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Wednesday, 29 August 2012

Kickstarter

In the past I've been skeptical of kickstarter for several reasons. Mostly because it seemed to me that people were using it as a way of getting cheap funding from the crowd without ever having to fund it themselves. Plus, the crowd probably doesn't charge 6% interest per annum  and have reams of legalese for them to sign. 

I think one of the things I didn't like about kickstarter was the fact that there were no guarantees. This wasn't like a bank where you would have to sign a contract with them and be liable if you failed to meet the terms of the contract. No, this was a new socialised form of lending and it was something I found myself very wary of. An unscrupulous person could just use this to get money from suckers and have no real obligation to repay them. I say this because until the day a kickstarter fraud case goes to court, I'm just not sure IF pledging in kickstarter is considered a legally binding contract. 

With that being said, I have started using kickstarter. Why? Admittedly I don't do it very often but there are several kickstarters I have been interested in. And most of them run by fairly respectable or at least; professional companies and not just random mook off the street. In fact, it was this kickstarter that really kickstarted me on my way to kickstarting. 

I'll admit, this kickstarter was amazing. It went from their initial goal of 200k USD and then went beyond it. When I looked at it; 11 hours before it was supposed to end, it was only 1.9million. In the span of 11 hours, it went to 3.4million USD. That's almost double it's original goal, and it's probably going to rise even more as people pledge more afterwards to get more goodies. Looking at it, I was truly astounded to just how much kickstarter could raise. And this was something I was taking part in. 

Although admittedly, I was doing it cause I was getting 1 mini for 1 usd basically and there were some very very nice deals on the site, which were only available if you pledged. But still, once I stopped looking at Kickstarter as 'hmm, let me fund some other business project for someone else with no discernable gain on my part' to  'hmm, if I pledge this much, I get this much in return. So it's really more like time-limited discount shopping...' , it was like a mental switch had just flipped in my head. 
this is what I'm getting

And I think that in order to be successful when you kickstart, you really need to be able to entice customers/potential funders like that. Most people aren't going to invest for nothing (I'm looking at you, ms. 'helpmebuildmystudio') but if you can promise them a decent ROI which would still be cheaper than borrowing from the bank, why not? It's a decent way to raise money without being bound by any legal obligations. End consumers are way less demanding than banks when it comes to money. Most times anyway. 

On the other hand, once you're completed a successful kickstarter, be prepared to wait for your 'rewards' to arrive. Depending on the company, it can take a while to start up the manufacturing process for whatever reward you're getting. I know I'm getting some of mine in 2013 -_-. So my final judgment on kickstarter will have to wait till then.