Popular crowdfunding sites like Kickstarter have earned a reputable reputation within the entrepreneurial arena, and for good reason. It's played a large role in shaping the crowdfunding market, which is now estimated to be well worth over $2 billion with the potential to reach as high as $93 billion by 2025. Some campaigns have raised more than six figures in less than 24 hours, while others have gone on to raise tens of millions of dollars for as simple of an idea as a horror themed board game. But with all that success comes plenty of failure. 14 % of Kickstarter campaigns fail to receive any pledges, and the current success rate of Kickstarter campaigns sits at 36%, meaning for every success story there are two failures quietly hidden and tucked away in the vast online fields of the internet.
Kickstarter isn't going away anytime soon, no matter how many times the company may boast a failed project. The crowdfunding tool can be a great resource to help you grow your business or bring attention to a product or service you're hoping to successfully introduce to the market, but that doesn't always mean it's the right path to take. Let's have a look at the top 5 reasons why you should and shouldn't carry out a Kickstarter campaign for your product or business.
5 Reasons You Should Use a Kickstarter Campaign
1) If you have an idea for a tabletop board game then Kickstarter is absolutely the right place for you to launch your campaign. In previous years online video gaming projects generated the most hype, largely because in 2015 the category had an average of over $100,000 for successful campaigns. But now board games seem to be the current fad, earning an average of $65,418 in 2017 and surpassing the flat growth of the online gaming world.
2) Your campaign doesn’t require too high of a funding goal. Backers want to believe that the project they are backing has a legitimate chance of being successful, or else why would they waste their time and money on your business? If your project falls below six figures it will have a greater chance of reaching its goal.
3) You lack real-world connections. Let’s face it, in today’s world who you know can be just as, if not more important than what you know. If you don’t have a strong social network that features angel investors or witty business tycoons then this platform can be your gateway to reaching the people you need in order to be successful.
4) You have a variety of rewards that can be given out for a multitude of pledges. If you only have one product to sell, how will you get people to donate $200 instead of $50? If your business can offer a diverse set of rewards and promises to your backers it will make your campaign look more attractive in the consumer’s eyes, because everyone wants options!
5) You have a strong PR campaign specifically made for the crowdfunding project. One of the most common traits among all successful campaigns is that they feature highly professional looking press kits and videos. If you don’t have a tutorial or a simple video explaining your project then how will consumers fully understand and recognize the benefits of pledging money to your campaign? Video is the new norm across all platforms, because who likes to read!?
5 Reasons You Shouldn't Use a Kickstarter Campaign
1) Your project requires a timeline longer than 30 days. The most successful campaigns feature short timelines. Statistics prove that projects with a long time stamp struggle to bring in revenue largely because backers don’t want to wait that long to receive their rewards.
2) Your product is heavily revolved around growing technology. The technology category is currently ranked 3rd on the most funded categories through Kickstarter. However, this is largely due to a few successful projects that raised over tens of millions of dollars in a short amount of time. The failure rate of technology projects is much greater than the average failure rate as currently 4 out of every 5 tech projects will fail to reach their targeted goals.
3) You don’t have the money to invest in promoting your campaign. If you can’t afford to pay for email subscription lists, online targeted advertisements, or PR campaigns then don’t even bother. Kickstarter is a massive platform with tens of thousands of shiny objects and fun projects. If you can’t invest money within online marketing tools served to broadcast your project then there is little chance anyone notices your business to begin with.
4) You’re not fully confident you can fulfill your orders if your goals are reached. 1 out of every 9 successful campaigns will fail to live up to their promises, leaving their consumers empty handed. There is no quicker way to ruin the integrity of your company then by failing to deliver on a reward you made available to the consumers who supported you before anyone else did.
5) You don’t have the right set of qualifications to prove to potential consumers that you can handle this project. If you’re a new company trying to sell a baseball bat, someone on your team better have experience as a player, coach, or working professional in the industry. When consumers are giving money for a product that has yet to be developed they are placing quite a bit of trust in you and your company. These consumers will likely check out your website, experience, and testimonials. Simply put, if you can’t prove that you have the right background for the specific project you’re offering backers will have a difficult time trusting your alleged capabilities.
For some, Kickstarter can be a tool used to help take their business to the next level. But for others, it can act as the final blow to their dwindling company. Remember, what you do online cannot be erased. A failed Kickstarter campaign will plague your company for years to come if you cannot properly handle the negative publicity that comes with it. Happy crowdfunding!