Is Kickstarter Always the Right Choice?
Kickstarter has become almost synonymous with crowdfunding: “Are you planning to kickstart that?” or “I’m thinking of kickstarting a new project.” Exploding on the scene in 2009, Kickstarter has housed some of the most successful crowdfunding campaigns in history and, in turn, has contributed largely to the standardization and expectation surrounding this relatively new method of generating funding.
The platform has not only shaped the way we think about crowdfunding, but has molded our idea of what a fundraising campaign looks like. An example of this is the popularization of short, infomercial-style videos that every campaign leads with. Another example is the uniformed campaign page template with rewards, creator information and funding levels always positioned to the right of the web page — you would be hard-pressed to find a crowdfunding platform that differs from this layout.
Despite having great influence, one must ask: Is Kickstarter always the right choice when selecting a crowdfunding platform? To answer this question, let’s look at the platform’s pros and cons, as well some crowdfunding alternatives.
- Great public discovery: Kickstarter, although not a full-blown marketplace like Amazon, is the top platform when it comes to public discovery. Campaigns that become “Staff Picks” are boosted to wider audiences and can receive solid exposure.
- Easy and optimized: Once a project creator has built out all of the necessary campaign components (e.g., video, description and rewards), Kickstarter is a cinch to set up. It’s easy to get started, glitch-free and optimized for best use by the thousands of campaigners before you.
- A design and technology hub: If your project falls into the “Design” or “Technology” categories (like most hardware innovations), Kickstarter's audience could be an ideal fit. Half of the total projects that surpass the $100,000 mark on the platform fall into these two categories.
- “All or nothing” funding model: Some critics argue that this model actually helps creators achieve a larger goal, while others think it’s counterintuitive. If a project creator doesn't reach their set goal, their campaign is deemed unsuccessful, and they don't get to keep any backer funding.
- Higher fees: The platform charges a 5 percent fee of total pledges earned. On top of this, the payment processing fees are an additional 3 percent to 5 percent. This means that right out of the gate, approximately 10 percent of your money raised goes to Kickstarter. Creators also cannot select their preferred payment processor.
- Lack of "brandability" or customization: Projects must conform to Kickstarter’s formulaic campaign template. This means brands cannot own their design through customizations, properly direct traffic to their websites, nor track the metrics of their choice.
- Post-campaign management: Once a campaign ends, you’re on your own. Tracking down missing backer information or issuing changes to the quantity, reward level or shipping address is up to you. Also, if demand is still high, you have no where to keep selling once the campaign ends.
There are plenty of alternatives when it comes to selecting the right crowdfunding platform for your project. Some popular platforms that come with different sets of pros and cons include Indiegogo, Tilt and Celery. Indiegogo is a traditional crowdfunding platform like Kickstarter, and shares a lot of the same pluses and minuses. One differentiator between the two traditional platforms is Indiegogo’s flexibility. Project creators can essentially set an unlimited campaign length, choose their funding model and accept international currencies. Tilt on the other hand is less designed for startup launches, as the platform is geared towards smaller community-based projects such as pooling money together for a collective local cause. Celery challenges the crowdfunding status quo by allowing project creators to customize their crowdfund and host it on their own website.
Ultimately, when it comes to selecting a crowdfunding platform, it’s up to the entrepreneur to determine what they deem most valuable. For that, here’s one more piece of advice: buzz is good, but building a business is better. Choose the platform that will help take your idea to the next level.
Thomas Krafft is the head of strategy at Celery, a pre-order platform that brings products to life.