The experience on Kickstarter.com has made the HAND Stylus’ founder/designer, Steve King, an advocate for the “crowdfunding ” site.
Kickstarter, like indiegogo.com, bypasses traditional venture capitalist funding and lets the public contribute to projects they believe in, with amounts as small as $1. (Find King’s HAND Stylus Kickstarter campaign by clicking HERE.)
In a recent phone interview, King, who lives in Alameida, Calif., described himself as an “incurable designer … constantly coming up with ideas.” He recognized Kickstarter as a way to get those ideas out of a file and into the real world. He also offered creators some tips and shared some of his experience about using a crowdfunding site to launch products and those investing in them:
For the creator/inventor:
1) Use the Kickstarter pages to communicate with the people who have contributed to the project. You can update them about development and manufacturing like you would post status updates on a Facebook page.
2) If you get a lot of orders on Kickstarter (certain levels of giving include the product as a thank-you), then expect a comparable amount of additional orders on the website when your product is ready.
3) Be prepared for a lot of work in launching your dream. “Making a video (for Kickstarter) took me months,” King said. “I could never get it right the first time.”
4) When you exceed your original funding goal, you aren’t rolling in money: All your costs will go up in manufacturing and in fulfilling promises you made to people who pledged. For King, offering laser engraving as an extra thank-you to donors ended up slowing down the process of getting the HAND Stylus to the public. However, “now that we’re through it, I’m glad we did,” he said. Also note that King had already invested his own money in the project before he launched his Kickstarter campaign.
5) Kickstarter projects let you keep the shares of your company. Instead of stockholders, creators get “pledgers” who pre-purchased the product.
6) Ask for enough money to carry your project from idea to completion. If there’s high demand, you’ll need the extra money.
7) The failure rate is high. “A lot of good things can come from Kickstarter if you beat the odds,” King said.
8) The more successful you are, however, the harder it is to keep your product distribution on schedule. “I thought I had figured out everything,” King said about coming in about two months after his deadline for delivering the stylus. “It was a little humbling. … I thought we would be a shining example.”
For the investor: Expect delays in shipping, if you contributed to the product at a level that nets you one. This is true especially for the successful projects with high demand. These products are not just sitting on a shelf waiting for shipping like others you order. These are new products where the manufacturing likely has not started and the kinks are not worked out.
King said the farther away he gets from the Kickstarter experience, the more he would consider doing it again, despite the massive amount of work that went into making it successful, starting with the design. His initial goal in creating the HAND Stylus was to improve upon existing styluses and design them better, which he accomplished.
“It will be harder than you probably anticipate but the rewards can be substantial, not just in monetary terms,” King said, adding it was affirmation that yes, he had a good idea. “For us the rewards were doing business with all sorts of people who wouldn’t have found us otherwise.”
~ Lillie-Beth Brinkman (email@example.com)