Crowdfunding campaigns are wonderful. Entrepreneurs, artists and creatives can use a website like Kickstarter to get projects funded that might otherwise have neer seen the light of day, or to take preorders to derisk a new product. The success stories really are astounding: The Coolest Cooler raised over $13 million, the Solar Roadways project raised $2.2 million, and the Soma water filter creators published the famous article “Hacking Kickstarter: How to Raise $100,000 in Ten Days“.
Yet, the chances of success are slim. Of all Kickstarter campaigns launched, about 40% are successful. Of those, 70% raise less than $10,000. Few have the runaway success we’ve seen in the previous examples I’ve mentioned. Alas, my company, Levaté LLC, ran a campaign that was one of the unsuccessful 60%, which Social Earth covered in this article.
My goal for this article is to share the lessons and insights we learned along the way so that you can make an educated decision about whether a crowdfunding campaign is right for your idea. I’m sharing what I wished we knew before beginning our campaign. We ran an unsuccessful 40 day campaign to raise money for our product development, to finish an attachable wheelchair lift designed to improve the reach and independence of users.
We were trying for $30,000 and made it just shy of $14,000. With at least three weeks of preparation leading up to it, we easily sank two months trying to make it work. While it wasn’t the only thing we worked on in those two months, it was certainly our priority. Here are five lessons we learned in the process.
Note that while many of these can be generalized, the circumstances may be different for other crowdfunding platforms or for other types of projects. Ours fell into the hardware and technology categories, but I encourage you to investigate the specifics surrounding your type of project.
5 Lessons from our failed Kickstarter Campaign
1. Your Kickstarter will take up most of your workdays before and during the campaign.
I can’t stress how much this took us off guard, and I wish we had realized this and come to terms with this earlier in the process. Plan on planning the campaign to a T, and improvising a whole lot once the campaign actually starts. It will be a lot of time, and unless you have immediate runaway success you won’t have the time to focus on much else besides marketing your project.
2. Kickstarter is not a good fit for early stage products.
This may be different for art and film projects, but the more we looked, the more we saw that successful consumer products on Kickstarter were already finished. The inventors were using the platform to take preorders and pay for the final tool-up and manufacturing.
In our case, our product won’t be ready for about another year. Humans are creatures of short attention span- we don’t want to have to wait a year to see something finished. In our case, I think this drastically limited our chances. Most all who saw our Kickstarter page and the video agreed that it was a great idea, and they’d like to support it, but generally found reasons not to.
If we were to try another Kickstarter with a finished product, I foresee it being MUCH more successful. It’s much easier to buy in to a product when you can see it functioning as intended, and you don’t have to be convinced that it can and will be built.
3. Expensive products, especially if they’re not finished, are a tough sell.
This was the second big issue we had going against us. Our product isn’t a $50 widget but rather a complex $1,000 piece of machinery. You might make a $50 impulse purchase, but you don’t make $1,000 impulse purchase. You think about it for a while. And by the time you decide, the Kickstarter may be over. Or, more likely, you’ll have decided that you’ll spend the $1,000 when the product is ready rather than waiting a year for it.
We were hoping to get at least one preorder from our Kickstarter campaign. Looking back, this was very unlikely. It is difficult to imagine someone putting $1,000 down on a preorder for a product that won’t exist for at least a year.
4. Social impact products can be a tough sell as well.
The final issue we had going against us was that as a social business, we were essentially asking visitors to our Kickstarter page to make a charitable contribution. Sure, maybe they were getting some cool (and overpriced, let’s be honest) swag in return, but for the most part the visitors to our page weren’t wheelchair users. They wouldn’t be using the product for themselves or buying it for a friend.
On the other hand, you can look at something that’s very successful like the Coolest, mentioned above. It’s easy to see why it garnered so much public support: you can easily imagine yourself and your friends taking one to the beach. It’s harder as a visitor to the Kickstarter page to imagine a wheelchair user suddenly being able to sit at a countertop, or see over people’s shoulders at a concert.
Not convinced? Typical projects have a success rate of about 40%, as I mentioned above. But of 18 wheelchair projects in the technology and design categories, only 2 were successful. That’s about an 11% success rate, a quarter of the average. And the two that were successful had relatively tiny funding goals- $5,000 and $1,500.
This isn’t to say that socially impactful projects can’t succeed. There are plenty of successful examples. But based on our unique situation, we should have known that our Kickstarter campaign at our stage in development faced an arduous, uphill struggle. This is where you’ll have to do your homework to analyze past projects similar to yours.
5. Be prepared for an emotional roller coaster.
News sources may not pick up your campaign, social media virality may elude you, and you may find yourself unglamorously spending your last campaign days desperately trying last minute strategies to garner contributions. Certainly in our case we were disillusioned by the low payoff of our news media and social media efforts. Even local media sources didn’t seem interested in what we were working on. Strategies including advertisements, live events, and celebrity endorsements just didn’t pan out. Probably about 70% of our contributors were friends, family, and connections we already knew. It was frustrating. That’s tough to admit, but recognizing that this is a possibility is a good thing to do, and may go without saying. I do wish we had considered it more.
Carefully consider your funding needs and the best way to meet them.
This article isn’t meant to dampen anyone’s spirits or enthusiasms for a Kickstarter campaign. Instead, we hope to give you a balanced view and share our experience so that you can make a better decision about whether a crowdfunding campaign is the right strategy for your venture at its current stage. Many alternative strategies exist. I think these insights are especially relevant for early stage social ventures, like ours, who are considering crowdfunding as a funding source. In our case, private angel investment has turned out to be the most viable funding route.
Feel free to share your thoughts, comments and experience with us!
Dillon Dakota Carroll and the Levaté team