Is Kickstarter the best option for the Rift? (Fees, etc)

Post by **PalmerTech** » Fri Jun 08, 2012 11:43 pm

Here is the deal: Kickstarter is great, but it ends up eating between 8% and 10% of your total funds. There are some other alternatives out there, and I have been contacted by a crowdfunding site specifically targeted at gaming, and they all charge lower rates (Around 4%).

Making this more complex is the fact that Kickstarter requires the use of a US bank account, which ends up locking out the worldwide community. I was thinking of patching this problem by allowing those people to pay directly through Paypal, but at that point, why bother with Kickstarter? Might as well put that effort towards either another site, or do it all independently and skip the middleman.

Any thoughts on how to handle this? I already factored the Kickstarter fees into the price of the HMD, but it is a little frustrating to know that a $500 device could be $450 were it not paying for the credibility of Kickstarter!

Post by **brantlew** » Sat Jun 09, 2012 12:17 am

Well one potential problem I see is that you have gotten so much press momentum on the KickStarter project. Do you think everyone will be able to find and follow it if it moves to a different site?

Post by **PalmerTech** » Sat Jun 09, 2012 12:32 am

I think so. I already have well over 400 subscribers to the Oculus newsletter, along with the people in this thread.

Of course, a lot of sites like Engadget and TechCrunch have weekly Kickstarter columns, so that is another factor to consider.

Post by **farbman** » Sat Jun 09, 2012 1:12 am

Making this more complex is the fact that Kickstarter requires the use of a US bank account, which ends up locking out the worldwide community.

I don't think that Kickstarter requires the use of a US bank account:
http://www.kickstarter.com/help/faq/bac ... PledToProj

I verified it by backing up a project using a non-US card and a non-US address and it is all good.

Zeev Farbman

Post by **fraherd** » Sat Jun 09, 2012 1:14 am

PM me your back details and I'll transfer you the money direct. Setup a payment/investing system through the website for people that want to contribute funds to the progression of the RIFT, stuff making someone else rich i.e 'kickstarter'.

Post by **Ameria** » Sat Jun 09, 2012 1:40 am

My understanding is that whilst Kickstarter is limited to projects set up in the US, it allows supporters to contribute from anywhere as long as they have a credit card - http://www.kickstarter.com/help/faq/bac ... PledToProj seems to confirm this.

10% is certainly quite a lot... although I guess it's worth bearing in mind that not only does Kickstarter bring publicity, there's also a perceived "safety" aspect as well (I emphasize the word "perceived", of course - at the end of the day it's the projects rather than the portal site that matter...).

I'm not sure I'd recommend going with Paypal, personally - it was a few years back, but I looked into them for an event we were doing, and once you start getting non-trivial amounts of money involved the fees ramp up quite quickly... and I recall at the time us having a lot of concerns over the TnCs as well - for example, if someone raised a complaint for any reason then we could potentially get locked out of our account (and funds) for months whilst they investigated.

It strikes me that one issue that may well come up with any not-Kickstarter-alike (including Paypal) is the unusual nature of the transaction - in general, payment processors seem to like setups where people pay money to buy items, with the purchases spread out over time. That way, they can verify on an ongoing basis that all is well, limit their exposure to chargebacks, and release funds in a (relatively) timely manner.
What we ran into in the past was that we were selling tickets for a one-off event, which is structurally similar to Kickstarter in that you collect all the money up-front and then people get the "product" afterwards. This lead to several conversations with providers going along the lines of "well, we can handle the transactions for you, but we won't actually give you most of the money until we've confirmed you actually ran the event".... which was obviously rather unhelpful when you have up-front costs! The solution we eventually ended up with in that case was Google Checkout, which worked well, but we did have to negotiate to get the reserve they held back down to a level where it didn't torpedo our pre-event cashflow.

I guess my point is... I wouldn't underestimate the amount of time and hassle (and cost) involved in "doing it yourself"... in particular, 4% seems like a very reasonable figure to me (if the site is handling all the transactions and backend stuff), as even if you go direct to somewhere like Google the fees are likely to be in the 2% range.

[Edit- fixed a typo]

Post by **QuasiSteve** » Sat Jun 09, 2012 5:50 am

New here, but not new to CrouwdFunding.

I have to say that your best bet is definitely to go with KickStarter, for the reasons Ameria has already outlined; KickStarter enjoys a lot of confidence from people due to all of the popular press exposure it has gotten with nary a negative message in them. There's the odd scam and lots (lots!) of projects that run late, but all that is drowned out by the successes.

I'm not sure which game-oriented CrowdFunding site has approached you, there are several and fees do tend to be lower. On the other hand, they also tend to be less well-known ( quick, somebody name one - if you guessed 'Gambitious' it's because they recently sent out a bunch of PR, so name 2 more.. hint: one starts with an 8 ). Also keep in mind that while your device may primarily end up being used for gaming, it is first and foremost not a game itself and a gaming-specific site may not be the best route.

You could go DIY, in which case IgnitionDeck may be worth checking out - it's a WordPress plugin that's set up completely for rolling your own CrowdFunding projects. The only take there is with whoever handles payments (PayPal is popular) + a fee for the software itself which is currently pretty low (and right now they're offering the Humble Indie Bundle with it). But you're still going to have to handle a lot of things yourself that platforms such as KickStarter take out of your hands.

You could go with another large CrowdFunding platform. IndieGoGo is easily the 2nd-biggest and a popular destination. It also has two main funding models: 'all or nothing' like KickStarter, as well as any amounts pledged whether your project ends up being successful or not. Their take depends on project's success, applicable fees, etc.

When in doubt, there's also a third option: use more than one. The Double Fine Adventure guys set up a separate funding route on their website in addition to their KickStarter project, and I've seen several projects at KickStarter that were also at IndieGoGo and RocketHub concurrently (or, if one failed, tried at another). The down side to that is that you somewhat dilute your audience and anybody becoming a Backer at e.g. RocketHub means one that likely wouldn't be at KickStarter - and if your KickStarter doesn't meet its goal even though on the funding routes combined you've exceeded it, that's going to sting.

Speaking of stinging, I hope you won't forget about taxes while figuring out the funding numbers:
http://www.forbes.com/sites/suwcharmana ... -tail-tax/
There's ways to deal with that should you run into it, ask your tax consultant for details.

Post by **Chriky** » Sat Jun 09, 2012 6:54 am

To be honest, people know who you are IRL, you've been very trusting yourself sending out prototypes with no deposits etc; I'd definitely be happy to just wire you the money and wait for the kit

Maybe you could get people like me who are prepared to do that to send you money beforehand, then you can set up the Kickstarter after that w/ a slighter higher price for however many more kits you want to make.

Post by **Neil** » Sat Jun 09, 2012 7:03 am

Stick with Kickstarter. It's the hottest media commodity right now and makes for a good story. As long as you are based in the US, it's really the best fit.

Regards,
Neil

Post by **BillRoeske** » Sat Jun 09, 2012 10:09 am

I'd also suggest sticking with Kickstarter. I know the commission can be a bit hard to swallow, but I suspect that's made up for in exposure and backer confidence. Put another way, Kickstarter may take the biggest cut, but they're also likely to get you more backers, probably enough to be an overall net win.

Post by **bobthedog007** » Sat Jun 09, 2012 11:50 am

Just want to confirm for you that kickstarter does support international backers.

I live in South Africa and have backed about ten kickstarter projects already.

The majority of those just mention in the various reward tiers to add an additional $15 for international shipping.

I would assume your international shipping might be a bit more depending on the weight.

Post by **Bishop51** » Sat Jun 09, 2012 11:54 am

You'll definitely want to stick with Kickstarter on this for a couple vital reasons. The first is media saturation; Kickstarter commands the most attention out of all available options, especially for gaming related projects. The second reason relates very simply to the first; saturation = higher returns. Though Kickstarter takes a slightly increased percentage, that is more than compensated for by the volume of backers you'll likely receive.

Every major gaming news site that I frequent often promote Kickstarter related projects. You really don't want to miss out on that opportunity.

Post by **QuasiSteve** » Sat Jun 09, 2012 11:58 am

Just to touch on something bobthedog007 just said:

bobthedog007 wrote:The majority of those just mention in the various reward tiers to add an additional $15 for international shipping.

Make sure you're absolutely clear about any shipping costs in no less than 4 places (presuming KickStarter):
1. The description.
2. The FAQ
3a. Pledge level description: "Add $N for shipping to X, $M for shipping to Y".
3b. Pledge levels themselves, e.g. a $500 pledge level for domestic, and a (say) $525 for international.
4. In an update no later than 3 days before the project closes.

The reason for this is that people don't read. The Pebble project (admittedly most likely of much larger scale than your project) had to deal with this and statistics graphs show there were hundreds of people who apparently forgot to add the shipping costs and quickly added it to their pledge before the project closed (1 day later) - even so the comments shortly after the project closed were filled with people who indicated they forgot to add shipping (didn't get the update in time) or couldn't add shipping due to one reason or another. Try to nip that in the bud where possible

The above to be null and void if KickStarter gets a clue and starts handling shipping costs management for their project Creators better

Post by **cybereality** » Sat Jun 09, 2012 12:07 pm

Well I'll quote something my pop used to say: "You get what you pay for."

With Kickstarter you are probably going to get more press, the name recognition, confident backers, etc. Like Neil said, it makes a good story. You will get more backers, and more money in the long run. But the biggest advantage over trying to do it yourself (like with PayPal) is not having to deal with customer complaints or BS. With Kickstarter it is very clear when and how your account will be charged (and not at all if funding is not reached). They use Amazon which feels ultra-safe and secure. With PayPal all you need is one or two idiots to file a complaint and then all of sudden PayPal will freeze your account or make you go through hoops to get your money back. With Kickstarter all that stuff will be handled on their end and you don't have to worry.

Post by **Dudebro** » Sat Jun 09, 2012 4:03 pm

Hey, I'm the guy with the other solution, I'll try to answer some of the points in this thread.

There are ways to use kickstarter outside the US, but it's a gamble and it can backfire: Bridgestarter which does just that got shutdown by amazon, and all related projects were cancelled.

Now I can't vouch for other areas like music and film, but as far as gaming goes kickstarter has come under fire for a number of things, the last biggest case being not properly screening projects, letting Mythic go through their filters despite many red flags like using stolen content and some very unconvincing pictures like a supposed t-shirt reward to backers which was photoshopped. That guy didn't even bother to make one actual t-shirt, and yet kickstarter said he was kosher.

It got worse when some users saw the pictures of Mythic in gaming blogs and went to the project page to denounce the fraud. The project had already $8,000 of it's $50,000 goal, and check this: kickstarter support didn't take it down despite the bad feedback, it was the author who cancelled it because he saw sooner or latter things were going to explode. And this was just one half-assed scammer, a more dedicated individual or group could do something that nobody could tell it's completely fake until it's too late.

Many gamers are becoming wary of kickstarter because they see it as a box where their money goes and nothing comes out, many projects end up going nowhere because kickstarter wont bother to check if things are coming along, nor gives backers the tools to keep track of the development process. As far as kickstarter is concerned once the pledge campaign ends that's it, they don't have anything else to do with it. They take their cut, send the money and if something bad happens, tough luck.

Had Mythic gone unhindered backers wouldn't be able to get their money back, they would've had to sue the guy directly, and that's easier said than done.

When you look at gaming projects in kickstarter, which are the most successful? the ones made by industry veterans or developers with a considerable following. They could go elsewhere and backers would follow because it's not about the site hosting it but the people behind the project.

I offered Palmer to host their project at a crowdfunding site I'm working on which is exclusively for game development, be it games or gaming hardware like the Rift. Together with my team we developed this platform to solve all the problems inherent to existing crowdfunding sites like kickstarter. We focus on games because we're gamers and thus we modeled our system to the needs of gamers and developers.

However I think that if Palmer doesn't likes our site the best alternative is to crowdfund it himself: setting up a crowdfunding page with the same basic functionality of kickstarter using a CMS it's easy as pie, he wont get the same features that he would get from us but he wouldn't have to pay kickstarter's fees either, just payment processing.

Personally I think whoever hosts the Rift project is irrelevant as far as the funding process goes since Palmer has enough credentials to stand on his own. It would sure make my day if he decides to use our solution, but I think using kickstarter is paying for smoke and mirrors: most gamers didn't care or didn't know about kickstarter until Tim Schafer launched a project there and the whole thing exploded. Before that it was just a few small projects, mobile and browser games.

What you got to understand is that there is no "kickstarter brand" because there is no "kickstarter product". There is no product because all you can do there is support the projects made by other people, not kickstarter. Kickstarter doesn't provides any services besides letting you back a project, is not like Facebook or Google, they wont even step in if you get scammed. When you host a project there the only thing you do besides paying them is driving traffic to their site, since you are sharing the link everywhere you can. They wont give your project any extra visibility, I can guarantee 99% of the backers will come from blogs and forums where the project has been featured, not by stumbling on the project while browsing through kickstarter's awful UI.

In conclusion: is all that worth 10% of your funds? is that worth the 10% of the money you gave to support a project?

Post by **Bishop51** » Sat Jun 09, 2012 4:39 pm

Dudebro wrote:Hey, I'm the guy with the other solution, I'll try to answer some of the points in this thread.

There are ways to use kickstarter outside the US, but it's a gamble and it can backfire: Bridgestarter which does just that got shutdown by amazon, and all related projects were cancelled.

Now I can't vouch for other areas like music and film, but as far as gaming goes kickstarter has come under fire for a number of things, the last biggest case being not properly screening projects, letting Mythic go through their filters despite many red flags like using stolen content and some very unconvincing pictures like a supposed t-shirt reward to backers which was photoshopped. That guy didn't even bother to make one actual t-shirt, and yet kickstarter said he was kosher.

It got worse when some users saw the pictures of Mythic in gaming blogs and went to the project page to denounce the fraud. The project had already $8,000 of it's $50,000 goal, and check this: kickstarter support didn't take it down despite the bad feedback, it was the author who cancelled it because he saw sooner or latter things were going to explode. And this was just one half-assed scammer, a more dedicated individual or group could do something that nobody could tell it's completely fake until it's too late.

Many gamers are becoming wary of kickstarter because they see it as a box where their money goes and nothing comes out, many projects end up going nowhere because kickstarter wont bother to check if things are coming along, nor gives backers the tools to keep track of the development process. As far as kickstarter is concerned once the pledge campaign ends that's it, they don't have anything else to do with it. They take their cut, send the money and if something bad happens, tough luck.

Had Mythic gone unhindered backers wouldn't be able to get their money back, they would've had to sue the guy directly, and that's easier said than done.

When you look at gaming projects in kickstarter, which are the most successful? the ones made by industry veterans or developers with a considerable following. They could go elsewhere and backers would follow because it's not about the site hosting it but the people behind the project.

I offered Palmer to host their project at a crowdfunding site I'm working on which is exclusively for game development, be it games or gaming hardware like the Rift. Together with my team we developed this platform to solve all the problems inherent to existing crowdfunding sites like kickstarter. We focus on games because we're gamers and thus we modeled our system to the needs of gamers and developers.

However I think that if Palmer doesn't likes our site the best alternative is to crowdfund it himself: setting up a crowdfunding page with the same basic functionality of kickstarter using a CMS it's easy as pie, he wont get the same features that he would get from us but he wouldn't have to pay kickstarter's fees either, just payment processing.

Personally I think whoever hosts the Rift project is irrelevant as far as the funding process goes since Palmer has enough credentials to stand on his own. It would sure make my day if he decides to use our solution, but I think using kickstarter is paying for smoke and mirrors: most gamers didn't care or didn't know about kickstarter until Tim Schafer launched a project there and the whole thing exploded. Before that it was just a few small projects, mobile and browser games.

What you got to understand is that there is no "kickstarter brand" because there is no "kickstarter product". There is no product because all you can do there is support the projects made by other people, not kickstarter. Kickstarter doesn't provides any services besides letting you back a project, is not like Facebook or Google, they wont even step in if you get scammed. When you host a project there the only thing you do besides paying them is driving traffic to their site, since you are sharing the link everywhere you can. They wont give your project any extra visibility, I can guarantee 99% of the backers will come from blogs and forums where the project has been featured, not by stumbling on the project while browsing through kickstarter's awful UI.

In conclusion: is all that worth 10% of your funds? is that worth the 10% of the money you gave to support a project?

Not to demean your efforts (honestly BIG kudos for giving it a shot) but the bottom line is that right now Kickstarter has achieved mass media saturation and it's a platform that the general public trusts (and knows about).

With Carmack behind the project the media is already circling around RIFT. So when the hoards of backers start making their way to the funding area, they need to be hit with something tried, tested, proven and commercially accepted before they part with their precious dollars (and credit card info). That's not a dig to you in any way but your startup needs time to mature and I don't think it's fair to Palmer to limit both his exposure and potential backing support to a startup.

Palmer is a super nice guy but in this case being nice and going with the underdog isn't the smartest move if he wants groundswell backing. Even at 10%, Kickstarter has saturation and that's all that counts here. And WE ALL need this to be a success!

Post by **3dNaut** » Sat Jun 09, 2012 5:24 pm

Hi everyone, I'm 3dNaut, one of the developers working with Dudebro on this platform, and wanted to share my 2 cents on this.

Bishop51, first of all thanks for the kudos, we are working day and night on this, but with all due respect your statement is a bit contradictory: you describe the level of popularity the Rift concept has and then try to say that if it's not in kickstarter then it doesn't exist.

What saturation? There's a number of other crowdfunding sites and some doing very well in part due to kickstarter's many limitations: you got indiegogo, appbacker, rockethub, ulele, and the list goes on.

Also you seem to be forgetting that it's a kit, it's not meant for everybody and that distrust you talk about is not something that bothers the kind of early adopters who will sign up for this, get a Rift kit and assemble it themselves.

Again, there's no value to being on kickstarter, there are tons of hacks and wannabes there, their screening process it's superficial at best.
Only the project matters, and Rift would do just as well anywhere.

Besides, in terms of payment procedures the users won't be hit in any way with anything they neither not know nor trust, for that same reason you mention is that payment will be through PayPal at first until we reach enough exposure and establish a consistent user base to include our own custom payment gateway.

And this is no charity, we offered Palmer a much better deal than kickstarter's, it's a win-win situation.

Post by **PalmerTech** » Sat Jun 09, 2012 8:08 pm

Thanks for all the input, everyone! Especially Farbman, Ameria, and QuasiSteve, I appreciate you all signing up to give input.

I am keeping this tab open as I continue to research. I am well aware of the tax implications, the hit should not be too bad, though. I am not planning on paying myself for R&D or production time, almost all of the money goes directly into purchasing components and the tools needed for fabrication and assembly. If the project is crazy successful and makes more than expected, then I will probably use that money to buy nicer tools (Laser cutter, 3D printer, and CNC mill are all on the wishlist).

Dudebro wrote:As far as kickstarter is concerned once the pledge campaign ends that's it, they don't have anything else to do with it. They take their cut, send the money and if something bad happens, tough luck.

What would your site do in a situation where something bad happens? I understand that the Kickstarter screening process is very lax, but how do you fix a situation where the project finds itself unable to deliver?

Another thing I could not figure out from reading how Paypal gateways work: What happens when a backer pays, then either files a chargeback with the credit card they have attached to Paypal, or files an "unauthorized transaction" claim through Paypal? I have had this happen to me before, one time on a rather expensive item (Macbook Pro). I would hate to see your operating margin disappear because of a few bad apples in the world.

Post by **PatrickReddeck** » Sun Jun 10, 2012 2:36 am

Palmer,

Are you planning on doing a run larger than 100?

Are you setting your corporation as an Non-profit because that will save money all around and you can still pay employees if you ever sale goods in volume. As an aside I would re-check your CA incorporation requirements since you'll burn a fair amount of fees there compared to TX or Delaware.

Kickstarter is great for people who don't have a press presence but you have that now.

Given the low volume I would go with pay-pal and vet the people and batch them. You should be able to control when you accept payments, or sale an item. Break the buyers into groups and give them a purchase window. After they purchase move the money out of pay-pal and repeat. Also, contact pay-pal and speak with someone of authority and let them know you are launching a product and talk about pitfalls/solutions. Having a dialog with them and they are more likely to contact you if they see a problem. What seems to freeze other accounts is large changes in values. I expect the reason for the months of lock-down is due to money laundering concerns.

Keep in mind Kickstarter has been known to shutdown things as well. The worse I read about was do to user comments that you can't control. Given the recent troll here that is important to consider.

Post by **AaronAsh** » Sun Jun 10, 2012 4:25 am

I am part of an ongoing Kickstarter project based in the UK; we were also in the position of evaluating Kickstarter alternatives (in our case, because Kickstarter wouldn't pay into UK based accounts). However, when we discussed the idea of going with a different service with fans it very rapidly became apparent that any saving we would make in fees would be lost many times over because people were simply not comfortable with the unfamiliar service - it doesn't matter at all that Kickstarter have no control over projects, simply being hosted by them gives a great deal of credibility (justified or not, it does).

In the end we went ahead and registered a US based subsidiary which allowed us use Kickstarter; our campaign has now gone very well, and I can't imagine it would have been anywhere near as successful on any other service.

Also, to the chaps from the competing service: unless Palmer invited you, it strikes me as bad form to drop into a community discussion thread to try and tout for business with long posts rubbishing Kickstarter; you just come across as desperate.

Post by **QuasiSteve** » Sun Jun 10, 2012 7:03 am

I had a long post here but FireFox ate it. So, tl;dr(ewrite):
They contacted Palmer and that's one of the main reasons this thread exists, I'd imagine. So I'm actually glad they jumped in and gave their point of view, even if it may be somewhat biased.

I don't see it as rubbishing - most of the points made are valid. Unfortunately, most of those points also apply to Backers' concerns rather than Creators' concerns. I haven't seen anything about how their platform would be better for Creators other than the lower take (which is a good thing, don't get me wrong!). KickStarter doesn't do promotion (beyond 'featured' projects and their blog), but I don't see other platforms taking out e.g. Google Ads to promote a particular project at no or reduced cost to Creators either. For all platforms you basically have to do your own promotion. Yes, it's true that big names attached to this project would mean you could probably get potential Backers to go to any platform or a DIY solution at your own hosting.. on the other hand, they don't get 'weekly KickStarter' exposures, or KickTraq, or even just the dozens of journalists that peruse the list of new projects hoping to get a scoop without the Creators so much as having to lift a finger.

I also don't see it as desperation.. I'm not sure if their platform was actually mentioned somewhere. I didn't see it, so unless it's some attempt at building interest and then going 'ta-daaa' with a name/link, it's just information to ingest, digest, and potentially act on with regard to "KickStarter: yes or no?" and then "If no.. then what?"

I believe that if they do have a superior platform for Palmer to use in terms of how much he gets to keep and/or the services that they would be able to provide to him, a combined approach (KickStarter and their platform) should be an option to consider. But I stand by the notion that not using KickStarter for this would be silly.

Regardless of the choice made (June 14th is still the goal?), I wish Palmer good luck with setting it up and its run (I'll be sure to follow it even if I may not back it) and DudeBro and 3dNaut good luck with their platform.

Post by **Chriky** » Sun Jun 10, 2012 8:31 am

Unfortunately, most of those points also apply to Backers' concerns rather than Creators' concerns.

Yes that's what I noticed; all the criticism (valid though it is) is basically saying "There's a lot of scam artists on Kickstarter" - http://penny-arcade.com/comic/2012/05/04 - but seeing as we are basically just trying to marshal a whole load of money in an accountable way to Palmer so he can make some mass orders, it isn't really relevant.

A more serious concern is that trolls will try and ruin it by making false complaints and spamming up the comments section.

Post by **space123321** » Sun Jun 10, 2012 9:21 am

Can Palmer simply take preorders through Paypal- and have a cutoff date? This would allow him to manufacture the kitsto an exact number and ship whenever ready...

Post by **Dudebro** » Sun Jun 10, 2012 12:57 pm

Frankly I'm surprised than a DIY forum is so concerned about branding. It's a DIY HMD kit, is not meant for the average consumer! I wonder how many people would say the same about the Rift and buy the inferior Sony solution because "it's made by Sony". No offense but some people here are reacting as if the Rift was an iPhone dock and thus geared to the same audience.

We are not trashing kickstarter, nothing of what has been said here was a lie or a fabrication, the Mythic fiasco was literally everywhere, there was no gaming blog that didn't cover that. One thing is not knowing what's going on, and another is defending the mistakes made by a company that should know better, which is what some users here seem to be doing. If you keep using kickstarter despite these very obvious flaws they are never going to improve it, same as with any other service.

We contacted Palmer directly because that's how it's done, we were not going to spam his inbox with bot-generated invites. We invited him to the launch lineup the same way we invited other developers working on great projects. If we just wanted some people to come over and pay us we could've contacted a bunch of lowend content mills to put a bunch of a dime-a-dozen generic projects. This is not about quantity or money but about innovation and changing the system.

This is not about beating kickstarter but doing what's best for the Rift, be it with us or self-hosted. With kickstarter we are talking about 10%, no less than $5000 going to a company that wont give anything to the project, not even proper support in case something goes wrong: they'll just cancel the project, which wouldn't be the case with us.

Post by **Bishop51** » Sun Jun 10, 2012 1:31 pm

Dudebro wrote:Frankly I'm surprised than a DIY forum is so concerned about branding. It's a DIY HMD kit, is not meant for the average consumer! I wonder how many people would say the same about the Rift and buy the inferior Sony solution because "it's made by Sony". No offense but some people here are reacting as if the Rift was an iPhone dock and thus geared to the same audience.

We are not trashing kickstarter, nothing of what has been said here was a lie or a fabrication, the Mythic fiasco was literally everywhere, there was no gaming blog that didn't cover that. One thing is not knowing what's going on, and another is defending the mistakes made by a company that should know better, which is what some users here seem to be doing. If you keep using kickstarter despite these very obvious flaws they are never going to improve it, same as with any other service.

We contacted Palmer directly because that's how it's done, we were not going to spam his inbox with bot-generated invites. We invited him to the launch lineup the same way we invited other developers working on great projects. If we just wanted some people to come over and pay us we could've contacted a bunch of lowend content mills to put a bunch of a dime-a-dozen generic projects. This is not about quantity or money but about innovation and changing the system.

This is not about beating kickstarter but doing what's best for the Rift, be it with us or self-hosted. With kickstarter we are talking about 10%, no less than $5000 going to a company that wont give anything to the project, not even proper support in case something goes wrong: they'll just cancel the project, which wouldn't be the case with us.

I don't think anyone here faults you for creating a viable Kickstarter alternative for gaming related projects, nor do they disagree with your criticisms of the service (or rather the lack of oversight).

That being said, you mentioned "doing what's best for RIFT" and in this case doing what's best for RIFT means putting it in front of the most eyeballs possible, under a service that backers (and the wishy-washy general public) feel comfortable with. Yes RIFT is heavy on the DIY side for now but the more money that spills into Palmer's coffers, the further away from obscurity this becomes and the more likely it is that we'll see this grow into a widely adopted and viable commercial product in a shorter turnaround.

At the end of the day its Palmer's call but lets be real for a minute about what it is that Kickstarter (or IndieGoGo to a lesser degree) truly offer here. Its about consumer confidence and social saturation. Kickstarter's 10% doesn't matter much when even lowly boardgames can potentially net close to a Million dollars http://www.kickstarter.com/projects/coo ... /zombicide . That's partially due to second party exposure (which Palmer has Carmack for) but it also has a lot to do with consumer confidence in the service being used.

Another example; I hate Facebook, its broken, imperfect, spits on our privacy and not an ideal social platform for countless reasons but its a multibillion dollar company that's gone viral and Grandma's feel safe using it.

Post by **3dNaut** » Sun Jun 10, 2012 1:56 pm

We understand how some of you might be wary, but given how niche this project is, it doesn't need any extra visibility, it has more than enough, so again the platform does not make a difference in terms of the exposure the project would need, but it does make a difference on the facilities provided for both Palmer and the backers.

Bishop51 wrote: That being said, you mentioned "doing what's best for RIFT" and in this case doing what's best for RIFT means putting it in front of the most eyeballs possible, under a service that backers (and the wishy-washy general public) feel comfortable with. Yes RIFT is heavy on the DIY side for now but the more money that spills into Palmer's coffers, the further away from obscurity this becomes and the more likely it is that we'll see this grow into a widely adopted and viable commercial product in a shorter turnaround.

The Rift is limited by it's DIY status to only a niche part of the market, it won't get donations from the kind of casual users that care about where the project is hosted because they want a consumer version that works right out of the box.

Post by **PalmerTech** » Sun Jun 10, 2012 2:03 pm

PatrickReddeck wrote:Are you planning on doing a run larger than 100?

Are you setting your corporation as an Non-profit because that will save money all around and you can still pay employees if you ever sale goods in volume. As an aside I would re-check your CA incorporation requirements since you'll burn a fair amount of fees there compared to TX or Delaware.

I was originally planning on doing 100, but I have started requesting quotes for parts in the 500-1000 range, as well. Getting Carmack on board has gotten an absurd amount of media attention, and it seems very likely that more than 100 people will want this. I can't handle putting together 1000 kits, though, so any kits after the initial 100 will have to be a little bit more expensive so I can hire someone to do it.

I looked into the requirements for being a non-profit, and it seems that I have to be serving the public good to do that. It is hard to spin the sale of cutting edge gaming hardware like that, even if it is open sourced.

Any way around that? And I have checked incorporation requirements, it would be shady for me to try and do it in another state. I would rather spend a few hundred dollars extra and make sure that the government has no possible reason to come after me.

AaronAsh wrote:In the end we went ahead and registered a US based subsidiary which allowed us use Kickstarter; our campaign has now gone very well, and I can't imagine it would have been anywhere near as successful on any other service.

Also, to the chaps from the competing service: unless Palmer invited you, it strikes me as bad form to drop into a community discussion thread to try and tout for business with long posts rubbishing Kickstarter; you just come across as desperate.

Thanks Aaron, glad to hear from another person with crowdfunding experience. I actually did invite them to comment here, we had been having a discussion via PM, and I told them that as a community project, I would probably go with what the community suggests. I told them to comment in this thread and put their solution out there, because nobody can compare against something they know nothing about!

QuasiSteve wrote:I had a long post here but FireFox ate it. So, tl;dr(ewrite):

...

Regardless of the choice made (June 14th is still the goal?), I wish Palmer good luck with setting it up and its run (I'll be sure to follow it even if I may not back it) and DudeBro and 3dNaut good luck with their platform.

Ugh, hate it when that happens!

June 14th is still the goal, might take an extra day or two for Kickstarter to approve it.

space123321 wrote:Can Palmer simply take preorders through Paypal- and have a cutoff date? This would allow him to manufacture the kitsto an exact number and ship whenever ready...

Paypal does not like pre-orders very much, I have seen some projects that ended up going through hell because of that. On the other hand, they were dealing with hundreds of thousands of dollars! The other big risk on Paypal is that it is so easy to do a credit card chargeback, or file a dispute, or claim an unauthorized transaction, etc. I wish the whole world was honest, but it would just be too hard to vet every single person, and the cost of even a few people taking back their funds could be in the thousands of dollars.

As for the troll problem people have brought up, I am not too worried. You can only comment on Kickstarter projects once you buy one of the rewards! There was actually one project where I donated a dollar to criticize them (It was a documentary on government waste, one of examples they used was a VR spray painting simulator that cost over $200,000; Never mind that in the first 6 months of use it saved several times that in paint formula simulation alone!). This might be a reason to stay away from really low value rewards, so if people want to comment, they really need to have something in the game. $500 might not be a lot of money for a company like VRealities when they want to hurt their competition, but you also have to use your real name and real Amazon account linked to a real bank account or credit card number. We will know who they are unless a lot of time and effort is put into it.

Dudebro/3DNaut, looks like you missed my comment asking about Paypal claims and and anti-fraud for your site, would be great if you reply.

Post by **cybereality** » Sun Jun 10, 2012 2:06 pm

Hey Palmer: Are there really only going to be 100 units available? If so you could probably fill that just taking orders here on MTBS. Not suggesting you do that, I'm just saying. With Kickstarter I imagine a LOT more than 100 people will want this kit. Is there a plan if you get 1000 backers?

Post by **Dudebro** » Sun Jun 10, 2012 2:23 pm

PalmerTech wrote:Dudebro/3DNaut, looks like you missed my comment asking about Paypal claims and and anti-fraud for your site, would be great if you reply.

Yeah my bad, forgot to add that to my previous post

Quote for context:

PalmerTech wrote:Another thing I could not figure out from reading how Paypal gateways work: What happens when a backer pays, then either files a chargeback with the credit card they have attached to Paypal, or files an "unauthorized transaction" claim through Paypal? I have had this happen to me before, one time on a rather expensive item (Macbook Pro). I would hate to see your operating margin disappear because of a few bad apples in the world.

I get what you mean: a guy I know got a chargeback a year and a half after the sale took place. Most warranties last less than that. Now, whoever tells you they have bulletproof security is either a liar or an idiot, there isn't a system that can't be hacked. The secret is to have enough measures put in place that the system is hard enough to hack that scammers choose to go elsewhere to find easier targets. I can't disclose the specifics of these measures on a public forum for the same reason I can't talk about what we're using to keep spammers and downvote trolls away, else they might game the system.

Fortunately we are in the sweet spot where we are big enough to put some fairly complex measures in place which most ecommerce sites don't have, and yet small enough to actually care about fraud and closely monitor any suspicious behavior rather than just write it off like big companies do.

Still, the key is to keep updating your system to fix any vulnerabilities that scammers might find.

Post by **brantlew** » Sun Jun 10, 2012 2:28 pm

@Palmer: For outside management, I still think KickStarter is your best bet. But if you're worried about doing it yourself because of Pay-Pal, I say just do it with cash. I'll pop you a check in the mail right now, and I'm sure there are 100 other guys that would do the same. You don't need the publicity or the trust network as far as I am concerned. For the people that are skeptical - they can just sit back, watch, and wait for a second run.

Post by **Dudebro** » Sun Jun 10, 2012 2:48 pm

BTW: Palmer, about the number of units available wherever you choose our system for the Rift, self-host it or go to kickstarter my advice is don't take more orders than you could handle. There have been projects with physical products that ran into problems when costs overran the available funds and they had to use their own money just to fulfill the rewards promised to backers.

Post by **lnrrgb** » Sun Jun 10, 2012 3:13 pm

I like the idea of dealing with the first 100 through this forum. I bet we would all be willing to fire off personal checks, given our history here with you Palmer. Are there 100 of us..... hard to say, maybe not. Are there enough new comers, willing to ride along with our gut feelings.... perhaps quite easily. All of this new publicity has been great, but now I also worry a little about being outside of that first 100 (but bringing back the sensations of the golden days of eBay has been nice...kinda):)

Are we special here? Maybe not. Just because I think so, does not make it so. I'd say, ask yourself what you'd actually like to do, and go with your gut. I might also suggest that the locals PM you.

Post by **brantlew** » Sun Jun 10, 2012 3:37 pm

Not trying to be exclusionary, but one benefit of filtering through the forums is that those people are more likely to be communally active with them. One of the stated goals of the project was to gather feed-back on how to improve the equipment and how to create applications for it. That's exactly the type of thing that goes on around here.

Post by **Octavion** » Sun Jun 10, 2012 3:42 pm

Possibly do the initial wave via your website or these forums where you have an established base of techno-geeks (beta/proto run), then roll out Kickstarter. This will allow your hardcore audience to get a slightly discounted kit eliminating the fees, and establish a knowledge base/baseline for more mainstream customers who are a little more.... needy.

As a fairly mainstream consumer myself, I've only heard of Kickstarter as a crowd-sourced funding option, and would be leery of other options, with Kickstarter and traffic you've already obtained from the prototypes (thanks John C.), I could easily see you getting enough for the equipment on your wish list.

Post by **Bishop51** » Sun Jun 10, 2012 5:53 pm

3dNaut wrote:We understand how some of you might be wary, but given how niche this project is, it doesn't need any extra visibility, it has more than enough, so again the platform does not make a difference in terms of the exposure the project would need, but it does make a difference on the facilities provided for both Palmer and the backers.

Honestly not trying to be contrary but the above logic is almost entirely backwards. The RIFT project IS niche, it needs all the extra visibility it can get to make it less niche and more commercially viable. I think the goal by all parties here is to break through the flotsam previous gen VR has suffered from and that requires extensive media saturation and public support. Carmack certainly did a lot to bring fresh eyeballs to the project, now RIFT needs an established and trusted funding service to collect on that interest. What it doesn't need is a new start-up that people don't know about or trust.

I understand that you guys want RIFT to help bring attention to your service but that really isn't serving Palmer's best interests here. The logic is starting to break down and you're focusing on issues that really don't effect Palmer's situation. I have no doubt you'll eventually break through that start-up haze but lets be real and face the fact that you're a good year or two away from that yet. Its not fair to saddle that on Palmer and worse, potentially hamstring his larger funding potential. Ambition has a funny way of scaling with money.

Post by **MSat** » Sun Jun 10, 2012 6:09 pm

Kickstarter would seem like a wise choice for a product that is intended for mass production and had no previous press buzz. The RIFT doesn't seem to fall under that category. Even if the demand for over 100 units existed, would it really be worth your while to pursue, as it doesn't sound like you'll really be making any profit anyway? Have you monitored the traffic to your website? I would be surprised if you wouldn't be able to reach 100 buyers via payment processing on your site alone. Adding $50 a pop to your own funds instead of kickstarter should at least get you one of the items on your wishlist. So, with the popularity you already have, the low initial run you're planning, and the type of buyers you're hoping to avoid, giving money to a crowdfunding site which you probably don't even need might be more of a waste than a benefit. When support is a bit more mature, and you're ready to start rolling in the dough from a mass produced non-kit version, then certainly crowdfunding would probably be the best way to go.

Any route you go, make sure you have plenty of disclaimers to let people know what they're getting into, and what's expected on their part. Having tutorials available prior to selling kits might save you from headaches. Lastly, if you decide to take orders via your site, make sure people know it's a preorder with an approximate ETA, that way, you limit the amount of whining you get from people a week after they send their money. And if you find that the direct route doesn't net you the funds you need in a given time frame, it's not like you can't refund the money, and go with crowdfunding instead.

Post by **Dudebro** » Sun Jun 10, 2012 6:30 pm

@bishop51: could you explain me how is it possible that the small niche who already follows this scene very closely, and of them the ones that have the abilities to put together a HMD from a kit (not everybody is into DIY) haven't heard about the Rift despite the hundreds of blog posts, mentions in twitter and videos of Carmack at the E3, and yet they will hear about it from kickstarter's main site?

I'm serious, I don't see how the situation you talk about it's even possible

Post by **Chriky** » Sun Jun 10, 2012 6:37 pm

@ Dudebro

If we want to keep it totally niche then we would probably just organize direct payment of cash via the forum. If we want to expand the audience massively and significantly up the perceived legitimacy of the project, Kickstarter does that more than other crowd-sourcing options.

Post by **mrMattB** » Sun Jun 10, 2012 6:39 pm

I'm sorry if this got posted 2x new to message boards and new here:

I think the kickstarter thing is a good idea.

Since your looking for suggestions/feedback I would say you need to position the rift as "a prototype developement kit for early adopters."

By positioning it as a prototype developement kit you are going to be able to get more of the developement feedback support that it sounds like your looking for and also most likely get more lower cost donations of 5,10,20 dollars from "gamers" that want to see this technology get adopted earlier and go mainstream.

Why not setup the kickstarter as a something to launch a storefront so you can sell these things through a website direct to customers?

I would setup the kickstarter not just for selling the initial run of kits but also gear it towards developing a website and distribution channel to be able to get these kits out to people who want to buy them - i.e. - the guys on this message board at a fair and reasonable price.

For instance lets say the developement cost for a website is 1000 bucks versus the 50,000 you'll need to sell the HMD kits. Also, like you guys were saying the 10% over the top from kickstarter is going to be magnitudes larger than if you just bootstrapped it to get a site up.

The plus side is you will have a business where you will earn profit on what you sell - add 5% markup for yourself so that you can get paid for your efforts while still being extremely fair on price.

Of course you will need to make iterations but that comes later - it sounds like your goal is to start getting some functional concepts out there in the wild so that you can start developing this thing as open source and working on design aesthetics, etc. Totally cool idea and it'll lead to faster iterations and a cult following - something all the other companies seem to be clueless about.

Get it out there - John Carmack took a huge risk showing this technology off at E3 - He's a smart dude - trust his vision for it and also understand he has created a lot of buzz for you. Basically all that's left is to build it and they will come.

Lots in here but wanted to contribute.

Matt

Post by **Dudebro** » Sun Jun 10, 2012 6:59 pm

@Chriky: what? this is not about staying niche or not, it is niche by default because a DIY HMD kit is already beyond the abilities of 99.9% of consumers out there. Maybe the Rift2 will change that, but meanwhile you are talking about selling this kit as if the people who can't even put together a PC on their own will jump into this just because it is on kickstarter.

Chances are, kickstarter or not, the kind of people for which the visibility argument is made will wait for the consumer version that they can just plug in and use.

@mrMattB: putting together a site with the same barebones features of kickstarter it's extremely easy, probably easier than setting up this forum was.