For those unfamiliar, Kickstarter is a crowd-sourced funding site that allows small companies sell their product based on the interest it generates. People buy the product after viewing a small video selling them on the design and function of it, often when the product is still in prototype phase, and doing so let’s the designer or creator gauge interest to the general public. It also helps companies become instantly aware if there is any interest in the project, how much, as well as gives them some much needed capital to begin building the final product.
The lure of Kickstarter is that it is actually rewriting the way a lot of people do business. For the users of the site, it means they can get their hands on a product that would otherwise not exist without their support, and they get to bask in the knowledge of knowing they’re helping a company get their project funded.
The lure for sellers is three-fold. First, there is instant advertising for their project on a site that gets tens of thousands of visitors daily. Second, and perhaps more importantly, it provides funding for a project while giving the company sales on day one of its product launch. Third, it saves time of those who don’t get funded or realize any sort of interest in their project by the end of the funding period.
There are a few issues with Kickstarter, mostly on the buyer side of things. First, because you’re buying a product still in the prototype stage, there are no reviews as to the product’s quality. Then again, so many products that see huge sales numbers on their first day are released without reviews (we’re looking at you every Apple product ever). And without funding from people while the product is in its prototype stage, there’s really no other option.
The other issue is perhaps underestimating the amount of work a Kickstarter project can become for smaller companies. For those companies, it can be a real eye opener to see just how difficult it can be to create a massive project, especially if it gets funded at multiples of its original ask.
Overall, Kickstarter is a phenomenal place for small and large companies to begin testing projects. We predict the use of Kickstarter by companies as large as Dell to help gauge the interest of new projects and see how far they can take the idea of crowd funding.
If you’re interested in seeing a few projects that need funding or have a great idea you think could really gain traction, head on over to Kickstarter!