Business 101: What I learned from Failing with Kickstarter

canceledAt the beginning of this journey, I had no idea what I was doing with my first Kickstarter project. I created an account, started a project, and set about filling out all the required fields with text, photos, mock-up images, a video, a proposed budget, and hit submit. In the end, I canceled the project after two weeks, having received only 15% of my desired funding of $1,500. I headed back to the drawing board, made some edits, and tried again. The second time around, I reached 100% funding in less than 24 hours and 500% overall. Here are a collection of the things I learned along the way that might help you out in your own journey. If you have any questions, please throw them in the comments section at the bottom of the page and I’ll respond when I can.

Read the Basics first

Don’t read this article alone and then decide you’re ready to jump right in. There’s lots of additional resources out there and things to consider. I suggest starting here.

It’s not going to be easy but it’ll be worth it

When I started this journey I was lucky enough to already be familiar with product photography (self taught), graphic design (self taught), and website development(self taught). What I didn’t know, you guessed it, I taught myself: circuit board design, video creation, social media advertising, and manufacturing. There are a lot of required skills to get up and going but there are also amazing resources out there to reduce the barrier to entry which I plan to write about in future posts. I have learned a lot along the way and each day offers a new exciting challenge to learn about and overcome.

Budgets are quite different with Kickstarter

The easiest way to explain this is with two examples. Say you offer 10 units of your product for a specific pledge level with $1 for local shipping and $5 for international shipping. If all items are sold locally, it would be $10 total for shipping whereas if they were sold internationally, it would be $50 for shipping. The thing is, either way you see no extra money in your pocket but Kickstarter counts the shipping amount towards your goal. This is quite different from elsewhere where in your budget, the cost of shipping would not have an affect on anything.

Additionally, the budget is complicated by the fact that Kickstarters are commonly setup so that people can pledge, for example, $10 for 1 unit or $15 for 2 units. If you have a limited quantity of items, say 10, you could either sell each of them separately for a total of $100 (10 * $10) or in pairs for a total of $75 (5 * $15). This would result in two different final totals for your project for the same quantity. Or of course, 1 person could go for the 1 for $10, 3 people go for the 2 for $15, which would result in only $55 for your project.

Be Realistic with your Goal

Kickstarter tells you from the beginning, it’s all or none. You set a goal and either reach it and get all the money or fail and get $0. They say to set your goal at the minimum amount needed to get up and running. I thought to myself that I could make more. So I set my goal nearly four times higher than what was actually my bare minimum. I believe part of the reason I failed is that the Kickstarter audience is a bit more savvy than your average shopper. I believe most knew that I didn’t actually need $1500. The funny thing is, the second time around, I lowered my goal to $400, which I reached in less than 24 hours and ended up with $2000 in the end. I suspect this is due to the fact that people are willing to put money in for a project that’s closer to its goal. A project starting with a $400 goal is much closer to being completed than a project with a $1500 goal. Those that are hesitant to put money in when the project goal is so far off from its goal are much more willing to put in money when the other is closer to being fully funded.

Of the projects that have reached 20% of their funding goal, 81% were successfully funded. Of the projects that have reached 60% of their funding goal, 98% were successfully funded. Projects either make their goal or find little support. There’s little in-between. – Kickstarter

Hand in hand with setting a proper funding goal is setting a manufacturing goal that you can obtain. I’ve noticed many projects, from first time creators, with goals as high as $100,000 where each unit sells for around $25. $100,000 / $25 translates to roughly 4,000 units that must be manufactured. Do you know how to order, assemble, ship, and do customer support for 4,000 units? Probably not. Be realistic. I gave myself until December, about two and a half months, to order, assemble, and ship 30 units with a two month gap until I have to ship the next round of 30 units. Better to under promise and over deliver than vice versa.

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