Incremental Converse Crowdfunding

Incremental Converse Crowdfunding is a system that attempts to make donor intent easier and more precise. It works by the following steps:

  • The artist publishes a list of proposals for works that they are willing to produce (a chapter of a comic, a sound design tutorial, software feature, etc.)
  • Some of their donors make pledges towards each of these proposals. The amount they pledge is based on how much they would like for the artist to complete each work.
  • These pledges are weighted and combined, then presented to the artist as estimated payouts that they would receive for publishing the proposed work.
  • The artist produces and publishes the proposed work.
  • Each donor is invoiced the amount they pledged, with the option to donate more (or less), based on their expectation when they made the pledge, and how that compares to the final quality of the work.
  • Donors who donate less than they pledged are penalized in their future pledges via the scoring system (i.e. their pledges are scaled down during the weighting and combining process, but they are still expected to donate the full value of their pledge).

I use the term "artist" when talking about the person producing works, but as mentioned, this also applies to people who produce audio or software or any other information-based output that can be trivially copied and distributed.

goals

  • maximize the quantity and quality of works entering the commons (i.e. encouraging reuse and collaboration using FOSS and Creative Commons licenses)
  • give donors a reason to pledge (and donate) to help make your creative output possible
  • encouraging artists to provide something that their donors actually want without sacrificing artistic autonomy
  • distribute resources in an ethical and just way

Problems with traditional crowdfunding

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.

Additional notes

All pages

crofu - Incremental converse crowdfunding platform
4 minute read Created: 2023-10-02
ICC Concerns - Potential risks and points of failure for incremental converse crowdfunding
16 minute read Created: 2023-09-25
ICC Continued - Additional thoughts on incremental converse crowdfunding
8 minute read Created: 2022-12-28
ICC Prior Art - Existing funding concepts similar to incremental converse crowdfunding
10 minute read Created: 2022-12-28