The online platform from which the
crowdfunding phenomenon was born has already helped more than 90.000 projects within 6
years. Kickstarter has created new opportunities for both entrepreneurs and
customers.
Even if
today there are different websites like Indigogo,
KissKissBankBank or FundRazr that use the crowdfunding system, Kickstarter
remains the most popular one. The website gathers different kinds of creative
projects regarding 15 different categories such as music, art or technology.
To survive, the website charges 5% of the funds raised to which we must add
transactions fees. Despite these costs, Kickstarter keeps its attractiveness among creators.
Accessibility
Any kind of project is welcomed on Kickstarter as long as it is creative. The
website makes it very simple to launch a project and to organize the product presentation
in the best way. Just click “Start a
project” and the website will guide you through the entire design of your
Kickstarter
page.
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| The "Edit your project" page includes several sections |
If the project is successful, your production costs will be pre-financed by “backers”.
This is a place where you can gather information on your potential customers –as people
pledging money are more representative than “likes” on a Facebook page- and to
have the first feedback on your idea, which might help you detect vulnerabilities in your product.
The only risk a creator must be aware of is when a project doesn’t reach its goal given that the creator doesn’t get any money –even if only a few dollars are missing.
However, the site is a real opportunity for creators, which is clear to see given the large number of projects available on the website.
Preparation is key
Launching a
project on Kickstarter is not risk-free. It requires a lot of preparation
before posting the project online. There are several things you must do to
maximise your success rate. Besides the
marketing research through which you will analyse demand and competition, to be
successful on Kickstarter you also need to develop great skills in
communication.
Make
sure your friends and family understand and see themselves using the product.
If nobody around you is enthusiastic, your product may not be that useful or
your communication may have failed.
If you master this key factor and combine it to an innovative product, your
project may experience a snowball effect thanks to the use of social networks that have
an incredible influence today.
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The “Coolest Cooler” project is one good example of an unexpected success. When it aimed for $50.000, the project finally reached $13 million. Discover more about this story!
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As it is an
all or nothing website you’d better
have a low goal. Results show that the less expensive a project is, the more it
has a chance to be successful. Obviously some projects require a lot of money, which is why you have to study the best solutions to reduce costs and work on
your presentation so that it makes people want to support your product.
User reward system
Another thing you have to think about is the way you will reward the people who contribute to your project. When users enjoy an idea, they can pledge money -the minimum amount is $1-. Depending on how much money a user decides to put into the project, he will get a reward, from a simple email saying "Thank you" to an invitation to visit the headquarter of the company, to a piece of limited edition merchandise.
Another thing you have to think about is the way you will reward the people who contribute to your project. When users enjoy an idea, they can pledge money -the minimum amount is $1-. Depending on how much money a user decides to put into the project, he will get a reward, from a simple email saying "Thank you" to an invitation to visit the headquarter of the company, to a piece of limited edition merchandise.
The first backers often have the opportunity to pre-order the presented product at a discounted price.
Key data
about Kickstarter
Launched in 2009
Projects launched: 269.000
Success
rate : 37%
Pledges
collected for successful projects: $1.81B
Most funded projects:
1. Pebble v2 $20,338,986
2. Coolest Cooler $13,285,226
3. Pebble v1 $10,266,845
Most backed project : Exploding Kittens with 219,382 backers
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| Exploding Kittens doubled the previous record of backers |
The internet has created new opportunities for
users and innovators as Kickstarter perfectly proves. Numerous
websites offer the same service. Some try to differentiate by focusing on “niche markets” like fashion, sustainable energy and even religion. If you want to try your luck be sure to pick the right
website, bring something new on the market and prepare your
communication well so you may have an unexpected success !
Thomas C.
Hello Thomas,
ReplyDeleteAs Kickstarter is a great opportunity for many, it also has its share of blunders. We have seen people taking advantage of the system. Lying about their product or staff, creating fake reviews or not producing anything after the money was banked. Do you think that it is possible to regulate the system to make it more safe without corrupting the concept?
In my opinion we should look forward to crowdfunding as it nurtures innovative ideas. But as long as it can be very profitable we need to create some sort of protection et verification before accepting any submission.
Edwin B.
Hi Edwin,
DeleteThank you for pointing out an interesting issue. This is true that there are not much protections for users who decide to trust entrepreneurs.
Kickstarter can not refund people who gave money to the project. It could actually motivate more frauds. Kickstarter also declared that it would be too expensive to sue someone when the average amount lost by backers is "only" $71.
This is just an online platform and the website reminds people that nothing is guaranteed. The user always have to think about the viability of the project he wants to back.
That's why on the product page you can find the author's profile - number of projects created and backed- and a "Report this project" button.
In the future, insurance companies may develop offers to support projects, highlighting them and ensuring users on their reliability.
Thomas C.