Startups, Kickstarter, and the Price of Bullshit (That You Paid For!)
Last year, I wrote a pretty controversial piece about Matter, a long-form science journalism web site with little inkling of a business model that managed to raise $140,000 on Kickstarter from 2,566 people who apparently have far bigger hearts and more optimism about the future of journalism than I do. But sorry folks, you've been used and abused.
What did the Kickstarter backers get? Erm. Nothing really, other than a handful of "free" articles, some of which were later distributed for free on the platform. Yes, Matter now has some inkling of a business model, but it's clearly not one that really works well.
The founders of Matter have now sold the magazine, but why they've "sold" to online publisher Medium is bonkers, given that Medium seems to have no intention to be a platform for paid for professional content. That's not what Matter promised its backers. Let's face it: Medium founder Ev Williams does great work, but not in the high-quality, professional media space.
What Medium has "bought" is a handful journalists with a bit of name within the technorati in-crowd (plus 2,566 pro-science backers who never wanted to back Medium …). The Kickstarter supporters backed a business to be funded by customers, a business with momentum, not backing the founders' careers, which is what happened. This sale, conducted so quickly after the Kickstarter fundraising round, inherently violates the spirit of what the money was raised for. Ostensibly, the cash should be returned.
I outlined my reasons quite clearly why I thought that crowdfunding, in this instance, was completely silly: Give people $140,000 for nothing and then permit them to produce a handful of articles (one per month!). Yes, Bobbie Johnson and Jim Giles should laugh at all of you optimistic peons who donated to them, while they went for the "take the money and escape to England" route.
And run they did: I can't say that I was surprised after I read article after article about Medium's acquisition of Matter last week. What did all of these articles lack? A price tag. I asked the folks at Matter if they could give me this figure, and the only reply I got, on Twitter, was: "Hi, @bobbiejohnson here. Thanks, but no. You burned your bridges when you called us fraudsters, I'm afraid. Bye bye!"
What's perhaps telling is their response. They claim I called them fraudsters, but I simply pointed out a number of issues as to why this business may not succeed. One wouldn't want to guess why they reflected on themselves so harshly.
And worst of all is that Giles and Johnson didn't even bother to update their Kickstarter supporters. Perhaps, as a long-time media pundit told me, "If there was an actual acquisition price, it would have been publicized!"
What did Matter's 2,566 Kickstarter supporters get from this acquisition? Nothing. Maybe that's what they ultimately signed up for when they forked over $140,000. But to me, the decision to sell should be made with the people who paid money for your services, not unilaterally.
While the U.S. is no closer to allowing crowdfunding (even though one can gamble away all of their hard-earned money at casinos, on cigarettes, or on any other number of vices, which is absolutely absurd), 809 investors funded my friends Frederik Fischer and Torsten Mueller's startup, Tame, a search engine for Twitter, with €250,000 (for a 25% share of the company) in Germany. So, in this sense, the crowd will actually benefit immensely should their company ever be sold. That's an idea that America should have jumped on long ago.
As for the revolution in long-form science journalism that Matter promised over one year ago, I'm not holding my breath.