In the last piece we introduced Kickstarter. We also discussed that despite its innovative disruption of normal development, it’s most successful campaigns often rely on traditional campaign qualities.
This article will focus on some the specifically new challenges that are faced by Kickstarter projects.
Kickstarter makes quick prototyping a necessity; you need to present either the actual thing you want to make, or enough infrastructure and design to make it clear that the actual creation of the thing will be relatively easy. Because of this, Kickstarter is not suited to all of the pre-work, the brainstorming and problem solving that leads up to an almost-finished product.
Kickstarter’s funding model is all-or-nothing. If the project fails to achieve its funding level, none of the money is kept. This means that Kickstarter operates on a confidence model.
Overall, contributors give their money for these reasons:
- They think that the project is interesting/compelling/desirable as something they want to see exist.
- They are confident that the project will succeed based on the skills and resources of the project organizers.
- They have been given a nearly-full picture of what the project will look like when it’s complete. (Either a prototype, demo or examples of past projects.)
Failed projects often failed to satisfy these reasons. They haven’t answered the fundamental questions: “Why are we doing this?” and “Why should you care?” They have failed to build a crowd or audience to the platform, instead relying on the platform (and the Internet) to somehow bring people to them.
According to data taken in 2012 (see below), only 50% of crowdfunding projects on Kickstarter were successful. Interestingly, of the money actually pledged on Kickstarter, 92% of it went to successful campaigns, and only 7.9% were pledged to campaigns that ultimately failed.
This shows that the users and crowdfunding backers of Kickstarter’s user base operate along these lines of confidence. A lack of general confidence in a project will result in an overall lack of any funding. Full confidence in a project often results in the opposite, with extra funding going to a project, allowing them to expand or scale the project to the level of their success.
Reference on Kickstarter project failures here.
Disclosure: This post was co-written with Jason Mehmel. Ideas contained were discussed collaboratively; and Brian F. Singh had the final review/edit.