What works, and what doesn't, on the biggest crowdfunding site
LAST year more than 18,000 projects were successfully funded on Kickstarter, the largest crowdfunding website. A total of $320m was pledged by 2.2m people, making possible creative projects including a documentary on fracking, a home aquaponics kit and a community centre for circus arts. Games, a category which includes video, board and card games, received the most support, with $83m pledged to more than 900 projects. Given their high development costs and passionate fans, video games are a good match for crowdfunding, particularly as established publishers churn out ever more sequels, leaving a long tail of unmet demand (see article). In all, 44% of the projects launched last year managed to raise the money they requested, but the success rate ranged from a threadbare 26% in fashion to a sprightly 74% in dance. Seventeen projects raised more than $1m apiece in 2012. Technology projects received the highest average pledge by category, at $107 per backer. The biggest Kickstarter project to date is Pebble, a watch that connects to a smartphone via Bluetooth, which received almost $150 per backer to raise $10.3m in May. (The first finished products are due to be delivered to backers next week.) According to Kickstarter, the total amount raised last year increased by more than 200% compared with 2011. Having opened itself to British-based projects in October, the site expects to see further growth in 2013.
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I guess you can explain the high success rate of dance, theater and partially also music due to the fact, that these are mostly less capital intense local projects. The backers are more likely to know the creator of the campaign personally. I actually am conducting a research about the motivations and incentives to crowdfund! If you have experiences as a backer or supporter feel free to take the survey. https://www.soscisurvey.de/crowd/
Would love to see the results Jonas. you can easily find me on Google (type Antoine Carriere) and connect with me through your favorite social network.
Interesting, games raised by far the most money yet Dance had the greatest success rate. In my unscientific analysis, I think it's because it costs so much time and effort to create a game, while all you need for dance is human bodies.
Technology has the biggest average pledge--no surprise there. I'd say startups invest in other startups or techies invest in their fellow techies. Our company Globial (http://www.globial.com) hasn't tried kickstarter out though even though we're a tech startup. For really big amounts the traditional firms are the best source of funding.
Also, don't forget that "backing" a project is often more like putting in an advance purchase order on a product that doesn't exist yet than it is like giving an altruistic gift.
Different levels of backing have different rewards, which, for a technology product, game, design product etc will typically be a copy of the product from the first production run, typically for slightly less than its intended initial retail price.
So it's not really comparing like for like - for some, total raised is total pre-order sales plus supportive donations, for others, it's almost all supportive donations.
It's a lot easier to send a copy of a game in the post than it is to post someone a dance.
Fascinating. But fitting. Each subgroup says a lot about the community behind them. The question I'd like to nail down is -- how does this pan out for genres Kickstarter won't endorse? Say, Healthcare and Medical Technology Crowdfunding (ex. http://www.healthtechhatch.com), for instance?
I suppose the Dance and Theatre metrics are a tad leading, with some of the lowest total asks, and highest success rates.
This style of crowd sourced funding is such an amazing way to test the value proposition of a new product, service or event...which get me thinking I should really do something about this...
I hate to say it, but I feel this is an Eden that is about to be invaded by snakes.
To encourage this sort of thing, they reduced the burden of paperwork and legaleze intended to keep the snakes out.
But scamsters will move in and start ripping people off, killing it either from a regulatory or a market point of view.
The bottom six categories by money raised are personality-based and thus are fairly resistant to scams. To a lesser degree, so are the top two categories. Films and video games are often driven by well-known directors, particularly the ones that raise huge sums. Music should be somewhere in the middle. Technology and design are the riskiest of projects.
The biggest Kickstarter project to date is Pebble, a watch that connects to a smartphone via Bluetooth, which received almost $150 per backer to raise $10.3m in May.
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Correct me if I'm wrong, but don't smart phones have a clock built into them? Many kids use the smartphone as a watch and set alarms for important times.
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Speaking of time...
"There's a sucker born every minute." I guess no one was born +/- 5 minutes of the backers.
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NPWFTL
Regards
The point of the Pebble is that it allows you to interact with your phone without taking it out of your pocket. The clock is the most mundane of its features - seeing your email, text messages, speed or location (for running etc) are some more interesting ones. It also uses an e-ink display, meaning it should be easier to read in direct sunlight than a smartphone, and use very little power (on the screen at least).
By your rational, owners of both traditional watches and a cell phone are even bigger suckers than Pebble backers. If that's the case I know a lot of suckers.
We are talking about having to buy ANOTHER watch.
One with Bluetooth.
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Reading is Fundamental
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NPWFTL
Regards
I don't think you understand the appeal of the product. That's ok, you're obviously not in its target market, but please don't call people suckers for valuing something you don't understand.
What do you mean *have* to? No one is making them buy the watch, people will buy the watch because it has features and functionality worth the price. They know pretty much exactly what they're getting.
Now if they were given a watch that didn't perform as expected, then sure, they're suckers. But if it performs as was indicated, and that's why they invested, that doesn't make them a sucker.
I backed this as I'm fed up of missing calls because I can't feel my phone vibrate in my pocket (no, I can't have the ringer on at work). I'm hoping that the watch informing me of an incoming call helps.