Facebook, Oculus Rift, and the Kickstarter Backlash

An angry roar erupted across the Internet yesterday. Facebook--that omnipresent, unavoidable social media corporation--had purchased Oculus VR for $2 billion. The pioneers of modern-day virtual reality had given up their self-ownership for a sum greater than the gross national product of Greenland, consumed by a company sewn into the very fabric of our social structure. Resentment spread like wildfire as many of those who had helped fund the Oculus Rift when it was nothing more than a far-off promise on Kickstarter were blindsided by the transaction. Oculus VR had betrayed those who had believed in the company, sold out to an unworthy website, and destroyed the goodwill it had fostered. People were livid, and I can sympathize with those feelings. But we have learned a valuable lesson: Giving money on Kickstarter does not mean we have any say in a company's decisions.

In an idealized point of view, Kickstarter has transformed the high-stakes game of startup investment into something that anyone with spare change can take part in. Creators propose an idea, and those whose interest is piqued give money to see that such a product can materialize. Books and movies are funded in this manner, and games that would never have found a publisher are brought to life by the people who are most passionate in digital entertainment. Studios are formed, companies graduate from tinkering in garages to working in proper offices, and all because people have spoken loud and clear with their wallets. The job of venture capitalists has been brought to the masses. No longer do you need millions of dollars to invest in something that tickles your fancy. People have the power, and a large group can scrounge up enough cash to bring any project to life.

We feel a sense of ownership in every project we choose to fund on Kickstarter. This is true no matter what we're giving money to--I imagine we would see similar unrest if Double Fine had sold Broken Age to Electronic Arts--but it's even more difficult to shake that notion in this example. People didn't give money to make just another game. No, the people who helped kickstart the Oculus Rift birthed an entire company. Oculus VR is nothing without its virtual reality headset, and because its very existence depends on those who financed it years ago, we thought of them as a grassroots company that listened to us. And that feeling has changed now that Facebook owns them.

We have to keep in mind that a Kickstarter backer and a venture capitalist are not the same roles. And it's this disconnect that has led to the gnashing of teeth and the heated posts on message boards. Although a venture capitalist may own a piece of the company, or get a cash return on the investment once profitability is reached, nothing is owed a Kickstarter backer beyond the milestone rewards posted on each page. Everyone has intrinsic knowledge that this is the case. We know that if we pledge a certain amount of money, we get a copy of a game when it comes out (assuming it ever does) or that our name will appear in the credits. Rationally, we know that we're going to receive only what has been spelled out. We do not own a part of the company, nor do we receive a dividend from profits made. We know all this. But knowledge only matters to a certain point.

Emotions can overwhelm even the most grounded of individuals. And we see an outpouring of emotions in the angry reaction to this high-tech transaction. Yes, the backers may know that they aren't owed anything more than they have already received. But who cares about facts? Oculus VR was nothing when it first proposed its fantastical ideas on Kickstarter. Virtual reality had been a failure ever since it had first debuted many decades ago, so there was no positive momentum to build upon. Yet despite the mountain of evidence stating that virtual reality is just a science-fiction fantasy, thousands of people embraced the ideas that Oculus VR was proposing. They punched in their credit card numbers in the hopes of getting a glimpse of the newfangled contraption before anyone else and because they believed that virtual reality was no longer just a fantasy. It was now a reality.

Facebook was not willing to spend money on what Oculus VR might be capable of years ago when the Kickstarter campaign was launched. It was not willing to spend billions of dollars to become an early backer in the next generation of virtual reality. No, it was not a giant corporation that saw the brilliance of this device. It was ordinary people who did--people with a vision and just enough extra money to see their dream realized. And though we know that nothing more than the stated rewards are owed to backers, that doesn't matter. People gave Oculus VR money when the company needed it most, and now that Oculus has more cash than any of us can fathom, many feel as if their baby has turned its back on them. After all, it wouldn't have ever reached these heights without investments from the people. Why shouldn't the backers be rewarded for having such strong beliefs in virtual reality when no one else did?

We have learned a valuable lesson: Giving money on Kickstarter does not mean we have any say in a company's decisions.

I do not have a financial stake in this scenario. When Oculus launched its Kickstarter, I could only roll my eyes that another team of talented individuals was going to waste its time in a dead-end technology. I have not given one cent to Oculus. But I understand why those who have done so feel betrayed. Kickstarter has an entrepreneurial aura that makes it seem like those who use it have realized the follies of corporate ownership and instead have turned to the people to see their wishes fulfilled. There's a communal energy, one that grows through the Internet as people spread word about a fascinating idea that needs more funding. Kickstarter has shrunk the world, making it more intimate, as disparate people team up to support the same cause. Am I idealizing this enterprise? Of course I am. But it was nice to think that such a website existed.

Now that we see how willing a company is to be swallowed by a massive corporation, that illusion is destroyed. Nothing has changed in the raw mechanics of Kickstarter. We still give money for what we find interesting and reap the rewards that are promised to us. But we have to face reality going forward. Even though we may think we have a relationship to the proprietors, we don't. Or at least that relationship isn't a given. Although some seek outside feedback to grow their project into something special, for others, we're faceless investors who aren't going to receive anything more tangible because we believed in what a creator was doing and gave money to help their vision come to fruition.

For those who are still angry, I understand. And it's fine to shout and yell and let your voices be heard. Think about how you feel now, and don't forget it. Kickstarter is not going to change. You have to decide if you're comfortable giving money to a company just so it can potentially become incredibly rich in the future. And understand that no contract has been broken. Oculus VR did what it believed is best for the company, and we can only hope that Facebook stands by its word that it will not interfere in the Rift's development going forward. I understand why you're angry. But we have to accept that reality will not always bend to our whims.