How Kickstarter works – a Creator’s Perspective
Several years ago I ran a Kickstarter project. It was unsuccessful. In the words used on the site, “funding goal was not reached”. I am currently in the pre-release phase of my second project. Here are some thoughts I posted on Facebook.
Kickstarter.com is a site of unexpected rewards and of dashed dreams. It was the first large and hugely successful crowdfunding site, aimed at “Creators” of art, technology, music, and …junk.
The predecessor of the FitBit watch, the Pebble, raised over $40 million in 3 campaigns. The “Exploding Kittens” card game raised over $8 million from 219,382 backers. Only about 40% of all projects achieve their funding goal. Kickstarter’s projects are “All or Nothing” – if the project doesn’t hit the funding goal, no money changes hands and the project dies. If the funding goal is reached or exceeded, the Creator is obliged to fulfill all the promised Rewards expeditiously. Creators who didn’t plan well can end up deeply in debt. Those that plan well and are lucky can make a lot of money – enough to fund a successful ongoing business.
Here is how I see the process unfolding under both Successful and Unsuccessful results.
The beginning is the same:
Creator (let’s call him Joe) has an idea he thinks will appeal to lots of people and that he can fulfill
Joe works for months on developing the idea
Confident that he can produce the planned Rewards, Joe starts a new Kickstarter project
Joe makes a detailed spreadsheet of expected costs and revenues
Joe takes photos, makes a video, writes many iterations of the copy, determines the Rewards, then populates the Kickstarter template with all that information
Joe shares the draft site for feedback
Now things can go 1 of 2 ways. First the “Yay” path:
Joe’s friends and family are excited by the project. They share it with their friends and families
All those people “Follow” the project, drawing the attention of the Kickstarter algorithms
Kickstarter staff are alerted to the hot new project and feature it as a “Project We Love”
Joe launches the campaign and lets friends and family know through email and social media
The project gains traction and supporters, maybe being Featured on the Kickstarter home page
By the end of the funding period, the goal is reached or exceeded
Supporters are charged the agreed Reward amounts, Joe gets the proceeds minus Kickstarter’s and Stripe’s deductions. In the end, Joe gets about 80% of the total funds.
Joe works his a** off for half a year or more fulfilling the Rewards, all the expenses coming out of his share of the proceeds
At the end, if he has budgeted well and there were no disasters, Joe has about 30% of the original funded amount to cover his time, with hopefully a bit left over. Joe takes his local friends out for a celebratory dinner.
Happy Joe! 😊
And then there’s the “Ah Sh**” path:
Many of Joe’s friends and family don’t open the email, or say “That’s nice”, and keep doomscrolling
One or two of those people “Follow” the project
The project is invisible to the Kickstarter algorithm, and therefore to the staff
Joe launches the campaign anyway and lets friends and family know through email and social media
The project sinks way down in the listings; it becomes derelict (derelict: stuff which sinks from a ship and disappears into the muck at the bottom of the ocean)
A few people actually sign up for Rewards
By the end of the funding period, the goal has not been reached, maybe embarrassingly so
Supporters are not charged and are disappointed, Joe gets nothing and is disappointed
Joe reviews “lessons learned” and takes a job as a store greeter to pay off the incurred expenses.
Sad Joe. ☹
So my question to you: does a failed project on one’s record reduce the likelihood of having a successful project? Improve the chance through lessons learned? Does it make any difference?