As far as the $25k for merch go, I believe that they had to spend quite a lot to fulfill their Kickstarter promises. Somebody had made the calculation that it would end up being fairly significant.
T-shirts for 3.5k people. Stickers and CDs for 4.5k people.
I’m estimating $15k for the T-Shirts, $1.5k for the stickers and $3.5k for the CDs. Maybe I underestimated one or several of those. $26k certainly doesn’t seem unrealistic for the merch and they had to ship it. It was part of the deal.
That’s actually one of negative things about Kickstarter: It can’t be good that someone who should and most certainly is busy pushing out a product suddenly also has to be this expert in getting merch made and shipping it to people.
I would assume becoming that expert is not easy and being good at dealing with merch doesn’t seem like a valuable skill the rest of the time – you know, when you are busy building a social network or doing whatever.
All this merch crap sadly seems to have become a staple of Kickstarter projects. Maybe it’s necessary to get people to pay?
Sounds like an easy value-add for them or someone else to provide design/manufacture/drop-shipping for all the merch if you give them your logos and brief, or whatever.
They save on effort, and you take a few percent yourself. Scale means you can make better arrangements with suppliers, and quite possibly everyone comes out ahead.
Edit: to address the "is it even necessary?" question, I'd personally guess at 'yes'. Having some sort of tangible reward for your contribution, even if it's just a sticker, helps people justify the cost. Then they can wear your hat or t-shirt and get maximum indie "I funded them even before they were underground" credit. Also, free(ish) advertising for you.
these people paid themselves less than 1/3rd market salary
Take into account these were 19-22 year olds, half of whom hadn't even finished their CS degrees, and didn't really have resumes to speak of. They're internship material, market salary would have been pretty generous.
$7900 for 10 full days of hosted training for an entire team seems somewhat cheap. Be conservative and say that each day they had two designers helping them out at a cost of $50/hr for 6 hours ($6000) and then add whatever costs and overhead is involved in hosting a team for 10 days. Top-notch designers who are good enough and prepared enough to train are normally well more than that hourly.
Comments
Nothing too crazy in here.
Surprised by:
* The 25k in what appears to be merch. Inclination: that's silly. Is this some crazy Kickstarter thing someone can explain?
* The ~8k in fees to LUXr, a "1 day a week for 10 weeks design residency for early-state startups". "Radically cheap", eh.
* The 1k trademark filing fee.
* That they actually spent $6k in a year at Rackspace. How many uses did they have? And ~$100/mo at Sendgrid?
On the other hand, these people paid themselves less than 1/3rd market salary, even after you account for the housing allowance.
And what do I know? I've never tried to start a social network (there's a reason for that, but...). Maybe 25k in merch is what it takes.
As far as the $25k for merch go, I believe that they had to spend quite a lot to fulfill their Kickstarter promises. Somebody had made the calculation that it would end up being fairly significant.
T-shirts for 3.5k people. Stickers and CDs for 4.5k people.
I’m estimating $15k for the T-Shirts, $1.5k for the stickers and $3.5k for the CDs. Maybe I underestimated one or several of those. $26k certainly doesn’t seem unrealistic for the merch and they had to ship it. It was part of the deal.
That’s actually one of negative things about Kickstarter: It can’t be good that someone who should and most certainly is busy pushing out a product suddenly also has to be this expert in getting merch made and shipping it to people.
I would assume becoming that expert is not easy and being good at dealing with merch doesn’t seem like a valuable skill the rest of the time – you know, when you are busy building a social network or doing whatever.
All this merch crap sadly seems to have become a staple of Kickstarter projects. Maybe it’s necessary to get people to pay?
Sounds like an easy value-add for them or someone else to provide design/manufacture/drop-shipping for all the merch if you give them your logos and brief, or whatever.
They save on effort, and you take a few percent yourself. Scale means you can make better arrangements with suppliers, and quite possibly everyone comes out ahead.
Edit: to address the "is it even necessary?" question, I'd personally guess at 'yes'. Having some sort of tangible reward for your contribution, even if it's just a sticker, helps people justify the cost. Then they can wear your hat or t-shirt and get maximum indie "I funded them even before they were underground" credit. Also, free(ish) advertising for you.
Yeah, one big takeaway from this was their fundraising cost was over $50K, counting Kickstarter's take.
these people paid themselves less than 1/3rd market salary
Take into account these were 19-22 year olds, half of whom hadn't even finished their CS degrees, and didn't really have resumes to speak of. They're internship material, market salary would have been pretty generous.
the project had such a high profile that they could have got all of this stuff for free from companies. they just had to ask
That's bad form when you have funds available. It's not like they were trying to cure cancer.
$7900 for 10 full days of hosted training for an entire team seems somewhat cheap. Be conservative and say that each day they had two designers helping them out at a cost of $50/hr for 6 hours ($6000) and then add whatever costs and overhead is involved in hosting a team for 10 days. Top-notch designers who are good enough and prepared enough to train are normally well more than that hourly.