Who’s the Shop Steward on Your Kickstarter?

[from The Baffler No. 21, 2012]

The Baffler’s own Kickstarter campaign took place last spring, attracted 308 backers and $20,761. We raised our funding goal. For details, check out the print version of the below essay in the new issue.
                                                                                              —The editors

At least twice a week I get an email asking for support for a new project via Kickstarter. More often than not I pledge money, wanting to act in solidarity with friends and acquaintances with giant ideas but small bank accounts. And Kickstarter, once a promising platform for artists and other cultural producers to raise money, has become the go-to tool for fundraising by writers, artists, designers, political activists, and even popular musicians and award-winning filmmakers. As more friends use it, and as I cough up more and more money with every visit to the website, it seems a good time to try to crack it open to see how it works—and who it really works for.

The basics are easy to understand. You have a project that requires financial help to realize. You choose an amount you want to raise, make a short video advertising the future project, and then post it on Kickstarter.com as a “campaign.” In order to entice people into supporting this campaign—or, in the site’s parlance, to become “backers”—you offer “rewards”: goods and services people will receive if they pledge money. Generally, the more money a backer pledges, the more valuable the reward. If you reach your fundraising goal within a fixed time period, between one and sixty days, then the money is yours. If you fail to raise the full amount, you don’t get any of the money; you just get sad.

Crowd-sourced, or community-based, funding models are not new. Bake sales and lemonade stands have been around for a while, funding everything from Parent Teacher Associations to small-town historical societies. As a kid, I went door to door selling Christmas wreaths for the Boy Scouts, and most of us have gained at least five pounds eating Girl Scout Cookies. The value that Kickstarter adds to these relatively common fundraising models is threefold. First, it provides software tools that make it easy to plug your campaign into existing online social networks, primarily Facebook. Second, Kickstarter offers a clean interface and a convenient payment mechanism, giving your project a gloss of professionalism it might otherwise lack. Third, Kickstarter links projects through its website, so people who help fund your project might also click on a completely different film project and become a “backer.” This means your own project may get support from strangers far outside your direct personal networks. These three features are why setting up a Kickstarter page seems so much more efficient than setting up a bake sale.

More efficient, and more necessary than ever. Since the eighties, state funding for the arts has dwindled, and we cultural producers have turned toward private foundations for grants. Now many of us are exhausted by an endless cycle of grant applications to foundations where who you know is more important than how interesting your project is. Kickstarter, meanwhile, has announced that it’s distributing more arts funding than the National Endowment for the Arts. According to bloggers at InformationDiet.com and the Los Angeles Times, while Kickstarter is looking at facilitating the funding of $150 million in projects (compared to the NEA’s funding of $146 million) in 2012, at least a quarter of the money is going into technology development and product design projects—nothing that could honestly be considered the arts. Even so, Kickstarter still looks to be a promising and seemingly innovative way to raise funds. Hundreds of friends and acquaintances are trying it out. But any time there is a suggestion of free money, we should get suspicious.

Welcome to Your New Boss,
Kind of Like Your Old Boss

Kickstarter cultivates the illusion that when you use its fundraising tools, you are opting out of wage labor. You are rejecting the usual game of winners and losers that comes with capitalism and turning to a model that allows everyone to win—one that combines the freedom of self-employment with the shared experiences of community building. Yet for all the talk of a crowd-funded revolution, Kickstarter manages goods, services, and labor in ways that are quite familiar. In 2009, the Guardian and other mainstream news outlets began reporting on teenagers—and prisoners—in China being employed to play video games like World of Warcraft for upwards of ten to fifteen hours a day. They were “mining” for “gold”—virtual money, weapons, and other resources that their bosses could sell to wealthy American and European gamers for real-world profits. This news tidbit caught a lot of interest because it so clearly illustrates the blurry line between the virtual and material worlds, and the quick hop, skip, and jump from one person’s entertainment to another’s imprisonment. Most of these news articles safely located the exploitation end of the equation halfway across the globe. But is it possible that the ultra-hip, intellectual artist set, building digital platforms controlled by corporations that deal in virtual goods, is also mining for someone else’s gold?

The Kickstarter platform and website might not look like a shop floor, but when you are there, you are working. The exchange goes like this: rather than work for a wage with minimum protections and some semblance of benefits, you marshal all your friends, and their friends, to ante up small amounts of money for your project. If you reach your goal, you get to keep the money you raise, but Kickstarter peels off a dime for every dollar your family and friends chip in. Then a nickel of that dime goes to Kickstarter’s exclusive money broker, Amazon.com, for processing the financials. So Kickstarter’s gross revenue is 5 percent of all the money brought in by all of our projects. (On four recent, celebrated, multimillion-dollar projects alone, Kickstarter brought in more than $1,175,000.) Since Internet infrastructure is relatively inexpensive, the costs of running a website that doesn’t produce or distribute any material goods is limited. The scaling up of web traffic doesn’t translate to an equal scale-up in costs, and at a certain point, costs max out, and profit skyrockets.

Running a Kickstarter campaign is work, so what do you get for your labor? The money you raise, of course. You do keep it, right? Well, say you run a campaign for $10,000—somewhere between a third to two-thirds of what a struggling artist might make in a year. You send out thousands of emails about your campaign, post it on dozens of friends’ Facebook pages, send out lots of tweets, talk it up with everyone you meet, and try to get as many people as possible to do the same. You’re a popular person living in a major city, with an active social network and a compelling project, so you hit your mark—$10,000 is pledged. Kickstarter and Amazon take 10 percent right off the top, so now you are down to $9,000. If the money is coming in to you as an individual, Kickstarter treats you like a self-employed contractor, so it’s on you to figure out your tax burden and pay it, likely at least another 15 percent, so now you’re at $7,650. For a $10,000 campaign, you will have around 200 donors, of whom 150 will want rewards. If your rewards are physical objects, and you were generous in your offerings (a good idea when raising money), you’re going to have to wrap 150 packages, all of which need shipping supplies and postage to get to their destinations. On average, you’re likely spending $8 per package, so that’s another $1,200 off your total; so now you’re at $6,450. Within a few weeks a third of the money you raised is gone, and you haven’t begun to spend it on the project you were raising it for.

But using up $3,600 isn’t the end of it. In addition, you’ve tapped out and stressed out most of your creative network in the process of generating the rewards, the introductory video, the reminders to donate to the campaign, and the personal requests to popular acquaintances to mobilize their networks to donate as well. Your close friends have helped you pack all the rewards and drag them to the post office. All in all you’ve taxed your community to a bending (if not breaking) point, and spent a good 150–200 hours—not on your project, remember, but on raising money in hopes of eventually getting to work on the project. If you were to pay a reasonable wage for that labor, you’re looking at another $2,500 in costs, lowering your total intake to under $4,000, or close to a third of what you raised. And suddenly a day spent on a grant application doesn’t seem so bad.

Kickstarter and Amazon made a grand sitting back and watching you do all that work. This is money they made not only on your friends directly paying it, but also on using you to tap into a deep-seated belief in our culture that volunteering is an important social value. Kickstarter gets its rentier-style money, you get a small portion to fund your project, and everyone else gets to bask in the glow of how wonderful it was for them to participate. What could be more exciting to venture capitalists and CEOs than a way to make money that on the surface seems completely non-coercive and non-exploitative of the raw materials, labor, and consumers involved?

Meanwhile, data on you and your networks has been collected along with the fees. Whether or not Kickstarter is turning around and selling your information, its collection adds value to the company based on the possibility of doing this. The founders and employees of Internet start-ups don’t make money from providing products or services, but by selling their companies to bigger fish, often for data mining and social networking potentials. Kickstarter has also absorbed your friends into its immense, undifferentiated labor force. Kickstarter’s founders are sitting in the yard watching you and your friends haul your furniture around on moving day, offering up a supportive, “Boy, does that look heavy!”—then peeling your friends off as the day goes by to help them plant their garden.

Scratching the Neoliberal Itch

When we launch a Kickstarter campaign we are attempting to liberate ourselves. We smell the promise of freedom from the bureaucrats at state funding agencies. The possibility of escaping the whims of more successful artists who lord it over the granting panels of private funders is intoxicating. Hell, why should these people have control over our lives? But mixing liberation and capitalism always comes with a price.

Kickstarting a project demands that we transform ourselves from artists into marketers. Are these two selves compatible? We are forced to streamline our heterogeneous senses of self, the complicated pushes and pulls that make up our personalities, for the sake of attracting investors. The edges are rounded, our rowdier aspects brought into line. In order to be successful, our drive to self-promotion has to outstrip all other drives. Our goal—our imperative—is to harden ourselves and our projects into cohesive, likable, and salable commodities. We wake up as brands, joyously exulting in these flattened, logo-like versions of ourselves. Clean and efficient with soft, smooth corners and antiseptic Helvetica expressions. What is not to love about these new forms, so sleek and attractive on the outside, with the promise of aiding us in the fulfillment of the last remaining human right in our society: the right to be an entrepreneur?

Yet our neoliberal metamorphosis doesn’t leave us as free and independent as we’re led to believe it will. The transformation and entrepreneurial promise are similar in many ways to an older economics, one a bit less slick and gloss—the pyramid scheme.

Growing up, I had a friend named Andrew. I loved playing at his house because it was much more run-down than mine, his yard a playground of tangled bushes, abandoned tools, rotting fences. His single mom was always struggling to make ends meet, and while their fridge was often verging on empty, its door always featured a giant photo of a bright pink Cadillac. She was a Mary Kay cosmetics seller, and as far as I could tell, she spent more time peddling cheap makeup than with Andrew. It turns out that selling makeup would never get you the car; only signing up more people to sell makeup could do that. The product wasn’t makeup, but the women needed to sell it.

The true product for sale on Kickstarter is not your art project, but your community and networks. It’s no surprise this reality is hidden: Who wants to see their exciting, new brand-selves as reincarnated Tupperware salespeople? But that is what a sober look in the mirror reveals. For our bio-economic change to take hold, we have to convince all our friends, and families, and our increasingly nebulous social networks to participate—to invest in our brand and themselves become entrepreneurs, for us. This carries the tacit promise that when the time comes, and they wake up to their gorgeous new brand-state, we’ll do the same in return. Except pyramids are built for pharaohs, who don’t exactly specialize in reciprocity. The pharaoh at the top might be decked in jewels, but the structure is built by slaves—those poor souls who changed themselves too late, after all the good logos were taken, and the marketing tricks used up.

Social Enclosures “R” Us

The friends we mobilize to support our projects appear to us as a community, but to Kickstarter they are raw material to be converted into commodity—a conversion we must also embrace. Members of our networks become investors, not so much in our projects, but in Kickstarter itself. Every fundraising campaign that is launched reaches into our intersecting communities. Newer and newer layers of people are extracted to invest in Kickstarter. Like any other for-profit entity, its goal is to make money. Our projects that facilitate the funding are a side effect, a cost of doing business—the business of drilling our relationships for all they are worth. This is the logic we are allowing to dictate the whos, hows, and whats of cultural funding in our society.

Clearly, Kickstarter extracts value from our communities—10 percent of the capital raised and an unknown amount of networked and social value—but it does something less obvious as well. It converts support and community building into a shopping experience. By building a commodity-based rewards system into the platform, Kickstarter naturalizes the idea that supporting a friend is similar to any other online purchasing experience. You charge your credit card and something cool shows up in the mail in the future.

But meaningful communities can’t be built on the exchange of commodities. No matter the monikers, a Niketown is not a town, and a Home Depot isn’t a home. A rich social fabric demands an equally dense and complicated set of social relationships. Kickstarter demands this social fabric, but only extracts from it, giving nothing of social value in return. It is up to us, those who run the campaigns, to invest the labor and capital back into our communities to keep them running, and to keep them sustaining us. In this light, the 10 percent taken off the top is a form of usury, taxation. We’re paying for harnessing the economic power of our community, yet how does the community benefit? I sincerely hope our art projects are enough, but I have my doubts.

Throwing Money at the Stars

As celebrities begin using Kickstarter, hailed by the company as a “new model” of fundraising for recording artists, we get a glimpse of the long-term vision. Kickstarter will become just another tool for the parasitic extraction of wealth from fans, and celebrities will become the only ones with enough real and cultural capital to launch significant and successful fundraising campaigns. None of the rewards for these campaigns will be material, because fans will upend couch cushions to find the money to have a Skype session with Bret Easton Ellis, to have him tweet his review of your short film, to get a “special hug” from Amanda Palmer and Neil Gaiman, or to get access to a film star’s “secret” Twitter feed—inevitably written by some other fan naive enough to ghostwrite it for free. These celebrities are honey, attracting unpaid or low-paid interns to fill out the immense army of worker bees.

Let’s just come out and say it: these people don’t need our money! Why are pop stars, bestselling authors, and successful video game designers coming to us to raise money? Because they love the grassroots and it brings them closer to their fans? Hardly. They simply don’t want to take the money they’ve already earned entertaining us and invest it into pet projects with questionable returns. Why spend your own money when there are tens of thousands willing to let you spend theirs without any expectation of compensation? I don’t want to speculate on whether it was ironic or not, but Amanda Palmer’s recent fundraising campaign was entitled “The Grand Theft Kickstarter.”

And how do these celebrity campaigns affect everyone else’s chances at raising money? For a long time there has been a cottage industry of experts consulting on how to run a successful Kickstarter (a quick web search finds more than two dozen articles promising help in mounting a strong campaign, such as “Kicking Ass & Taking Donations: 9 Tips on Funding Your Kickstarter Project” and “9 Essential Steps for a Kickstarter Campaign”), and some of these tips expose just how far Kickstarter has strayed from most people’s conception of community. In particular, it is now common for people running campaigns to send out press releases to drum up media exposure. Earlier this year, well-organized and well-capitalized project hopefuls began hiring consulting firms for their campaigns. When a project’s funding depends on bending the ear of the mainstream media, Kickstarter will no longer be a tool for the aspiring artist or amateur filmmaker, but just another way for those already laden with cultural or actual capital to attract more of it.

This converts the rest of us into a new marketing demographic, likely already being talked up by the sharpest consultants. We’re now consumers willing to front-end pay for the creation of a project, and then willing to pay for it again when it comes to market. It’s venture capitalism for the huddled masses, no stakes and no returns; the act of pretending to be an investor is prize enough. The action is entrepreneurial and material, but it’s couched in philanthropy, with a commensurate benefit in the realm of the purely psychic.

Working the System?

So far we’ve been assuming that you’ve successfully raised the money—and that it’s the amount you really need. Kickstarter, of course, encourages you to assume that. It presents a front of victorious projects, and it can—after four years and counting, everyone knows someone who has succeeded. But there is also evidence that Kickstarter hides failed projects. Not surprisingly, projects that don’t reach their fundraising goals are never featured on the website. But in addition, journalist Dan Misener has found that metatags are added to failed projects so their Kickstarter pages are actively hidden from third-party search engines. According to Kickstarter’s own data, almost 56 percent of projects fail, but this information never shows up in the boosterish media juggernaut the company has built around itself.

Let’s also look at Kickstarter’s “all-or-nothing” rule. In order to maximize extraction, and make you work harder for them, you only get the money if you reach your goal, a goal even more motivational because you set it yourself. This has led to a popular intervention and campaign insurance model, a secret weapon for success if you will. When mobilizing your social media army fails to convert to cash, you have to fall back on much more traditional relationships.

In order to make sure you’ll reach your goal, it’s smart to have a close friend or family member with some extra cash willing to front a significant chunk of the money you are trying to raise in case you can’t reach your limit. If you are trying to raise $10,000, but only reach $5,000, it makes sense at the last minute to have someone jump in and pledge the rest, so you don’t lose the half that was already pledged. For something more expensive and complicated, like a feature film, you might be trying to raise $200,000. Unless you’re already famous, or have the luck of a cultural zeitgeist swirling around the ideas in your project, it’s going to be hard to find ten thousand people to donate $20 each, especially through disembodied networks like Facebook. In all likelihood you’ll raise half, and need a friend to chip in the second half. But either way, Kickstarter takes its $20,000, the government its $20,000, and the rewards process eats up another $10,000. And you still need to pay back your friend $100,000 with the $150,000 you have left, leaving you a quarter of the fundraising total to make your film. You’ve gotten five thousand people to support your project, but two-thirds of them are actually only supporting Kickstarter and your rich friend. Brilliant.

It is extremely taxing on our community networks to be continually donating rewards, paying money, promoting campaigns, and volunteering labor to fulfill the rewards, never mind any help needed actualizing any of the projects that the fundraising was for. I was involved in a campaign that raised $22,000 through Kickstarter. More than 250 people received rewards, and almost all of those rewards were material objects that needed to be mailed. Reward fulfillment alone became a twenty-hour-a-week job for one member of the group, having to be in constant contact with donors and continually negotiating international customs specifics. Hundreds of dollars in mailing supplies had to be ordered, and two full days of labor from half a dozen people were needed to roll, and pack, and tape, and label all the parcels. A minimum of $2,500 was spent on reward fulfillment, not including labor, which easily topped one hundred total hours of work.

We bent over backward to please those who supported us, but unlike a sale at a traditional store, there is no guarantee with Kickstarter rewards. The person being funded is not obliged to fulfill rewards or complete the actual project. So it’s the worst of all worlds: there’s a weaker system of social accountability because the web interface abstracts you from an embodied community, while there is none of the regulation assumed to exist between two parties making a financial exchange. Our campaign was so much work, and so taxing on our ability to mobilize people, that I doubt we could ever be as successful if we decided to try to run another one. This seriously hinders the motivation to be particularly forthright with the rewards. Why bother sending out rewards if you are not going to ask people for money again? We felt we had to fill all of ours, but I can see why people wouldn’t.

The Boss Needs You,
You Don’t Need the Boss

Given all these concerns, you might think I’m trying to get you to stop using Kickstarter. Actually, not at all. There is no liberation in purity, and removing your project from the platform would be meaningless. The real issue is whether Kickstarter could be better, and how we all could make that happen.

The first and most important step in that direction is asking a simple question: Why shouldn’t, or couldn’t, Kickstarter be owned and run by those that invest in it? The initial capital has long since been paid back; it’s time to expropriate! But instead of an expropriation in the name of an abstract entity like the state, we need an expropriation by and for the actual, unique, and individual workers: us. Those who use the platform to raise money should control the platform, collectively, and share in the benefits generated.

How would this work? I don’t know all the details, but that doesn’t mean the idea isn’t worth considering. There are thousands of interesting and unique models for running successful worker-owned and -operated entities in the United States, from small print shops to large grocery stores, from bakeries with nationally distributed products to industrial-scale eco-laundries. Throughout history, the people doing the toil have struggled to control the means of production, and have often succeeded on a small scale. What is being bought and sold is now changing, as is the nature of work—how we do it, where we do it, and how we are compensated for it. We need to recognize platforms like Kickstarter not only as tools to raise money, but as tools that harness new forms of our labor power. Which means we need to learn how to organize around these forms. Communizing Kickstarter seems as good a place to begin as any. Who wants to join me?


end

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