Kickstarter Fundraising: Myths, Facts, and Alternatives
Kickstarter.com — a social fundraising tool for creative projects — now has a reputation among social media enthusiasts as THE Magical Way to Raise Money. People have told me it works better than other methods, and it attracts more attention (probably true). I’ve also been told that anyone can use it for anything (not true), and that you can keep all the money you raise even if you don’t reach your goal (nope!). One person even informed me that Kickstarter personally MATCHES and DOUBLES financial contributions (definitely, definitely not true). There is a growing mythology about this tool.
Five facts about Kickstarter
Let’s set a few things straight:
- It’s smart, attractive, clean, awesome,
and the first of its kind[see comment discussion below]. Yes indeed it is. - It ONLY allows funding for creative projects. No business funding.
- You ONLY receive funds if your project reaches its funding goal. (This a core feature of their service, and an alarming number of “Kickstarter is awesome!” chorus members don’t seem to know this.)
- Because of their growing popularity, you now have to submit your projects to Kickstarter for review, and wait to be approved or denied before you can start your campaign.
- At the end of a successful campaign, Kickstarter will take 5% of the total amount you made, and Amazon payments (their payment system) will take an additional 3-5%. That means that if you raise $5,000, you will pay $400 – $500 in fees.
Consider the Innovations
Most of Kickstarter’s magic mojo is simply that they made a game out of raising money. Here are the rules to that game:
- Set a deadline. Let people know there is a limited time to this campaign.
- Set a minimum funding goal. “If we don’t reach this number, the project won’t have enough funding to happen.” Figure out what that number is.
- Enforce the deadline and the funding goal. The campaign STOPS at the deadline, and if you didn’t meet the goal, the project DOESN’T happen. (This is where Kickstarter is most valuable: they play bad cop about the rules of the game, while you get to play good cop and try to get people excited.)
- Set up tiered levels of giving, and promise people different thank-you gifts for each level.
- Let the fundraisers keep full ownership of their projects. (It’s not investment; it’s sponsorship. It’s pre-selling. It’s generosity.)
Kids, you can totally try this from home. You don’t actually need to be on Kickstarter’s lawn to play this game. (It just helps. Sometimes. That’s all.)
It’s not the only way.
Personally, I am all for Kickstarter. I think they’re a good, sexy, internet-loving company that’s doing amazing things for people, and doing them well. But I also find it disturbing that people are so excited about them that they spread false rumors about their particular form of magic. And I think it’s important that everyone know: there are other ways.
IndieGoGo, for instance, is a blatant Kickstarter clone [see comment discussion below] has three major differences:
- There is no approval process or waiting period to get started.
- You can list any kind of project — creative, business, whatever.
- You get to keep all of the money, even if you don’t reach the goal.
(Note: This doesn’t necessarily make them better. If anything, it removes a lot of the game and heat that makes Kickstarter projects so exciting. But it does make them a solid alternate option — especially if Kickstarter’s rules aren’t working for you.)
Another option is to use a PayPal-based fundraising tracker, like ChipIn or Fundrazr.
I went DIY.
In December, I launched a crowdfunding campaign without Kickstarter. I used the giving widget offered by PayPal Labs to track donations (mostly because I thought it was prettier than ChipIn). I also used a Tumblr site to manage the campaign, and Google Checkout to catch a bunch of contributors who hated PayPal (guess what? There are many).
I set a goal of $5,000 in 30 days and laid out some perks for contributors based on donation amount. At the end of the time period, I had raised about $8500 from nearly 300 people. I had more control over the campaign and I paid lower fees on the money I raised (about 4% instead of 9%) than I would have if I had used Kickstarter.
And I will tell you all about how I organized that fundraiser and why my community made it successful in another post.
[photo credit: "Tip Jar" by Dave Dugdale]
Very informative. Looking forward to your next post!
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[...] This post was mentioned on Twitter by Kevin Marks, Sarah Dopp and Susie Cagle, cameron wiltshire. cameron wiltshire said: RT @sarahdopp: Lies people told me about Kickstarter, why I love them, and why I'm glad I didn't use them: http://bit.ly/i3EQ6w [...]
Yes. You know it’s a weird thing about geeks, we can be really gung-ho and uncritical at times when things match our cultural values. I guess because it’s so exciting and shiny that there are cool companies out there now. But alternatives and pros/cons are good. Nothing is so shiny it works for everyone. And huzzah for rockin’ the DIY.
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Just wanted to drop by and let you know that you mixed up some of your facts.
IndieGoGo is not a blatant Kickstarter clone. In fact, IndieGoGo was launched in 2008 while Kickstarter was launched in 2009, a year after. They even created the perks driven crowdfunding model, and have done many great things, especially for the film industry. I know these guys, and cloning is definitely not their thing.
Great post, I look forward to reading your next one!
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Sarah Dopp Reply:
February 3rd, 2011 at 8:56 pm
*sticks foot in mouth and does a bunch of internet research*
Wow. You’re absolutely right — indiegogo did launch a year earlier. Thank you so much for correcting me. Really sorry for the misinformation. I will correct the post.
Digging through some materials (and the wayback machine)… it looks like indiegogo was originally for film projects, and then it expanded its scope to cover all kinds of projects.
What’s disturbing, though, is that the designs of the two sites *are* outright clones of each other. The widgets and campaign page layouts are nearly exact. It looks like indiegogo redesigned in 2009. Was it to match kickstarter? Or did kickstarter match them?
Either way, the combination of (a) the sites having scarily similar site designs, and (b) the fact that kickstarter is more exclusive and indiegogo is intentionally less exclusive… makes it look like indiegogo is just trying to pick up kickstarter’s discarded business…. which is what elicits reactions like this:
http://www.chicagonow.com/blogs/journal-vitriolic-observations/2010/03/crowdfunding-kickstarter-vs-indiegogo.html
…and mine above.
If indiegogo doesn’t know this yet, someone should clue them in.
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Sarah Dopp Reply:
February 3rd, 2011 at 9:02 pm
Update: I just receive this message directly from a staff member at indiegogo:
“You have a great post – but I was a little disappointed in the fact checking – although the feature differences between IndieGoGO and Kickstarter are totally correct, just wanted to point out that IndieGoGo was the first to the game in jan 2008 when we launched at Sundance. The platforms have both evolved over time based on how crowdfunding has evolved and user feedback, which has resulted in some similarities and some differences.”
My apologies for the mess, guys.
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Tiara the Merch Girl Reply:
February 3rd, 2011 at 9:17 pm
There are tons of sites that could be classed as “Kickstarter clones” – but honestly there’s only so much you can do with the perks/funding/pitch model. I’d like to see some sites break out and add something unique – for example, Fundbreak/Pozible (Australia based) has offline funds (IndieGoGo did too, but then it seemed to have disappeared, boo) and a way for companies to sponsor projects based on Facebook likes. There’s RocketHub but I can’t see how it’s different from the other sites.
Here’s a post of mine comparing a few:
http://blog.themerchgirl.net/post/1019024404/crowdfunding-project-sites-a-growing-list
and another post from brain pickings:
http://www.brainpickings.org/index.php/2010/03/10/crowdfunding-for-creativity/
Terence Reply:
February 4th, 2011 at 12:06 am
I wouldn’t say “there’s only so much you can do” to this vastly growing industry. It might just be “the next big thing”.
However, I do agree. There are so many different crowdfunding platforms, it’s pretty hard to differentiate.
I have some experience on IndieGoGo and what’s great about them is that campaign owners get to keep what they have raised, despite not achieving their goals. Also, they have the lowest fees to launch a campaign and have an amazing analytic tool to track progress in real time.
Last note – if IndieGoGo started first, instead of being “Kickstarter clones”, wouldn’t the other sites that you mentioned be “IndieGoGo clones” ?
Sarah Dopp Reply:
February 4th, 2011 at 1:35 am
@Terence: If it’s true that Indiegogo’s current campaign and widget layouts were designed before kickstarter launched (meaning: kickstarter copied the layout), and also that indiegogo shifted from “film projects” to “all projects” before kickstarter launched, then yes, i will happily change the cloning order in my head. I’ll also help scream that story from the rooftops, because misinformation is definitely being spread. Do you have that information?
All I can see is that indiegogo existed a year earlier, but it had a major style and scope metamorphosis later on. Would love more information on what actually happened there.
(eta: i do totally understand that indiegogo was crowdfunding before kickstarter started. the issues are style and scope, and how creepily similar it all looks. but i also see now that there are other sites looking just as creepily similar, so i’m sorry for picking on indiegogo directly. i just want to see them claim their independence from this silly shadow that they seem to be under right now.)
Sarah, I am so glad that you liked my Flickr photo so much that you included it on this page.
I enjoy when people use my Creative Commons photos that I work hard on, but as I noted on Flickr (below the photo) I require that they provide me credit to my rentvine.com site.
Please add my link when you can.
Thanks, Dave
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Sarah Dopp Reply:
February 3rd, 2011 at 9:37 pm
Fixed! Sorry about that. Thanks for the great image.
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Dave Dugdale Reply:
February 4th, 2011 at 7:51 am
Thanks, I really appreciate it.
Also thanks for using my photo, I love to see them viewed by as many people as possible.
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There was crowdfunding long before Kickstarter, it just wasn’t called that and didn’t quite have the same creative focus that Kickstarter has. I remember a site in early 2000s called Tipping Point/The Point that did this but not just for money – it was mostly political and was along the lines of “if 20 people pledge to call their politician I will do X” etc etc. And actually I can think of a few though their names escape me – they were largely to raise funds for a project related to charity. “Donate $20 to Nepal while I trek Everest!” kinda dealios.
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Tiara the Merch Girl Reply:
February 4th, 2011 at 2:11 am
Here you go, the text of a Wikipedia article from 2006 (that got deleted for lack of notoriety!): http://crowdfunding.pbworks.com/w/page/10402176/FrontPage
I definitely remember the “fund a musician” model, and know someone else who did it DIY too – not only did you get credits to help her record her CD, you also got a percentage of the profits.
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There are lots of platforms and fundraising script , crowd funding funding, group sourcing script providers and Kickstarter clone, indiegogo clone and gofundme clone script developers available at affordable and reasonable prices. One of the most impressive website I found and like to share with you people is: fundraisingscript.com. This website provides fundraising script and unique and eye catchy web template design to all. Also they have diffrent types of script licence packages available to fit with your financial condition.
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Sarah, where’s the followup article? I am sure you’ve got other things on your plate but what a teaser ending to the article!
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Sarah!
Many of us would love to see the follow up on the DIY approach. Teaser ending for sure! :)
Dan
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[...] Source 10: http://cultureconductor.com/2011/02/kickstarter-fundraising-myths-facts-and-alternatives/ Source 11: [...]
Thank you very much for this list. as I research possibilities for a client project (I’m looking for specific API functionality…) I found your post useful.
off to find the follow-up to this post that you mention!
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Sarah,
Your a beautiful writer, thinker, and woman. Love your clear mind, and humble style of correcting your mistakes (publicly). I am really excited about using IndiGoGo! I got rejected by Kickstarter, and I didn’t realize they took so much money! Keep blogging!
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Actually, IndieGoGo does not let you (#3) keep all the money. It’s free to start a campaign, but any money you raise they keep 4%…unless you don’t meet your goal, then they keep 9%. But #1 and #2 are right…you don’t need to be approved and it can be in any area (not just creative). I like them for that reason…but I wonder…can it look clean and profesh if I pull a DIY? I need to look at yours and see!
Thanks.
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Would love to get the details of your diy fundraiser. Where can I find that blog post?
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[...] Kickstarter Fundraising: Myths, Facts, and Alternatives [...]
lol i saw it he stoped the vid then swiched em round then played it? again lol
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I need a car loan at 17 years old.?
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