Thursday, July 21, 2011

Is concept the venture capitalist business model for small publishers?

While looking over the AMAZING job Gareth is doing with Far West (Good work and I am professionally jealous. Got to give credit when credit is due), reading The 4-Hour Workweek by Tim Ferriss, I was thinking about what I would define as being.  Kickstarter defines it self as a new way to Fund and Follow Creativity. But if you look further you might say their business model is that of venture capitalist. Venture capital is defined in wikipedia as financial capital provided to early-stage, high-potential, high risk, growth startup companies. The venture capital fund makes money by owning equity in the companies it invests in, which usually have a novel technology or business model in high technology industries, such as biotechnology, IT, software, etc.  While this is not exactly what Kickstarter does, you can see a relationship between the ideas of a venture capitalist and a kickstarter project supporter. So the question is, Is concept the venture capitalist business model for small publishers?  What do you think.  Talk to you later...


  1. I see the relationship to VC, but I think crowdfunding is best seen as pre-order retail that lets customers buy not just products but also a wide range of intangible or experiential add-on purchases. Back in '04, Behemoth3 tried to not leave money on the table by offering some ways that people could spend as much on us as they liked, e.g. a signed limited edition for something like $50 more than the ordinary retail cost. The writing was on the wall even then, but there wasn't an accepted way to do the kind of self-selected upsell + preorder that Kickstarter enables. By contrast the Adventurer Conqueror King Kickstarter I'm part of has two $1,000 backers - some of this is concrete goods amnd services of the kind I'm doing with, but even so that's an order of magnitude more intangibles than you could get people to pay for seven years ago.
    - Tavis

  2. I think you are making some reasonable connections here, LPJ. It is definitely about risk mitigation. But I think it is also a way for people to "overpay" for things that they like, in the hopes that it will lead to more of those things.

  3. If you enjoyed the 4 Hour Work Week I recommend his second book the 4 Hour Body. Tons to pull into life that encompasses more than just physical work there.

    As far as Kickstarter goes, I see it as an adjunct to VC. Like pre-ordering but once the goal is reached, the final product can have a wider reception. I personally think it and the other sites like it are stupendous for our hobby, for indie creatives such as muscians/writers/filmmakers/poets/sculptors/etc.