Macbook

An open letter to our Kickstarter backers - 2014
Sam Schirmer - 02/14/2015

Yes, we will be relaunching Private Die, and we're shooting for late Summer/early Autumn, 2015. The parts will be at least 99% USA-manufactured, and we will still be covering domestic shipping.

I'd appreciate it if you read the rest of this letter, but I didn't put a TL;DR at the beginning because I'm vain enough to expect it. Make sure you're subscribed to our newsletter for more info.

So here we are... yet another relaunch of the website. New look, new attitude, new company direction, same goal: get Private Die into your hands. We will be relaunching the campaign, but we'd like to dissect what went wrong last time, and what we're going to do differently from now on.

Let's dive right in then. Preparing for a Kickstarter campaign is rather... unpleasant. Staying up into the wee hours to speak with Chinese manufacturers, pleading with unresponsive bloggers for reviews, and reading every new post about how the Kickstarter bubble is about to burst (on websites that survive on ads for failing Kickstarters, of course) isn't really, uh, enjoyable.

And yet, we've done all that before. Our project, Private Die, funded to 56% before failing. We worked for months preparing, campaigning, and then analyzing what went wrong. It sucked. Let's be honest, no one enjoys running a Kickstarter. It's stress followed by expenses followed by more stress followed by either failure or even more stress and expenses.

Oh yea, if you fail, the consensus seems to be that you need to get it up and running again within 90 days to stand the best chance of succeeding. Shoot me.

A bit of transparency

When we decided to try and make board games, we sat down and discussed how we wanted to run the company. Did we want it to stay as a hobby? Did we want to just pump out ideas and try to sell them to publishers? Or did we want to try and build a sustainable company from the ground up? We unanimously decided on the latter of the choices. Like most people, we didn't have a few grand lying around to pump into a new company.

With no startup capital, Kickstarter seemed like the obvious choice. Afterall, everyone else was doing it, with varying degrees of success, so why not us? Some projects even went viral and brought in way more money than they even asked for.

"We'll try to raise enough money to build up an inventory at a low enough cost to support distribution and post-Kickstarter sales."

While that sounded great on paper we needed $15,000 to make the numbers work.

Why so much?

The actual cost of the games, meaning the materials and the distributed cost of custom mould tooling, came out to just over half of the Kickstarter goal. If I recall correctly, the games would have been roughly $9,000 themselves. Sounds like a lot of wiggle room, but we weren't going to make a dime from the Kickstarter if it funded. Inventory, yes, but unrealized profits are, well, unrealized. Not counting chickens before they hatch and so forth.

We were trying to account for distribution. We really wanted to keep the funding goal under $10k, but it was impossible to get the goal that low while at the same time accounting for distributors. The more games you order, the cheaper each game is. We needed the get the cost of each game low enough that the margin would allow distributors to buy at 40-50% of the MSRP and leave us something left over to reinvest into the company. When each game costs us $4 to make and distributors are going to want them for about $7.60 a piece, we were pushing it even with our $15k goal.

The second major pitfall is shipping. We were covering shipping for domestic backers, which meant $6 from every pledge was going to its own shipping. We were actually only pocketing $13 for the base game. This wouldn't be such a problem if Kickstarter would acknowledge that the way they handle shipping is stupid. The whole $19 pledge goes straight to our funding goal, but $6 of it was for shipping costs. This means we need to move X more games to account for the funding goal bloat from rolling shipping into each pledge. Which in turn... means we have to ship that many more games. We had to calculate where those two values meet.

This is all aside from the flat ~$2k in shipping from China to the US, the fees that Kickstarter and Amazon collect (about 10% of the total funding), wire fees, backer rewards, accounting for lemons, etc.

You know how people always complain that they ended up losing money on successful Kickstarters? That's because there's a TON of planning and accounting that needs to go into it. We needed $15,000 to make the numbers work, even when charging $13 for a $4 game.

What we've learned

Kickstarters can be like a raffle ticket. Some people gain a high reward with very little effort. Look at that potato salad guy. Let's be real. Stupid stunts like that are making Kickstarter look cheap and shady. He didn't do anything. He offered nothing of substance to anyone, nor did he build anything from the very small amount of labor he put into his campaign, but he got rewarded. At the same time, you have tons of projects offering real, sometimes tangible results or creations that fail because they don't get enough attention. It's a gamble.

Our biggest mistake was overlooking a major aspect of the Kickstarter model: it's not sustainable. Potato salad guy's 15 minutes of fame are up. If he tried it again, he'd be mocked. We thought we could marry our company vision with the flash-in-the-pan approach of Kickstarter, but it didn't work out. Now, established companies are almost insane NOT to take advantage of crowdfunding, where they can test the market and raise capital simultaneously, and one-off projects might as well take a flyer on a campaign, ala potato salad guy, but it's never a sure thing. For aspiring small companies like us, it's just not a reliable way of doing things.

The state of the industry

We need to slow things down and take a look at ourselves and the board game scene as a whole. What does the market need? What's missing? What can we offer?

In the last few years of running Mystic Ape, we've rubbed elbows with quite a few large players in the industry, most notably Greater than Games. We've learned a ton from them. I've spent time talking with and emailing Paul about the operations process and he's given lots of advice. I've walked up to Chris at many conventions and snuck him pulls from my bottle of whiskey. We're not great friends or anything, but we have some good memories of our interactions with them.

Likewise, we've gotten to know lots of published developers by showing up to our local IGDA chapter meetings and the St. Louis Board Game Meetup Group. Every time we meet someone, we have a great conversation, learn something new, and walk away feeling like a more integrated part of the board game community. So of course, we support the local guys by picking up copies of their games, usually whether it actually interests us or not. The weirdest part is how impersonal the games always are, especially compared to the generally warm personalities of most board game devs.

Getting handed a glossy box, straight off the boat from China, complete with rather brittle components and slippery, paper-thin cards snaps you back to reality. The games look like they're from Target or WalMart, not developed during nights and weekends in that-dude-I-know's basement, then illustrated by his buddy. The only indication of that-developer-I-had-a-beer-with is his name on the box. This guy spent forever on his game... it's his baby... so why do the cards suck so much?

It's not his fault. Really. It's the industry standard: if you're making board games, you're using a Chinese manufacturer like Panda, Liya, or WinGo. Why? Because people expect Settlers of Catan to be $39, not $69, and China is way, WAY cheaper than using US manufacturers. Hooray capitalism, eh?

What we can do differently

We have figured out a way to make everyone happy. This time, us included. We're going to meet Kickstarter halfway and use it the way it was intended instead of trying to leverage it into something it cannot sustain. We're also going to work within a set vision for the company:

1) Be fun. The most important thing about board games is that they're fun. Without fun games, there's really no point. We vet all of our games rigorously to make sure we really have something special before offering it to you. We will never lose sight of the big picture here: great games.

2) Be personal. We want to make buying one of our games mean something to everyone. We strive to inject passion, individuality, and humanity into our games. You should feel like they are going directly from our hands into yours... because they actually are. Every purchase is personal, whether it's notes or trinkets left inside, unique emails sent to buyers, or handing it to you in person. We also want to be as transparent as possible with our design process, including providing updates about the status of unreleased games and more tweets/blog posts about our progress.

3) Be green. We don't order stuff from China unless we absolutely need to. Instead, we do as much as we can locally, or at least domestically. The beauty of this is the quality that comes with it. Did you order a game with dice? You can expect nothing less than Chessex dice in your game box. The rulebook? It was printed at a local small shop that doesn't rhyme with Plinko's, and all of our game boxes are plain, recycled cardboard (don't worry, we'll make it look unique, just for you). It only makes sense that we worry about the environment, being apes and all. Speaking of which, a portion of every sale goes to the Center for Great Apes, a charity focused on providing sanctuary for chimpanzees and orangutans.

4) Be affordable. We want our games to be affordable while maintaining great quality. How are we going to do stuff locally and make any money? By not distributing. We're going to walk before we run. This allows us to cut our margin and put more money into the components. The downside is moving less games, but we're okay with this slow and steady approach for now.

We're also ordering parts a la carte from various US manufacturers and assembling/shipping every single game by hand ourselves. This is going to be either simple or a monumental undertaking, depending on how many backers we receive. We're okay with that risk.

By using this strategy, we cut our costs immensely. If we aren't concerned about distribution, we can cut our required startup capital by over 80%. That's pretty massive. All of a sudden, we're well within our means to try another Kickstarter, even without making any compromises (we can still cover shipping!). We have the flexibility to adjust backer rewards on the fly, manage exclusives better, and add a personal touch to every single backer's package.

So what does it cost us? Time. Effort. Sweat. That stuff is free.

We're excited.

We really think this can be something special. We're not measuring success by selling thousands of games. We just want to make an impact. We hope people will love us (and our games), but we really want you to fall in love gaming as a whole. There's an entire culture of gamers out there, some smellier than others, and it's a beautiful thing. We are spoiled here in St. Louis, due to the vibrant board game community. We want to bring that to everyone, and we believe that we can. If we can't, at least we'll try.



Love always,
Sam and the rest of the Apes

P.S. We will be relaunching Private Die in late Summer/early Fall of this year. More details to follow... stay tuned to our Twitter, newsletter, and/or blog for more info.