.21.12 at 9:58 pm
Of course most online purchases are done via credit card, where your liability in the case of fraud is legally capped at $50 and the credit card company is responsible for the rest of it. So the credit card companies act as the central authority for who can open a website in your terms, and small merchants bitch incessantly about the ridiculous hoops they have to jump through and the insane amount of money they have to keep in reserve and how slowly they get paid.
Who’s expected to provide the supervision for the new “sell shares to the public” world of financing?
Martin Bento 03.21.12 at 10:16 pm
Jake, you’re assuming I’m actually signed up with a credit card company to charge cards. Why would I bother with that? If all I want to do is steal numbers, all I have to do is have an HTML form for them to write the number in, a snippet of code to store it in a database, and some sort of generated HTML to give a success message. That’s not how it’s supposed to work, but then I’m a scammer, aren’t I?
Tim Wilkinson 03.21.12 at 11:14 pm
Credit card companies are currently, or have been until recently, keen to quickly and quietly reimburse those claiming fraud – at least those who might be listened to. I would expect them to become less munificent once such transactions have become indispensable. Like insurance companies they are in a privileged position in assessing claims.
cf. in the UK cheque guarantee cards, which don’t seem to provide a guarantee any more, but which were unconvincingly found to be protected by criminal law in the early 80s.
Debit cards, before they were ubiquitous and online point of sale transactions were rolled out, were originally protected by genuine penalty clauses, deterring cardholders from overspending which would have necessated (in a modality which holds constant profit) either non-payment of ‘guaranteed’ transactions or excessive exposure to genuinely unauthorised borrowing.*
Debit card transactions can be challenged as fraudulent, though this is very much an on display in locked filing cabinet, beware of the leopard kind of situation. I think they can also be reversed within 70 days or something without an allegation of actual fraud. But they don’t like doing it though I think they do for big clients.
I went in to a branch recently because I’d fallen foul of one of those bar-bet cancellable free trials but without accessing the product and under the impression the clock hadn’t started. Said my card details had been compromised, I didn’t think the big company should have taken the money, they said they couldn’t do anything. Said but you can reverse transactions and for this one there was no mandate†.
Then they say I have to get in touch with the fraud team on some number. So took out some cash, cancelled card/ordered new one, took the £15 on the chin and moved on. Beware of the leopard. Or the Glaswegian mountain lion, that is easily provoked.
*Though these remained extravagantly disproportionate to costs, after they lost some of their deterrent function (and were pre-emptively rewritten – I should write a -dull but- short book about the UK bank charges fiasco) while retaining the shame and blame rational choice, they were held not only to be ‘incapable of being penalty clauses’ but to be concerned with the adequacy of the remuneration with respect to the goods or services offered, i.e. price not contingent/non-‘market’ claim, thus not unfair under the meaning of the consumer contracts directives as enacted. Which I don’t suppose anybody is interested in actually…I’d better go. (Yes I think you better had.)
† (the bank acts as agent in respect of payments out – see some case in the 20s; Atlantic something – thus has fiduciary obligations about them and quite right too. Bank charges lifted automatically and with priority seem to be self dealing unmandated transactions but anyway.)
Tim Wilkinson 03.21.12 at 11:32 pm
OK look just in case anyone is interested, this is very much an on display in locked filing cabinet, beware of the leopard kind of situation. should have applied to I think they can also be reversed within 70 days or something without an allegation of actual fraud.
It’s specifically or especially online transactions that the companies are keen to maintain confidence in, of course.
Comments on this entry are closed.