The best scene in It’s a Wonderful Life is the last one, where all the townspeople whose keisters George Bailey saved in the bank run show up and all pitch in money to help George avoid jail time for bank fraud. They didn’t call it crowdfunding when the movie came out, but that’s essentially what it was, a lot of people giving a little to a worthy enterprise.
Kickstarter is the most visible name in the crowdfunding movement, and since its inception there have been hundreds of successes (and failures) with valuable lessons for using the site and funding a business in general.
Few projects that pop up on Kickstarter are cooler than the OUYA. Since it first launched in July 2012, gamers and developers everywhere have been hotly anticipating (and handing over fistfuls of cash at the prospect of) this new creation that promises to marry the openness of mobile gaming with the established performance and powerful user experience of home consoles.
With over $8.5 million brought in by the end of the fundraising portion, people familiar with the difficulty of successfully entering the video game industry began asking if the OUYA would deliver, both literally and figuratively. So far, everything is right on schedule, so it looks like this Kickstarter giant will have a happy ending.
The Lesson: Kickstarter is a good bet for projects that address a need consumers may not even realize they have, but will pay to remedy once they know better.
The Double Fine project proved downloadable games could have phenomenal success raising money on Kickstarter, but as the leader of the iOS game Republique found, video games aren’t a magic potion for instant funding.
Ryan Payton recounted to Gamasutra that he nearly pulled the plug on the entire campaign after a dismal start that included thousands of people viewing the Kickstarter page, but not donating, and many leaving comments that the video “looked too expensive.” Payton was understandably frustrated, his team having worked long and hard to make their pitch as professional as possible. Amazingly, Republique managed to soar past its $500,000 target in the last 3 hours of the campaign, having only raised $355,000 at that point.
The Lesson: Kickstarter may not be the digital equivalent of begging for money, but the wise fundraiser will beware looking like he has no need of help.
Who says Kickstarter is only for multi-million dollar enterprises? For the right projects, much humbler requests can work wonders.
Comedian Myq Kaplan wanted to make a podcast; in fact, even if Kickstarter hadn’t existed, he would have spent his own money to make one. So he figured, ask for $1. As he put it, “Pick something you can achieve, and vastly exceed it if you can.”
His appeal was successful 996 times over, thanks to the help of 81 backers who contributed based on promises of thank-you emails (for $1 pledges), the chance to inject a particular word into a podcast script ($5 pledges) or the sheer joy of having given $10,000 (no one took him up on that). He’s now produced 2 podcasts and has plans for 10 more
The Lesson: Sometimes it pays to aim low.
One of the beauties of Kickstarter is that you can pitch 100 million investors in a day, actually in the few minutes it takes to read a project’s page. To do that in the real world would obviously take quite some time and ruin the chances of capitalizing on trends and popular public sentiments.
For example, Facebook’s security dalliances have cropped up as an issue several times over the years since its massive popularization. A December 2009 privacy settings change immediately began to prompt concern from security experts and users, which hit a peak in May of the next year. Facebook alternative Diaspora was there to sop up angry Facebookers who were ready to jump ship, taking in over $200k by promising a more secure social experience. Coolest of all, Mark Zuckerberg was a contributor.
The Lesson: Timing is everything. Also, caveat emptor (Diaspora has yet to materialize).
On March 11, 2011, the world looked on in horror as Japan suffered the worst nuclear plant disaster in 25 years at the Fukushima Nuclear Power Plant. As the inscrutable Japanese government withheld information about the impact of the crisis, Japanese citizens were left in the dark about toxic radiation levels, and Americans who wanted to help were left with little recourse.
But in June, a team of volunteers launched Safecast to remedy the problem, and a year later they turned to Kickstarter. The plan was to seek funds to build Geiger counters for the 21st century to use in mapping the spread of the radiation. With the help of backers, the project raised almost $100,000 more than the asked-for $4,000. It has since collected 3 million data points, which it now shares freely with everyone.
The Lesson: Kickstarter and social good campaigns were made for each other.
The original Ogre was a board game about “future tank warfare,” released in 1977. As happens with most cult hits, the game disappeared from store shelves after going out of print.
In 2008, after decades of petitioning the maker to bring it back, die-hard fans’ prayers were answered. The company was reintroducing a huge designer’s edition — not huge as in important, huge as in 14 pounds. They took their funding campaign to Kickstarter to gauge the interest level in the game so they could calculate how many to produce. While they put the floor at 3,000 units, 5,512 backers pledged $923,000, or $165 per contributor, crushing their goal of $20,000. In other words, since $100 pledges got investors the game, there was an amazingly supportive response.
The Lesson: Even an established fan base can be encouraged to give more than the bare minimum when investors are given a chance to feel a sense of involvement in the project.
While the highest court in the land is on the verge of getting involved with copyright infringement, writer and filmmaker Ross Pruden is trying to usher in a paradigm shift in the way the world treats creative material.
He launched Dimeword in August 2012 as a new way of looking at the problem. His goal was to embrace sharing instead of rejecting it. With his Kickstarter, Pruden offered fans a chance to buy 100 of his stories for $1, and we do mean buy. Pruden actively promoted fans copying, remixing, filmmaking and anything else they could do to his work.
Ten dollars commissioned another story, also destined for the public domain. As he saw it, more sharing meant more fans and more commissions for stories. He did double his goal of $1,000. Maybe he’s on to something.
The Lesson: Kickstarter is the perfect place to challenge conventional thinking with an idea that might be a tough sell to conventional investment sources.
Now that NASA’s future is cloudy, who will pick up where that legendary group of space explorers left off? That’s not rhetorical; the answer is scientists funded by people on Kickstarter (actually, thanks to Kickstarter, pretty soon it may not be just scientists who get to do the space exploring.)
Dr. Doug Witherspoon, Dr. Andrew Case, Dr. Sam Brockington and “space entrepreneur” (we’re picturing Han Solo) Chris Faranetta raised just shy of $73,000 to work on, “a prototype pulsed plasma jet thruster targeted for orbital maneuvering, asteroid/comet rendezvous, orbital debris cleanup and interplanetary transportation.”
They started the project because although other plasma jet thrusters exist, they felt they could build a better mousetrap.
The Lesson: Even strictly educational ventures can attract funding with clearly defined goals and a healthy dose of swag for investors.
Reprinted by permission.