The Kickstarter Handbook.
Don Steinberg.
Your Kickstarter Campaign Prelaunch Worksheet.
SCOTT THRIFT DREAMED OF DESIGNING a new kind of clock.
Instead of having the usual hour hand and minute hand and second hand relentlessly ticking away, his clock would have just a single white hand that would take a full year to go all the way around, its sweep through time practically imperceptible from moment to moment. Instead of numbers around its circ.u.mference, the clock"s face would display the full spectrum of color, a gradient from icy blue in winter to verdant green in spring, brilliant yellow in summer and leaf red in the fall.
He was imagining a beautiful piece of wall art. But his vision wasn"t really about the clock so much as his outlook on life, which is that if we encounter time only in terms of its hurtling, transient pa.s.sage, we may fail to appreciate what is happening now, in the present.
"I"m at war with seconds," Thrift says. "The second hand is a recent invention. I think it"s only 120 years old or so. It damages the way that life actually is. There"s a larger scale at work."
Thrift dreamed that an alternative to time"s most overbearing taskmaster, the traditional wall clock, might help. He first had the idea in 2004. He spent years refining his concept, initially working on it in his head and then building a prototype. He imagined it would be great if the annual clock became an object he could make and sell to like-minded people across the planet. But Thrift lacked expertise in manufacturing. He wasn"t even a product designer. He"s a filmmaker in Brooklyn. Besides, any attempt to produce even a small number of the clocks could be costly-there were unresolved questions about the design and materials, and it would require reinventing the way the gears and electronics worked. A clock that doesn"t tell time isn"t exactly the sort of thing you can raise money to manufacture; it"s not as though a buyer from Walmart would be eager to place an order. We live in a world where ideas are funded based on the amount of revenue they are projected to produce.
So, like a lot of product designers Thrift was encountering by late 2011, he tried Kickstarter, a website where an artist, designer, or inventor can create a page that describes a project, and then anyone anywhere can contribute money to help make the idea a reality. He gave his invention a name that would remind everyone what it celebrated: "The Present." He posted a description of his project on Kickstarter.com. It included a video that mixed quick-cut life-flashing-before-your-eyes imagery with earnest electronic music, showed his design concept for the clock, and asked potential backers: "How can you live in the moment when the moment changes every second?"
"I explained on the Kickstarter page that part of the funding would be to hire a product designer, to rethink everything," he says. "Is this the best way to do it? Should we do it in ceramic? What"s the best printing? I was convinced that I had brought the idea as far as I could. I felt confident enough that it was something I could talk about, that I had taken it to the edge."
Through Kickstarter, he asked the world for $24,000 to help him produce the Present. Backers could pledge $2 and receive a rainbow-colored digital image of the clock face as a thank-you. They could pledge $120 to receive one of the clocks, essentially preordering a product that didn"t exist yet and might never exist without their help. In thirty days, Thrift raised $97,567 from 867 backers worldwide.
As surprising or unconventional as it sounds, Thrift"s tale is typical of what has been happening on Kickstarter since the site formally launched in 2009. More than 20,000 inventors, designers, filmmakers, musicians, authors, painters, game developers, ch.o.r.eographers, poets, and other artists have used the site to raise money for their projects, in many cases for traditional starving-artist reasons.
"I had booked shows for a tour, and I was basically deciding whether I was going to go on a payment plan for my property taxes or ask my parents for money, and that was an option I had used too many times," says Nano Whitman, a folkie musician based in Austin, Texas, who asked for $11,000-and raised $15,950-on Kickstarter in 2011. "It wasn"t just the tour. I needed to press my records. I"d booked time in a studio. I had lined up PR for the tour. I made a lot of commitments that were going to cost me money, before I knew how I was going to pay for them. I think, for musicians, that"s totally normal. If you waited until you had money before you started lining up projects, you"d never do most of them."
Can something like Kickstarter really exist?
Kickstarter is one of those rare so-crazy-it-just-might-work ideas that did in fact work. Who would"ve imagined it? A website where a person can present an idea, ask people for money, and people give it to you? Really?
Face it: people don"t easily part with their cash, even on the Internet. One might say especially on the Internet. Most of the Web"s biggest successes are popular for one simple reason: they"re free. You don"t have to pay to use Google, Twitter, Facebook, YouTube, Wikipedia, and thousands of other hugely popular sites. Web users have been spoiled by free searching and free social networks, free online newspapers, free magazines, free videos, free software, free maps, free blogging tools, free e-mail, free video conferencing, free online storage, and free p.o.r.n. And that"s not even counting the wide world of music and movie piracy. The Internet has even redefined the word sharing to require less of an out-of-pocket commitment. Sharing used to mean that if Annie had three cookies in her lunchbox and she gave one of them to Johnny, she was left with two for herself. Today sharing can be sacrifice free. Just post a link or pa.s.s along a copy of a song or a photo, which maybe you never owned in the first place, and it doesn"t diminish your own stash one bit.
So amid this pay-nothing-to-play ethos, how does one explain the explosive growth of Kickstarter, where, as of March 2012, Web users had pledged more than $165 million? Kickstarter runs counter to conventional logic in so many ways that it almost defies gravity. It evokes that old Monty Python comedy sketch where a meek fund-raiser approaches a rich businessman, waving a tin can, asking for a donation of one British pound.
"I don"t want to seem stupid," the businessman says, "but it looks to me as though I"m a pound down on the whole deal." Yes, the fund-raiser says, that"s how it works. And the businessman replies: "Good lord! That"s the most exciting new idea I"ve heard in years! It"s so simple, it"s brilliant!"
Where it all began Some might say the idea of Kickstarter itself is so simple, it"s brilliant. The person who imagined it is Perry Chen, whose prior adventures had included everything from day-trading to opening an art gallery. As the now-legendary Kickstarter origin story goes, in 2002 Chen was living in New Orleans, unemployed, messing around with electronic music. He wanted to throw a big party featuring the Austrian DJs Kruder and Dorfmeister, but he figured it would cost $15,000 to stage the event and wasn"t sure he"d be able to sell enough tickets to cover the expense. That"s when the seedling of the Kickstarter idea began to sprout. If only there was a way he could ask people to pledge to buy tickets in advance, to show their support for the DJ party. If advance pledges were enough to cover the costs, then it would be party time!
Chen never followed through on the DJ party but took the advance-funding idea with him when he moved to New York City. There, while waiting tables at a Brooklyn restaurant, he met Yancey Strickler, a music journalist, who agreed that the concept was pretty sweet and potentially a useful website for struggling artists like themselves. They connected with Charles Adler, a user-interface-design expert, who helped with the look of the site. Being liberal-arts guys, they had to hire a techie to write the computer code. In 2008 they launched informally as KickStartr.com, with $200,000 in funding from backers including the comedian David Cross, who knew somebody they knew. Later they bought a vowel and became Kickstarter, formally launching in 2009.
The site had a few basic rules from the get-go. A Kickstarter project had to fall within the creative arts (the founders came up with thirteen categories) and could not be a fund-raising initiative for a charity (see chapter 1 for more on Kickstarter regulations). Another fundamental rule was that creators had to declare the amount they wanted to raise and set a deadline date; if the stated funding target was not reached by the deadline, all pledges would be erased. The creator would get nothing. That made sense in the context of the original DJ-party idea. If Chen had raised only $10,000 of the $15,000 he needed for that party, he"d be committed to staging the event while facing a $5,000 loss before he even started. Why create that possibility? When there"s a make-or-break fund-raising target, the pledges become a sort of vote on whether a project has enough support to exist, whether it deserves to be born. The target also becomes its own ent.i.ty. Many artists and product designers who have run Kickstarter campaigns attest that the target dollar amount evolves into a kind of group destination, and on the Web it acts like a magnet, attracting pledges with its own force. "I think the all-or-nothing formula is part of what makes it work," Strickler said in an interview. "It"s part of the game-ification of life. If something is getting close, the Internet comes alive and makes it happen."
Another tenet of the Kickstarter rule book was that pledging money to a project created neither debt nor equity. That is, money given through the Kickstarter site isn"t a loan and never needs to be repaid. And it isn"t an opportunity to buy a share of a fledgling company as a way to receive a share of profits later. It"s simply: here"s some money. Backers often do feel invested in the Kickstarter project they supported because they were there at its inception, but they aren"t literally invested in it. They may feel a sense of ownership, helping to birth an idea before the world knew about it, but they don"t have any legal ownership.
The earliest Kickstarter campaigns, to test the waters, proved that the site was functional. In one primitive project t.i.tled "drawing for dollars" (note that we"re talking about the primordial days of May 2009), a cartoon ill.u.s.trator sought to raise $20 to custom-draw a picture. He got $35. The site grew fast, evolving from a home for offbeat art ideas to a place where serious designers could test the viability of their products. In November 2010, a project to create a tripod mount for the iPhone, called Glif, attracted 5,273 backers and raised $137,417. In December 2010, the TikTok and LunaTik wristbands, which would allow a user to wear an iPod nano music player as a wrist.w.a.tch, raised close to $1 million from 13,512 backers. Born as a so-crazy-it-just-might-work notion, Kickstarter was quickly becoming a breeding ground to nurture more such outlandish ideas.
But even then, Kickstarter had barely shifted into second gear. By 2011, Publishers Weekly magazine calculated that Kickstarter had become the No. 3 publisher of indie graphic novels in the United States, in terms of the number of book projects it funded. The 2012 Sundance Film Festival, a major showcase for independent films, featured seventeen movies that had received Kickstarter funding, amounting to 10 percent of the festival"s lineup. Early in 2012, Kickstarter announced that it expected to fund creative projects to the tune of $150 million for the year, a slightly larger sum than the 2012 fiscal year budget for the National Endowment for the Arts. (Kickstarter keeps 5 percent of all project funding, so the company and its early backers are clearly doing fine financially.) Along the way, a new word was born for a novel way to support arts and invention: crowdfunding. It"s yet another way that the reach of the Internet has been put to work. Thousands of individuals contributed information to help build the free online encyclopedia Wikipedia-that"s crowdsourcing. Turn that into money, and you have crowdfunding, a means of moving money among people, circ.u.mventing traditional sources and decision makers and gatekeepers, a sort of gra.s.sroots redistribution of wealth. Kickstarter is part of a diverse ecosystem offering new ways for people to connect with one another online, to exchange ideas, stuff, and sometimes hard currency. That universe broadly includes eBay and other auction sites, where buyers and sellers find each other and one person"s extra money is swapped for another person"s vintage vinyl LPs. It includes Kiva, a microlending site where you can loan $25 to a pig farmer in Senegal or a seamstress in Guatemala. It includes Team Continuum, where you can volunteer to run in a marathon to raise money for a cancer patient. It"s all about sharing wealth and ideas and work in ways that weren"t so easy before the Web.
The folks at Kickstarter like to point out that this shiny new business model for artists and entrepreneurs is in fact a sort of throwback to much earlier times. Painters have long depended on patrons to put up money in advance. Cla.s.sical composers, such as Mozart and Beethoven, sometimes relied on "subscriptions" similar to Kickstarter"s system, allowing them to advertise for pledges to finance concerts or printed editions of their work.
For product development, too, crowdfunding creates markets for products that otherwise might never be born. "The most amazing thing is that the product doesn"t exist, but they"re making it exist through their funding. It"s not like I had clocks on the shelf," says Scott Thrift. "The way the market has been driven throughout history is there"s some company that puts out a product and expects you to buy it. This is totally different. It"s a collaborative process. It"s a beautiful thing. Kickstarter is just one of the most brilliant ideas I think I"ve seen on the Web since Google. It"s such a strong use of what the Web really is."
Adds Josh Hartung, who raised $34,123 in December 2011 to produce a paper-lamp-making kit called Loomi: "I think some of the magic is that you can create these small companies around products that would normally not be feasible to bring to the ma.s.s market. Through Kickstarter, you can reach these niches. I just funded a project for a collapsible sungla.s.ses case. It"s ingenious. You can bring out these products that would never be able to come out if left up to, say, Sony."
Because Kickstarter has become so popular, it can bring attention to artists and entrepreneurs that goes beyond the art or the products they offer on the site. "I had no idea the response would be so big," says Joshua Harker, a sculptor in Chicago who raised $77,271 to create cool-looking plastic skulls using 3-D printing technology. "Not only have hundreds of thousands of people been exposed to my work, but I have a thousand new collectors who didn"t exist for me previously. That is huge. I have had job, project, collaboration, movie, exhibition, and lecture offers. This is the type of game changer I had been working for, and something the gallery/exhibition circuit has not been able to provide. Kickstarter put me in front of everyone that matters to me in forty-five days."
Now it"s your turn I know what you"re thinking. You"re thinking you might like a piece of this action. You have a great idea, too, after all. Your dream to create a radio show featuring the world"s best ventriloquists and their dummies has been building inside you like an ache, crying for release. You just know that your product could revolutionize the world of dog grooming, or pencil sharpening, or both, if only you had enough money to make it real. Or maybe you"d simply like to join the Kickstarter gold rush while the prospecting is hot, gather ideas to figure out what sort of project might be successful and how to do it right. All that is what this book is for.
No one says the task will be easy. Chapter 1 is meant, in part, to scare you and prepare you for the ma.s.sive amount of work that a successful Kickstarter campaign can demand. Everything in this book is based on research into real Kickstarter projects. Dozens of people connected with Kickstarter campaigns have been generous enough to share the biggest and the smallest details of their efforts. What worked and what didn"t. What challenges, surprises, and failures they confronted. How they decided they were ready for Kickstarter, settled on their fund-raising goals and their rewards and pledge amounts, made their videos, attracted attention through the media and social networks, and fulfilled their promises to backers by shipping goods after their projects were successful. The book also includes financial worksheets and helpful lists and charts. Some names will recur throughout the chapters, and you"ll become familiar with their projects. Sometimes we just let them talk. They"re the ones who have lived through the process, and their experiences are the best textbook.
We also use distinctive terminology that has become standard on Kickstarter. For example, by posting a creative project on Kickstarter to raise funding, and setting it up to run for a certain number of days, you are starting a "campaign." Someone who launches a Kickstarter campaign may be referred to as a "creator." People who donate money are called "backers," and what they give is a "pledge." When a project reaches its financial target, it is considered "funded." The items that backers receive as thanks for their pledges are always called "rewards."
People who are hip about all things Kickstarter occasionally refer to a campaign as, simply, "a Kickstarter." A person who launches a campaign may also be called "a Kickstarter." So, yeah, a Kickstarter can launch a Kickstarter on Kickstarter. Hey, it"s a flexible word, and the author and publisher of this book don"t have to pay a royalty every time we use it, so there you go. Most of the rest of the stuff that happens on Kickstarter can be described using normal, everyday English, and we don"t antic.i.p.ate any confusion.
So what are you waiting for? Let"s get this dance party started. As one Kickstarter campaign creator might say: there"s no time like the Present.
IT"S EASY TO HEAR THE TALES of Kickstarter hauls so gargantuan that your eyes light up like silver dollars while the cash-register sound from Pink Floyd"s song "Money" plays in your head. Did two Brooklyn product designers really rake in $281,989 to make stainless-steel pen holders, after asking for just $2,500? Yes, they did. Did a crew of civic-minded movie buffs seriously receive $67,436 in pledges to erect a statue of RoboCop in downtown Detroit? Yup. Did an ill.u.s.trator in Philadelphia rake in $1.25 million to print books of his Web comics? Indeed. All those things really happened, and more.
The numbers are alluring-and may be deceiving. They might lead you to imagine Kickstarter as a magical candyland of tangerine streams and marmalade skies (and, most of all, pennies from heaven) where benefactors are milling around with oozing checkbooks, just waiting for you to show up so they can click Donate and lavish their munificence upon you. This is gonna be easy money, you think.
Think again.
You don"t hit the jackpot on Kickstarter just by pulling the lever. Yes, a portion of the funding in pretty much every successful campaign does come from benevolent strangers or remote acquaintances who kick in money because either they think your project is awesome and worthy or they just want a chunk of the soap you"re selling. But even mysterious benefactors need to find out about the project. And it"s still real money. Potential backers need to be sold on the concept and your ability to execute it. And so do the people you thought you could rely on unfailingly (i.e., your parents and siblings and so-called "friends").
For the month or so that your Kickstarter campaign lasts, it can be a relentless, all-consuming effort, one in which you are required to ask loved ones and casual acquaintances and total strangers for money, begging desperately for donations, and then maybe begging some more. You"ll grovel for attention from journalists and bloggers. You"ll pray to the online G.o.ds that a sympathetic Web editor who works at Kickstarter will highlight your project as a "Staff Pick" or, dare to dream, "Project of the Day." All that while your personal goal is festering out there in public, submitted for approval, or rejection, by the entire world.
And that"s before you even undertake the work of making your awesome moose-themed mural, or USB-controlled pancake griddle, or nu metal folk alb.u.m, or whatever it is that your project promises that you"ll do.
The process is not for the timid or fainthearted. Felix Dennis, the international publishing mogul and self-made multimillionaire who t.i.tled his amusing memoir How to Get Rich, writes about the fort.i.tude you must bring to any effort that involves asking others for money so that you can get started (as he did). Although he"s talking about getting filthy rich, not launching a Kickstarter campaign, the same principles apply: "If you are not prepared to work longer hours than almost anyone you know, despite the jibes of colleagues and friends, you are unlikely to get rich," he writes. "If you care what the neighbors think, you will never get rich. . . . The truth is that getting rich means sacrifice. And the worst of it is, it isn"t always you that"s doing the sacrificing." In those hard nuggets of advice, just swap out "get rich" and insert "successfully fund a Kickstarter campaign."
It"s more than an adventure; it"s a job "One of the things we learned is-it"s a job. It"s not free money," says Brandon Walley, one of the princ.i.p.als of the project called Detroit Needs A Statue of Robocop! "A couple of us were here in Detroit . . . and it was like a full-time job for a while. Making sure you get the word out, constant social media stuff." Pete Taylor agrees. "It"s unreal," Taylor said, two days into his campaign to raise $12,000 to launch SAVORx, a service to provide fresh spices and spicy recipes to foodies. "I haven"t slept in two days."
"We weren"t very smart about it. I think we kind of a.s.sumed if we put it on Kickstarter people would magically flock to the project," Dave Chenell told the Betabeat blog, after he and friend Eric Cleckner raised only $3,049 of their $20,000 goal to make graFighters, "an online fighting game for your hand-drawn characters."
Aurora Guerrero, a filmmaker in Los Angeles, set out to raise $80,000 to finish Mosquita y Mari, a feature-length film about a relationship between two Latina teenagers. "I"ve told people, if you"re going to launch a campaign where you"re trying to raise more than $10,000, then you"d better get ready to work," she says. "Work your b.u.t.t off. Even before you do the campaign. You need to do research. What are your incentives? What"s your goal gonna be? Create a team to help you, because you can"t do it by yourself. If you try to do it on your own, your life"s going to be miserable for thirty days or however long. We had somebody doing online social media every day during the campaign for thirty days straight."
Says Bill Lichtenstein, a veteran filmmaker and fund-raiser who sought to raise $104,000 to make The American Revolution, a doc.u.mentary about Boston rock-radio station WBCN: "If you look at almost any account of anybody who"s done one of these things, usually they"ll say, *don"t do more than thirty days. It will kill you. Or plan to take a two-week vacation afterward. It"s exhausting." I thought, how exhausting can it be? It"s like eBay! But it"s not."
"The Kickstarter thing is so dramatically divergent from anything I"ve done. I mean, I"ve been fund-raising now for fifteen years, and it"s unlike anything, drawing much more from my experience on Election Day or community organizing. People who think *Oh, I"ll just put something up and raise $10,000" are horribly disappointed. Part of it is that if you don"t raise all of it, you get nothing. That"s why it"s like Election Day. You have one shot. So every minute you"re thinking about it, handing out cards. You"re talking to a cabdriver and you go, *Hey, here"s a film I"m pitching.""
A clinical way to look at Kickstarter is to view it as merely a billboard and an accounting system-a central place to tell the world what you"re offering, along with a mechanism for collecting and tallying donations. The rest is up to you, and the work you"ll need to do and the connections you"ll need to pursue are not that different from what you"d have to do in a world without Kickstarter.
But to those who have achieved their fund-raising targets, Kickstarter does seem like more than just a tool. "There is some magic in it that I will never be able to put words to," says Guerrero. "I felt like it was the universe saying: it"s time. After Kickstarter, we were at full speed. We wrapped the film-we went into preproduction for June and shot in July. We got a postproduction grant and were in post through October before we submitted to Sundance."
Lichtenstein thinks that although Kickstarter may not exactly be a honey pot dripping with sweet, free cash, neither is it like cold-calling unsympathetic people who have no idea what you"re talking about. "I think it"s somewhere in the middle," he says. Anyone who comes to your Kickstarter page is likely to be aware of the basic idea of it, open to the notion that a creative project is seeking support, maybe willing to try a new experience. "It"s kind of like Club Med, a place where all these single people are looking to hook up and meet other people. It"s not like walking up to a stranger and saying, Hey, wanna come home with me?"
Clearing the low hurdles Your first gauntlet of requirements before you begin a Kickstarter campaign is easy enough to ace. It"s sort of like the horizontal line drawn about four feet high on signs at the entrances to the scarier amus.e.m.e.nt park rides. You have to be this tall to ride. For Kickstarter: You must be at least 18 years old.
You must be a U.S. resident with a Social Security Number (or EIN).
You must have a U.S. address, a U.S. bank account, and U.S. state-issued ID (driver"s license).
You must have a major U.S. credit or debit card.
You will have to establish an Amazon Payments account and link it to your bank account.
Basically, you need to be an adult in America with the usual stuff. But, hey, enough about you. Next come two key questions about the nature of your project. Aside from screening for prohibited content, these two questions const.i.tute the only official criteria that the Kickstarter staff uses to decide whether you may proceed with launching a campaign. The only things they need are "yes" answers to: Does it serve a creative purpose?
Is it a project?
Both of these questions need to be explained a little more. They are in fact a little squishy and potentially generous with wiggle room.
But first, here is the official list of prohibited subject matter that will get your project rejected from Kickstarter before it ever starts: Prohibited Subject Matter
on Kickstarter
Items not directly produced by the project or its creator (you can"t offer things from the garage, repackaged existing products, weekends at the resort, etc.) Alcohol (prohibited as a reward) Contests (entry fees, prize money, within your project to encourage support, etc) Cosmetics Coupons, discounts, and cash-value gift cards Drugs, druglike substances, drug paraphernalia, tobacco, etc.
Electronic surveillance equipment Energy drinks Financial incentives (ownership, share of profits, repayment/loans, etc.) Firearms, weapons, and knives Health, medical, and safety-related products Multilevel marketing and pyramid programs Nutritional supplements Offensive material (hate speech, inappropriate content, etc.) Projects endorsing or opposing a political candidate p.o.r.nographic material Promoting or glorifying acts of violence Raffles, lotteries, and sweepstakes Real estate Self-help books, DVDs, CDs, etc.
source: Kickstarter Does it serve a creative purpose?
Kickstarter was founded by artists with the idea of helping creative work come to life. As much as you"d like to help your friend Agatha pay for her bunion surgery by holding an online fund-raiser, Kickstarter is not the place to do it. It isn"t for charities. Prohibited uses, according to the site"s guidelines, include "raising money for the Red Cross, funding an awareness campaign, funding a scholarship, or donating a portion of funds raised on Kickstarter to a charity or cause." There are crowdfunding sites online for charitable causes, such as Crowdrise.com (see chapter 12 for more of these types of websites). A Kickstarter campaign also can"t be for a "fund my life" project: to pay tuition or bills, to go on vacation, or even to buy art supplies without a specific purpose and project in mind.
"Creative purpose" means that it needs to be cla.s.sifiable into one of Kickstarter"s thirteen creative categories: Art, Comics, Dance, Design, Fashion, Film, Food, Games, Music, Photography, Publishing, Technology, and Theater. The gatekeepers at Kickstarter headquarters profess to make no aesthetic judgments about your project. They don"t care if you"re cool or you"re square. They don"t judge whether a project is right for Kickstarter"s image. They"re not grading your movie"s plot structure. They"re not asking how much experience your drummer has.
Is it a "project"?
The other requirement is that your project needs to have a discrete goal, a clearly articulated objective. That is, if you get the money you asked for, you will produce a particular thing-an alb.u.m, a film, a machine, a book, a new way to keep the surface of beverage bottles from getting moist on muggy days, and the like. Kickstarter is not supposed to be used for ongoing expenses for a business or as a general way of obtaining seed money for a start-up company. It gets a little squishy, though. Plenty of companies have been born because Kickstarter funding helped them produce their first gadget, or game, or clock, or smooth stones that control the temperature of your cup of coffee (this last was a real Kickstarter, called Coffee Joulies).
"The idea of a creative project is a made-up one. It"s kind of a fuzzy line," Kickstarter cofounder Yancey Strickler has acknowledged. The bra.s.s at Kickstarter feels that even if what you"re really doing is starting a company, and the product in your campaign is its genesis, Kickstarter wants the campaign to be about the product, not the company. By the same token, if you want to a.s.semble a ska band to make an alb.u.m, the alb.u.m is the project. If you promise the alb.u.m to backers and deliver it, Kickstarter considers its purpose served. The long-term survival of the band isn"t the goal.
An ideal Kickstarter project also benefits backers as much as the creator. The way the Kickstarter team sees it, it should be about personal achievement rather than commercial interest. Or at least you"re well advised to present it that way. You want to be saying: "We have this awesome idea-help us make it a reality!" Not: "We have this profitable idea-help us commercialize it!"
Are you ready for your close-up?
OK, so you"re ready to rock. You"re pretty sure you"re psychologically prepared to launch a Kickstarter campaign. You"ve blocked out the time to make it work. Your project appears to qualify as legitimate for posting on the site. The only remaining question is: is your project ready for prime time?
Although funny to say, the name Kickstarter is a bit of a misnomer. Many of the most successful Kickstarter projects have not started from scratch at all. Many were in development for months or even years before arriving on the site, having been developed by creators who had long before then built reputations and developed devoted fan bases. Tim Schafer, who smashed Kickstarter fund-raising records in March 2012 when he attracted $3.3 million in pledges for the Double Fine Adventure video game, was a known game developer who"d spent more than a decade at LucasArts creating such industry hits as Grim Fandango, Monkey Island, and Psychonauts. Scott Wilson, who in late 2010 raised $942,578 for the TikTok and LunaTik wristbands, which turn an iPod nano into a wrist.w.a.tch, is a former creative director for Nike whose work has been displayed in museums. The Order of the Stick Reprint Drive, which in early 2012 drew $1.25 million in pledges for Philadelphia ill.u.s.trator Rich Burlew, was set up to print books of Burlew"s existing webcomics; the pa.s.sionate fan base he"d spent years developing drove his funding total to dizzying new heights every day.
Many filmmakers bringing projects to Kickstarter are not pitching dreamy notions that exist only on paper; rather, they are seeking funding either to wrap up filming or for postproduction. They may have plenty of footage in the can, ready to show potential backers. Musicians who take to Kickstarter to make an alb.u.m likely have songs written, with many or all of them recorded, and they"re looking for money to engineer and produce a CD. If you have a product idea, it"s highly advisable to have progressed beyond the idea phase before you even venture onto the Kickstarter platform. "Definitely have a functional prototype if possible. Otherwise people don"t really believe that you can deliver," says Peter Seid, a cocreator of Romo - the Smartphone Robot, which drew $114,796 in pledges in late 2011. In fact, Kickstarter has been tightening its guidelines specifically for product design projects, asking would-be creators to provide detailed information about their background and experience, plus a manufacturing plan (for hardware projects) and a working prototype.
In a way, Kickfinisher might be as apt a name for the site. After all, it"s about carrying an undone project to completion. Of course, it"s all part of an ongoing process. You"re wrapping up one project to make your next creative steps possible. Like that grand old cliche they dust off when you graduate from high school: they call it commencement because it isn"t an ending; it"s a beginning.
Kickstarter has funded thousands of creative projects, and there"s no reason you can"t join that club. If this chapter has been a little scary, cautionary, even discouraging, that"s intentional. You want to be completely ready to roll when that curtain opens and the audience quiets to examine you. If you"re going to ask your friends for their money and time, you need it to be for something you"re truly pa.s.sionate about and a hundred percent committed to. If that is indeed the case, if you"ve got your act together, if your project is ready to present to the public, if you need the money enough to work for it, then you are ready to go for it on Kickstarter.
The next steps, and the next chapters, will carry you into the fray. Here"s what you"ll need to do next: a decide what your project is and how you want to tell your story a decide how much money you need to raise to make it happen a decide what rewards you will give to backers, and attach specific pledge dollar amounts to specific rewards a decide on a duration for your Kickstarter campaign, setting a fund-raising deadline a make a video explaining and promoting your project a know in advance who are your likely backers and outlets for media publicity, and be prepared to contact them a set up your campaign page on the Kickstarter website and launch it IN OCTOBER 2011, three brash young advertising professionals launched a Kickstarter campaign to raise $3.5 million. They said they wanted to buy time during the NFL Super Bowl telecast to air a "kick-a.s.s" commercial that would celebrate the state of Kentucky. They made a funny two-minute video during which, sitting in front of a life-sized cutout of Colonel Sanders, they extolled the Bluegra.s.s State"s virtues and famous natives and some other goofball stuff. Amazingly, people pledged more than $112,000 to their Kickstarter campaign. Crazy, right? But forget about it: it was funny money. Backers knew they"d never have to pay up, because spending $3.5 million for a joke was pretty much . . . a joke. The campaign failed as anything but a publicity stunt. Kickstarter uses an all-or-nothing funding model called the threshold pledge system. You establish a target monetary amount, and if you fail to reach that goal by the deadline you set, you receive nada. Any amount anyone has pledged is erased. "It"s like Cinderella at midnight. It just goes away," says one filmmaker.
Because of this all-or-nothing system, determining the amount you should set as your Kickstarter fund-raising goal is itself an art, a mix between hardcore financial calculation and game of chance. Do you go for every penny you think you can squeeze out of people? Or ask for just enough to cover your costs? If you"re more serious than those lucky-in-Kentucky boys, it"s crucial to set a realistic, attainable fund-raising goal. Your instinct might be to set a low goal, just to be safe. But beware: you don"t want to sell your idea short by raising too little to pull it off. In fact, it may be better to aim high and fall short, and therefore not be obligated to do anything, rather than to underestimate the cost of your project, attain a fund-raising target that is too low, and find yourself holding the bag to complete a project with an inadequate budget.
There"s no one-size-fits-all answer to the above scenarios, but here is a pretty good golden rule: you need to raise enough money to cover the cost of your project, plus the cost of fulfilling the rewards you"ve promised to backers. And there"s one added consideration: your total pledge target needs to cover your costs after you subtract Kickstarter and Amazon Payments fees. From whatever amount you raise, Kickstarter takes a 5 percent fee of the amount you raise, and Amazon Payments takes 3 to 5 percent, too, depending on some complicated calculations involving backers" credit card processing.
The way these amounts can add up is interesting (and this chapter contains two sample financial worksheets to show this). For example, if you need $25,000 to produce a film, you may need to raise closer to $35,000 in Kickstarter pledges. That extra $10,000 would cover about $6,000 in reward-fulfillment costs (sending out promised DVDs and such to your backers) and around $3,000 in fees to Kickstarter and Amazon, in addition to other expenses related to running the campaign.
To guide you in setting up a fund-raising goal for your Kickstarter campaign, we"ve provided a few pieces of essential information. First, we have two different financial worksheets. They"re simplified customized-for-Kickstarter versions of what an accountant might call a profit-and-loss statement. After these, and for a more organic take on the subject, we include interviews with multiple successful Kickstarter campaign creators, in which they explain how they set their fund-raising targets and what factors they considered.
Doing the math: Two Kickstarter campaign cost/revenue worksheets The science of setting a Kickstarter fund-raising target is inexact. It"s a crazy calculus that involves forecasting your costs and receipts without knowing how many pledges you"ll get or how many rewards you"ll need to provide. It differs depending on the type of project. If your aim is to create leather Kindle Fire cases that double as bicycle seats, or any other gadget or invention, you will essentially be preselling the items by offering to produce and send them to backers who pledge a certain dollar amount. Your expenses will vary widely depending on how many backers pledge at the level required to obtain a finished product. In that case, your aim may be to give birth to an ongoing business based on that product, so you may also want to have excess inventory after the Kickstarter campaign is complete.
On the other hand, if your Kickstarter is aimed at funding a one-time creative endeavor, such as a film or an alb.u.m, a stage performance or a work of art, your campaign-related finances will be different. For example, for a film with a budget of $25,000, you mainly have one large fixed cost that won"t change based on the number of pledges (though if you promise to mail out DVDs to backers, you will have to factor in some variable costs and variable revenues).
Individuals from the artsy side of the aisle may feel a little outgunned by this business-school forecasting. Fear not. We"ve got these two financial worksheets to help you understand and figure out the kind of reward price/cost structure you need to meet your funding goal (or, conversely, what goal seems realistic based on how many pledges you think you"ll get).
This may seem to be jumping into the deep end with some very specific information about your project that you don"t have yet. But don"t worry. You don"t have to fill out any worksheets until you"re ready, and you can skip ahead for now if you"d like.
Worksheet #1 is best suited for a one-time performance/arts piece for which you want to raise a chunk of money for a single project or event, and you offer rewards like DVDs or T-shirts to entice pledges (we"ll have a lot more about choosing great rewards in the next chapter and beyond, so don"t panic). Worksheet #2 is more suited to a situation in which you have a product design that you want to bring into the world, and you"d like to create a business around that product that might continue beyond its lifespan on Kickstarter. In this case, the product itself is the reward that you send to backers, and you"ll want to receive enough pledge money that you can build up some post-Kickstarter inventory to sell to the public.
Both of these worksheets are merely templates, allowing you to input your own numbers and see what kind of pledge amounts and pledge volumes-and rewards costs-will lead to what sorts of results. Feel free to borrow ideas from either sheet or combine them to suit your project.
Worksheet #1 This worksheet is designed for projects where you are trying to fund a single artistic production-a film, an alb.u.m, an art installation, a stage show. If your project involves manufacturing products-and then sending those products to backers as rewards-you"ll want to use Worksheet #2.
OK, that"s a lot of numbers. The gray areas in the worksheet are numbers you don"t enter-they are calculations based on the numbers you do enter, those in the white areas. (The green areas-or darker gray for those reading in grayscale-are also calculated numbers, but they"re more nice-to-know stats than essential to this worksheet"s purpose.) The goal on this worksheet is to have your total Kickstarter pledge revenues come out equal to or higher than your costs. That"s the bottom line (literally, it"s on the worksheet"s bottom line).
Here is the information you need to enter into this worksheet, and what it does with your numbers: Fixed costs: The top of the worksheet is where you enter the antic.i.p.ated fixed costs for your Kickstarter campaign. It starts with the amount you want to spend to make your film/finish recording your alb.u.m/erect your statue/stage a ch.o.r.eographed dance production featuring munic.i.p.al garbage trucks (yes, that is a real Kickstarter project). If you"re asking people for money so that you can execute a big project, you need a solid idea of what it"s going to cost you. You need to research those expenses. That"s the first number on the worksheet.
Your campaign is likely to have other fixed costs that will need to be included in this worksheet"s top section. For example, you should add the expenses a.s.sociated with making your Kickstarter video as a fixed cost of the campaign. If you set up a website for the Kickstarter campaign, that"s another fixed cost independent of the number of people who pledge. Web costs can vary widely depending on how ambitious you are. Your site may be simple enough that your only Web-related costs will be for the domain name and site hosting, with you loading all the content yourself. But if you want to set up an online store, that"s another level of cost (in our worksheet, it"s given as $750). If you need to buy equipment to make your product or your ancillary rewards (for example, a burner to copy DVDs of your film), the cost of that equipment may not vary based on the number of items you need to produce, making it a fixed cost. If you promise to throw a party for all backers who pledge a certain amount, that party will have certain fixed costs a.s.sociated with it (such as the venue rental) that may not depend on the number of attendees. So, as you can see, you may need to add lines to the fixed-cost section.
Pledge revenue and rewards cost: Here is where you indicate what rewards you"ve promised to give backers at each pledge level and how much it will cost you to fulfill those promises. In this worksheet we have included four rewards, and each one ill.u.s.trates a different way the costs may break down. You can add or subtract rewards to suit yourself; they"re all set up the same way.
For each reward there are three lines, representing different cost scenarios. To understand these, let"s look at Reward #2, which might be a DVD of your film that you promise to ship to backers. The "basic" line in the first column has the basic cost of the pledge, $50. Next is an estimate of how many you think you will "sell." Then come the costs to produce the item and to ship the item to your backer. Obviously, you"ll need to research all of these expenses, too.
The second line, labeled "bulk order," takes into account economies of scale or volume discounts that you might receive if you"re able to make or order in bulk. In the Reward #2 example, the first 200 DVDs cost $5 each to make and $3 to ship. But the next 150 DVDs cost only $4 apiece to make and the same $3 each to ship. (This is just an example of a volume discount; your numbers will differ.) If you will score progressively better discounts at higher production volumes, add more "bulk order" lines, listing those per-item costs. The third line in each rewards section is for international pledges, for which the shipping expenses will be higher, perhaps substantially so. To protect yourself from having to cover these elevated mailing charges, you may choose to set the pledge level slightly higher for backers who live outside your home country.
Looking back at Reward #1, which lists digital delivery of your content, notice there is no per-item cost or shipping expense. After your fixed expense of setting up a website or online storage account, there"s essentially no cost to let people download from the site, even for those living in other countries. That makes this reward highly "profitable," though at $10 it isn"t likely to push your total revenue into the stratosphere.
For Reward #3, a customized version of Reward #2-a special color or configuration-there"s a higher per-unit production cost and no bulk discount available to you, but the shipping rate is the same as for Reward #2.
For Reward #4, which includes local travel to provide a personal service-say, cooking a meal for people or ch.o.r.eographing a wedding-the cost of travel per reward could fill the cost column, if you can calculate that expense. However, if you"ll be renting a truck to use for all your visits, you might list it as a fixed cost instead.