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ReaperBryan Interview, or Why we got the PDFs


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I thought folk might be interested in this Podcast from 'TheNerdHerders', where Bryan talks about the Kickstarter process now the first part is over

 

He also explains why we had the PDFs that some were puzzled/dissapointed by (not me by the way, LOL), they were used to 'split' they huge stretch goals needed to give free figures towards the end of the KS. The familiars would have needed a $500,000 stretch, a daunting prospect by itself

 

http://traffic.libsyn.com/nerdherders/Nerdherders_Exclusive_Reaper_Miniatures_Kickstarter_Interview.mp3

 

I picked this up of the DakkaDakka forum where it was posted by one of the NerdHerder crew, user mattyboy22

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I listened to the podcast twice and there were tons of neat tidbits in there. It was a long night with a crying baby, so i may have missed a few things.

 

Bones accounts for 1/3 of the Reaper revenue. Does that mean it is cannibalizing other products, or growing their revenue by 1/3. I think the later is more likely as they had an aggressive KS to embiggen dem bones skus. Their accountant was even willing to allow the 30k goal as is, even though 30k only covered 1/3 of the costs. So they were sitting on a big hit, but unwilling/unable to pay the upfront cost to grow the line. 3.4M of risk free cash can alleviate those sorts of issues.

 

A very rough breakdown of where them money went might be as follows:

 

~340k to Amazon/KS (~10%)

~2M to the molds (5k to 10k per at about 300 models) Is size or complexity the cost driver for the molds? An injection machine or two may be in here as well, plus plant upgrades.

~1M for production and perhaps shipping cost (Bryan said they needed 500k to pay for people who added in the last 24 hours or something to that affect, so roughly double that I think.) They may have even paid out of pocket for some of this.

= ~3.34M (the take)

 

But this is not the end of the story. Accountants can do all sorts of fun things with cash flow (did I mention Reaper is owned by accountants). Expenses can offset other gains, and capital expenditures can be amortized/depreciated over many years Thus the kickstarter money is not a cut and dried cost calculation, it results in long term tax reductions as well. In addition, every bone sold from the KS line in the future will result in higher profits per unit when compared to the earlier bones, as the capital expenditure portion of the price has already been paid. The molds will last a long time if there is good maintenance.

 

Another important matter is that that the KS money is like a 7 month risk free loan, it is a big sum of money for a company the size of Reaper, Risk free means that it will not drive them into bankruptcy if things get squirly. Businesses also like prepaid sales, in fact they love them! The bigger the better, they can get lower prices per unit, while also adding to the size with non prepaid units at a lower rate. I wouldn't be surprised if Reaper orders 10-20% more than the KS total to cover the time period where they will be setting up the equipment.

 

As to how much Reaper will release on the market at one time, i think everything at once. This matches their current model as they already have over 7000 skus, a few hundred more will not make a big difference. Plus the Undertaker level will already have everything included.

 

I think they will allow swaps in the RPM, they hinted at other features in the video, and each order is already customized. In addition, it will allow them to gain (free) marketing data on their core customers. What kind of customers like x, y and who does not like z. There is much anecdotal evidence already, but real data is usually better.

 

All in all. it seems like Reaper just about broke even, but the long term implications of the drive are significant as well as the goodwill it fostered in the community and the new audience it opened up (me being one). They chose to price the KS very aggressively giving great value as it helps them more this way in the long run. It was not a cash in move (rather obvious).

 

As Reaper is a private company, the owners can execute solid long term strategies without worrying about shareholders trying to thrown them out for short term losses/non nonperformance (not that they are nonperforming mind you).

 

TY Reaper,

 

Cheers

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Thanks for sharing! What a great podcast! Lots of interesting stuff and things to learn in this interview.

 

Are they ever going to stop?!

LOL.

 

I'll drop a link for this in the KS Reaper Bones comments section so that others can listen on this as well.

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Hey guys,

Ian from the Nerdherders podcast here. Thanks Orlando for posting the link and for all the kind words from everyone. We were honored to have Bryan join us for the Q&A and hopefully it came across in the podcast just how jazzed all three Nerdherders hosts are about the Kickstarter. We all backed it big-time!

 

If you enjoyed the podcast, please check out our other episodes. We talk about all kinds of geeky stuff beyond games like comic books, movies, video games and more. And Episode 14 (going up this week) is our post-GenCon show with all our shenanigans from the Con. Find us on iTunes (Nerdherders) or at our site: www.3nerds.us.

 

Thanks again!

Ian

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