8 May 2017
5 months ago, I announced that Stonemaier Games would no longer be using crowdfunding or pre-order campaigns. This was a notable announcement because I have Kickstarter to thank for my company’s inception and growth from 2012-2015, plus, well, this blog is about crowdfunding.
Today Richard Bliss released a new 20-minute podcast chat with me about life after Kickstarter, so I thought I’d take the opportunity to share the trials, tribulations, and successes of the last few months for Stonemaier Games. I’ll focus on the top 3 reasons I moved away from crowdfunding and the 5 pillars of Kickstarter.
- Fulfillment Risk: Because we no longer rely on fulfillment centers to send our products to thousands of backers, we’ve completely eliminated any risk involved in this process. In a way, we’ve shifted some of that risk to partners who specialize in shipping specific products, like Top Shelf Gamer and Meeplesource. Also, there are great fulfillment companies I trust 100% if I ever need to ship something to a number of people.
- Time: I work the same 80-hour workweek I did when I was planning, running, and fulfilling our Kickstarter campaigns. I still have deadlines and responsibilities, and I’m still just as averse to vacations as I have been since I went full time in late 2013. But I much prefer the current feeling of my most precious resource, time. It’s more fluid and often more relaxed.
- Human Nature: I still get to see the darker side of human nature among a small number of people on social media. The difference now is that I have administrative control. Though even that comes with new challenges, as I don’t want to remove someone from a Facebook group just because they had a bad day. Instead, I’ve trained myself to look for a pattern of negativity before taking action.
The following are what I consider to be the top 5 purposes of crowdfunding. In this post I described my plan of how to accomplish these things without Kickstarter. Did these plans work out?
While there are many channels for people to know about Stonemaier Games and to interact with me (this blog, e-newsletter, e-mail, Twitter, BoardGameGeek, YouTube, etc), by far the most impactful platform has been Facebook. Specifically, product-specific Facebook groups. Combined, our groups for Viticulture, Euphoria, Between Two Cities, Scythe, Charterstone, and our treasure chests have over 10,000 members.
I’m frequently active on social media, but I also like that the Facebook groups are entirely self-sufficient without me. Also, unlike on crowdfunding platforms, I really like that anyone can join the Facebook groups or chat on Twitter, BoardGameGeek, etc. Those platforms allow you to love something or be interested in something without spending money to interact with others who are passionate about it.
Improve the Product
I’ve shifted early information about our products from backers over to our 2,000+ ambassadors, allowing them to provide insights and suggestions while the product is still pliable. Most of this comes in the form of blind playtesting, but I’ve also just tried to ask ambassadors specific questions and simply leave my metaphorical door open for them to offer input about the information I share with them.
I’ve also used Facebook for this. Throughout the Charterstone design process, every now and then I’d pose a question in the Charterstone FB group to help me get outside perspectives about legacy games, worker-placement games, etc. I really liked having a forum to discuss games while they’re still in development.
Possibly the biggest change in methodology has been shifting my entire sales focus to distributors. Retailers and individual people are my customers, but distributors are my clients. In practical terms, it means that I frequently communicate with distributors to coordinate direct orders, product releases, reprints, and marketing efforts.
I look to distributors to help me gauge demand–it’s mutually beneficial for us to talk about those numbers. Back in December I went to distributors and asked if they wanted to commit to quantities for the 6th printing of Scythe. If they committed by late December, I would guarantee that quantity for them. Those games are now arriving at their destinations.
We did something similar with Charterstone. I used our future printing request form to gauge demand from our e-newsletter subscribers, then I shared that total with retailers to get a feel for their interest. With 450 retailers on our mailing list, I wish more than 50 had replied, though I think many of them communicated directly with their distributors. We took all of that data and shared it with distributors, which has contributed to determining the size of the first print run of Charterstone (51,000 units).
I learned an unexpected lesson while generating awareness for Charterstone: If you tell retailers a product’s SKU and MSRP, they will list it for pre-order.
Now, this isn’t inherently a bad thing. Pre-orders are how stores gauge demand, and they’re directly competing with other retailers.
The problem is that when I shared the SKU and MSRP for Charterstone with distributors and retailers, it wasn’t with the intent that they would accept pre-orders already. If that were the intent, my communication with them would have been different: I would have informed all stores that they could open pre-orders, creating a level playing field. I would also have been very precise in nothing that the release date was in flux. And ideally I would have provided links to early reviews so customers could make an informed decisions–that’s why I wanted to wait until much later in the process to initiate pre-orders.
So I’ve learned to either (a) not release the SKU and/or MSRP until I’m ready for retailers to accept pre-orders or (b) cater my communication to retailers so they all have the same pre-order information at the same time.
Beyond that lesson, I’ve continued to use the same methods of marketing I used while I was running Kickstarters: send out review copies, support play-and-win, post banner ads on BGG, and send out the monthly e-newsletter.
Cash flow in the business of board games is an odd thing. You may invest hundreds of thousands of dollars in a game that takes 3-4 months to manufacture, 1 month to ship, and then 1-2 months after that you’ll get payments from distributors. So there are extended periods of time when cash flow is a struggle, then all of a sudden (if all goes well) you’re flush with cash.
The X-factor we experienced a few months ago is taxes. I’ll discuss this in detail in an upcoming post, but the short story is that our cash flow was very healthy, then suddenly the US Treasury had almost all of our cash.
Fortunately, a major asset has been our partnerships with international publishers. When we localize a game as part of a bigger print run, the partner pays for half of their costs (manufacturing plus royalties) before printing begins and then the other half right before the games ship to them. This is a much tighter cycle than distributor payments, and it really helps with cash flow.
We also have some distributors who buy directly from us. Depending on how well I know them, I’ve let some pay me when they receive the product at their final destination instead of when their shipping company picks up the product in Shenzhen. But I think I’ll need to switch to a system where all distributors use the latter method. Without it, there may be times when we want to make a product but simply need to wait until we’ve received distributor payments, which doesn’t benefit anyone.
Overall, as much as I enjoyed and am grateful for my crowdfunding experience–and while I continue to believe it’s an amazing platform for creators–I’m personally much happier now that I no longer use Kickstarter as a creator. And when I’m happy, it’s a lot easier for me to create joyful experiences and interactions for our fans.
But that’s just me. Has Stonemaier Games suffered as a result of not using Kickstarter? Like, all other factors remaining equal, would Stonemaier Games be better off if we ran a Kickstarter campaign for Charterstone?
Honestly, I think the only metric by which we’d be better off is current cash flow. Otherwise, in every other way (including total revenue), the company is more successful because we grew out of crowdfunding instead of continuing to use it.
I’m happy to answer any of your questions and to read your comments below.