What makes a Kickstarter success story?(Read article summary)
Entrepreneurs have been raising money using the crowdfunding platform Kickstarter for years, but what separates a million dollar idea like 'The World's Best Travel Jacket' from a failed campaign?
Kickstarter has a new success story. An entrepreneur who asked Kickstarter backers for $20,000 to start production of “The World’s Best Travel Jacket” instead raised over $9 million.
Chicago-based entrepreneur Hiral Sanghavi pitched a new kind of travel jacket to the crowd at kickstarter.com in July. His idea was a stylish, comfortable jacket that would come in four different styles and feature 15 different travel features ranging from a passport pocket to an inflatable neck pillow.
In less than a day, he was over his funding goal. As of September 4, Mr. Sanghavi’s jacket concept was worth over $9 million. It is currently the most funded clothing campaign and the overall sixth-most-funded campaign in the history of Kickstarter.
The eye-popping success of the campaign begs a question that has been asked since the genesis of Kickstarter: Why does a travel jacket warrant $9 million in pre-orders and pledges when so many other crowdfunding campaigns are doomed to failure?
The answer: it might not be entirely about the jacket.
Kickstarter can be a harsh place. There have been an estimated 207,135 campaigns launched in the six years since the platform's inception in 2009, according to company statistics from February of this year. Of those, a recorded 156,708 campaigns have failed (a success rate of about 40 percent). Of the 92,095 that have succeeded, over 70 percent didn't earn more than $10,000. Still, the rabid consumer enthusiasm that turned a jacket idea into millions of dollars is not new for Kickstarter. 119 campaigns on the crowdfunding platform have made over $1 million.
The elite club of Kickstarter million dollar success stories is varied. The top 10 campaigns, which have raised more than $94 million dollars combined, consist of two video games (Bloodstained and Shenmue III), a card game (Exploding Kittens), a video game console (Ouya), a music system (Pono Music), a movie based on the canceled TV series "Veronica Mars," two smartwatches (Pebble and Pebble Time), a hi-tech cooler (Coolest Cooler) and, now, “the world’s best travel jacket.” That diversity suggests that Kickstarter users are willing to invest in a variety of products – if they have the right campaigns.
“The most compelling projects inspire backers to share their vision and invite them in close for a behind-the-scenes look at the creative process along the way,” a spokesperson for Kickstarter told The Christian Science Monitor via e-mail.
Sanghavi’s campaign followed Kickstarter’s recipe for a successful campaign almost exactly. For one, the concept was simple to understand. Second, it had a lot of interaction with users. The "World's Best Travel Jacket" team invited participation from donors with over 43 different rewards for people pledging anywhere from $5 to over $1000. Over the course of the two-month campaign, Sanghavi and his team also provided weekly, and sometimes biweekly, updates to the backers, treating them to a behind-the-scenes look at the production process and communicating obstacles and successes.
Pebble, the smart-watch company that holds two of the top 10 most popular campaigns on Kickstarter (and the most funded campaign in Kickstarter history), followed a similar method. Pebble's original Kickstarter campaign, which garnered more than $10 million, features an extensive reward program and over 53 updates, ranging from campaign updates to production timelines. The Pebble Time campaign, Pebble's second campaign, features fewer rewards but likewise has extensive updates. Even with the similarities in campaigns, the differences between the Pebble smart-watches and Sanghavi's travel jacket are vast.
"Great campaigns come from tapping into a great community that believes in your idea -- Right time, right place, right idea, all contribute to giving your campaign that key spark, but a lot of campaign success boils down to an emphasis on product focus and community," Ben Bryant, head of Special Projects at Pebble, writes the Monitor in an e-mail. "Crowdfunding, at its essence, is about connecting creators with those who truly care about a project."