A Kickstarter's Guide To Kickstarter

The Paradox of Choice

Nelson de Witt — Sun, 01 Jan 2012 13:45:40 +0000

We love choice. In any given year every single film on Netflix is watched at least once. The Long Tail is an economic theory and excellent book, which explains why this happens. It states that due to the infinite shelf space of online retailers, people will now have almost limitless choices as to what they consume. We are living in a world where people can find exactly what they’re looking for and are willing to pay unbelievably high prices to get those special unique items.

At the same time, we hate choice. Having too many choices when we don’t have a lot of time, can be overwhelming and confusing. Limitless choice works when people have the time and energy to pay attention and look for the very best. When they don’t, people want quick and easy choices.

The Coffee Joulies project is one of the top-funded design projects on Kickstarter, and it has only three backing levels. It’s simple, and people visiting the page do not have to think much about what level they are going to choose.

Then again, the Womanthology; Massive All Female Comic Anthology! project was incredibly successful with a very complex system of rewards and almost 50 different backing levels. They even had unlockable rewards that, like in video games, became available when a certain goal was reached. This, however, was probably planned out ahead of time, and a lot of work went into putting them all together.

When creating your rewards, it is probably to best make ones that have meaningful value. If you are having trouble coming up with a $5 reward, then maybe you don’t need one. Having too many rewards ultimately clutters up your page and makes it difficult for people to decide. However, you may want to have a lot of different rewards. Either way, make it a conscious decision. Creating rewards just to fill price points probably won’t be meaningful enough for backers.

Pricing Theory

Nelson de Witt — Fri, 30 Dec 2011 13:45:55 +0000

The psychology of pricing is very difficult and complex. This book is too short to really get into it, but here are some things to think about. If you would like an in-depth look at pricing theory, I recommend Smart Pricing by Z. John Zhang

People enjoy a purchase more if they pay more for it. This is counter-intuitive. A common misconception is that people are very price sensitive, and always look for the best possible price. That might be true for food or gas, but most people coming to Kickstarter want to connect with other people. Stay away from really high reward levels, but don’t undervalue your rewards either.

If a higher priced reward is not significantly better, then why pay more? The tricky part about creating rewards is increasing value to match the increase in price. For example, if you are making an album you could offer a digital download and a CD as rewards. But, how much more valuable is a CD vs the digital download? I don’t mean monetary value but sentimental value. If the download is $10 and the CD is $25 is there enough of a difference that I would purchase the higher priced reward? For me, no. In fact I might pay you $15 extra NOT to make a CD. What’s the point? It wastes resources and gets scratched. However, if your CD is personally burned, and has an extra track, and sold for $50, then it might be a compelling enough reward.

The Allure of a Large Backer

Nelson de Witt — Wed, 28 Dec 2011 13:45:52 +0000

While large backers definitely give your project a boost, they also take away from the size of your new audience. One of the biggest benefits to Kickstarter is that it allows you to talk to more people. Every time you post an update, you get into the inbox of people who want to hear from you. Large backers are, in a way, a double-edged sword. They help your project, but hurt your reach.

Let’s say you launch a project for $3000. You get six backers and raise $400. Then a BIG backer pledges $2000 and almost completes your project. Now you only have a handful of people you can talk to. One of the best things to come out of my first project, Identifying Nelson, was the 170 people I can now talk to directly. Next time I want to launch a creative project I have a small group of people that I can share the idea with first.

Quantity OF Quality

When creating rewards the goal should be to have an adequate quantity of quality backers. You want to design the rewards so that most people will pledge right in the middle of your reward levels. You want some high backers and some low backers with most falling in the middle. Having a good spread of rewards, especially in the $25 to $250 range, will really help get a solid group of backers.

Going for the BIG bucks

Nelson de Witt — Mon, 26 Dec 2011 13:45:28 +0000

I see a lot of rewards in the thousand dollar range on Kickstarter. Sometimes projects even skip the most lucrative pledging tiers altogether, going from $20 to $200 to $1000. To me this is another example of people misunderstanding how Kickstarter works. The idea of crowd-sourced funding is that a lot of people will pledge smaller amounts of money. Pricing rewards in the thousands of dollars contradicts this idea. It is very hard to get people to spend large amounts of money on a perfect stranger.

In my experience, pledges of a $1000 or more came from people who knew me BEFORE I ran the campaign, not people who found me online. They are close family and friends who wanted to support our work. If someone is going to pledge in the thousands, you probably already know them. They already believe in your project, and you may have an inkling they will pledge at that level. You could have the coolest rewards in the world, but it probably won’t convince people who don’t know you to back at that level. Then again, if you are catering to an audience that regularly pays $1000+ for products, it just might work.

Managing Deadlines

Nelson de Witt — Fri, 23 Dec 2011 13:45:11 +0000

Another factor to consider is your own personal deadlines. In both of my Kickstarter projects the timing and length of my campaign was set by outside factors. I wanted to hit deadlines and timing windows which forced me launch at times that might not have been optimal.

You may have some timing windows that you are trying to hit. Meeting these timing windows can be tricky, because you run the risk of not putting enough work into your campaign before it launches.

The most important factor here is the size of your project and how much you’re going for. If you have a tight timing window and a smaller size project, then you might need to launch before you have worked everything out. If you’re going for a large amount and have a big project, then it will pay off to wait until you have everything ready to launch a campaign. Trying to launch before you are ready in order to hit an arbitrary deadline might hurt you. If I had to do it over again, I would’ve spent several months preparing for my first Kickstarter project instead of rushing to get it out the door.

30 days or less

Nelson de Witt — Wed, 21 Dec 2011 13:45:58 +0000

According to Kickstarter’s Kickstart School: Setting Your Goal page, statistically the most successful projects run for 30 days or less. Since they have data on projects, I would say this is a good number to go by.

During my interview with Dan Provost, co-creator of the iPhone tripod mount Glif, he explained why shorter campaigns are better.

“Anything longer than 30 days was kind of unnecessarily long. It’s either going to hit or it’s not. And if it doesn’t, then you are kind of dragging it out.”

I think this is a great way of looking at the timing. If people like your idea, they will like it right away. A longer campaign won’t necessarily make the idea any more attractive. He also makes the point that the attention span for things on the Internet is usually less than 30 days.

How long your campaign depends on one thing, momentum

Nelson de Witt — Mon, 19 Dec 2011 13:45:33 +0000

Projects that can sustain momentum over time will do well. Most campaigns will see a lot of activity at the beginning and the end, with a lull in the middle. Setting the time limit on the project is really about guessing how much momentum you can sustain during your project.

This is very hard to judge, and I have no real way of predicting this. Some projects that I think are going to do well, don’t make it, or only finish at the last minute. Other projects that I’m unsure about get funded right away. It is hard to say exactly where momentum comes from, but you should be prepared to deal with it.

In his blog Kickstartup, Craig Mod talks about planning media coverages to avoid “dead zones” in momentum. You can see from all the wonderful data he provides that there were several days in the middle of the project where pledging dropped off. Try to have a strategy for dealing with a drop in momentum, but be aware it’s part of the process.

Why be Reasonable?

Nelson de Witt — Fri, 16 Dec 2011 13:45:58 +0000

Of course you don’t necessarily have to play it safe. Craig Mod provides an interesting counterpoint to the “be reasonable” argument.

“Our biggest mistake was that we set our financial goal too low. It’s inevitable that a Kickstarter project becomes less exciting and loses its ‘gambling’ element when the financial goal is met and there’s still time on the clock (just look at our funding graphs above for empirical evidence!). An ideal situation for any Kickstarter project is to define a financial goal that is high enough to just be met within the allotted time.” – Craig Mod, Kickstartup

Perhaps for Craig’s project, the goal was set too low, and it might have been able to get more backers. However, I just want to point out what I think is the key sentence in his entire post.

“We took advantage of the vast contact lists we had built up while working in the design and art worlds over the past six years.” – Craig Mod, Kickstartup

To me, this demonstrates that Craig had a large existing audience before launching the Kickstarter project and therefore could have gone for more money.

Personally, I think it is better to get funded at a lower level than to be too ambitious and not get anything. Of course, the risk is yours. I reiterate: unless you have a relatively large existing audience, it is going to be very hard to generate $10,000 or more.

Reasonable funding goals

Nelson de Witt — Wed, 14 Dec 2011 13:45:40 +0000

So what are some reasonable expectations for funding amounts?

For a single person with a limited or no built-in audience, $5000 or less is manageable, $5000 to $10,000 will be hard but doable, $10,000+ will be very hard.

For projects with more than one creator and a limited or no built-in audience, each creator can probably bring in $7000, assuming their networks do not overlap too much.

For projects with established audiences it really depends on the size of your audience. Nataly Dawn raised $104,788 from 2315 backers, but one look at her Youtube channel shows over 88,000 subscribers. Videos from her group Pomplamoose get over a million views. The majority of her backers are people who have been following her for awhile. If you don’t have this type of built-in audience, think hard about your goal.

You are free to set your funding goal to whatever you want. Just keep in mind how many people you will need to look at your project to get it funded. Even the “most funded” projects on Kickstarter have relatively small goals compared to what they were able to raise.

Focus on what you need

Nelson de Witt — Mon, 12 Dec 2011 13:45:37 +0000

It’s time to focus on your budget and really look at what you need to make the project work, because setting your goals too high might actually hurt you. It takes a lot of work to get a project funded and you should be realistic about what your needs are.

This was one mistake my co-producer and I made during Identifying Nelson that almost cost us the project. John and I debated whether we should go for $20,000 or $15,000. Obviously, when making a movie you want as much money as possible. We went back and forth but ultimately decided on $15,000. The thinking was that we would hope for higher amount and have the lower amount as a safety net. I am so glad we made that decision, because in all honesty, I don’t think there was any way we would have made it to $20,000. It turned out $15,000 was just in our reach.

Look at all of your research and try to determine what is the minimum amount that you need to do your project. You may have a bigger vision for your project, but try to keep it small at first. The goal should be to get funded. If you do a really great job and get overfunded, then you might be able to do your project as envisioned. However, if you don’t get funded, you might not be able to do anything.

Should you undershoot your goal? No. Be honest about how much your project is going to cost. If you need to raise $50,000 minimum to do your project, then that’s your goal, not $35,000. Do the work and figure out exactly what you will need to complete your project and its reward obligations.