Explaining Southern California's economy

For Matter, Kickstarter is advertising plus money

There's been a lot of discussion recently about Matter and its swift fundraising on Kickstarter, bringing in over $100,000 in just over a week (I've embedded the pitch video above). Felix Salmon thinks Matter has merit. Stephen Morse thinks it doesn't. You can watch them debate their positions here.

During the course of their he-said/he-said, the question of whether it's a good or bad thing for Matter to be avoiding venture capital funding came up. Felix summarizes:

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.