- Not started , or
- Started or
- Finished ( successfully or unsuccessfully ) or
- Rejected by Kickstarter, then
Crowd Funding portal website = Social Media Engine + CRM + help desk + LMS + user interfaces + shopping carts + donation meter + web portal accepting campaign content + administration module + qualification module + administration + product management + some more
- A website or a blog , a good video and a Hard launch web page. ( Sample 1 and 2 )
- Or combination of CrowdFunding portal to kick off your marketing and branding program and then use your own portal to do the rest (Sample #3)
- And leverage with Google and have a complete success (Sample #4)
Editor’s note: After a rejection by Kickstarter, the co-founders of Lockitron, Cameron Robertson and Paul Gerhardt, decided to follow in the footsteps of App.net and take pre-orders for their innovative deadbolt add-on directly. This gamble paid off. Big time. The initial goal of $150,000 pre-orders were hit within 24 hours. Now, just five days after launching, the company has $1,500,000 in pre-orders. This is their story told by Cameron.
I’m still having a hard time believing that only a few short days ago, my co-founder Paul and I refreshed our homepage, anxiously waiting to see if anyone would subscribe to our vision for Lockitron and help us climb towards our lofty $150,000 goal. With reservations now exceeding 1,000% of our original target and most of the time left in our campaign, we are immensely thankful to our 10,000+ backers who have made this possible.
Just four months ago we squeezed in with over a hundred other hardware startup devotees to listen to the creators of some of the most popular and impressive Kickstarter projects impart their wisdom. The folks behind Pebble, Skallops and the Brydge answered dozens of questions about their success on Kickstarter; how much effort should you put into the video, did press matter, why did some projects take off and others flop. At one point, our moderator asked the group for a show of hands. “How many of you plan to release your own Kickstarter?” Nearly every hand in the room went up.
Kickstarter meant that for the first time hardware companies could take their ideas straight to the masses, bypassing the gatekeepers of venture capital, and de-risking their business in one fell swoop.
It wasn’t that long ago in Silicon Valley that the very mention of the word “hardware” in the context of fundraising was enough to glaze over the collective eyes of venture capital.
While we are just beginning to witness a renaissance of software wrapped in plastic, the traditionally high costs of making hardware, coupled with the perception of the low margins characteristic of the bygone PC-era, weigh heavily on risk-reward calculation for new investments.
So it was not surprising that Kickstarter gave hardware startups hope.
From its inception, however, Kickstarter was never designed as a store. Kickstarter’s benchmark for success is matching and exceeding the funding provided by the National Endowment for the Arts, not becoming the Apple store for yet-to-be released products.
Last month, mounting backer frustration over project delays seemed to boil over when a series of articles ran detailing what some had been wondering; how many of these projects failed to deliver to their backers?
The question of who exactly assumed underwriting the risks for projects loomed large despite Kickstarter’s reaffirmation that the creators were indeed responsible for delivering what they promised.
Consequently, new guidelines and rules were developed to meet these challenges and to protect backers using their site.
We applied to Kickstarter on a Wednesday, “Kickstarter Is Not a Store” landed on Thursday and by Friday we were rejected. We reached out to a co-founder of Kickstarter through our network. A brief e-mail exchange ensued, culminating with a firm “No” – stating that Lockitron fell into the “home improvement” category of prohibited projects. Kickstarter was simply not the right place for it, he said.
By the following Monday we knew what we had to do. We would launch Lockitron on our own, in an attempt to emulate the success that Dalton Caldwell had with App.net.
In running our own ad-hoc crowdfunding campaign, we knew that we needed to solve the same challenges inherent in Kickstarter’s model for running a hardware campaign.
Our solution was to create a customer-focused system. We decided to collect payment information using Amazon Payments, batch Lockitron shipments for customer transparency regarding delivery dates and only charge customers when their unit is ready to ship. This drives us to make the best product possible rather than overpromise what we can deliver on.
This approach also lets us know how many units to make and qualifies our backers as willing to put money down for the product when delivery time comes due, all while removing risk for them.
Since we only earn our keep once a customer’s Lockitron is ready, we are incentivized to use faster, low-volume/custom-quality production methods that may cost more initially, but will ultimately help us to compress our timelines.
Finally, this past Tuesday (October 2nd), just over a week after Kickstarter declined Lockitron, we took the plunge, fixated on our computer screens after a sleepless night filled with last minute video and website tweaks.
What followed over the next 24-hours was nothing short of stunning – thousands of people saw our vision and voted with their wallets to reserve a Lockitron, blowing past our initial goal in a matter of hours.
It’s debatable whether or not we will see another Pebble or Ouya on Kickstarter. But something I can’t emphasize enough is how much the success of our crowdfunding experiment is predicated on the groundwork that Kickstarter put in place. We are indebted to Kickstarter for validating the incredible potential of crowdfunding in bringing products to market.
Our crowdfunding method isn’t perfect. It requires that you have some resources to be able to kick off production of your product and I believe that there is room for a new model of crowdfunding.
Hardware startups need a platform that would add value for customers and producers by acting as an escrow for funds while validating and assisting fledgling hardware companies with their production plans. Consequently, we are planning to open source a skeletal version of our crowdfunding app to help start this discussion.
The power to ultimately go ahead and purchase a Lockitron rests with our backers. The onus is on us to justify and substantiate any delays along the way. Just as popular hardware Kickstarter projects have proven, it will be our willingness to involve excited Lockitron backers in our progress and turn them into happy customers that will drive our success.
On August 1st, a campaign for the space simulator Star Citizen raised its 15 millionth dollar. It was enough to fund the first installment of the game and put the developers on track for the full $21 million they need to finish the whole thing. Along the way, backers will get access to exclusive ships and early peeks at game modes that are still in development.
The story has all the elements of a classic Kickstarter or Indiegogo success story: an established name (Roberts created the classic Wing Commander series) comes back from obscurity and reconnects with a rabid fan base that decides to fund a new project directly.
"IT'S MOSTLY MEANT FOR ONE-OFF CREATIVE PROJECTS."
The only difference is, they didn't need a platform. Star Citizen did have a Kickstarter, netting a full $2 million, but the bulk of the fundraising happened on their own site, where the team built its own donation meter and collected donations directly. That required a little more logistical work, but also lets them wriggle out of Kickstarter's 5 percent fee — which in this case, would have cost the project a hefty $750,000.
With the concept and the process of a successful crowdfunding campaign now established in the mainstream, projects are increasingly bypassing the services that pioneered large-scale crowdfunding and simply going to the fans directly. Soylent, the infamous food substitute, raised $1,000,000 on its own site. "We didn't really fit into Kickstarter's design," says Soylent CEO Rob Rhinehart. "It's mostly meant for one-off creative projects. If you want to raise funds for an idea or a business like us, then Kickstarter is not really amenable to that."
KICKSTARTER'S FEE WOULD HAVE COST THE PROJECT $750,000
Rhinehart turned to his fellow Y Combinator alumni at Crowdtilt, which was working on its own white label crowdfunding software. Because the software was still in private beta, Soylent didn't even have to pay for the service — and most funders never knew the difference. "A lot of people still referred to it as a Kickstarter, even if it wasn't on the site," Rhinehart says.
"IT WILL BE A SIMPLE THING, AS SIMPLE AS LAUNCHING A BLOG or a hard launch web page ."
In other cases, projects have turned to independent crowdfunding to get around Kickstarter's tightening terms of service. Scout CEO Dan Roberts launched his smart-lock project just weeks after a similar product, Lockitron, had been kicked off the platform for terms-of-service violations. In a clarifying blog post, Kickstarter placed new restrictions on hardware projects, banning product simulations or renderings and placing Scout in a difficult spot. But after moving the campaign to an independent platform, Roberts found the alternative wasn't as bad as he thought. "You do give up Kickstarter's established base of users," Roberts says, "but you gain more flexibility, and you're saving a decent chunk of money." In addition to the money, Scout was able to keep pre-orders open after the project hit its fundraising goal, as well as hold onto valuable customer data that Kickstarter blacks on privacy grounds.
At the same time, the market for white-label crowdfunding software has seen surprising growth in recent years. Invested In making crowdfunding software on a licensing model, and has hosted $31 million in crowdfunding deals since it launched in 2011. CEO Alon Goren says most of that has come in the last year. It's not much compared to the $320 million that was pledged through Kickstarter in 2012, but as crowdfunders learn more about their options, Goren thinks the independent option will become the default. "It will be a simple thing, as simple as launching a blog," he says, "It’s just a matter of time."
The hardest work has already been done, now that Kickstarter has pioneered the idea of crowdfunding. In the four years since the company's launched, it’s become a commonly used term — but crowdfunding doesn’t belong to Kickstarter. Now that the practice is established, anyone can try their luck, and Kickstarter will be competing with all the newcomers for market dominance.
The site still has plenty of advantages. Both Scout and Soylent pointed to Kickstarter's aggressive marketing efforts as a potential benefit. When contacted by The Verge, Kickstarter reps pointed to the site's active internal community as worth the price of admission, with more than one in four backers returning to back another project, along with an array of anti-fraud tools and economies of scale. If you’re not a coder or you don’t want to deal with payment processing, there are many reasons to stay in a manicured marketplace. But the days when people refer to every campaign as "a Kickstarter" may be numbered.
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