Kickstart your business in the golden era of innovation
Kickstarter, the hugely popular crowdfunding website, is beginning to see a new trend emerging. Initially the site attracted creative types looking to fund their latest artwork, album, fashion line or film.
Since then it has become synonymous with the independent games industry. Incredible sums of money are being raised, such as video game Project Eternity, whose creators massively overtook their target of $1,100,000 by raising a total of $3,986,929 from 73,968 backers.
And whilst both of the creative industries continue to thrive on Kickstarter, it is the emergence of the technology hardware projects that is turning heads in the business sectors.
It is not uncommon for projects to raise millions of dollars on Kickstarter. Pebble, a customizable watch for iPhone and Android, raised an extraordinary $10,266,845 from 68,929 backers. Similarly OUYA, a new kind of video game console, raised $8,596,474 from 63,416 backers.
There are many other examples like these, entrepreneurs and innovators are finding their dreams being realised, and have a ready-made audience to help them promote the product once it has launched.
Kickstarter launched in the UK last October and it has been fascinating to see how British based projects would fare.
The good news is there are plenty of success stories. Emilie Holmes’s Good and Proper Tea company is one such story. Emilie, 27, had been working for an advertising company four days a week, spending the other three on her business plan and researching teas.
After “boring friends and family” for years with the idea of setting up a tea company she finally took the plunge last September. Holmes quit her job, bought a 1974 Citroen H van and was then left needing £10,000 to convert it into her dream.
With Kickstarter launching in the UK in October, Emilie knew it was the perfect opportunity. She raised £14,682 from 372 backers and the rest, as they say, is history.
The evolution of Kickstarter
As I stated in the opening paragraph, Kickstarter is beginning to see a new trend emerging. Established businesses are realising the potential of Kickstarter, not only for raising funding, but gaining invaluable user feedback.
Ram Malasani, founder of Securifi, the world’s first wireless router with a touch screen, is currently running a project on Kickstarter to fund Almond+ the second product in their router range. With just 4 days left to go the company have raised $706,889, far more than the $250,000 they aimed for.
Malasani’s reasons for starting the project on Kickstarter were a lot different to most. Securifi is not exactly struggling for funds. The first product launched at the Consumer Electronics Show a year ago and has sold thousands of units on Amazon.
The problem Malasani has is that being a third-party seller on Amazon, he can’t contact those who have previously bought his products, losing the ability to ask about their experience or to promote new products and features.
Kickstarter has allowed him to do early marketing and solicit high-quality feedback. Crowdfunding is the ultimate form of consumer research. Not only are you asking people’s opinions, you are receiving their money with those opinions.
Gaining this feedback before creating the product really helps to ensure that the development is geared towards the end user. And so far 6,345 people have backed the Almond+ project, which is a great customer base to build in less than 60 days.
A golden era
What does the future hold for Kickstarter and UK businesses? The opportunity is there for established companies, as well as start-ups and creatives, to make their projects a reality. For some the feedback is as valuable as the funding.
Kickstarter is an all or nothing platform. If you fail to raise the funding target you set at the beginning of the campaign then you don’t receive any of it. Overall, 43.56% of projects reach their funding goals. With 81% of projects, that raised more than 20% of their goal, being successfully funded.
With comprehensive planning and a clear strategy business owners have a great chance of funding their idea and gain insight into what consumers want.
Crowdfunding has arrived in the UK. Will 2013 see the start to a golden era of British innovation?