Felix Salmon

Kickstarter funders aren’t angel investors

Felix Salmon
Apr 18, 2013 18:04 UTC

A correspondent writes, via email:

Since much of the seed capital of Matter was Kickstarter funded, isn’t it worth asking why the backers aren’t coming along, so to speak?

I know the absolute answer, but the usual issues of founder sweat equity versus angel capital apply, it seems to me. It’s likely that the angel funding via Kickstarter is pretty substantial on a term sheet basis relative to other early stage investing. At the very least, it’s an interesting topic vis a vis what Kickstarter is and isn’t: the Verge just did a piece about how it’s not a store. Fine. But what exactly is it then? It would be one thing if it was used to put the screws to Sand Hill Road, but the people left holding the bag aren’t really Fred Wilson.

This is an easy one, but it’s also important. Kickstarter is not a store, but it’s definitely not a place to raise seed-round equity. The money that gets raised by a company on Kickstarter isn’t debt, and isn’t equity: it’s operating revenues. From a business-plan perspective, Kickstarter revenues are basically pre-orders.

Last September, NPR asked a simple question: “When A Kickstarter Campaign Fails, Does Anyone Get The Money Back?”. It’s a question with a simple answer: No. To take just one example, look at the Geode. It raised $350,000 a year ago, but most of its backers — who are complaining vociferously in the comments section — seem to have received nothing. And while the founder didn’t just abscond with the money (he was eventually tracked down by the Charleston Post and Courier), it’s pretty clear that the Geode is Exhibit A for people who think of Kickstarter as SkyMall for vaporware.

There is one small piece of good news from the Geode fiasco: while the manufacturer has disappeared, and Kickstarter certainly isn’t giving anybody their money back, some commenters have managed to get refunds from their credit-card companies. If you do back a Kickstarter where you’re expecting a reasonably valuable thing in return, then it makes sense to use a credit card, rather than say a debit card or PayPal, to make your payment. (Just as it makes sense, if you’re buying an airline ticket, to use a credit card just in case the airline goes bust before your flight.)

That said, NPR’s question does make it clear that there’s a pretty explicit contractual relationship between the company and the funder: cash goes one way, goods and/or services flow the other way, a few months later. The money counts as revenues, not as funding, and the liability for the company is not a cash liability but rather one of deliverables.

But if it’s wrong to think of Kickstarter funding as debt finance, it’s even more wrong to think of it as equity finance. Kickstarter money is pretty much the cheapest money that an entrepreneur can raise, and that’s great: anything which makes it easier to generate some cashflow for startups can generally be considered a good thing. And Kickstarter is very clear that it’s not going to jump onto the crowdfunding bandwagon that was included in the JOBS act. Other companies can try to provide platforms for small companies selling off micro-chunks of micro-equity: that’s not what Kickstarter is about.

Matter did give out some equity, carefully, to important partners like Clearleft, which is wonderfully recycling the proceeds from yesterday’s sale into a small incubator. Matter’s backers, however, would and should neither want nor expect to see their pledges converted into some kind of equity. Most of the backers — 1,775 of the 2,566 in total — gave $25 or less: it’s clearly impractical for any company to deal with that many shareholders owning such tiny stakes. And people who subscribed after Matter launched have in some cases given just as much money; it’s not clear why the people who prepaid should get some kind of equity stake, while all other customers don’t.

Clearly there’s a bit of an asymmetry here: whenever you back a Kickstarter project, you’re running the risk of unexpectedly losing everything, while there’s no countervailing upside risk of some windfall down the road. But that’s the genius of Kickstarter. It gives creative people and entrepreneurs a way of asking for money without seeming to be begging, and it gives funders a way to be able to support the people they like and admire within the familiar wrapper of a commercial transaction. It’s a fine line to walk, and Kickstarter has done a very good job of not turning it into a contractually-binding funding operation, be it debt or equity or something in between.

For people who are used to looking at the world in terms of capital structures and funding costs, this can be weird: at one event in Davos this year, I met a successful businessman who was genuinely offended at how cheap the effective funding cost was for startup companies using Kickstarter. But backers of Kickstarter projects don’t think that way, and it’s worth noting that Kickstarter caps the amount that any one person can give at $10,000.

On the internet, there are lots of people who are generous and enthusiastic. That’s a great resource to be able to tap into. Let’s not try to turn it into something which is all lawyered up and financial.


rapgenius.com is VC-funded to the tune of $15 million. That means there isn’t really any shortage of capital. Quite the opposite.

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Kickstarter’s mission creep

Felix Salmon
Mar 12, 2012 16:11 UTC

I had a fascinating conversation last night with a chap from Kickstarter, a site designed to help creative professionals realize projects. And it’s still doing that, pretty well. But there’s clearly a degree of mission creep at Kickstarter, too — especially with regard to some of the most successful and highest-profile projects on the site.

“A project is not open-ended,” says Kickstarter: “Starting a business, for example, does not qualify as a project.” Yet that’s exactly what Matter is doing with Kickstarter.

What’s more, Kickstarter can only be used to fund projects “from the creative fields of Art, Comics, Dance, Design, Fashion, Film, Food, Games, Music, Photography, Publishing, Technology, and Theater”. Which one of those fields is a bar of soap supposed to fall into? Design, I guess. But if the fields of Design and Technology can be so broadly construed as to mean anything, they ultimately mean nothing. And the bar of soap — just like Matter or the famous $1.5 million iPhone dock — is at heart an attempt to start a business, much more than it is an attempt to fund a creative project.

The bar of soap and the iPhone dock are glossy and sophisticated sales pitches: one of the questions yesterday was whether they were closer to SkyMall or to QVC. But there’s a huge difference: SkyMall and QVC sell products which exist. On Kickstarter, you’re buying a hypothetical future product. And I worry that this is going to end in high-profile tears and recriminations at some point, the first time a big funded project fails to produce what it promised.

Getting a product to market is hard. Even companies with business plans and executives and millions of dollars in funding — and a fully-functioning product — can fall down on that front. Look for instance at the Switch lightbulb: in July 2011, Farhad Manjoo of Slate said it would go on sale in October 2011 for $20. In August 2011, Dan Koeppel of Wired magazine ran an article saying that the bulb would go on sale in October for $30. But here we are in March 2012, there’s still no sign of the thing, and the company’s Facebook page is filling up with comments saying things like “I’m going to start my own company making a product that no one can buy. Hmm….what should I not sell? So hard to decide.”

There are two big hidden risks which I think that Kickstarter should emphasize much more than it’s presently doing. The first is on the side of the person with the project. It’s easy, when you’re trying to raise funds, to promise lots of things to lots of people, in that glorious utopian future where you’ve raised the cash that you need and you can actually finish your project. So then you finish the project, and you’re still incredibly busy and stressed, but now you have hundreds or even thousands of things to send out. Which can be a decidedly unpleasant chore. Kickstarter buries its page warning about how shipping “may end up being a bigger part of your budget than you thought”, and doesn’t really talk at all about the massive time commitment involved. For rewards which are individually hand-made, the result can be something much sloppier than the project owner originally intended. Which isn’t really good for anybody.

The bigger risk, however, is on the side of the funder — and that’s the risk that the project will get funded, you will spend your money, and you will end up getting nothing in return. For original-concept Kickstarter projects, that’s probably OK: you supported the arts by funding an artist, and you hoped to get a memento of that funding, but the reward was just a reward, and not necessarily the main reason you funded the project. For things like bars of soap and iPhone docks, however, the great majority of the funders are thinking of themselves as buying a thing. And they’re not properly discounting the very real risk that they will end up with nothing at all.

Even the most well-intentioned projects can run into unanticipated obstacles, some of which could be fatal to the project. And of course there’s the risk too of outright merchant fraud. You put together a glossy Kickstarter video, raise a few hundred thousand dollars, and then just pocket the money while telling everybody that the project is taking longer than expected.

In either situation, your funders have very little recourse. They may or may not, at some point, be able to get a refund from their credit-card company, if they paid with a credit card. But it’s extremely unlikely that they’ll be able to get a refund from the project owner.

Kickstarter doesn’t keep statistics on the number of projects which get funded but not completed, or the number of projects where funders fail to receive what they were promised. It’s hard to know how such statistics could possibly be generated, since projects don’t come with deadlines by which the rewards are deliverable. I, for one, have a number of Kickstarter receivables coming to me; I don’t have them listed anywhere, however, and if they don’t arrive, I’m not going to be particularly upset. There are 12,521 people expecting an iPhone dock, however, and 21 of them have paid upwards of $5,000 to receive 100 docks or more. If I was expecting a shipment of 100 iPhone docks, I’d consider that a real business contract, rather than a much fuzzier form of support for some creative project.

The JOBS act which recently passed in the House would allow Kickstarter to allow project backers to receive equity, rather than specific rewards, in return for their money. The regulatory and compliance costs for Kickstarter would surely be enormous, but might well be worth it, given that SecondMarket is now valued at $200 million. But before Kickstarter moves into the realm of equity stakes, it should probably start thinking much harder about the way in which it’s becoming a shopping site. Because if it doesn’t have a good way of regulating the people on its platform who are fundamentally just selling things, then it’s going to have a really hard time becoming a platform for people selling ownership stakes in companies.


At iPledg (http://ipledg.com/) we do not judge the projects submitted. We feel this is the role of “the crowd”. As long as the project meets the crtieria set out in our project guidelines (largely covering the legal and moral outlines) then we are happy for the crowd to determine the suitability for it to receive exposure and funding. And isn’t that the essence of Crowd Funding??

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Why the micropayments business model matters

Felix Salmon
Mar 8, 2012 23:12 UTC

Kevin Drum has an interesting take on the Matter debate: if Matter does great journalism, it will succeed, and if it doesn’t, it will fail, and the business model doesn’t, well, matter.

I don’t have much of an opinion about Matter because I suspect their delivery mechanism is beside the point. It does have the benefit of keeping overhead costs low, but that’s probably a wash since they also have no advertising revenue. Basically, if they’re able to consistently produce spectacular pieces of journalism that generate a lot of online buzz, they’ll succeed. If they can’t, they won’t. But that would probably be true regardless of what kind of delivery model they choose.

I differ with Kevin here — I think the business model matters a lot, precisely because niche publications can’t support themselves online through advertising.

There are two ways of looking at this: the quantitative, and the practical. The quantitative goes something like this: let’s say that there are 2 million science nerds in America — that Matter’s potential audience is 2 million people. And let’s say that if Matter publishes a great piece online for free, it reaches 200,000 of them. If it manages a respectable RPM (that’s ad revenue per 1,000 pages) of $5, then that story will bring in 200 x $5 = $1,000. Even if it reaches a million science nerds it still only has revenues of $5,000 for that story. And then you have to back out the ad network’s take, the ad sales guy’s salary and commission, the time spent trying to do biz-dev deals, and in general the enormous publishing-side infrastructure that all successful ad-supported websites require. By the time you’ve done that, there’s literally nothing left for editorial.

The practical level is even simpler: a niche long-form science-journalism website is never going to get the kind of scale which advertisers want. Big-name brand advertisers want to reach lots of people lots of times. They’ll advertise on blogs, which can get audiences in the millions, but they’re not going to advertise on a site which only updates once a month or even once a week. In general, the amount of inventory online is growing fast, and websites need to be able to keep up with that growth or start seeing their advertisers fall away, one by one.

With subscriptions, though, the math is much more compelling: if you get 20,000 people paying a buck apiece for that story, that’s $20,000, with no sales overhead; most of that money can end up going to editorial.

What’s more, if you’re writing for a small audience rather than a mass audience, you massively increase the opportunity space with regard to the kind of journalism that’s possible. Drum is right that the best writers and reporters in the business are expensive. But they will also nearly always work for less money if they get to chase down really juicy stories, or write exactly what they want to write, in a medium which will give them all the space they need. I’m sure that Christopher Hitchens didn’t charge the New York Review of Books or even the Atlantic anything like the kind of money he was being paid by Vanity Fair.

Matter has a compelling pitch as far as writers are concerned. You don’t need to dumb down your story, or make it accessible to a mass audience: instead, you can be obsessive and geeky and so long as you end up with a fantastic investigative narrative at the end, that’s fine. What’s more, we won’t cut out half your story unless doing so really makes it better: we don’t have any space constraints.

Professional-quality nanopublishing has never really worked online, because the ad-supported business model can’t make it work. In a world of micropayments, however, everything changes. Matter’s early to this game; one of the reasons I’m excited about it and hope it succeeds — and one of the reasons that 1,881 people have pledged $108,470 to make it work — is that if it works, then it will blaze the way for many other publications, in other fields.

There are lots of things which are yet to be worked out, not least how content behind a paywall can be effectively shared on the increasingly social internet. (Which is one reason I hope the Matter paywall is at least a little bit porous.) And I’m sure that Matter will make mistakes: all startups do. But at some point, a publisher somewhere is going to crack the nanopublishing/micropayments nut. And when that happens, it will be revolutionary for the world of online journalism.


Yeah, they really should call $0.99 a minipayment; micro payments was supposed to be, like, 5¢ per strip for a webcomic, or something like that…

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Can Matter succeed?

Felix Salmon
Mar 7, 2012 05:06 UTC

Stephen Morse doesn’t Matter. In fact, he calls the journalism startup — whose Kickstarter campaign broke past the $100,000 level in just nine days — “Snake Oil Salesmen 2.0″ and “a scam”. And after getting a smart explanation of exactly how Matter’s business model is, he doubled down on his position and said he would keep it even if they manage to raise $500,000. So I invited him up to Reuters for a little debate.

We disagreed about a few different things. The first is Morse’s idea that there’s so much great content out there for less than 99 cents that no one’s going to pay that whopping sum to read Matter’s stories. I, obviously, disagree. I think that the success of the Kickstarter campaign is proof that there’s huge untapped demand for this kind of material — demand which is not being met by the competitors Morse cites, like Scientific American or Popular Mechanics. I think that the success of books for the Kindle — for that matter, the success of decades of magazines and centuries of paper books — demonstrates that there’s real demand for quality content, even from people who don’t necessarily have the time to read it all. I think that mobile devices like phones and tablets have revolutionized where and how we consume a huge range of written content. And, most importantly, I think that trail blazers like the iTunes Store and the New York Times are changing the willingness of millions of people to pay for digital material.

“If I were a content consumer,” says Morse, lapsing into a rather odd conditional, “I wouldn’t pay 99 cents for one article” when magazine subscriptions amortize out at a lower per-article cost, and besides there’s lots of great content out there which is absolutely free. Such things, he says, are “a much better value” than Matter. But here I think Morse misses the great hope of the 99-cent price: it’s low enough that substantially everybody in Matter’s target audience can afford to pay it without any real effect on their wealth or cashflow whatsoever. It’s less than the amount you tip a cab driver, or a bartender; in fact, it’s less than the cost of just about anything you might buy in the physical world. 99 cents is low enough that, for hundreds of thousands of people, worries about value disappear. They pay that on text messages all the time, which have much lower value. Why not pay it for something great, if doing so allows that thing to exist in the first place?

Put it this way: if Matter found a way for people to pay them after they read a story, rather than before, on a purely voluntary basis, I’d still be optimistic about their ability to make money doing this. Think of a world where you got the New Yorker delivered for free every week, and then clicked a button paying them 99 cents every time you really liked one of the articles. I think they could get a lot of revenue that way, and I think the success of the porous New York Times paywall is strong evidence of that. Yes, there will always be people who don’t want to pay, and there will always be others who somehow find free samizdat versions of Matter’s stories. But those people aren’t important. What’s important is the number of honest people who are more than happy to pay when they find something good to read. And that number is extremely large, and growing.

Matter’s Kickstarter campaign proves that people want to give them their money. The task facing Matter is to create material that’s so unique, so great, that readers around the country and the world will be eager to buy subscriptions, or individual issues, in the knowledge that their money is going straight to the creators of that content. It’s an exercise in doing something which has historically been extremely rare, in the world of journalism: selling stories to readers, as opposed to selling readers to advertisers. But the internet makes it so easy to reach millions of potential readers that a small and enthusiastic subgroup can be big enough to sustain this kind of publication. Nanopublishing didn’t work when Nick Denton tried it on an ad-supported basis. But Matter is effectively running a publication at a CPM of $1,000 — and a lot of math starts working when the numbers get that big.

In our debate, Morse snarked that no one down below us, in Times Square, had heard of Jim Giles or Bobbie Johnson, the co-founders of Matter. And in saying that he revealed his broader mindset: that of a would-be internet entrepreneur who raises venture funding by using the words “platform” and “scale” a lot while promising things like “explosive growth”. It’s no great secret that Giles and Johnson have talked to VCs, many of whom have been very supportive. But what they’re building doesn’t lend itself to the VC business model, where you either have monster, multi-million-dollar success, or else you die trying.

Morse uses the fact that Matter doesn’t have VC funding as a count against them, when in fact it’s a great count in their favor. VCs provide two things: money and advice. And Matter’s getting the advice; it’s just doing so without having to sell its soul to people wanting a monster return on their investment. All it needs to do, at least in the first instance, is pay for itself. And at the end of our debate, Morse finally came up with a number: if Matter can get 20,000 paying customers each week, he said, then he sees a sustainable model there.

Morse also said that “even if every science nerd out there pays a dollar, this is not going to be something that will get the critical audience needed to be a financial success”. Which I think is plainly wrong: there are a lot more than 20,000 science nerds out there. Scientific American has a circulation of 475,000. Popular Mechanics and Popular Science both have a circulation of over 1.2 million. Smithsonian has a circulation of more than 2 million. And National Geographic has a circulation of over 4 million. Can Matter reach 20,000 paying customers? Of course it can. Here’s Johnson:

We don’t think it’s going to be a mainstream smash; we don’t think it’s going to change the world; we don’t think we’re going to out New Yorker the New Yorker; we don’t think we’re going to be billionaires. But we do think, done right, we can offer something valuable and remain sustainable in the medium term.

There’s nothing pie-in-the-sky about that idea; to the contrary, it’s eminently achievable. I think so, and 1,806 of Matter’s Kickstarter backers think so too. With 17 more days to go.

Matter’s vision for long-form journalism

Felix Salmon
Feb 23, 2012 21:44 UTC

Yesterday morning, a very exciting new journalism project was launched on Kickstarter. It’s called Matter, and it’s going to be home to long-form investigative narrative journalism about science and technology. “No cheap reviews, no snarky opinion pieces, no top ten lists,” they promise. “Just one unmissable story.”

They hit a nerve: as I write this, some 31 hours after the Kickstarter campaign was launched, it has already reached $44,395 of its $50,000 goal, with 569 backers. That’s an average of almost $80 each. “People are giving way more than I thought they would,” said co-founder Jim Giles when I talked to him today. “We have tapped into frustration with the way the internet has promoted quick and cheap journalism and bashed longer-quality stuff, or at least undermined the business model that used to support that sort of thing.”

Matter will surely exceed its $50,000 goal, which is great news, because the more money it raises the better. In the first instance, the $50,000 will be enough to get a nice website up and running, and should also pay for the first three stories on the site. With more money, Matter can get more ambitious: commission more stories, for one thing, but also start building an iPad app which would live in the iOS Newsstand. Or maybe something on Android, or both. There’s a lot of opportunity out there.

This is an old-school Kickstarter campaign, where people are raising the money they need to create something great. It’s not one of those campaigns where donors are essentially pre-buying the product in advance: this isn’t about buying stories before they’re published, or buying subscriptions before the publication even exists. “We’re asking people to make an investment in a sustainable platform for really good journalism,” says Giles, “not to buy a whole bunch of articles in advance.” (That said, anybody pledging $10 or more will get the first three stories, $50 gets you the first six, $100 gets you the first ten, $300 gets you the first 50, and $1,000 gets you a lifetime subscription.)

Once Matter has launched, readers will have the option of buying individual stories for 99 cents each — the Kindle Single model, basically — or buying a subscription. It’ll be monthly at first, and then weekly, assuming everything goes according to plan.

The stories themselves are going to be really good, I think. Matter’s founders, Jim Giles and Bobbie Johnson, are both first-rate journalists, and they’ve quietly amassed a list of really good writers and editors they want to work with. They have a smart model: rather than soliciting detailed pitches, they’re more interested in writers coming to them with vaguer ideas. The writer then gets matched to an editor very early on — before the piece is even formally commissioned — and the final article comes together as a collaboration between the writer, editor, and publishers.

I like this model, because one big weakness of long-form narrative journalism is that it has failed to embrace everything the web is capable of. Writers get commissioned to write X thousand words on Y; they then hand in a document written in Microsoft Word, which goes through a few rounds of editing before getting laid out to a greater or lesser degree. (Ben Hammersley is really good at diagnosing this problem and suggesting how to begin solving it.) I’m optimistic that Matter’s editing process will help its stories be much richer than most of what we’re seeing today.

Matter is coming into a world where companies like The Atavist and Byliner have already broken important ground, and where willingness to pay for content is clearly going up. It’s entirely natural, online, to disaggregate things like magazines, and have a blog over here be really good at what would in a magazine be the front-of-book stuff, while a subscription site over there specializes in features.

And while Matter is quite narrow in what it wants to publish — chiefly long-form, narrative, investigative news stories about science and technology — it’s quite broad in terms of how it intends to distribute that content, and what kind of models it might embrace along the way. For instance, Giles is very keen to work with newspapers, who might help underwrite some of the cost of reporting these stories, in return for being able to break the news in them. Matter would then give those stories the long-form narrative treatment. Or maybe the same story could just appear in both places, if the newspaper covered the costs of the reporting.

In any case, this is a great project, and I’m pretty sure that a lot of the readers of this blog would love to support it. Most long-form journalism these days is political, with much of the rest being in the art-and-literature field. There are thousands of amazing stories in science and technology; I can’t wait for Matter to start uncovering them.


I pay $149 a month for Rackspace cloud sites (cloud server solution) – its elastic and will expand and contract bandwidth according to the traffic volume hitting your site. My point is, I agree with the comment that said $50k is a ridiculous amount of money to build / launch a website.

WordPress = free / or a few hundred for premium theme
Customization: let’s say high end, $500
Cloudsites: $149 per month ($1788 yr)

Now what do I do with the other $47,500?

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The idiocy of crowds

Felix Salmon
Sep 23, 2013 21:47 UTC

Today’s a big, exciting day for anybody who has found it simply too difficult, to date, to throw their money away on idiotic gambles. Are you bored with Las Vegas? Have you become disillusioned with lottery tickets? Do micro caps leave you lukewarm? Does the very idea of a 3X ETF fill you with nothing but ennui? Well in that case today you must rejoice, because the ban on general solicitation has been abolished, and the web is now being overrun with companies like Crowdfunder and RockThePost and CircleUp which offer a whole new world of opportunity when it comes to separating fools from their money. You can even lose your money ethically, now, if that’s your particular bag. The highest-profile such platform is probably AngelList: as of today, founders like Paul Carr (alongside, according to Dan Primack, over 1,000 others) are out there tweeting at the world in an attempt to drum up new investors.

It is conceivable that over time, these equity crowdfunding platforms will learn from their inevitable mistakes, and the few which survive will learn how to be something other than a hole in which to pour millions of dollars. But right now we’re in the very early days, and there’s no conceivable reason why anybody should want to volunteer to be a sacrificial guinea-pig. All of the platforms, right now, feature what RockThePost rather touchingly calls “crowdsourced due diligence” — something which, if you read their FAQ, is detailed thusly:

Though RockThePost requires companies to include a certain amount of information before being eligible to list on the site, RockThePost does not conduct any due diligence on them or endorse any as attractive investment opportunities.

This is basically the Prosper business model, circa 2005: blind faith in the wisdom of crowds, leading inevitably to a toxic mixture of good-faith and bad-faith failed fundings. To be honest, the distinction is not one worth worrying about too much: in both cases, a business gets funded, the money disappears never to be seen again, and the funders are upset.

It’s worth noting, here, the highest-profile company to not get in on this game: Kickstarter. They decided in early 2012 that they were not going to open up their platform to people who were looking for equity investments — and that decision looks pretty smart today. After all, Kickstarter knows full well how big the reach/grasp disconnect can be for people taking to the internet to try to fund their new project with ambition and zeal. It’s easy, in the early days of a project, to massively underestimate the cost of meeting future obligations — even when those obligations are little more than sending out t-shirts in the mail. With crowdfunding, the obligations are much more onerous: business owners have serious responsibilities to their shareholders, and I suspect that very few of the businesses listed on the new platforms are actually equipped to meet those responsibilities.

What’s more, as Fred Wilson notes, there are a myriad of little ways in which startups can get tripped up by restrictions in the crowdfunding rules. Unless the company has very good lawyers and has already signed up some very experienced investors, the chances are it will end up inadvertently breaking the law somehow. And if it has signed up some very experienced investors, you have to expect that the fish swimming around the waters of sites like CircleUp are just going to get eaten alive by the bigger sharks doing custom deals.

One angel investor explained it very well in an email to me this morning:

These guys are building their business on the notion/dream that somehow the internet can disintermediate social and relationship capital. I’d argue that this is precisely what the internet can not do: if you’re going to invest in a startup, you’d better know the founders, and you’d better know something that most people do not know. Information asymmetry is the only way to lower the risk profile on such crazy risky investments.

In theory, these companies are providing a useful service for startups. Raising money is hard, logistically speaking — and once you’ve got your commitments all lined up, there are some good reasons why it makes sense to outsource a lot of the accreditation and paperwork to an outside company. The problem is that AngelList and its ilk don’t stop there: their main purpose, in fact, is not to take care of paperwork, so much as it is to act as a lead-generation service for startups which have failed to raise all the money they want through more legitimate avenues.

There’s something of an alternative-investment bubble right now: just look, for instance, at Saatchi Online’s truly insane “invest in art” project, which takes unknown artists and tries to sell their work as something which could be worth millions in a few years’ time. Five years of ZIRP will do that: first the bond markets get inflated, then the stock markets, and then, eventually, the really crazy stuff.

In that sense, right now — the tail end of the ZIRP experiment — is the absolute worst possible time to embark upon this general solicitation road. Far too much liquidity is chasing yield, with the result that even the smart money has started funding companies at utterly bonkers valuations. When you then open up the dumb money to projects which the smart money has passed on, the outcome is certain, and not pleasant.

The best case scenario, here, is that a bunch of people who can afford to lose some money end up doing just that. There’s no shortage of ways to invest badly, and the world isn’t going to come to an end just because there’s now one more. But I do fear that when the inevitable happens, the ensuing litigation will drag on for many years. If you want to avoid it, I would avoid all equity crowdfunding platforms as a matter of principle.

Update: Howard Lindzon (an investor in AngelList) responds.


Simple solution – only allow the huge number of new Chinese billionaires and mega-millionaires to invest – who cares if they are fleeced?

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Democratic art

Felix Salmon
Apr 16, 2013 06:55 UTC

Maud Newton has a good introduction to the art of Molly Crabapple, whose new paintings are being raucously exhibited at a storefront gallery on the Lower East Side. The new work was born of Occupy, and shares much of its ethos:

“Occupy favored art that was populist,” she told me last month… Theirs was art, Crabapple says, “that was passionate, accessible, unironic—art that bled and took sides. It was art out of the gallery and into the streets, into life. I hope it presented an alternative, a good strong alternative to detached, ironic uber-expensive art whose primary purpose is to fill up an oligarch’s loft.”

Newton places Crabapple in what she calls a “vanguard” of “artists are dedicated to a more democratic art world”, and quotes Jerry Saltz’s important essay on how the “art world” is fragmenting into multiple “art worlds”. Saltz’s piece, interestingly enough, is illustrated with a photograph of Keith Haring’s 1982 opening at another downtown storefront art gallery. For all that Crabapple wasn’t even born in 1982, the similarities are obvious: a flat, populist, all-over aesthetic with a real propensity to go viral; the gallery merely one part of a much broader cultural attack.

It’s not that such things are entirely absent from the higher-end art world these days: indeed, you can see them in any number of artists from Duke Riley to Takashi Murakami. Rather, what’s interesting to me is the way that a new economics of art is emerging — one which has much less emphasis on the Priceless And Transcendent Unique Object, and which relaxes much more easily into simple enjoyment of the art itself, whatever form it takes.

Crabapple, for instance, in her Kickstarter campaign for the current show, promised to give 538 backers art objects ranging from a signed Molly Crabapple million dollar bill, all the way up to one of the 9 big paintings which anchor the show. Those hundreds of backers are excited to be supporting the project; they’re not, in general, worried about things like edition sizes, or certificates of authenticity, or all the other trappings of art-world seriousness which mainly exist to give potential buyers the illusion that they’re purchasing something which has some kind of secondary-market resale value.

There are many successful artists these days, from Shepard Fairey to Damien Hirst, who are taking this path — who are selling art to consumers who enjoy it, without making a big deal about how unique it is or how much it might rise in value. These artists tend to want to disintermediate galleries, who are generally wedded to the art-as-investment narrative, or at least to the idea that there’s a certain amount of money that any given artwork is “worth”. That’s very different from the practice of, say, Roberto Dutesco, whose Soho storefront sells his photographs of horses in much the same way that the shop next door might sell sofas. The photos are expensive, but not because they have any particular resale value: the major auction houses won’t even accept them. (The last time one of them came up for auction, in Berlin, it sold for the same price as Dutesco’s book.)

Dutesco’s photographs have decorative value, and they look expensive, and they’re actually extremely good at filling up an oligarch’s loft, if the oligarch isn’t particularly interested in detached, ironic uber-expensive art. In fact, they are just as much at home in Soho as limited-edition Fairey posters are in Los Feliz. And just like Fairey, Dutesco can make a very good living selling his art, as a decorative consumption good, directly to the people who put it straight up on their walls.

This kind of thing is not entirely new, but I think it’s becoming more common, thanks to the way in which the internet allows artists to reach a niche audience much more easily than they ever could before. I’m a big fan of Etsy, in this regard; I’ve used it myself to buy the work of the brilliant Stephanie Tillman, who sells her wonderful, darkly hilarious embroideries online at ridiculously low prices. Much like Dutesco, every piece is unique, but anybody else can come along subsequently and buy their own virtually-identical version. Originality and scarcity are not what matters; it’s the art that matters.

The high-end art world naturally mistrusts all these artists, as it mistrusts just about anybody who tries to sell their own work rather than going through a gallery. If an art lover buys art directly from an artist without a gallery, you’re not going to have any third party reassuring yourself that you’re making a good decision, or that the piece will be worth much more in the future. The art world lives on third-party validation, and galleries really do earn their money, in that without them, the art they sell would be worth much, much less.

But as that world shrinks down to a hard and shiny plutocratic core, alternative models are bound to present themselves — and with them, a whole new idea of what art is and should be. When you procure art via Etsy or Kickstarter, you’re basically going back to the old patronage model, trusting your instincts, going with what you love. It’s incredibly easy to be very snobbish about a lot of this art, but in many ways its very attraction is the way in which it has no particular interest in ending up on the walls of MoMA.

We no longer live in a world where a small group of the self-appointed elite can simply tell the rest of us what is good and what isn’t. We’re going to make our own determinations of what we love, and we’re going to be happy transgressing boundaries in doing so: many of the comments on my post about technologists buying art, for instance, were from techies who said that they do buy art; it’s just that the art they buy is likely to be a piece of hardware, like the iPhone, or maybe a Telsa car. Their point is well taken: people pay a premium for such things just because they love their aesthetics, and want to own them and interact with them. They’re quite art-like, in that way.

I hope this world expands, and that many more artists will be able to carve out a niche for themselves selling pieces directly to the people who love what they do. Museums and curators will always exist, searching for narratives and art-historical importance. But if the internet is going to democratize art, and I think it probably will, then those tastemakers are going to have to be marginalized in the process. Instead, in places like Etsy and Kickstarter, a thousand flowers will bloom.

When crowds disintermediate charities

Felix Salmon
Mar 12, 2013 03:55 UTC

Seth Stevenson has a problem with the fact that the Internet raised $703,168 for Karen Klein, the bullied bus monitor. That kind of money is “disproportionate”, he says, adding:

Charities have always used poignant, individual stories to play on people’s emotions and open up their wallets. But the idea was that you should donate to the charity, not to the individual sad sack with the most heart-wrenching video or the most prominent link on Reddit. Likewise, political and social causes have long used the specter of bad behavior to lobby for new laws and policies—but rarely to round up an angry mob that tracks down specific offenders. It seems we’ve decided it’s more fun (and much easier) to collaborate in making one person happy or unhappy than it is to work together to change the underlying context.

Well, yes! It is more fun, and much easier, to make one person happy than it is “to work together to change the underlying context”. And yes, that’s one of the reasons why we do such things. There’s nothing inherently bad about fun-and-easy, but Stevenson seems to think that there is. The hidden syllogism would seem to be that the $700,000 that went to Karen Klein is money that would otherwise have gone to change the underlying context, and that therefore there’s something corrosive about the donations to Klein, because the alternative, while not as fun and not as easy, was in some sense superior.

But this is silly. At the margin, the Karen Klein campaign, along with all the publicity surrounding it, surely helped, rather than hindered, those people working to change the underlying context. And once someone has given $20 to Karen Klein, they will be more rather than less receptive to people asking for help on broader campaigns.

The fact is that almost none of us have some kind of annual giving budget, from which we draw when we send money to someone like Karen Klein. Instead, we give as and when we’re moved to do so. Once you start giving money away, you’re more likely to give money away in the future; Stevenson’s implication, by contrast, is that giving money in one place makes you less likely to give money somewhere else. Which is completely wrong.

Still, phenomena like the Karen Klein campaign are interesting. As Stevenson says, the vast majority of the money was given after it became clear that campaign founder Max Sidorov’s stated aim — to send Klein on “the vacation of a lifetime” — had long been surpassed. Which means that the people giving to the campaign no longer, at that point, wanted to send Klein on a vacation. The whole point of the campaign, from the beginning, was to be excessive: to single out Klein and shower her with cash and goodwill, not because she was more deserving than anybody else on Indiegogo, but just because sometimes the internet does excellent things for people. As the campaign snowballed, the very gratuitousness of it became its point: thousands of people were giving money to someone who no longer needed it, just because they could.

Stevenson draws various lessons about “metaperceptual influence” online, along with “deindividuation through the enhanced opportunity for anonymity”, all in the service of a thesis that there’s “something inherently different about crowd behavior on the Internet”. But he misses the simple and obvious point: that the internet is so enormous that 32,000 is less of a crowd than it is a micro-subset of people who think it’s cool to do something randomly good in a vaguely coordinated and largely effortless manner. As Amanda Palmer puts it, on the internet, a relatively small number of self-selecting people can be more than enough: enough to fund an album tour, enough to send $700,000 to a bus monitor in upstate New York, enough to make thousands of Harlem Shake videos. There’s something random about these things: you could never predict in advance which ones will catch the wave and which ones won’t. That’s just the way the internet works: it’s a bed of a million oysters, and, randomly yet inevitably, some of them will grow pearls.

If you want to look at crowd behavior online, it seems to me that the place to look is not any of the million fads which flare up and die down in a matter of a week or two. More interesting, to me, are the political campaigns — Howard Dean ’04, Barack Obama ’08, Ron Paul ’12 — which manage to excite a wired and youthful base. Those campaigns really are rival goods: if you support Obama you’re opposing Hillary, if you support Ron Paul you’re opposing Newt Gingrich. And they also share with political campaigns more generally the fact that giving money is generally done more for the benefit of the giver than it is for the benefit of the recipient: the marginal benefit of a donated dollar in a presidential campaign is very close to zero, in these ad-saturated times.

And that’s surely the real reason why so much money flowed to Karen Klein: people who gave her money felt really good about doing so. They weren’t trying to change the world, they were just making themselves feel good, and helping out a victim of bullying at the same time. It’s the story of most successful Kickstarter campaigns, too: the feeling-good-about-giving part is much more important than the ostensible commercial transaction.

The internet is the greatest disintermediating force the world has ever known, and it’s going to have to change the way that charities campaign — at least with respect to the ones who like to use individual stories as a way of raising collective funds. That worked much better when you couldn’t help the individual directly. Nowadays, as a charity, you either need to give people the belief that they are helping the individual (as Kiva does, for example). Otherwise, you risk being disintermediated entirely by the likes of Max Sidorov.


Publius, it sounds to me like you’re describing intermediaries. The Red Cross collects blood from a bunch of people, in order to redistribute it to those in need. A disintermediated blood donation system would have individuals willing to donate blood giving that blood to specific people in need of blood.

United Way is DEFINITELY an intermediary. People give them money; they then give the money to organizations that they think are helping people, and those organizations, we hope, actually help people. The Klein story involved a bunch of people giving money directly to Klein, rather than to an intermediary they trusted to distribute it to a broad class of people in need of money.

“You keep using that word. I do not think it means what you think it means.”

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Content economics, part 2: payments

Felix Salmon
Mar 3, 2013 09:57 UTC

Apologies for the delay between part 1 and this: I wanted to wait until Amanda Palmer’s TED talk appeared online, because it’s an important part of the other big aspect of content economics. Part 1 was about the ability of publishers to sell readers to advertisers; part 2 is about the ability of publishers to persuade readers to pay the publisher directly.

There are basically three ways to go about this. You can put up a paywall; you can ask for donations; or you can sell non-digital things to your digital audience.

On its face, Palmer’s talk is about the second strategy, but in fact it’s about all three. (And yes, I’m the “financial blogger” referred to in the talk.) For instance, when it comes to online publishing, why are paywalls more common than tip jars, despite the fact that they’re much more difficult to implement? Palmer does a great job of walking us through the answer to that question: there’s something shameful, there’s a whiff of the panhandler, in asking strangers for money.

At the beginning of the talk, Palmer talks about her early career as a living statue, and the people who would drive by, shouting “get a job!” as she waited for people to drop money into her hat. The implication, of course, was that being a living statue is not a job (its surprisingly consistent revenue stream notwithstanding), and that a living statue’s income represents an entirely one-way transmission of value: spectators give money, and receive nothing in return. The rest of Palmer’s talk is an attempt to explain that the value goes both ways, and that there is (or should be) nothing shameful about creators asking for money. But the attitude she’s pushing against is deeply ingrained.

A couple of weeks ago, for instance, I asked Andrew Sullivan why he chose to put up a paywall rather than putting up a tip jar. His answer (at about 23:00) was unambiguous:

This is not a tip jar. And it is not a pledge drive. It is a subscription. And that makes it a different proposition. It’s telling people I’m not an amateur, and I’m not a charity. I’m doing work that I’m asking people to pay for. And it seems to me that at some point, we have to say that, in new media. Or else it is not going to continue to exist…

I had two pledge drives early on, in 2002 and 2003, which netted a certain amount of money. But this is a different model. This is trying to make it sustainable, long term: don’t give it money just because you like me. We are trying to create an actual site that is news and opinion that people value and pay for, and become associated with in the long run. We could have done a tip jar. We decided no. We wanted to be a business. And do it the right way.

The distinctions here are subtle ones: Sullivan still nags his readers, just as public radio does during its pledge drives, but in his mind those nags aren’t part of a pledge drive, because he’s a business, rather than an amateur, or a charity. And similarly, although he raised $500,000 from readers before his paywall even existed, those dollars weren’t donations, for much the same reason. There’s something shameful, on this view, about working for tips; there’s an unpleasant neediness about asking for charity. And it was those reasons, as much as any simply financial considerations, which resulted in Sullivan plumping for a paywall model.

Truth be told, Sullivan’s paywall is not much of a wall at all. 70% of his readers don’t click on the read-on links at all; they just stay on the home page, which is always free. And of the 30% who do click on read-on links, 91% are still within their allocation of seven free stories. Which means that overall, just 2.7% of his readers are reaching the point at which it gets a little bit harder to read what they want to read. And the actual number is lower even than that: many of his readers use RSS readers to consume his content, or else they disable cookies, or otherwise don’t get counted among the people visiting his website.

But as Sullivan would probably agree, the choice between a paywall or a tip jar is not as clear-cut as it sounds: realistically, it’s more of a spectrum. Some paywalls are forbiddingly high “Berliners“: if you don’t cough up, you have no access. Most, however, are porous to a greater or lesser extent. The Times and Sunday Times of London will give you the first 75 words or so of any story; the New York Times will allow you a certain number of free articles per month, plus all articles arrived at from external sites; the WSJ will let you in if you’re coming from Google, or from a link which has been emailed to you by a subscriber. At other sites, the wall is drawn around some content but not all: the New Yorker, for instance, puts only some of its magazine content online for free, while the Boston Globe hides all of its content behind a Berliner paywall but then allows a subset of that content onto Boston.com for free.

None of these models is obviously better than any of the others. No paywall lasts untouched for long: all publishers are making decisions to put up or take down paywalls every day, and it can be hard to keep track of which publications have which model. (Right now, for instance, without looking, I genuinely can’t remember whether the Economist is paywalling any of its content or not.) Just in the past few days, we’ve seen one high paywall demolished, at Variety; there, the new proprietor, Jay Penske, called it the “end of an error“. Meanwhile, another paywall has been erected, at Fortune: for the time being, for now, most Fortune magazine content is now behind a wall, while online-only content is free.

In an editor’s letter which isn’t online, Fortune’s Andy Serwer says that “we consider Fortune’s content valuable enough that we have decided not to give it all away online”. The unfortunate implication is that the online-only content, including the excellent Term Sheet blog, is not valuable enough to be worth charging for. On the other hand, if you look at the pricing, you’ll see that the cost of a digital subscription — $19.99 per year — is exactly the same as the cost of a digital subscription plus home delivery of the magazine. And the unfortunate implication of that is that all the extra value one finds in a magazine — the art direction, the layouts, the ability to read it while waiting for your airplane to take off — is also worthless. (Contrast that with the NYT paywall, which doesn’t really charge for the content at all, but rather for the online ability to navigate from one story to another.)

The real reason why Fortune put up a paywall, of course, has nothing to do with how valuable Andy Serwer thinks the magazine’s content is. Instead, the paywall is just another way for the Time Inc brass to try to make money and keep the magazine’s rate base high, the idea being that people will be less likely to cancel their magazine subscriptions if they know that they won’t be able to read that content online for free.

Which brings up a fundamental rule of online subscriptions: there is zero correlation between value and price. There are lots of incredibly expensive stock-tipping newsletters which have a negative value: you’d be much better off if you didn’t subscribe to any of them at all. And of course there’s an almost infinite amount of wonderfully valuable content available online for free, starting with Wikipedia and moving on through the sites of organizations like Reuters, Bloomberg, the Guardian, and the BBC.

Or look what happened when Newsweek and Sullivan parted ways: both of them started subscription products, at almost identical prices. (Sullivan wants $20 per year; Newsweek wants $25.) That doesn’t mean the two products have almost-equal value; it just means that both Newsweek and Sullivan — just like Marco Arment, for that matter — came to the conclusion that the $20-a-year range was more or less the point on the supply-and-demand curve where they would maximize their income. They might be right about that; it’s hard to tell. Paywalls are put together in so many different ways, at so many different price points, that trying to work out their relative merits, in terms of income generated, is almost impossible.

But there’s another consideration, too: the more formidable the paywall, the more money you might generate in the short term, but the less likely it is that new readers are going to discover your content and want to subscribe to you in the future. Amazing offline resources like the Oxford English Dictionary and the Encylopedia Britannica are facing existential threats not only because their paywalls are too high for people to feel that they’re worth subscribing to, but also because their audiences are not being replaced at nearly the rate at which they’re dying off. The FT, for instance, has discovered that its current subscriber base is pretty price-insensitive, and has taken the opportunity to raise its subscription prices aggressively. That makes perfect sense if Pearson, the FT’s parent, is looking to maximize short term cashflows, especially if it’s going to sell off the FT sooner rather than later anyway. But if you’re trying to build a brand which will flourish over the long term, it’s important to make that brand as discoverable as possible.

And the lesson of very porous paywalls, like Sullivan’s, or even of pure tip jars, like Maria Popova’s, is that on the internet, people prefer carrots to sticks. That’s one of the lessons of Kickstarter, too. To put it in Palmer’s terms: if you want to give money, you’re likely to give more, and to give more happily, than if you feel that you’re being forced to spend money. If you look at the $611,000 that Sullivan has raised to date, essentially none of it has come from people who feel forced to cough up $20 per year in order to be able to read his website. To a first approximation, all of that money has come from supporters: people who want Sullivan, and the Dish, to continue.

Palmer concludes her talk by saying that “people have been obsessed with the wrong question: how do we make people pay for music. What if we started asking: how do we let people pay for music?” The same question can and should be asked about other forms of online content, too. Tomorrow Magazine raised $45,452 — more than three times its goal — from 1,779 people, none of whom felt in the slightest bit grudging about the money they were spending. A mere 296 people clubbed together to raise $24,624 for Baltimore Brew. 99% Invisible, a radio show, raised $170,477 from 5,661 people. And that’s just a few of the Kickstarter journalism projects which were funded in 2012. There are lots of other models, too, like membership of Longreads, or Spot.us, which helps to fund all manner of interesting and amazing journalism. What all of these projects have in common is that they’re free online even as they’re asking for money: they’re not going to punish anybody for not supporting them by throwing up a paywall and saying “well, in that case, we won’t give you access”.

As Palmer says, this kind of model involves something quite rare in the journalism community: the ability to trust that people will support you, even if they don’t have to do so. And the stronger the relationship you have with your readers, the more you’ll be able to trust them. This is why Palmer’s Kickstarter campaign was so successful: not because she had a lot of fans (that, in itself, doesn’t work), but because the connection she has with her fans was so strong. As Paul Smalera says, “digital media needs to reconnect to readers”:

For all of the hype around interactivity, big media is still primarily a one-way street. And the rise of programmatic ad-buying will only reinforce that trend. Most old media revenue officers aren’t going to care about connecting to their online audience, beyond understanding their aggregate profile and average value to an ad network. Yet cultivating those reader relationships on an editorial level can unlock all sorts of value, understanding, and yes, even revenue.

Twitter is great at this: readers are quite right when they feel that they know the people they follow on Twitter, in a way they never do just by reading polished content. But there’s more to connecting with your audience than Twitter. Indeed, the best way of all to do it is to venture out into the real world.

Events are one obvious way of doing that, and can be significant profit drivers in their own right. Atlantic Media is fantastic at monetizing its brand by putting on conferences, as are other franchises: the tech world is a particularly good place for such things, as All Things D or Wired or TechCrunch will attest. The NYT has its Dealbook conference, the New Yorker has its festival, and of course the business press has branched out into things like the Economist’s gatherings or the WSJ’s whole suite of events.

Big formal expensive events like these aren’t easy to put on, of course — they require large dedicated staffs, and a huge amount of effort. But non-sponsored events like Radiolab Live are a bit cheaper and easier, and anyone can cobble together a Meetup, or even just tell his readers to meet him at the Oyster Bar for an impromptu celebration.

And events are just one tiny part of the non-digital world which digital creators can put their brand on and sell. The whole Kickstarter phenomenon, for instance, is based on the idea that if you give enough money, you’ll get stuff in return. Palmer was offering glossy books and LPs and CDs and even (if you ponied up $10,000) promised to come and paint your picture and have dinner with you. Tomorrow offered a phone message from a porn star. 99% Invisible offered books and shirts and all manner of other stuff. Kickstarter is no tip jar: make no mistake, it has a very large element of e-commerce to it as well. Meanwhile, Monocle has seven stores around the world, plus an elaborate e-commerce site, and Mental Floss magazine makes a good third of its revenue from selling things.

Think of this as the flipside of content marketing: if brands can bypass publishers and create their own content in order to sell the stuff they produce, then publishers can bypass advertisers and sell their own stuff — be it a $40 chemistry cocktail set or a £415 cashmere scarf — to their readers directly.

The bigger lesson here is that when it comes to persuading your readers to pay you money, it actually helps to be small. There’s an exception for finance, of course, and also for the NYT, which is unique in many ways. But the lesson of Palmer’s talk is that while 25,000 supporters aren’t nearly enough to support a band on a record label, they’re more than enough to support a band on Kickstarter — or, for that matter, to keep an iPad magazine going strong. What’s more, while consumers can be very loyal to brands and to publications, in many ways it’s easier to become loyal to an individual, especially when she has an idiosyncratic and unique voice.

If you want to read The Dish, you can’t get there by going to thedish.com or to thedailydish.com or anything like that: you get there by going to andrewsullivan.com. The person is the site, and when that happens, the readership becomes much more willing to hand over money. Do I want to give Fortune $20 a year so that I can read its magazine articles online? No, I do not — especially when we live in a social world, where if I find a story I love, the first thing I want to do is be able to share it. On the other hand, I’m much more willing to spend $20 a year to support Andrew Sullivan, even if I rarely visit his site, precisely because I don’t particularly have to do so, and can read any of his stuff whether I pay him or not.

We’re not talking about micropayments here: those have never taken off, and I doubt they will, at this point. For a long time, people thought that the sheer size of the internet would enable enormous numbers of people to pay negligible sums of money, which would add up to substantial amounts in aggregate. The problem with that was that it’s just too hard to spend money online: the effort involved just isn’t worth it, for sums of a dollar or less.

Instead, the sheer size of the internet enabled the opposite to happen: it enabled smallish numbers of people to pay modest amounts of money, which can add up to just as much in total.

So if you’re a huge publicly-listed corporation, by all means create an elaborate paywall in the hopes that people will decide that they need your content and will just have to pay for it. Every so often, that can work, as it has at the FT and the NYT. But frankly I don’t think those examples are particularly replicable: they’re both sui generis in many ways. Instead, it seems to me, the most promising aspect of content payments is at the other end of the spectrum. Build up a relationship with your readers, in large part by giving your content away for free; ask for money with pride and shamelessness; and place no cap on how much you let your readers spend. Give them the opportunity, and you might be very surprised at what they’re willing to buy.


Well, maybe now we understand why Mr. Bezos, the country’s expert on low-friction purchases, has backward-integrated into “journalistic media properties & production.”

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