Kickstarter can reap big rewards, even for small businesses. The crowdfunding giant is the premier place to ask strangers for money to fund your ideas, and it works: more than three billion dollars has been raised on the platform since 2012.
It’s clear Kickstarter can be a great platform for small businesses if used correctly. So, how can you get in on the action and source some funding for your own company or a new product? Follow the guidelines across this two-part series and you’ll be well on your way.
In this first instalment, we’ll look at determining whether your project is something that will be a success on Kickstarter.
Make sure your project is right for Kickstarter
If you’ve got a new fitness product or a clever events app, great, but if you’re just trying to expand your inventory or buy new gym equipment, Kickstarter isn’t the place to do it.
Know the Kickstarter audience
Kickstarter has a certain demographic, and it pays to know it and pitch your project accordingly. According to Art of the Kickstart, the average Kickstarter backer is a tech-savvy millennial male and will be after a good deal, given the majority of crowdfunders maker less than $50,000 a year.
Does this mean that only products targeted at these types will do well? Not at all. But if you can give an angle for this demographic to support you, even with projects aimed at others, then you’ll have a better chance of success. Got a tool that makes shopping easier for pensioners? Preach to the millennials about how they can transform their parents’ lives with a gift like that.
Figure out exactly what you need
One of the things new project founders struggle with the most is knowing how much to ask for. Less is almost always more here. Campaigns that do reach their goal tend to raise just a little over their target. Appsblogger reports that 25% of successful projects achieved funding at 3% or less over their goal, and 50% raised only 10% over their goal.
With that in mind, work out the minimum amount you need to get your project off the ground. As long as you can deliver a working product, any extra money that comes in can be used to develop further cool features.
Another consideration in setting your funding goal is the amount you’re confident that you’ll be able to have committed before the project launches. This may sound odd, but it can be vitally important for a campaign’s success. While Kickstarter was founded on the idea that total strangers would throw their money on great projects regardless of who else was doing so, that isn’t how things work in reality. A proportion of your funding needs to come from people you know well enough to guarantee their pledge.
Why? Because no one wants to the first (or even only) person to back a project that then fails! Having some support already in place looks good and can even lead to being featured by Kickstarter, which will further raise your profile. In fact, Kickstarter reports that projects with up to 5% in pre-funds, have a 50% chance at meeting their goal, and once a campaign reaches more than 20% of their goal, the project has a 78% chance of successfully reaching its funding target.
In part two, we’ll look at building a following for your project, designing a great campaign page, and finally launching your project!