One of the things I love watching our 9 founders go through our VentureBox Venture Launch program, is the energy they get from each other. As the class finishes week 4 today, it’s really fun to watch the team development among the founders. Each are struggling with many of the same challenges, however since they’re going through the class as a group, they’re managing those challenges better than going it alone.
Don't underestimate the power of the team dynamic in a business accelerator. Even though each founder is working on a completely different product or service, they're all doing it together. No question is dumb, and the answers often apply to each of the startups anyway. So it's all good.
That brings me to Kickstarter. If you haven’t heard or visited this site I encourage you to do so.
What is Kickstarter?
- Kickstarter is the world's largest funding platform for creative projects. Every week, tens of thousands of amazing people pledge millions of dollars to projects from the worlds of music, film, art, technology, design, food, publishing and other creative fields.
- A new form of commerce and patronage. This is not about investment or lending. Project creators keep 100% ownership and control over their work. Instead, they offer products and experiences that are unique to each project.
- All or nothing funding. On Kickstarter, a project must reach its funding goal before time runs out or no money changes hands. Why? It protects everyone involved. Creators aren't expected to develop their project without necessary funds, and it allows anyone to test concepts without risk.
- Each and every project is the independent creation of someone like you. Projects are big and small, serious and whimsical, traditional and experimental. They’re inspiring, entertaining and unbelievably diverse.
What I like about Kickstarter is the fact an Entrepreneur can take their idea and pitch it to the crowd. If the crowd likes the idea, they will pledge dollars for some benefit. When you think about it, this is what Lean Startup and Customer Development is all about. Not wasting your time (or money) on something no one wants. If your pitch sucks, and you don’t hit your pledge goal, then maybe your idea needs additional refinement or ditched all together.
I found Kickstarter to have another benefit. It allows you to browse the thousands of ideas and simply be inspired by the creativity and passion of entrepreneurship. If you’re leading a startup and feel like you’re on an island alone, spend an hour on Kickstarter and I bet you'll get re-energized.
Every Kickstart begins with some type of pitch, similar to an investment pitch, but you’re not selling equity. Think of it more as an advance sale where you pre-order today for a discounted price or basket of goodies. When the project is completed, you get the item, warts and all of a version 1.0. Most of the time people are asking you to pledge the cost of a nice dinner out, though you can pledge a serious amount if the basket of amenities appeals to you. The power is with the crowd, if many pledge a little, it adds up to a lot.
Here is an example, Tim Schafer is an industry veteran in the software gaming industry. He decided he wanted to publish a classic point-and-click adventure game. He estimates the game will cost $300k to produce (seems low to me). To make things interesting, he teamed up with a video documentation company to film the process for another $100k in costs, bringing it to $400k. You can watch his video pitch here.
So far, 70,630 people have pledged an average of $34.71 for this project, well exceeding the $400k needed for the project by over $2 million!
Here is what a $30.00 pledge gets you:
- The finished game in all of its awesome glory DRM free on PC, Mac, and Linux, or via Steam for PC and Mac, exclusive access to the Beta on Steam, access to the video series, and access the private discussion community.
- HD download of the documentary series with extras, Digital game soundtrack, Digital documentary soundtrack, and all previous reward tiers.
Keep in mind, the more you pledge, the more you get. The full menu of options are available here. For example, $10k get you lunch with the founders, office tour, signed posters and other goodies. As of this writing two people have signed up for this top honor.
Should all startups use Kickstarter to fund their projects? No. It’s not a one size fits all. Should all startup founders consider crowd-sourcing as a funding method? Yes, I believe so. I think it’s good for you to go through the exercise and ask if it's right for you.
At a minimum, I think all of us need to be inspired by our fellow entrepreneurs, Kickstarter.com is a site that does that for me.