Kickstarter changes strategy – enters its Mature Era
Perry Chan, Yancey Strickler, Charles Adler – most of you would definitely not know these three names. On the other hand, you might know about Oculus Rift (because Facebook bought it at a whopper of a cost), Pebble (Smart-Watch!), Ouya (a gaming console with a difference), Form 1 (an affordable 3D printer). A few might know that these unique products happened because of crowdsourced funds through a website that has been synonymous to such activities – Kickstarter.com. It has been known as the social network for artists and innovators to fund their projects. Those three names I mentioned before, were the ones who envisioned Kickstarter.
Ever since Kickstarter was founded in 2009, it has been responsible for the crowdsourcing of more than 100,000 projects. Its success can be measured by the fact that the term “Kickstarter” is now 8 times more popular in the internet than “crowdfunding”. It has even been hailed by Time Magazine as one of the best websites for 2 years running. All this success, in spite of a lot of restrictions on the kind of projects Kickstarter would support and in spite of an extremely rigorous approval process. Imagine the kind of products that would be in development if these restrictions were removed.
That’s exactly what Kickstarter is aiming to achieve with three new changes that they announced recently. With the change in its strategy, Kickstarter hopes to make the crowdfunding experience friendlier and much simpler. Firstly, the previous ban on products has been lifted. Anything that is unsafe, illegal and prohibited is not allowed on the platform. Second, projects that are ready for launch can be launched directly without having to go through the tedious approval process. And third, the rules that the creators have to follow if they want to start and launch a project have been reduced to these meagre three points
- Projects must create something to share with others.
- Projects must be honest and clearly presented.
- Projects can’t fundraise for charity, offer financial incentives, or involve prohibited items.
In short, as long as the creators are honest about their projects, have raised enough money through crowdfunding and have complied with Kickstarter’s three simple rules – releasing the project is as simple as clicking on a button.
From a marketing perspective this move makes sense. Kickstarter’s close competitor, Indiegogo has recently managed to raise about $40 million from its investors which is the largest financing any crowdfunding startup has ever received. This huge success has been attributed to Indiegogo’s very liberal and ultra-simple motto for accepting projects – it should not be illegal or dangerous.
Before the change the website was already approving 78 percent of new campaigns of which 44 percent get fully funded. It already has a great brand recognition and has a history of repeat backers that is not enjoyed by any other crowdfunded website. By simplifying and speeding up the approval process, Kickstarter hopes to make the website a premier place for crowdfunding projects and there is no doubt that this will propel it ahead of all its competitors.
In hindsight, with the rules being relaxed, the crowdfunding website runs the risk of attracting more scams and plagiarized projects than ever before. How Kickstarter has geared itself up to face these challenges, is something that only time will tell.