|07-09-12, 12:20 AM||#1|
Join Date: Jun 2009
How Pebble And Other Product Phenomenons Killed It On Kickstarter
It's a good time to be Kickstarter. The crowdfunding platform has had a blockbuster year, breaking into mainstream consciousness with campaigns that raised millions of dollars,like the Pebble e-paper watch above. The platform has seen almost $275 million pledged to some 63,000 projects to date, with $231 million going towards successful fundings.
As Devin wrote at the time, before February, no Kickstarter project had ever raised over $1 million, but since then, seven projects have surpassed $1 million, including the current #1, Pebble, which raised an astonishing $10 million. And this growth applies to multiple categories, not just sexy wrist watches. Prior to February only one gaming project had reached $100K in funding. Since then? 37. Even something as niche as webcomics saw its number of pledges double in February.
A lot of people came to Kickstarter for the first time as part of the buzz around those seven projects that surpassed $1 million, and to the startup's delight, a lot of them have gone on to fund other projects, resulting in a positive net effect both for the platform itself and for project founders.
The long-term question/caveat to this, of course, is whether new users coming to Kickstarter tend to just end up amplifying the projects that are already blowing up, or whether they're actually spreading the love and helping other projects reach their goals that might not have otherwise. After all, when you launch a Kickstarter project, the odds are against you; 56 percent of Kickstarter projects fail to find funding ' with some 32K projects in total having failed, compared to the 25K projects that succeeded.
The company hides the failures as a gesture to creators, and to help users focus on the projects with traction. To further boost its transparency, Kickstarter also launched a stats page in June, which provides daily updates on metrics like dollars pledged, success rates, etc., broken down by category. Check it out here.
A 44 percent success rate ain't bad. Considering there have been seven $1 million-plus projects since February and that today 82 percent of projects that raise more than 20 percent of their goal go on to become successfully funded, the overall trend is positive. However, keep in mind that 62,711 projects have launched in three years, and only seven have hit $1M. That means your chances of reaching $1M are a fraction of one percent.
What's more, few of the Kickstarter projects that are successfully funded go on to become real, revenue-generating businesses. Many of those projects naturally go on to create eCommerce stores to sell their wares. As a number of those projects have used Shopify to open their storefronts (including the $10M baby, Pebble) the startup has taken an interest in this growing trend.
Shopify's marketing and PR guru, Mark Hayes, even decided to profile the creators of some of Kickstarter's most successful projects to ask what they'd learned and to get them to share some of the secrets of their success. (You can check the post out here.)
As Kickstarter grows, and more and more companies opt to use it as a launchpad and a means to validate their product and measure market demand, learning from those who've found success provides an awesome guide future founders. So, piggy-backing on Hayes' work, herein we'd like to offer a glimpse into what the most successful projects have done right ' and what they did wrong.
For starters, it's good to know what areas (or categories) you should be focused on based on past Kickstarter data. It turns out that 'Theater' and 'Dance' projects have the highest success rates at 64 and 69 percent, respectively ' good to know for all you theater and dance geeks out there. Yes, there are people who will fund your avant garde, dance-heavy rendition of 'A Confederacy of Dunces.' (Best to do it now in the event Zach Galifianakis beats you to it.)
Of course, only 3,256 Theater-related projects have been launched, which is on the lower end, when you compare it to the 18,263 Film & Video projects and the 14,906 Music-related projects that have launched on Kickstarter. These two categories are by far the most popular, having raised over $100 million 'successful dollars' between them. While there is far more competition for dollars among these categories (and in Publishing), of the more popular categories, Music projects have the highest success rate at just over 54 percent. Meanwhile, I'm sorry to say, readers, but Technology ranks near the bottom with only 1,236 projects launched and the second lowest success rate at 29.25 percent.
Now that you're aware of what categories are most popular on Kickstarter, let's dive into some examples.
Ministry of Supply
Ministry of Supply is a good place to start. (You can read our recent coverage here.) Borrowing technology from NASA (with a dollop of Under Armour), the startup has designed a next-gen line of dress shirts, called 'Apollo,' that adapt to your body to control perspiration, reduce odor, stay wrinkle free and looking a badass. Plus, everything from the fabric to the packaging is made right here in the U.S. of A.
Ministry of Supply set out to raise $30K and has raised $288K to date, sneaking up on the $291K raised by Flint & Tinder for their men's underwear ' currently the most-funded fashion project on Kickstarter.
So, why has Ministry of Supply been so successful? Well, there's less competition in Fashion and it also happens that the top three most-funded projects in the category tackle menswear and offer either a next-gen, wrinkle-free, durable product or focus on bringing manufacturing jobs to the U.S.
For Ministry of Supply, it also helps that working stiffs like you and me who need dress shirts, and futuristic dress shirts that solve all the problems of what's currently out there (wrinkles, pit stains, etc.) are certainly appealing. Especially when they advertise the fact that they've borrowed from the same technology that NASA uses in its space suits.
All that makes for a sexy product that solves a real problem, plus there's a movement to help get the U.S. back on track by keeping manufacturing jobs here. 'We used to make things,' you might've heard an American lament. There's also the fact that the founders used to work at companies with recognizable names, like SpaceX, Lululemon, IDEO, and Apple.
The founders also attribute their success to focusing on an iterative process, developing a product, releasing it to a small group of testers, taking the feedback to make it better. They made dozens of test runs on Apollo before launching their Kickstarter project. And, for those who are lucky to exceed their goals, the founders tell us that it's important to keep people engaged with the project page by offering updates.
Ministry of Supply has posted videos and updated the text of their Kickstarter page numerous times since reaching their initial goal, as a way to thank their supporters and talk about their plans going forward. They also said it's important to add further goals. For example, if they become the most-funded fashion Kickstarter project, they're going to launch their backers' names into space on a 'ridiculous weather balloon.' This keeps people coming back, checking in on their progress, and sharing the concept with friends.
Dave Jackson and Dave Petrillo, two mechanical engineers from New Jersey, were tired of the foibles inherent to coffee drinking. Baristas seemingly love to use lava to heat coffee, which makes for burned tongues and hands. Plus, there's the fact that coffee tends to stay at a pleasant, warm, drinkable temperature for less than 30 seconds. So, the engineers developed a stainless steel coffee bean that you can put in your cup. The bean absorbs excess heat, bringing your coffee down to a drinkable temperature ' and not only that, but when it starts to get cold, the bean releases heat to keep your coffee warm. Sweet. (Read our coverage here.)
The team set out to raise $9,500 but brought in over $300K and is one of the top 15 Design projects on Kickstarter to date. As to their tips for success? The engineers told Mark Hayes of Shopify that the smartest thing they did was to allow potential customers to opt-in to their email list as their project came to a close. Kickstarter brought a ton of referrals to their site, but because they were busy filling orders, they weren't able to pre-sell their Joulies for several months.
For successful Kickstarter campaigns this can be a huge problem. Teams are small and they inevitably have to go into overdrive and rush to fill orders. If they're not prepared, they can lose a ton of customers as a result. 'Instead, we had a compelling opt-in email box that would notify customers when Joulies were ready to order, so that when the time came to sell again, sending emails to the list was easy ' and of enormous value,' they said.
In describing what went wrong with their project, we find a good lesson both for project creators and for Kickstarter itself. Founders need to be ready for traffic, and Kickstarter needs to get better at providing its companies with more guidance and transparency into traffic and metrics.
Here's Petrillo's explanation:
We didn't know what our real traffic numbers were like on Kickstarter, and we also didn't really have a clue what levels of hosting were required to host and protect against traffic spikes since it was all behind the scenes during Kickstarter. When we did get spikes, like when a story about us got syndicated on Yahoo! homepage for 12 hours, our 'unlimited' shared hosting crashed within minutes and we lost hundreds of thousands of unique viewers. Bummer.Ramos Alarm Clock
The Ramos Alarm Clock was developed by a team of engineers in NYC. It's an old-school, neat-looking clock that displays time in a funky way and includes a wireless alarm deactivation panel that forces you to get out of bed to turn off the alarm. The team set out to raise $75K, but made double that and was even teased on Saturday Night Live.
The Keys to success? The founders said that it's all about creating a product that solves a real problem, finding an idea that people can relate to and want to use every day. That should sound familiar to entrepreneurs. They also found Kickstarter to me a much better launch platform than just going it alone or trying to reach out to press themselves. 'Kickstarter served us well in being a reputable, visible platform to start from â?¦ I don't know if we could have generated that much buzz launching ourselves, or elsewhere,' said co-founder Paul Sammut. He also recommended that companies be ready with their own storefront as soon as their projects expire on Kickstarter.
What didn't work? Easier said than done when the future of your idea is uncertain, but Sammut said that founders should be realistic about what they can achieve in a short period of time. In other words, be careful of over-promising and under-delivering. 'We offered things to customers at the onset of the project that seemed easy to do, but ended up adding a great deal of complexity to the manufacturing process,' the co-founder told Hayes. 'I would recommend a serious analysis on how to simplify your product and keep variations to a minimum when starting out,' especially if you're attempting to launch something that will need to be mass-produced. If you're a small team, even handling communication and customer support for a couple hundred people can be a bear.
Kickstarter also apparently loves coffee. ZPM Espresso, the makers of a high-tech espresso machine called the Nocturn, set out to raise $20K, but made nearly $370K on Kickstarter. The machine offers PID controls, programmable presets, adjustable temperature and pressure settings, and open-source software to boot ' to the delight of coffee geeks everywhere.
What worked? ZPM Espresso co-founder Janet Tambasco said that the key to their campaign was focusing on being extremely responsible to questions and feedback. What's more, when asking for money on a crowdfunding platform (i.e. you're hitting up strangers for money), she said that the key is being both passionate and transparent. Be honest about your product and what you expect to accomplish.
Tambasco said that the team made sure to respond to the thousands of emails they received during their campaign, talked to people who work in the coffee industry about planning next steps, and posted frequent updates on their blog and on their Kickstarter page.
As to what didn't go right? Even if you're worried about being able to meet your manufacturing (or production goals) at scale, don't try to slow things down. Roll with it, and don't be afraid to try to amplify the publicity for your product yourselves ' through press and otherwise. Plan for scale in advance in the event you're lucky to find it. 'In retrospect, more funds always helps,' she says, 'so we should've tried to gather as much momentum as possible, rather than trying to slow things down while we tried to figure out logistics.'
Pebble is the most-funded Kickstarter project to date. The project set a goal of $100K and raised over $10 million. Whoah. (Read our coverage here.)
Pebble is an infinitely-customizable smartwatchthat is water and scratch resistant and comes with a neat ePaper display (i.e. Kindle-like). Its battery lasts for seven days and can be charged by USB. Users can connect the watch to their smartphones to sync calendars, alerts, emails, and even calls. Essentially, it's the watch of the future. It makes my Casio calculator watch of yore look like an abacus attached to a sundial that can be worn around the wrist.
What worked? Pebble Founder Eric Migicovsky says that (besides all the kickass technology ' my words, not his) the key to its Kickstarter campaign was finding effective, demonstrative ways to describe its use cases, which they laid out on their page. 'We knew that no one really wakes up in the morning with a desperate urge to buy a smartwatch,' he told Hayes, 'so it was our job to figure out exactly how to explain to future users how they will be able to use Pebble.'
To do this, he recommends testing out your pitch on people who aren't going to be your core user base or audience. In fact, he turned to, among others, his mom. Find the best way to pitch every day people and then expand on that to describe your product ' advice that has broad/general application, too.
And to that point, his other piece of advice echoed that from many others: Above all, one should listen to their users, take care to hear their problems and react accordingly. Be responsive, quick to react, and transparent, and do whatever you can to resolve those pain points as you iterate and go through your product cycle.
Amanda Palmer has the most-funded Music project on Kickstarter to date. She set a $100K goal and made over $1.1 million. Amanda's goal was pretty simple: It was to raise money to release her new album. Kickstarter wrote a lengthy description of Amanda's milestone (becoming the first musician to reach $1M), so we won't re-hash the whole thing here. But, in case you missed it, there's plenty that applies to this discussion ' and echoes what's been said by other project founders.
Amanda wasn't famous or particularly well-known before her Kickstarter campaign blew up, which should be encouraging to other fledgling musicians out there. But what we can take from her success is that, for starters is that, when strangers offer up their cash to help you meet your goals, they love being rewarded with experiences just as much ' if not more than ' items or things. This may not apply to every category, but a significant portion of the money pledged to Palmer's campaign was for experiential rewards. She offered backer-only performances, or for $5K, she offered to play a show at her funders' houses, or the chance to have dinner with her in which she would paint you your very own portrait.
Backers ate these rewards up, something that's reminiscent of Ministry of Supply's offer to send their backers' names into space on a weather balloon if they become the most-funded Fashion project. As a result, they're almost there. As Kickstarter says in its post, 'traditional marketplaces restrict fans to being customers, but Amanda's project invited people to participate.' With the evolution of the web to a discovery and entertainment-driven medium, this kind of interactivity is huge.
Transparency also came up again in the discussion of the musician's success, and, for what it's worth, Kickstarter likes to think that backers reward artists and campaigns that 'step out from behind their industries' protective walls.' If we can agree that the creative economy is in shambles, then it is likely true that fans are eager to support people who are willing to challenge the status quo and take risks. Even if that means you have to paint your investors' portraits.