Six Pixels of Separation - The Blog
June 21, 2012 9:02 AM

The Most Exciting Thing Happening In Digital Right Now

It's not Twitter. It's not Facebook. It's not YouTube.

It's Kickstarter.

I fell madly, deeply in love with Kickstarter when I first heard about it back in 2009 (you can read more about my love for it here: Kickstart Your Own Economy). It seems like the world is starting embrace the idea of buying a product long before it is even manufactured. What is Kickstarter? Kickstarter is a simple crowdfunding platform that allows individuals to post their creative projects (everything ranging from music and film to technology and journalism) and start an online threshold-pledge system for the funding of the project In short: if you can't get a book deal, you can post your project to Kickstarter, define the budget and invite anybody and everybody who thinks it's a good idea to become a backer of the project. Kickstarter is a New York startup that was founded in April 2009. According to Wikipedia, the company has raised more than $230 million dollars for more than 23,000 projects since it got started. Even more impressive, Kickstarter has a project success rate of close to 45 per cent. (Success is defined by whether the project met or surpassed the threshold set by the project organizers). The company makes its money by taking a percentage of the funded projects.

The face of success on Kickstarter.

In the past short while, there have been a handful of extremely successful and interesting Kickstarter projects that have captured the attention of the world:

  1. The Pebble E-Paper watch did an astonishing ten million dollars-plus in sales, making it the biggest Kickstarter project to date.
  2. Musician and artist, Amanda Palmer, raised over a million dollars for her next record, art book and tour.
  3. Business leader, Seth Godin, launched his latest book, The Icarus Deception, on Tuesday. He was looking for forty thousand dollars in funding and hit that goal in less than two hours. He's about to surpass $250,000 is sales in a little over twenty-four hours... and the project will remain open (and available for people to fund) for another twenty five days.

What's to love about Kickstarter?

It's real. People are not just funding/backing an idea. They are, physically, buying a product. In short, we all get to buy something that immediately delivers value to us, as individuals. We're not investing (or betting) on anything. There's no hype and there's no uncertainty. If the masses don't like a project, it doesn't get funded. If they like it and run with it, it happens. At a business level, there's a bigger (and much more profound) element at play here: Kickstarter devours the chasm that existed in entrepreneurship between ideation and go-to market (the hardest and most complicated part of it). A clever video, well-defined copy, enough levels of pledging that creates interest and it's easy to know - in short order - if you have something that people will actually buy. There's no speculation, prayer or finger's crossed as the entrepreneur moves from ideation to finding distributors to putting something on the shelf and hoping it gets some traction. With Kickstarter, you know before any pieces are ordered what your initial sales run looks like.

The creativity of humanity.

Kickstarter highlights creativity. Not "creativity" in an art and painting kind of way, but creativity as defined by ingenuity. The platform highlights talented people who have something to sell. It's not only valuable to us - as consumers - but it also acts as a microcosm that demonstrates the creativity of humanity. It demonstrates the desire of more and more people to become entrepreneurs or run their own startups on their own terms. It also enables people like you and me to become true patron of the arts. Yes, you can make a donation to a local symphony orchestra or you can make a donation to keep your local library alive (nothing wrong with any of that), but now, you can actively back, fund and derive value from artists who are flirting in many new and interesting intersections of creativity and commerce. True power to the people.

Kickstarter is not magic.

Just because someone created an interesting video, some fun copy and the right levels of pledges does not guarantee success. What is clear (especially if you have been following the Amanda Palmer and Seth Godin projects) is that it helps if you have already invested time and energy into building a semblance of a community. Simply posting a project on Kickstarter is not enough (even though there are some rare exceptions to this). Kickstarter acts as a catalyst to activate that community of people whom you are already connected to. If those community members derive value from what the entrepreneurs are offering, they will naturally make the Kickstarter project shareable and findable to everyone that they know. Again, Kickstarter works because it's real. Real people with new and interesting products to sell. Real people who want to buy that product. Real people sharing because there is value for both the Kickstarter project leaders and everyone taking part in the process. Real people connecting to one another and sharing which Kickstarter projects they're funding.

There a ton of social media initiatives that could learn a ton from Kickstarter. 

By Mitch Joel


Comments Comments Feed
  • Posted by Rene Barsalo
    Mitch Joel

    Totally agree with all the possibilities of Kickstarter... but it seems that in Canada, we must be cautious about how to register these funds... The canadian media fund posted a good source of infos about how the Canadian govt sees these funds.

    Excerpt : "During a presentation entitled “Best Practices in Canadian Crowdfunding,” Richard Hanet, a partner at Lewis Birnberg Hanet LLP, recommended the following:
    Pay close attention to the type of contributions you receive. This aspect is central to the crowdfunding strategy. Canadian content creators must understand that any funding received via a platform such as Kickstarter will be considered as taxable income as soon as it enters the country. In addition, under the federal law governing tax credits, this kind of monetary injection into a financial structure is considered as “assistance,” which obliges the producer to reduce the contribution of these tax credits accordingly in the organization’s financing structure. Therefore, what may be gained on one level could be lost on another."


    http://www.cmf-fmc.ca/about-cmf/trendscape/advice-on-best-crowdfunding-practices-1/52/

    Reply
  • Posted by Michel Bertrand
    Mitch Joel

    Good heads up in that article Rene.

    The other problem for us Canadians is that Kickstarter is, for now at least, open only to US residents - as stated on their eligibility requirements page: http://www.kickstarter.com/projects/guidelines

    Pity, as it's such a great concept.

    Reply
  • Posted by Josh M
    Mitch Joel

    Agree - I fell in love the same as you and I'm happy to see more attention going towards this wicked awesome platform.

    Can we scale it though for bigger business? Not that it has too, just a thought

    Reply
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