Do you Kickstart? Three years of Crowdfunding
Kickstarter was founded in 2009, but it didn’t explode to what it is today until 2012. Since then the platform has helped over 125'000 projects get funding. Below How I Built This host, Guy Raz, interviews Kickstarter founder Perry Chen. I highly recommend listening to it, but it’s not the focus of this article.
How I Built This is a podcast about innovators, entrepreneurs, and idealists, and the stories behind the movements they…www.npr.org
Since 2013, I’ve funded 20 Kickstarter projects, 3 Indiegogo, 1 wemakeit, Projekt R’s Republik and the Liquid Spirit Distillery. Four years and 24 projects later, I thought that I would take sometime to highlight some of my experiences with Crowdfunding.
If I had to describe myself, I’d say that I’m an optimistic, early adopter. When the iPad came out, I bought one in the first month thinking that it would change the way I taught languages. It improved the teaching, but didn’t revolutionize it. I’m also an entrepreneur at heart and believe in the power and ability of people to change the world. The company’s that really change things though need support, and to me Crowdfunding is a way for ordinary people to get traction for their projects. Have my 24 backed-projects disillusioned me? No, not really. But, I’ve become more discerning and critical. Below are the lessons I’ve learned as a backer.
You’re most likely backing the first run of a new product
If the product looks super advanced, it probably is and won’t be as good as you imagine it to be. Why is that? Today most companies or project leads know they need to sell a vision and something that will be a game changer. They use computer animations and great videography to convince backers that they are further advanced than they are.
For backers, learn to set expectations lower. You’re most likely supporting a first run of a product that doesn’t exist. Think of it as you helping create a company.
For creators, be honest about your product and take a page from Steve Jobs’ playbook and be particular on the product you ship. Your first customers need to be your ambassadors and heros and not naysayers.
Great example: ZEIº from Timeular has done what I expected and looks like what I was promised. This product has made me money because it’s helped me better track my time.
Bad example: Trunkster never shipped their full-sized suitcase and the carry-on is a heavy, clumsy and all-in-all unusable piece of baggage.
Forget the timeline
When you back a project, you’ll see the estimated time of delivery. The key word is estimated, and most of the time the estimation is overly optimistic.
For backers, remember most creators of new products have no experience in manufacturing, supply-chain etc. They are learning by doing, which is fine, but it means that there are plenty of delays. For simple projects add 2 months, for complex ones add at least 6 months.
For creators, instead of disappointing your backers with late projects, give yourself enough time. Like with the quality of your product, it is better to underpromise and overdeliver than the opposite. No one will be disappointed when they get a product a month earlier than expected, but they will be if it comes 8 months after it was expected. If you are expecting or experiencing delays communicate them to backers.
Great example: The Everyday Backpack was promised to backers to be delivered before Christmas 2016. It came at the end of November and made it under the Christmas tree. To their credit, Peak Design is an established company that knows how to deliver.
Bad example: LEVITAT promised delivery of their aerial mat by July of 2017. There has been limited contact from the creators and as on October 2017, still no aerial mat.
Fund at your own risk
Over the past several years, I’ve spoken to many people who have asked me why I back these projects and what my guarantee is that I’ll get what I’ve been promised. The answer goes back to the fact that I’m an early adopter and what to get new things before they are mainstream. I know that there is no guarantee that I’ll get any of my backed projects, but apart for one, the others have all arrived, or I have received updates.
For backers, there is a moral obligation for backers to ship their product to you and they commit to doing their best to fulfil their promise but are not legally obliged to deliver or return funds. Many creators are inexperienced in budgeting and cannot finish what they’ve started. Others have planned something that is with the current technology impossible to produce. Remember that you’re taking a gamble and if you’re not willing to do that, look for serial Kickstarters.
For creators, yes, you’re not legally obligated to deliver but you are morally bound, and a failure to do so will most likely ruin your credibility for a long time if not forever. If you’re having problems, like with the timing, communication is vital.
Great example: Prepd Pack, a new company, delivered slightly late, but communicated effectively and transparently throughout the process. And the product looks and feels like what they promised. My girlfriend and I constantly get compliments on the lunch boxes.
Bad example: Vessyl promised a smart drinking cup in 2014. Realizing the difficulty in developing their vision and the fact that the technology was probably not yet available, they notified backers that they could opt-in for a smart hydration cup while they waited for the originally backed product to be completed. I last heard from Vessyl at the start of October 2017 — having opted-in for the Pryme Vessyl in early 2016. All I get is a standard e-mail and still no cup. At this point I consider my backing a write-off. (I backed them on their own Crowdfunding site not via Kickstarter)
Crowdfunding today is a great marketing tool. You can test the interest of the market before fully launching a new product like the folks at the Zurich-based bag company Freitag did. Build hype and a community around your product or service. Republik managed to be the most-funded media project in history (as of October 2017) and has a strong and loyal following amongst their backers. They also engage with their backers and send out regular updates, which builds the sense of community. However, as a backer none of this is self-evident, which I can attest to over my years of backing projects. Often campaign creators go silent and deliver sub-optimal products or not at all. As a backer you are always taking a gamble. Sometimes it pays off other times it doesn’t. To be wise about choosing your projects I would suggest doing adequate research into the teams behind them, past track records, looking at feasibility and not getting too dazzled with the hype.
All projects that I’ve supported on Kickstarter
- AppSeed — 4/5* (received it, it works and I continue to get updates)
- Trunkster — 0/5* (received carry-on but no checked. Product is different than was promised. No more communication from the company)
- BetterBack — 5/5* (received the product. It works like promised. I continue to get communication about developments in the company. I hardly use the product though.)
- The Norlan Whisky Glass—4/5* (received glass and get updates. The final product didn’t quite meet expectations though.)
- Xpand Lacing System—5/5* (received the laces on time and they work great.)
- Prepd Pack — 5/5* (received the boxes slightly late, but great communication during process. The end product looks and functions as promised)
- Ably—5/5* (received clothes and they work as promised. I love these t-shirts and my hoodie. I continue to get first dibs on new products as the company grows.)
- The Everyday Backpack—5/5* (received them on time as promised and they are of a very high quality.)
- Miops Mobile — 4/5* (received the product. It came a little later than expected and is a bit more cumbersome than anticipated, but does work.)
- Shotbox 2.0 — No rating (still have not received this product. Communication has been scattered, but I believe I will get it by the end of 2017)
- ZEIº—5/5* (received the product. It’s been the best project that I’ve backed to date, because it helps me earn money by getting paid for the hours I work and simplifying time tracking.)
- Eclipse—4/5* (received the product after numerous delays, though the communication was great. The end product came with the wrong power plug as the company had to save on production costs. It also makes an unexpected buzzing noise)
- HyperDrive—5/5* (received the product and it works great. Makes using my MacBookPro 2016 much easier and dongle free.)
- FlowMotion Smartphone Stabilizer—No rating (still have not received this product. Communication has been good. Hope to receive this product before the end of 2017)
- Teodoor—No rating (Should get this product by December 2017. Limited updates.)
- Arsenal—No rating (Should get this product in January. Updates come on a regular basis.)
- LEVITAT—3/5* Super late delivery — more than 8 months. Very heavy. Came in beat-up box. Will test this summer so the rating is based off of first experience.
- Smart Belt—5/5* I received this in January 2018, about 5 months after the expected delivery date. Definitely the best fitting belt I’ve ever had.
- The Side Winder—5/5* Delivered as month late. It does what it promises. Easy to use and saves space.
- World’s Most Comfortable Work Pants—No rating (Expected delivery is in February 2018. Campaign ends on October 31, 2017)