How to Kickstart your business.

In last week’s blog we discussed the pros and cons of crowdfunding as a way to fund business growth. Today, we delve into Kickstarter, the World’s largest funding platform for creative and technology projects. $136 million has been pledged to technology businesses through Kickstarter with over six million people having backed a project to date. In the first year that the crowd-sourcing platform opened to UK projects, backers have pledged £22.5m.

So, is it a great way to raise some money, whilst keeping your equity? We think so, but as we discussed in the last blog, there have been some horror stories, mainly due to wildly successful fundraising campaigns that aren’t backed up with the necessary due diligence beforehand. So, a word of caution: make sure that before you click that ‘launch’ button, everything is in place and you’re ready to give it your all for the duration of the campaign.

Don’t let this put you off though. We found seven successful Kickstarter campaigners who have some great top tips for those looking to take the leap! Here’s what they said: 

  1. Picade, £74,134 from 625 backers – “Find your audience first. We had a good idea of the type of person who might like Picade – they’d be people like us! We had to trigger the initial wave of interest and publicity by contacting people directly who might talk about it and get more visibility for the project. From there it snowballs as more people see and talk about it.”
  2. Blaze Components, £55,000 from 782 backers – On overcoming challenges: “I spoke to anybody who knows more than me in a certain areas; be it legal, PR, recruiting, distribution…  I am quickly having to learn an awful lot in many different areas. My motto is ‘you don’t get if you don’t ask’, so I ask. Go for a coffee, ask for people’s advice. Chances are, spending 20 minutes talking to someone who works in a field you’re currently struggling with, could be truly invaluable to the development of your company. Just make sure they know that and how grateful you are.”
  3. Origami Slate, $7,913 from 207 backers – “Remember when you do a crowdfunding campaign, you aren’t asking for donations. You are selling a product and it needs to be competitively priced. It isn’t reasonable to expect people to pledge $50 to receive a DVD that will sell for $10. Yet, it happens all the time. Don’t fall into that trap. The trick is to design your rewards and price points so you can hit your goal, while giving your fans the best deal. The transaction needs to be a win-win.” 
  4. Evolve Love, $27,000 from 208 backers – “Research has shown that the optimal length of a crowd funding campaign is 30-45 days. Too short a time frame and you risk not being able to build enough momentum. Too long and your fans and potential funders lose interest. A Kickstarter campaign should not be used to gather incremental ongoing donations for your project. It is more effective to build quick infusions of cash around specific aspects of your project. 
  5. TikTok+LunaTik, $942,578 from 13,512 / Glif iPhone Stand $137,417 from 5,273 backers – “Execution really is always the hard part, isn’t it? It isn’t surprising then that manufacturing and fulfilment are frequently the biggest challenges for the Kickstarter projects that get funded. Make sure you budget for shipping costs and that often means being ready to ship internationally to your supporters overseas.”
  6. Click & Gro, $625,851 from 10,477 backers – “When in Rome… do as the Romans do. And I don’t mean frequent visits to public baths or lavish festivities, but following the best practices that work really well on Kickstarter. Early bird offers and limited pledge levels give a reason for your loyal community members to back your project early (and help getting listed on Kickstarter). Kickstarter-special reward modifications make backing more interesting for your biggest fans.”
  7. SolePower, $60,184 from 637 backers – “Build a product that meets a need by solving a problem. We found, through talking with people and reading comments, that although people like novelty, cool gadgets, etc., there are only a few reasons someone will buy it: it saves money, it saves time, it provides safety or it provides (a lot of) entertainment. Everything will take twice as long as you think it will so triple your time-to-market estimation. Running late seems like a pretty consistent problem from hardware start-ups.”

Despite these successes, just 60,326 projects have been successfully funded out of the 143,233 projects launched. 78,176 projects failed to reach their goals with 13,284 never receiving a single pledge, so it’s not an easy ride. For more fascinating Kickstarter stats, click here!

If you’re determined to get your business idea off the ground and you’re confident that you have a great product that meets a market need, Kickstarter is a great place to not only receive capital, but also to build a loyal fan base. Of course Kickstarter isn’t the only rewards-based crowdfunding platform, there’s also Indiegogo and RocketHub. 

If you’re considering a technology rewards-based crowdfunding project, why not apply for a place in the Catalyst Centre for the chance to win free business support, mentoring and office space for six months? Applications are now open for the next round of the Catalyst Centre but they close on 31st of May so it’s time to get started – click here to find out more.