Update: I’ve updated the statistics about how many patterns have been sold in the month of Janaury 2018 across all of Ravelry.
Making Things is a new web app that launched on October 30 to the knit and crochet community and has provoked intense online discussion about the cost of pattern, designer compensation, and disclosure of affiliate links. Created by Megan Elizabeth and her partner, Rob Andrew, and based in Melbourne, Australia, Making Things is a monthly subscription service providing access to over 1,000 patterns as well as web-based pattern reading tools including stitch counters, row highlighters, chart grids, and editable notes, plus 24-hour live pattern support.
For $11.99 a month, Making Things subscribers have digital access to the entire pattern library, but patterns can’t be downloaded or printed (and there’s a 30 pattern access limit to prevent fraudulent usage). Making Things is using a “subscriber share” model for figuring designer compensation which means that half of each subscriber’s payment goes to support the platform, while the other half goes directly to the designers whose patterns that subscriber used that month.
This is Elizabeth and Andrew’s second craft business. They formerly ran Wool Days, a small-batch Australian yarn company that had a three-year run. Last fall, according to an interview Elizabeth did with Frankie magazine, the couple decided to build an app together (Andrew “loves tech, especially designing beautiful experiences,” Elizabeth said) and kept coming back to the idea of an app that would allow users to better interact with knitting and crochet patterns on their phones.
Rob Andrew and Megan Elizabeth. Photo via Startmate.
After reading about startups and “the way they think about solutions. The way they just appear & hit the mark – so eloquently define a problem, and solve it,” Elizabeth applied to Startmate, an Australian startup accelerate not unlike to Y Combinator in the US. Startmate offers entrepreneurs a $75,000 AUD investment in exchange for 7.5% equity in their business.
To her surprise, she was accepted to the Sydney 2018 cohort. The 12-week program includes workshops, goal setting sessions, and inspirational lunches and dinners with successful entrepreneurs. Founders are paired with mentors who help fine-tune their business idea and get practice pitching to investors. The cohort also travels together to San Francisco to visit successful startup founders. The culmination is demo day where founders hope to secure investments from venture capitalists to fund their businesses. According to Startmate, the Sydney cohort this year had three teams raise $1 million AUD or close to it while the program was running. Elizabeth says she was one of them.
In her demo day pitch she explains that Making Things has the potential to scale exponentially. She says there are 848 million makers in the world who enjoy crafting as a hobby. Most of them are between the ages of 18-35 and spend 20 hours a week crafting, according to her pitch. “We’re starting with knitting and we’ll be expanding craft by craft to include the two-thirds of all makers who participate in at least two crafts,” she says. “This means we’ll be doubling, and then tripling the lifetime value of our customers.” Making Things closed a seed round from Skip Capital, a venture firm based in Sydney run by Kim Jackson who has made investments in seven startups with female founders in the past year. The company also secured funding from one other investor.
The ability to scale fast is a priority to early-stage venture investors and a large market opportunity is key. Whether that actually exists within craft, and within knitting patterns in particular, is open for debate. Knitting is a time-intensive craft and that means access to thousands of patterns in a single month may not be appealing as it sounds.
“If it takes you 4 months to make that sweater, and a lot of people do only one thing at a time, it is going to cost you $48. And if you are a good knitter and don’t need any help, then that $48 is going to be for the pattern only,” writes Ravelry user rosamaria. “Meanwhile, back at Ravelry the same or similar pattern…might be going for $8, and you have it forever.” 909 of the 1,104 patterns currently on Making Things are also available on Ravelry. Many pattern buyers also purchase patterns and never access them. Of the first 10,000 patterns bought on Ravelry in January 2018, 10 months ago, only 40% have been downloaded, opened or viewed. Although the idea of open access sounds appealing, it may not match up with actual pattern buying behavior.
In addition, other apps already exist that do many of the same things Making Things offers. For example, knitCompanion is a free app that syncs with Ravelry and allows users to mark up patterns with the same sorts of tools available on Making Things. For easily accessing patterns on your phone, LoveKnitting, another venture capital funded craft company, has a mobile app that syncs with a user’s Ravelry’s library.
Still, for some early adopters, Making Things is very appealing. Kim Miller joined up right away and, according to her comment on the Stitchcraft Marketing blog, is very happy with the app. “I also am a pattern hoarder so it’s worth it for me,” she says. Elise Blaha Cripe, founder of the Get to Work Book, is intrigued, too. “I like that it seems so clean and un-clunky,” she says. “I’m excited for anything that makes it easier for makers to make.”
Making Things has started with funding right out of the gate. Elizabeth says it was important to her to be able to compensate her team for their skills and creativity from the start. “Now we could bring on amazingly talented people onto our team and pay them fairly,” she said in an interview last week, “So they don’t have to say I could go get a high paying job somewhere or be valued for my creativity and passion for the industry. They can do both.”
In contrast, knitting and crochet pattern community and marketplace Ravelry has chosen to remain independent of outside investors. “It seems like all downside to me,” says co-founder Casey Forbes. “I’m very curious about this because to me, bringing in investors for $1,000,000 AUD seems worse than not having money at all…A small sum like this seems like a free sample of drugs. ‘Here you go – this won’t last, see you when it’s gone and you come back for more.’”
Forbes, his partner Jess, and the Ravelry team have managed to engender tremendous trust among the knitting and crochet community over the 10+ years the platform has been in business, perhaps in part because they’ve been responsive solely to the community of users. (1,017,00 people used Ravelry in the past month.)
Ravelry user Rachel Newin pointed out on Twitter that the platform is “run by ethical wonderful people who focus on the community rather than the bottom line.” Still, the discussion about Making Things, and its sleek user experience, has prompted Forbes to post an ad for a user experience designer to improve Ravelry’s interface.
While developing Making Things Elizabeth joined Ravelry to recruit approximately 40 designers and several hundred knitters and crocheters to become beta. The app was in beta for eight months, from the beginning of February through the beginning of October, and it was then that the concept evolved from a pattern reader to what’s now being described as “the Netflix for knitting patterns.” Once Making Things launched the beta testers group was deleted from Ravelry, as was Elizabeth’s Ravelry profile and all of her posts.
Making Things has a very generous referral program. Designers who refer a new subscriber to site receive $30 for each new signup during the month of November, and $20 for each signup thereafter. At launch, many designers who had been involved in the beta test wrote glowing reviews of the app on their social media accounts and email newsletters, but some failed to disclose that they would earn money from Making Things for each new subscriber who signed up through their link.
According to Elizabeth, “these are referral links and not affiliate links because only one designer can get one thing from one person” and “as it stands you can have a referral link that doesn’t have to be disclosed as a referral link.” She went on to say, “there’s no secrecy around that, but its because it’s a new way there’s a lot of questions about it.” The Federal Trade Commission does not differentiate between affiliate and referral links and requires disclosure of both whenever compensation is involved.
In the days after Making Things launched, many knitters and crocheters began to raise questions about the affiliate disclosures, as well as about how the app would affect consumer understanding of the monetary value of a single pattern. (If you get access to over 1,000 patterns for $11.99, how much is a single pattern really worth?) Several well-known designers who had been involved in the beta version publicly withdrew their patterns from the site.
Still, Elizabeth says Making Things is off to a promising start. “Personally I’m deeply satisfied and inspired by how this launch has gone. Our designer waitlist has grown to over 400 designers in the last week,” she says. “The biggest thing that I think everyone has noticed is that we’ve started a conversation. We’ve said out loud what so many people are thinking. Can we do better? It’s so important to have those open, honest conversations about how we support designers, how we support creativity, how we pay people, how we access things, how we are going to support ourselves not only now but in five or ten years time, and what do we want to do today to change that.”