So what is Kickstarter?
How can you use it to raise money?
In today’s post, I’m going to explore this website, what makes it different, and how you can use it as an entrepreneur or a creative type.
This is a killer fundraising platform for the right purposes, but you gotta know whether or not it’s right for you.
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For now, let’s get started on exploring what exactly Kickstarter is, and if it’s a platform that can work for your entrepreneurial goals!
What is Kickstarter?
Put simply: Kickstarter is a crowdfunding website.
I got started with Kickstarter and crowdfunding in 2012, when we were seeing tons of media attention surrounding the platform and those similar to it.
In that time, there were tons of awesome projects being launched—leading to amazing success stories with millions of dollars being raised.
Since then, Kickstarter has become much more mainstream. It’s unlikely that you could raise 50,000 simply for making potato salad like in the early days of the platform.
So how can you actually use Kickstarter to raise money for your dream and your passion project?
Categories
Kickstarter is organized through various categories.
These serve to delineate the different types of projects that are offered on the platform. Every project launched on Kickstarter fits into a category.
Kickstarter is not a marketplace for ideas. The platform is only for tangible product offers and projects, not causes or concepts.
Causes and business concepts are better suited for a site like GoFundMe; and I have a ton of great content out there as to how to launch a successful GoFundMe campaign.
By the time you launch on Kickstarter, you should have already created a prototype that can fit into a specific category. The money you get from your backers will eventually be used to ship that product out to them.
All or Nothing Fundraising
All or nothing fundraising is a hallmark of Kickstarter’s platform, and makes it different from other platforms like Indiegogo.
So what does it mean?
If you’re trying to raise money on Kickstarter, you have to set a fundraising goal. You then have to meet or exceed that goal in order to keep the funding.
This is helpful for backers, as they can be assured that they will only have their credit card charged if you have the means to deliver the product you are promising to produce.
Duration of Campaign
When you set out to launch your campaign, you will have to set a campaign duration. You can’t just raise money over the course of months or years until you eventually hit your fundraising goal.
Usually, the ideal campaign duration is about 30 days.
This duration is what creates a sense of urgency and encourages new live projects to come to life. If a creator hasn’t raised enough money after 30 days; that campaign has failed. This forces creators to rework their campaign and launch something better.
What are Backers?
A term I have been throwing around a lot in this post is backers—a concept that is important to understand when it comes to a successful campaign launch.
Backers are people that support a project in return for a product being shipped to them. They aren’t a customer or a donor; they are investing in a project for something in return.
Backers are the community that make Kickstarter work. There are thousands of them out there, including super-backers that are supporting 50+ projects.
Components of a Kickstarter Campaign
Every Kickstarter campaign has certain components, including:
- A pitch video
- Reward tiers
- Campaign text / campaign page
- Gifs, images, etc.
The pitch video is especially important, as it creates interest and hype surrounding your campaign, demonstrating the value of the product.
The rewards are what a backer gets on their doorstep after they support your campaign. The reason Kickstarter works is because backers receive perks and rewards that bring value into their lives.
The more money that a backer pledges, the higher reward tier they will receive. For a fashion line, a $25 pledge might get them a pair of boots, and $100 might get them access to the boots and a sports coat.
The key is incentivizing people to buy into your idea via pre-ordered rewards.
Campaign Timeline
Now that we have established how the platform operates, I want to give you an idea of the timeline that you will undergo when building a campaign on Kickstarter.
- Creation of your idea through a prototype.
- Build your campaign through pre-launch.
- Go live on Kickstarter; the first week is the most critical element. You want to reach at least 30% of your fundraising goal in this time frame.
- The remaining duration of your campaign where you continue to build momentum and reach your fundraising goal.
- The final days of your campaign where we expect an extra spike in pledges due to a sense of urgency.
- The funding period ends.
All of these steps are going to incur costs.
It will cost money to build your prototype.
Through the campaign, you will have to invest in marketing to get your campaign out there.
And then once you get to the end of your campaign, you will have to fulfill your promised rewards.
This includes manufacturing and shipping the product out to backers around the world. This is a complicated process, which is why I recommend using a company like Fulfillrite, who can assist you in this stage.
In the Fulfillment stage, you’re also going to be hit with fees. Kickstarter takes 5% of the total money raised, and credit card processing usually runs about 3%.
Takeaways
I hope this post has given you a good primer as to what Kickstarter is, and how you can use it to launch your passion project.
For more great content, you should subscribe to my Youtube channel and check out my free crowdfunding course that goes way more in-depth about Kickstarter best practice.
Think you’re ready to launch your project? Schedule a free coaching call with me—I’d love to help you out!
