Pay What You Wish

"I originally pledged a bit more than the estimated fair-price-plus-shipping because I wanted to help subsidize someone… I never thought about the game theory applications or people trying to take advantage of others. I participated as a member of the little community. Every community has some people who are doing all they can, but are in circumstances that prevent them from doing more. And every community has freeloaders." — Ruth Ann Harnisch

"It is interesting to look at this vs the Radiohead "In Rainbows" experiment. The big difference is that with this project, there is a physical object attached. Those "under paid" on In Rainbows were resulting in potential lost revenue, as they wouldn’t have been full-price customers in a normal situation. With a physical object that costs money to produce, the game changes." — Jeffry Matthias

"I think it’s funny how everyone automatically places such a high value on this thing because of the $50k/3000 calculation. I asked myself how much I would pay for this simple item if it were an impulse buy at the registers at a place like Micro Center, and decided on $3. I didn’t think I was "freeloading" or screwing anyone over; I was using the opportunity given to tell the seller what I think their product is worth. It seems some people are forgetting that products are allowed to fail if they can’t be sold for a price people are willing to pay." — Justin Cardinal

"I personally own two styluses and have backed another one here on Kickstarter. The fact that I was given the opportunity to pay what it’s worth *to me* was awesome. And so my pledge was less than the $16. On the plus side, I tweeted the link as well as posted it to Facebook. I also found this a great opportunity to introduce my teen to Kickstarter. He signed up and pledged as well. Sure, he didn’t put in a lot of $$$ but he’s actually really excited about getting in on the ground floor." — Jose Lema

"I think this project would have hit well over the $50,000 needed if pledge amounts were public. Few people want to be caught at the $1 level, and plenty of people want to show how altruistic and giving they are. Anonymous actions encourage selfishness, while public actions encourage altruism." — Corey Ward

"So once this project hits the $50k goal, won’t we see a lot of people dropping their pledges to $1?" — Zach Wendkos

"Bottom line: this should be the default for all Kickstarter project funding. Early adopters can get in for minimal contribution, they’ll be more apt to share to their circles, and it keeps you coming back to Kickstarter for more neat ideas to fund. The later you buy-in, the more it costs. (Of course this would be an optional project setting.)" — Benjamin Bertrand

Tom and I have been fascinated by the outcome (and subsequent discussion) of our pay-what-you-wish Kickstarter experiment for the Cosmonaut. We had no idea how this payment model would work out for a physical product, and were blown away that we made it 90% of the way to our funding goal in less than 48 hours. When the last of the 3000 slots was filled, those backers had accounted for $44,631, which averaged out to $14.87 per backer. Let’s first look at the dollar distribution:

The bulk of the funds raised were from people pledging in the $16-25 range, which, incidentally, spans the same range as the average needed ($16.67) to the suggested retail ($25). We also got a nice bump from individuals pledging $50 or more. 

The backer distribution graph, below, better tells the story of how much each backer decided to pledge. The color bands in each bar distinguish the dollar increments in each respective range (eg. in the left most bar, the bottom light green represents the number of $1 backers, while the dark green on top represents $5 backers). 

Just over 25% of the total backers pledged $1-5. The next most popular tier is $16-20, followed by $6-10. It’s also interesting to note that backers definitely prefer to pledge in $5 increments (as illustrated by the darkest shade of green). 

We will continue to monitor the backer report, especially in regard to how people are adjusting their pledges. 

April 2, 2011 / 123 notes

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