Nonstarters: this week's worst kickstarter video

"Mongolian beef".

San Francisco band "The Khans" made the offending video.

Kickstarter acts as a giant, low-risk dragon's den: a virtual boardroom where anyone can honk their ideas into the dark and see if they come back with money on them. Unlike the Den, however, there are no bollockings from Bannatyne, no garbled flipchart nighmares, and no brutal profitability criteria to satisfy - just the potential investor's sense of whimsy.

Some ideas turn out to be masterpieces that would otherwise have evaporated in a risk-averse economy. Others are creative endeavours that entice swarms of impulsive backers into territory no sane public or private body would consider.

Needless to say, these success stories are the tip of a decidedly iffy iceberg. Every plucky win wafts the smell of freshly baked money further into the internet, prompting a gold rush of would-be superstars, frustrated writers and post-pub entrepreneurs to try their luck. 

To rifle through this bag of offal with me, I invite you to switch on something I call "Failure Vision": activate the site’s "ending soon" filter, and cast your eye down the page looking for the most desperately stunted green progress bars. What emerges is a torrent of hopeless daydreams; mangled barks for charity growing faint and hoarse as they drift off the site with just a few dollars to their name.

Some, such as this man’s dream to publish a quarterly magazine containing only photographs of clouds taken in Southern Idaho, are thoroughly charming in their overestimation of the public appetite for the mundane.

Others, such as this frankly terrifying plea to fund a book detailing one woman’s obsession with the band Green Day (and, it transpires, accusing them of stealing her ideas along the way), are pitched with the sincere and unwavering belief that the world is waiting to share the author’s monomania.

Nevertheless, out of the mire of mediocrity, terrible judgement and marital aids made from human hair, some concepts rise gloriously and soar out of the failuresphere on wings of sheer Chutzpah; pitches so brazenly crap as to endear anyone with a few bucks to spare.

Meet the Khans, a band from San Francisco whose roaring, exclamatory passion for horde-era Mongolia was strong enough to blow away the funding target for their 7-inch vinyl without recourse to such dull tactics as comprehensible prose.

“ORDER UP A SMELLY Preview of THE KHANS Hit MONGOLIAN BEEF Now!!!!” howled their pitch. “Hunt with an Eagle!!! (not included)”, it promised, “Learn how THE KHANS strategize!”

Better yet is the accompanying video, (see above) in which someone who sounds like an out-of-work trailer voiceover artist after two bottles of scotch slurs menacingly over stock photos of Mongol horsemen, ordering the viewer to donate generously so the Khans can “put their musical captured treasures on round plastic discs”.

“A little horse milk money from your yurt won’t hurt…” concludes the voice, and neatly summarises exactly why Kickstarter works so well. Who wouldn’t spare a dollar for these people?

But this look into crowdfunding represents merely a cheap plastic net dipped into the stream of America’s subconscious. The Khans, Cloud Man and even Green Day’s Biggest Fan look like reasonable people with reasonable ideas compared to some of what lurks in the site’s depths.  

Next week, we’ll be going deeper. Bring your wallet.

Each week Fred Crawley will blunder through the underbelly of Kickstarter.com in search of the world’s most tragic, spectacular and incomprehensible online pleas for money. 

A still from San Francisco band "The Khans"'s kickstarter video. Source: kickstarter.com

By day, Fred Crawley is editor of Credit Today and Insolvency Today. By night, he reviews graphic novels for the New Statesman.

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Let's turn RBS into a bank for the public interest

A tarnished symbol of global finance could be remade as a network of local banks. 

The Royal Bank of Scotland has now been losing money for nine consecutive years. Today’s announcement of a further £7bn yearly loss at the publicly-owned bank is just the latest evidence that RBS is essentially unsellable. The difference this time is that the Government seems finally to have accepted that fact.

Up until now, the government had been reluctant to intervene in the running of the business, instead insisting that it will be sold back to the private sector when the time is right. But these losses come just a week after the government announced that it is abandoning plans to sell Williams & Glynn – an RBS subsidiary which has over 300 branches and £22bn of customer deposits.

After a series of expensive delays and a lack of buyer interest, the government now plans to retain Williams & Glynn within the RBS group and instead attempt to boost competition in the business lending market by granting smaller "challenger banks" access to RBS’s branch infrastructure. It also plans to provide funding to encourage small businesses to switch their accounts away from RBS.

As a major public asset, RBS should be used to help achieve wider objectives. Improving how the banking sector serves small businesses should be the top priority, and it is good to see the government start to move in this direction. But to make the most of RBS, they should be going much further.

The public stake in RBS gives us a unique opportunity to create new banking institutions that will genuinely put the interests of the UK’s small businesses first. The New Economics Foundation has proposed turning RBS into a network of local banks with a public interest mandate to serve their local area, lend to small businesses and provide universal access to banking services. If the government is serious about rebalancing the economy and meeting the needs of those who feel left behind, this is the path they should take with RBS.

Small and medium sized enterprises are the lifeblood of the UK economy, and they depend on banking services to fund investment and provide a safe place to store money. For centuries a healthy relationship between businesses and banks has been a cornerstone of UK prosperity.

However, in recent decades this relationship has broken down. Small businesses have repeatedly fallen victim to exploitative practice by the big banks, including the the mis-selling of loans and instances of deliberate asset stripping. Affected business owners have not only lost their livelihoods due to the stress of their treatment at the hands of these banks, but have also experienced family break-ups and deteriorating physical and mental health. Others have been made homeless or bankrupt.

Meanwhile, many businesses struggle to get access to the finance they need to grow and expand. Small firms have always had trouble accessing finance, but in recent decades this problem has intensified as the UK banking sector has come to be dominated by a handful of large, universal, shareholder-owned banks.

Without a focus on specific geographical areas or social objectives, these banks choose to lend to the most profitable activities, and lending to local businesses tends to be less profitable than other activities such as mortgage lending and lending to other financial institutions.

The result is that since the mid-1980s the share of lending going to non-financial businesses has been falling rapidly. Today, lending to small and medium sized businesses accounts for just 4 per cent of bank lending.

Of the relatively small amount of business lending that does occur in the UK, most is heavily concentrated in London and surrounding areas. The UK’s homogenous and highly concentrated banking sector is therefore hampering economic development, starving communities of investment and making regional imbalances worse.

The government’s plans to encourage business customers to switch away from RBS to another bank will not do much to solve this problem. With the market dominated by a small number of large shareholder-owned banks who all behave in similar ways (and who have been hit by repeated scandals), businesses do not have any real choice.

If the government were to go further and turn RBS into a network of local banks, it would be a vital first step in regenerating disenfranchised communities, rebalancing the UK’s economy and staving off any economic downturn that may be on the horizon. Evidence shows that geographically limited stakeholder banks direct a much greater proportion of their capital towards lending in the real economy. By only investing in their local area, these banks help create and retain wealth regionally rather than making existing geographic imbalances worce.

Big, deep challenges require big, deep solutions. It’s time for the government to make banking work for small businesses once again.

Laurie Macfarlane is an economist at the New Economics Foundation