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The Kickstarter Effect: Fundraising as Game Theory

By Michael Galinsky

My partners Suki Hawley, David Beilinson and I tend to focus on immersive documentaries about subjects that are in process. As such, we can't wait around for grants. If we don't start shooting, we miss all of the action. From an artistic viewpoint, it's the only way to get the films done, but from a financial perspective, it's lunacy. Recently, after shooting our doc Battle of Brooklyn, about an eminent domain case pitting Brooklyn residents against a real estate developer, for over six years with only one medium-sized grant, we successfully carried out a campaign to raise $25,000 to keep the project afloat.

Kickstarter is an arts funding site that utilizes the power of game theory to notch up fundraising energy. What sets it apart from other crowd-sourcing ideas is the fact that it's an all-or-nothing situation. The artist sets a fundraising goal and a timeline (up to 90 days). If the goal isn't reached in the time allotted, the artist gets none of the pledges. The artist also sets rewards for different pledge amounts to incentivize supporters. Before we launched our Kickstarter campaign, we did some research and we followed a few projects to see how they worked. We saw that as projects neared the end of their time limit, there was a flurry of pledging activity that pushed them past their goal. It appeared that even projects that didn't seem capable of reaching their goal shot way past it. 


Screen grab from the Kickstarter website.


My brother does research on negotiation. In one study, he and his colleagues examined eBay auctions of a certain type of camera. They found that the cameras that were offered at a very low opening bid sold for much higher than ones that started out with higher bids. Their research demonstrated that people who bid when the price was low became emotionally invested in the process and tended to bid repeatedly. I think that the same theory holds true with Kickstarter (and was borne out through our anecdotal evidence). People who pledge towards a project become invested in seeing the project succeed, so they are likely to reach out to others to help reach the goal.

We set a fairly high goal of $25,000, with a pretty short timeframe of 30 days because we believed it was a reachable goal that we could focus on. We set up a wide range of pledge rewards from $10 for a download of the film in the future to $2,500 for a producer credit. We expected that the majority of people would pledge $25 for a DVD when the film was finished.  As such, we tried to put together a list of 50 to100 people we could reach out to and enlist them as partners in our goal. We wanted these people to aim to get 10 other people to support the project. In addition to reaching our goal, it was important for us to have as wide a base of support as possible, because we wanted to prove to foundations and possible TV partners that there was a great deal of interest in the subject of our film.

During the course of our filming, we refrained from reaching out for funding from the local community that was fighting the eminent domain case because we didn't want to cannibalize the support that was needed to fund the fight, and it felt like a conflict of interest to get support from the community that we were documenting. However, eminent domain abuse is an issue that has interested parties throughout the country. We compiled a list of groups that might help us spread the word about the film, and we reached out them before launching.


From Battle of Brooklyn (Dirs.: Michael Galinsky, Suki Hawley, David Beilinson). 


In addition to lining up potential supporters, we also developed an implementation strategy that included figuring out potential rough and deleted scenes to post as updates each day to keep piquing interest in our campaign. Once people become backers of a project, they get alerts about every update, and we knew that blogs were likely to pick up some of the more controversial ones that would help us spread the word. For example, one scene in our film shows Bertha Lewis, the head of ACORN, proclaim at a press conference that they were working with the renters in the project footprint to ensure they were treated fairly. After the conference, our main character pleasantly confronts Lewis with the fact that the renters are all being kicked out. She replies that she hasn't actually started to work with the tenants--but she plans to....With ACORN in the news due to the "hooker/pimp" gotcha video, we knew that this scene would get play on other sites--and point back to our Kickstarter project. Lastly, we decided to stagger support from both individuals who would give larger pledges and groups that could reach large amounts of people because we didn't want to blow out all our steam in the first few days.

By the time we were ready to launch, we had lined up about 15 to 20 people who had committed to helping us spread the word, as well as several groups and websites that were against eminent domain abuse that pledged to help us out. Within a few minutes of launching, a close friend of ours pledged at the $2,500 producer level. This simple act of kindness gave us a huge boost and almost instantly legitimized our efforts. Our status bar pointed out that we were 10 percent funded, which signaled to others that we had a reachable goal. Over the next few days we slowly clawed our way to 20 percent funding, and then it leveled off for a few days.

Over the course of our campaign, I personally wrote back to every supporter, thanking them and gently urging to spread the word to friends. I'm not sure that it helped significantly, but it was important to me to acknowledge that even the $10 pledges gave us a huge boost emotionally. After working for so long below the radar, it was a great feeling to have people backing what we were doing. Once things had leveled off, we had one of the groups supporting our goal, The Institute for Justice, send out an e-mail mentioning the campaign, and we saw a flurry of activity that carried on for a couple of days. We repeated this type of strategy with other groups over the coming weeks.

By the time we had two days left to go, we were only 65 percent of the way there. I was a little worried, but I figured that the Kickstarter effect would go into overdrive--and it did. Over the next 48 hours, we had a steady stream of pledges that picked up steam as we got closer to our deadline. At 7:00 p.m., with five hours to spare, we crossed the $25,000 mark with nearly 400 supporters. The vast majority of our supporters pledged at the $25 level, but we also had a number of $50, $100 and $500 pledges. I talked with a lot of people who told me that they were constantly watching the progress all day and thinking of other people to send the link to. As we suspected, they became invested in the process and became our essential allies in reaching our goal.

For us, raising that $25,000 won't exactly get us to the end of our film. It was a lot of work, but it was huge boost for us. Over all, the process worked for us because the film had a large set of untapped affinity groups that were interested in supporting a project on the subject of eminent domain abuse. We did research before launching so that we could set up a clear, executable plan of action to reach our goal. In addition, when things slowed down we continued to brainstorm and reach out to friends despite the fact that we feared we were bothering people. We knew that they knew that we had invested six years of our lives in the project, and as such we knew that it was OK to push them a little bit.


Michael Galinsky is a filmmaker/father based in Brooklyn, NY.  After over six years of filming, he and his partners Suki Hawley, and David Beilinson are nearing the completion of Battle of Brooklyn. /battle