Opinions on crowd funding

I was originally going to post this in the ipad forum, but this is probably a better place…

I was just checking recent legislation passed by US Congress that includes regulation on crowd funding. It seems like an interesting concept and I started checking a few sites (such as app founder) and it seems like an interesting model.

I was wondering if anyone had experiences with this investment model and if not-Kevin & team may consider this as a form of funding their ipad/iphone development.

Kevin might, but I’ll hazard an uninformed guess that Keith won’t be particularly keen :smiley: :smiley: :smiley:

EDIT TO ADD: On a more serious note… I worked in a corporate incubator for a while, and the implications of various funding routes are a bit of a minefield. “Crowd funding”, or whatever they’re calling it these days (it was “subscription” in previous centuries – for example, raising money to fund colonisation) carries a host of expectations, whether of return on investment, or influence on design, or ownership of output. It might work for something where ownership of IPR is fairly clearcut and where funding is clearly only intended as a form of patronage or support (such as in the music industry, again with historical precedent), but if I were a software company protecting my IPR and trying to manage the expectations of users, I wouldn’t touch this form of funding unless I had run out of other options. Firstly, it’s unpredictable. Secondly, the last thing a software company needs is dilution of IPR, or of design control, or of the ability to manage customers’ expectations of what is reasonable to deliver in a given timeframe. My view is perhaps jaded by experience of managing investor expectations during IPR negotiations, but this approach doesn’t seem particularly desirable to me, personally. Other people clearly think differently, or else the US wouldn’t be spending time and money on legislation.

EDITED FURTHER: Obviously, I write purely on my own account, and my views do not in any way reflect the position of Literature & Latte! :smiley: :smiley: :smiley:

I’m not sure why we would need this exactly? Our iPad/iPhone version is already under development. I don’t really have any opinion on crowd funding, but I don’t really see the point in it for the sort of software design model I’m interested in. The great thing about software is that it costs nothing to develop (if you start off in your spare time, outside of a regular job), and then if people like it, it makes money and you can build things from there. :slight_smile: So, yeah, I’m a bit confused about how this is at all relevant to us when we already have an iOS version in development. Throwing money at things doesn’t make them happen more quickly, at least not if you’re after quality… Our iOS app will be out before the end of 2012, we hope, don’t worry. :slight_smile:

KB, I can attempt to comprehend this (and other “you need to” comments) to a latent opinion that is expressed as one or all of the following:

  1. If you are not Microsoft/Apple you must need money.
  2. If you are asking folks what they want, you must not be big enough to fund “focus groups” and need money.
  3. If you actually listen to your customer feedback and make improvements or add features at their suggestion, you must be strapped for cash and need money.
  4. If you are not a developer either fresh out of “higher education” or lacking “decades of experience” you must not know how things work and so you need money.
  5. If you take your time to do actual quality checks of releases, plan out your future product development, and maintain a strict adherence to delivering what you set out to build, it must be because you need money to hire folks to ruin, I mean develop your product for you.

While I’m sure everyone has the best of intentions in mind, I find it oddly depressing to see how everyone wants L&L to conform to some industry/theoretic/social model that actually degrades what you have achieved. I applaud your achievements while apologizing for any similar comment I may have made in the past. I hope that I can someday exhibit the same level of professional patience as you.

I have to admit, I kind of long for the days when L&L was a bit smaller and less widely distributed. Less effort was spent filtering out posts telling a very successful man what he needed to do to be successful and more time was spent harassing vic-k.

Hi, I didn’t have an opinion. Read stuff coming from the investor side, and not from the developer side, and I found that odd. I thought that the financial side would be daunting, how to estimate returns of investment, fairness, what type of community is fostered, etc. Siren’s reply confirmed and even added new elements to what I was thinking on.

I was just curious, not trying to push it in any direction. I’m sorry if it was misinterpreted or read as adding pressure of any kind. Sometimes the online register flattens the tone of a friendly inquiry into something akin to a demand. My most sincere apologies (and most sincere admiration for the best software team I’ve ever interacted with!)

No need to apologise - I was just curious about the question, and Jaysen is just growing more jaded by the day. :slight_smile: (Jaysen - many thanks for your kind words, by the way - I think many would take issue with your description of my “professional patience”, though, ha.)

I do see a number of software start-ups going after investment, and I know that model has worked well for some. On the other hand, you also read about massive investment into software and sites that will never make money. In my completely uninformed and talking-off-the-top-of-my-head opinion, I think investors would be wise to be cautious at the moment, as the belief that apps are a goldmine and that throwing money at them will reap rich rewards reminds me a little of the dot com boom and crash in the nineties, in which new companies based on a web page and an idea were sprouting like old potatoes in Hoxton and across London, and a lot of people lost a lot of money when they realised that, yes, the internet was massive, but “monetising” (hate that word, and so does spell-check, fortunately) it was a different matter.

I should add that none of us are business people, but I’m kind of glad of that. We’ve learned as we’ve gone along, hired good accountants and suchlike, and taken advice where we can find it and where it’s relevant. L&L was an accidental business, with Scrivener starting out as a hobby, something for my own writing. Then it became my main job, then I brought David on board, then Ioa… But my approach to developing other versions has been a little unorthodox. It’s true that hiring developers - Windows developers, iOS developers - costs a fortune. We have money in the bank, but we’re not such a large company that it wouldn’t have been a huge risk throwing a lot of that at a Windows developer or an iOS developer who we didn’t know and who has no investment in the product other than getting paid. And so our model is a little different: we work on a profit-share basis with our other developers - our Windows developer, our iOS developer - rather than hiring them. That way, hopefully those developers have a much bigger motivation to keep going - this becomes their business, too, and not just a job. Of course, it means they take some of the risks for a higher reward, but Scrivener is at a point where we hope those risks aren’t too high.

On top of that, one of the reasons it took us so long to start in on an iOS version, just as it took us a long time to start in on a Windows version, is that I knew I wouldn’t be able to do it myself (because I don’t want to do what some other Cocoa developers have done, and neglect their Mac program in favour of getting an iOS app out there, seeing as Scrivener for the Mac is my passion), but at the same time I didn’t want to just hire someone who I then told what to do. I wanted people who knew Scrivener, were passionate about Scrivener, and who were committed to bringing it to another platform. Lee and Jennifer met those criteria with abundance.

In other words, I’ve probably followed some silly ideals rather than good business acumen, but I’ve been very happy with how the Windows version has turned out and with where it is going, and I have every confidence in the work we’re doing with Jen for the iOS version… And just as importantly, we still enjoy it.

Heh, I don’t think I’ve discussed our business set-up in public before, but that’s how it is. L&L is really a bit of an umbrella for a bunch of people working together on a product they all love (that’s the idea, anyway). When it all goes tits up in a few years, people can feel free to point and say they told us so…

All the best,

Kevin (how’s that for a poke in the eye?),

My point is that you have created a well organized, highly successful, and very flexible company by not doing what “business acumen” would have told you to do. I was a passionate supporter of another company that succumbed to the “give us iOS” and “run your business this way” crowd and their product is rapidly becoming unusable by the shear distraction the once visionary developer is now confronted with.

Am I jaded or a realist? Jaded would apply to my frustration with some of the posts (notice I help the windows crowd too). Realist would be my continued violent assertion that you should continue to work under the same rules that have enabled you to support your family as well as expand your business. I find it funny that anyone could suggest that you are “doing it wrong”.

The forum has got bigger: inevitably, it has lost some of the family atmosphere that it used to have. We should thank our lucky stars that Jaysen, vic-k, the pigeon, Ioa, KB and a whole host of others manage to maintain a flavour of what it was like in the anarchic old days. It reminded me of being an undergraduate when I was at one of the most left-wing universities in Britain … Marx is dead, but The Party lives … I still come here for entertainment as well as information.


Scrivener itself aside, I think one should read the fine print in any crowd-funded project very very carefully, whether one is a supplier or a seeker of funding.

For instance, Kickstarter – one of the most visible crowd-funding clearinghouses – is NOT an investment vehicle. Not only is their user agreement is written in such a way that the creator retains ALL IP rights, but creators are explicitly FORBIDDEN to offer such things as equity shares in return for support. If you contribute to a Kickstarter project, you are making a purchase, and you may be helping a project that you care about succeed, but you are NOT investing.

A distinction which is very important under US law. The regulations around investment opportunities are vastly more stringent than the regulations around purchase/sale transactions, and for good reason. The blurring of this distinction in the marketing of some crowd-funded projects may very well be why Congress is getting involved.

This distinction also defines the sort of projects for whom crowd funding is appropriate fairly narrowly. People with a lot of money to invest will want to do more due diligence than this mechanism allows, and projects that need lots of money would probably benefit from closer contact with experienced investors.

In other words, yes, I think it’s somewhat ridiculous that some crowd-funded projects have raised millions of dollars. I expect we’ll see some spectacular failures when these people have to actually deliver a product.


Reports of Marx’s death are greatly exaggerated. :wink: