With over $1.23 billion pledged to over 75,000 successful projects, Kickstarter is a veritable crowdfunding juggernaut. At their standard 5% fee, they've pulled in over $61 million hosting successful creators' dreams.
Clearly, they're doing something right. So you're probably wondering why we we're not using Kickstarter to launch our first product, Topo.
We'll flesh it out in detail below, but it boils down to this:
- We've gotten so far that Topo is now a product, not a project.
- Their 5% fee is too high for the value they would provide us.
- Hosting our launch there would keep us from doing some really cool stuff we want to do.
We're quite confident that we can reach more fantastic backers like you and provide more value by eschewing Kickstarter. Here's why.
Kickstarter Charges 5% for Things We Can Do
Browsing (especially wildly) successful campaigns is inspiring. Thousands of users reached and sometimes millions of dollars raised is certainly appealing. Especially when all you see on the campaign page is a snazzy video and what essentially amounts to a blog post describing the project.
But there's a ton of work going on behind the scenes that most people aren't aware of.
First, there's the whole product development cycle. Identifying a need, brainstorming solutions, assessing front runners with prototype builds (we've made dozens each of a dozen different designs), durability and field testing, and beta-test programs.
Second, there's an incredible slew of logistics. Engaging and vetting suppliers, negotiating quotes, contracting fulfillment operations. Want to ship outside your home country? Better seriously study customs laws and international tax structures while opening relationships with fulfillment centers around the globe.
Third, there's general marketing and customer outreach (you better have started this early in the product development cycle). Identifying key audiences that will benefit from your work and finding a way to reach them is crucial. Building a community to launch into is vital to the success of any launch campaign, and it only works with many months of hard work and a little luck.
Once you have all your ducks in a row with the stuff above, it's time to get the launch materials in place. A great video goes a long way, but a mediocre one gets you nowhere. So you better invest in fantastic videography. You'll need professional product photography and compelling copy too.
Your campaign is sure to fail without media coverage, so build those blogger relationships and establish a robust press kit to make covering you as easy and rewarding as possible.
With all that work above done, it's time to put up a page where excited potential users can help get your company off the ground. This is where Kickstarter comes in. And, believe us, it's after way more than 95% of the pre-launch work has been done.
Kickstarter Really Offers Little More Than Web Dev
They provide a handsome page template for your project, handle the electronic money transfers, and facilitate easy communication with backers. They don't bring in any potential backers or promote your product to unfamiliar users (unless you make the front page).
Many of the numbers we've seen indicate that the majority of the work and expense in running a crowdfunding campaign lies in "driving traffic" - making potential backers aware of your project. And Kickstarter doesn't help with this at all.
In fact, we have everything Kickstarter would have provided us set up on our own domain now, and it only took us about 150 hours. Compared to the estimated 8,000 hours we've put into developing and launching Topo so far - well that only represents about 1% of our time. So why would we give up 5% of our users' hard-earned money?
Because that's truly what it means. Avoiding Kickstarter's 5% fee means we can charge 5% less. And that's a huge deal to us, because we want to reward early backers for their instrumental participation as much as possible.
A Note on Credibility
One benefit Kickstarter offers (we think, anyway) is credibility. Ordering a product that won't be delivered for a few months requires some serious trust, and seeing that Kickstarter logo at the top of the page probably helps address that. But we believe that our inherent honesty and transparency (combined with great testimonials from beta testers and partners) will make up for that in the mind of the potential backer.
We are also public with our names and info, so any failure to deliver would surely damage our reputations irreparably. Combine that with a no-strings money-back guarantee until we ship product, and we hope that potential backers see there's really nothing to lose (and much to gain!).
Kickstarter Would Prevent Us from Doing Some Very Cool Stuff
We've seen time and time again that social media sharing and blog coverage is the make-or-break for crowdfunding campaigns. It seems pretty obvious, but if you want to be successful, you need a lot of people to see your site. And those people have to come from somewhere.
So we had a great idea (borrowed from the way online marketplaces like Amazon have run for more than a decade). We wanted to create custom links that allow us to track who drives backers to our site. Then we can reward the biggest promoters with discounts, payments, or even just serious public gratitude.
We've also developed a "leaderboard" that shows who is helping to grow our community during the campaign. As we see it, those fervent fans deserve acknowledgment and reciprocation for their help and support.
Launching on Kickstarter wouldn't allow either of these. Sharing would have been incentivized with nothing beyond saying "please". And we think that's a serious bummer. Shouldn't Topo's most ardent supporters be recognized and rewarded for their extra effort in launching an awesome product?
Does This Mean No One Should Ever Use Kickstarter?
No, it definitely does not. If you can't (or don't want to) build a web page, 5% of raise is a decent fee. And we should remember that crowdfunding is largely only possible because of the great work Kickstarter has done.
10 years ago, would you consider paying for a product you wouldn't see for months, in an effort to help push something into existence that would never exist without you? I wouldn't have. But thanks to the popularization of crowdfunding - which Kickstarter was instrumental in - millions of people have done it multiple times, and will again.
75,000 successfully-funded projects is nothing to sneeze at, and many of those products wouldn't have existed without Kickstarter. We should applaud them for their foundational role in an exciting ecosystem.
But we should also recognize that their platform is not ideal for every project or company. And that there are still plenty of improvements to crowdfunding on the horizon (some inside Kickstarter, I'm sure).