To Kickstart or Not to Kickstart: The Top 10 Reasons to Launch a Product via Crowdfunding

28 August 2014 | 20 Comments

A few days ago someone contacted me with the fundamental question: “Why should I crowdfund my product?” (opposed to traditional means of launching a product, most of which are financially driven–loans, angel investors, dipping into savings, maxing out credit cards, etc).

I searched through my Kickstarter Lessons to find the one about the pros and cons of crowdfunding…and I couldn’t find one. Unless I’m forgetting something, I’ve never written it.

Granted, if you read this blog, you’ve probably already decided to crowdfund your project. But it was really helpful for me to take a step back to look at why I’ve consistently chosen to crowdfund our products.

Below I’ve included both a “top 10” list and a shorter list of reasons why you might not want to crowdfund your product.

Top 10 Reasons to Launch a Product via Crowdfunding 

  1. Build community: Crowdfunding allows creative people to build a community around their creations. This can lead to much greater success in the long run if you’re launching or expanding through the crowdfunded project, as you have a passionate group of fans supporting you (and holding you accountable).
  2. Gauge demand: You might have an idea that you think is really cool, but you don’t know how the general public will receive it. There’s no better way to find out (again, with very low risk) than asking people to pay for something that doesn’t exist yet.
  3. Raise Funds: If you need to raise a lot of money to create something new, rather than taking a loan or putting your own money at risk, crowdfunding provides a way to raise the funds without giving up equity in your endeavor. Plus, the whole idea of the “funding goal” helps creators avoid situations where they raise some money but not enough (if they budget correctly).
  4. Improve the Product: Stretch goals have allowed products to get better from inception. Instead of making the most basic version of a board game due to lack of up-front funding, if you receive enough interest on Kickstarter and can produce more games, you drive down the cost per unit and can add in more cool stuff, making it better for everyone.
  5. Business training wheels. Starting a business is hard, but a crowdfunding campaign gives you the opportunity to learn how to launch a company with the “training wheels” still on. You have a big group of people there to point you in the right direction, and you usually have plenty of time to figure things out. Plus, if your original campaign doesn’t fund, you can try again.
  6. Direct access to customers: Say you create a new product and sell it to Walmart. You know nothing about the people who buy the product. But with crowdfunding, you know tons of information about every single customer. That data is incredibly helpful, and also allows you to build a shipping strategy for each individual customer that could save both of you a lot of money.
  7. Generate Awareness: Kickstarter is a platform, not a promoter of products. But a lot of people browse Kickstarter to discover new stuff, so you have access to a broad range of people who wouldn’t otherwise have heard of you.
  8. Urgency: The limited-time aspect of a crowdfunding campaign creates a level of urgency that pre-orders cannot replicate.
  9. Trust in the platform: Remember 10 years ago when people were really hesitant to enter their credit card information online? Now we don’t even think twice about it. Kickstarter (and other crowdfunding platforms) have created a similar level of trust. The platform is polished and professional looking, and people trust that when they press the “pledge” button, they’re in good hands.
  10. It’s a lot of fun. Running a Kickstarter campaign is thrilling. I don’t think there’s anything else out there quite like it. Don’t get me wrong–it’s extremely stressful too–but it’s a lot of fun.

Reasons Not to Launch a Product via Crowdfunding 

  • You haven’t prepared (or don’t want to): People really have to do their research. There are no shortcuts on Kickstarter, and if you take shortcuts and end up losing your backers’ trust, it’s going to be really tough for you to run another campaign in the future.
  • You only have an idea or concept: Crowdfunding really isn’t the place for bare-bones ideas or concepts. Backers want to see a working prototype, something you’ve spent months and months designing, testing, budgeting for, etc.
  • You’re just trying to sell a product you already have in stock: This goes against Kickstarter’s guidelines.
  • You don’t already have some sort of community or crowd: You need the support of people who believe in you from day 1 on Kickstarter. This is distinctly different than angel investing, for example, in which case you really only need a few people to believe in you. How do you build a crowd? I’m glad you asked.
  • You don’t have much free time: This probably applies to any type of product, but at least with other ways of launching something new, you can work on it on your own schedule. That’s not the case with Kickstarter–it’s going to take a ton of time before, during, and after the campaign, and if you’re not available during those times, you’re quickly going to lose backers.
  • Your primary motivator is to make money: If you don’t care about any of those 10 reasons I listed above and you’re just trying to make a quick buck, you’ve come to the wrong place. There’s nothing wrong with making money via crowdfunding, but if that’s your primary motivator, not only will you probably not fund, but you’ll probably barely break even after fulfilling your rewards (at best).

Note that I didn’t include “you need the money.” Granted, I think backers respond better if they feel like their hard-earned dollars are creating something that could not otherwise exist without them. But I don’t think it’s a prerequisite. So what if you don’t need the money? If you like building a community around something new, making something better than it could be without crowdfunding, and all the other reasons listed above, crowdfunding is perfect for you.

What would you add to either of these lists? Are there some situations in which you think that traditional methods of launching a product–or even something new like Shark Tank–are better than crowdfunding?

Also read: 7 Questions That Will Help Tell You If Crowdfunding Is Right for You (Inc Magazine)

Leave a Comment

20 Comments on “To Kickstart or Not to Kickstart: The Top 10 Reasons to Launch a Product via Crowdfunding

  1. Hi there, Jamey. I know it’s a little bit old subject, but your blog is still extremely valuable regarding KS. Would you recommend a game designer to run a KS campaign before reaching publishers, after, only after they get a deal…? Thank you!

  2. Great one. I totally identify myself with the majority of the points above. I guess each creator has its own 10 but here are some other 3 i believe to be quite relevant in some cases:

    1) ESTEEM/PASSION – not a logical reason but an emotional one. You have something you have created, are attached to, and you want to share it, show it to the world, receive applauses instead of being restricted to an editor’s glimpse of it. The accomplishment of the “esteem” level of Maslow pyramid. i believe this to be a very strong (and sometimes critical) motivational force behind the success of many crowdfunding projects

    2) BRAND EQUITY – a large audience and a good track record leverage the value of your brand. Not only very strong brands have been raised and continue to raise on these platforms (Stonemaier or CMON are some examples) as more and more these experienced brands seem to account for a very significant share of all funds on a given year/category. (I am curious to see how they might dominate these plataforms in the long term ;)

    3) RISKLESS – you have nothing to lose besides your own time and eventually some minor finantial investment. However, and because a crowdfunding project is extremely time consuming, “opportunity cost” seems to be a common reason for creators not to crowdfund. (“i can’t quit my job”..;).

    1. Thanks for sharing your perspective, Nuno! Just to clarify, Stonemaier Games no longer uses Kickstarter (our last project was in November 2015, and we’ve launched a bunch of different products since then). I still have just as much passion and esteem for the post-Kickstarter products as I do for those Kickstarter products. :)

  3. Hi Jamey – great article, as usual. An important point I don’t see is that you have prospects’ undivided attention and can give them a presentation you can’t feature anywhere else.

  4. Wow, your book was awesome, I finished it on my vacation. I had a question for you on the time you put into the beginning project. I currently work 40 hour job and I also am a part time 15-20 hour a week Pastor of a Church.

    Sooo :-) can I do this with only 10-15 hours to spare. Just wanted some honest feed back, I will obviously make up my own mind either way.

    Last year I had a part time 15-20 Amazon business, I like the thought of helping customers and being that person.

    I am working currently towards getting a project to Kickstarter in July, after reading your blog, and book I am not ready. So I am implementing becoming a person, getting a bit more blind feed back to see if my idea is rubbish or not, and so on.

    My fear is I will continue to make the excuse that I am not ready (I know I am not right at the second) but the type of person I am is, being over prepared, which obviously is great if you are also rich and I am not. I have worked on the game concept for 9 years, and it has only been in the least 4 months that we started going in this direction.

    Anyway thanks for any feed back.

    1. Clinton: This is a great question about the type of time commitment necessary to effectively run a Kickstarter campaign. Other than the first day and the last day, I think it’s possible to run a more low-key campaign by just spending an hour or two it each day. Those two hours are usually spread out over the course of the day–it’s a general level of availability to answer questions, post updates, scour social media, etc. It particularly helps if you’ve done a lot of the legwork in advance (reaching out to bloggers, sending out review copies, etc).

      Also, in regards to being ready, I’d recommend taking a close look at the list in my book where I talk about how you can know if you’re ready to launch or not. A lot of it is building awareness for your project before you launch.

      1. I am cross referencing that section and building a 3-6 month timeline to get these things accomplished.

        I am sure I can find this in the book again, but when would you reach out to a production company for an estimate? Just to “see” what the minimum might be, also how many places would you recommend contacting?

        1. Clinton: I’d recommend reaching out to a manufacturer (or several manufacturers) as early as possible. I often talk to my manufacturer even during early brainstorming to get a rough idea of what’s feasible and cost-effective.

  5. Hm; maybe some more context is in order: I’ve been making games for about a decade now, and I’ve got a long-term business strategy that involves me remaining full owner of all my own work and IP. So while making lots of money isn’t my top priority, I *do* definitely want to build a sustainable, independent business.

    And I’m definitely aiming to make something that can flourish post-Kickstarter! I actively want to build my community, and have no problem interacting with backers and providing post-release support–mostly, I just prefer to release the game in discrete batches in order to eliminate the risk of having to take on a bunch of excess, unsold stock.

  6. This is probably an overlong reply, but I’m feeling chatty, so here we go!

    I’m a long-time indie video game developer with a focus in RPGs and strategy games. I love those types of games, but they take years and years to make, and once they’re out, I then have to support them for months on end, fixing bugs and such. It’s a bit exhausting.

    I’m a designer at heart, and I believe I still have a lot of games left in me. In order to maximize the number of games I get to make and release, I’m interested in finding ways to develop and release them more quickly and easily. To that end: I find designing board games *dramatically* faster and easier than developing video games–they involve the same sort of design and balance challenges, but there’s no AI to program (indeed, there’s no programming at all!) and no endless procession of bugs to fix.

    I’ve done my homework, and I believe I’m up to the unique logistical challenges of designing and manufacturing components, then shipping copies of the game to their respective destinations. The one thing I’m not especially interested in is managing a surplus inventory once the game is out; I have too many other things I’d rather do (e.g. design an expansion; create a mobile version of the game; move on to another project; die of autoerotic asphyxiation; just about anything else, really!)

    Basically, I’m just sort of asking for a reality check: from someone who’s actually done this before, particularly since I see relatively few board games hit $50,000 on Kickstarter. Is a one-and-done approach feasible on KS?

    1. It kinda is I think… In fact I expect a large proportion of successful Kickstarter games never make it to retail so it this way by default, but not by design.

      It is viable to say “this is a kickstarter only game”. The main issue is: can you find a good printer to give you the low MOQ you need so you aren’t paying for wasted games, and yet still offer the game on KS at a competitive price?

      If you can find a way to do all that, and its what you want, then go for it.

    2. Thanks for your reply. It sounds a little bit like you’re more interested in being a game designer than a game publisher, Kickstarter or otherwise. There’s no mention in your comment above about building community, building relationships with backers, improving the game with backers, or even making money. If those aren’t motivating factors–if your true drive is in designing games–why not just submit them to a publisher?

      If that doesn’t appeal to you and you really just want to go through the motions of producing a board game, price it a lot lower and dramatically reduce your funding goal. Most games cost about $8-10 to make. The price of most games ends up being about 5x that because of MSRP. But if you’re not selling your game outside of Kickstarter–if you just want to make copies for backers and that’s it–then it’s not a retail product. You’ll sell more (and increase your chances of making your goal) if you drop the price quite a bit. $50 on Kickstarter needs to be quite a substantial game.

      It sounds a little bit like you want to make games for yourself. You enjoy the design challenge, and maybe you want to make a little money. That’s fine. But as I talk about on this blog, it’s a backer-centric approach that will help you succeed on Kickstarter. Part of that is price, but another part is creating something that has the potential to flourish post-Kickstarter. And like it or not, you’re going to have to support the game post-Kickstarter, whether it’s through replacement parts, rules questions on BGG, or other things.

      Overall, I think your best bet is to focus on being a game designer and submit your games to a publisher. If that really doesn’t appeal to you, that’s fine, but I would recommend that you start putting yourself in the shoes of backers as you make decisions about the structure of the project and the produce. I have a bunch of entries that can help you switch to a backer-centric mindset. Good luck!

  7. So here’s a question for you: what do you think of Kickstarter as a means to fund–and, simultaneously, sell off the entirety of–a limited run of a game? I’m currently considering running a Kickstarter with a $50 “get the game” reward tier and a $50,000 base funding goal so as to do precisely this with a manufacturing run of (a minimum of) 1,000 copies.

    I’d like to go this route because I don’t want the hassle of keeping excess copies around my apartment, I don’t want to pay Amazon monthly storage fees, and I don’t want to have to set up arrangements with distributors and retailers; I like the idea of a clean one-and-done operation. Is this feasible, or am I setting myself up for a bad outcome with this approach?

  8. Great summary post Jamey. Its implicit in point 1 and a few others but I think ‘Build a business / product line with high fan base loyalty and future product uptake to maximise your chance of increasing success with future releases”.

    You and other KS exemplars now have a massive advantage over first timers.

    1. Kim: Well said, although I don’t necessarily think that returning creators on Kickstarter have an advantage over anyone else. In fact, more than ever before I think that creators are learning from their predecessors. That’s especially true if you gauge success by a variety of categories, not just funds raised.

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