Incremental Converse Crowdfunding

Incremental Converse Crowdfunding (ICC) is a system for precise and meaningful donations. Its goals are to:

1. Allow people who create things for free on the internet to be able to make money.
2. Allow the people on the receiving end to more precisely express how they feel through donations
3. Encourage creators to provide something that their donors actually want without sacrificing autonomy or integrity
4. Maximize the quantity and quality of works entering the digital commons

To explain exactly how it works, I will walk through a series of legally distinct case studies, starting with:

Derbert is making a rhythm game exclusively featuring avant-garde jazz music. Because he is extremely cool, Derbert believes in the benefits of free culture, and wants his game to be free-source, and all the music to be Creative Commons. He has been working on the game for about 3 years now, and has a public demo out. Now he wants to try and somehow make money to work on it full-time.

To make money from something he is publishing for free, Derbert could take the following steps (left to right, then top to bottom):

	Propose Derbert publishes proposals for each of the tasks he could spend his time on, whether that's a new feature for the game, a new song, improvements to the anti-cheat system, etc.
	Pledge The players of the game make pledges towards each of these proposals. The amount they pledge is based on how much they want Derbert to work on that task.
	Present These pledges are weighted and combined, then presented to Derbert as estimated payouts that he would receive for completing and publishing the task.
	Proletariat? Derbert works on his game.
todo: image	Publish Derbert publishes his work, and the players try it out to see what it's like. A lot of people really like it! But some people don't.
todo: image	Payment Each player who made a pledge towards that task is invoiced. They can choose to adjust their donation based on whether the published work was better or worse than they expectated.
todo: image	Predict/Penalty Players who donate less than they pledged are penalized in their future pledges via the scoring system. In short, their pledges are scaled down during the weighting and combining process so that in the future, Derbert has a more accurate guess of the actual expected payout for each task.

The last step of adjusting scoring is the heart of ICC, and there is a link to the "ICC Continued" article at the bottom of this page that gets deep in the weeds of what that might look like.

And of course, this process is not exclusive to Derbert and his game, and can apply to any work that can be trivially copied and distributed, such as a webcomic, blog post, or operating system.

Lets see how this process satisfies the goals we set out to accomplish earlier:

Problems with traditional crowdfunding

To inspect the flaws of traditional crowdfunding and how it differs from ICC, let's consider another example:

This is Winterton. Winterton is a fairly popular TikTok influencer known for his intellectual close-readings of saturday-morning cartoons. Despite having no industry experience and never having written any narrative works before, he wants to produce a shonen anime series. To do this, he needs a boatload of money.

His choices are thus:

• Find investors or an established company to fund production
• Save up money or take a loan
• Traditional crowdfunding (Indiegogo, Kickstarter)

The first option can be dismissed because he wants complete control over intellectual property, and the second is bad because he doesn't want to risk his own money/credit. Traditional crowdfunding is unique in that it is practically a donation drive. Sure, the donors might get early access or some nice merchandise, but the actual value of those perks is significantly lower than the cost; it must be, otherwise it wouldn't make sense from the creator's perspective to run the campaign.

So Winterton goes to KickGogo and starts a campaign for a new production company that will be making this anime series.

• fans are excited
• he claims to start production
• goes quiet
• fans are confused
• there are various reasons that Winterton could have done this

I believe the biggest problem with traditional crowdfunding is that the final result is often far less than what is initially pitched. Searching for "failed kickstarters" provides plenty of listicles outlining Kickstarter campaigns and why they failed, and the various reasons why:

• the people running the campaigns were scammers
• the people making the product severely overestimated their abilities
• unforseen legal or logistical obstacles
• all of the above

In addition, once the funding is provided, there is little reason for producers to be expedient in their delivery (other than their usually nonexistent reputation), and it is difficult, if not impossible, for funders to get their money back if the producer takes too long or disappears.

To fix this, I have two proposals:

• converse crowdfunding: flip traditional crowdfunding so that the money leaves the funder's hands after the final result is presented
• incremental crowdfunding: campaigns should be split up into smaller pieces, with incremental goals that give the opportunity for funders to recalibrate their excitement in the project as a whole

By combining these two concepts, I have come up with the procedure outlined at the beginning of this article.

Converse crowdfunding

The traditonal method of crowdfunding can be described by the statement "If I fund this, then you will produce it". The logical converse of that statement would be "If you produce it, then I will fund this". In converse crowdfunding, donors pledge money towards a work, and only donate after publication of that work. This gives artists an incentive to deliver a work quickly, but with minimal sacrifices to quality.

Incremental crowdfunding

Splitting up a work into smaller tasks gives donors more opportinuties to predict how much they value the final result, and increase or decrease their pledges if their expectations change. By providing donors with information more often, they can make more informed decisions about how much they want to pledge for a given work.

Similarly, artists get more insight into how their work is perceived, as their donors give regular feedback on each work via their donation amount. In contrast, metrics from social media can be very volatile, and are just as often due to randomly being shared by the right person at the right time rather than a conscious, attentive evaluation. Plus, $2 is usually a more meaningful show of support than a social media like.

For most cases, works can be easily split into smaller parts. For example, a music album could be split into 3 promotional singles, album art, a full release, 5 music videos, an extended/collector's edition release, and a remix album. Serial works like TV shows and comics could be split into episodes and chapters, or even further into distinct production steps like character references, screenplays, and storyboards.

Because no money is transferred until after the work is published, artists are essentially working off their own money for any given work. As a result, artists are encouraged to split their work into definable milestones, and be as transparent in their progress as possible. In this way, incremental crowdfunding follows as a natural outcome of implementing converse crowdfunding, and so it isn't really necessary to force works to be split in this way; only to allow and streamline it.

No silver bullet

It is worth noting that there are no silver bullets. That is, there is no single solution that will instantly solve all of your problems. ICC is only one of many ways to improve the process of a project little by little. That being said, I think ICC works really well with other paradigms. For example, there is nothing about ICC that requires someone to release their project under a FOSS or Creative Commons license, but I think it's a natural fit.

Additional notes

• Potential concerns: too many to list
• Prior art: Ko-fi, Patreon, Bountysource, Liberapay
• Extra features: Donor Reliability Coefficient, social engineering

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