Kickstarter
and Indiegogo are international crowdfunding platforms (or websites) based in
the U.S.. They assist people in bringing creative projects to life. They have
an idea. Before producing it, they want to see if enough people would buy it.
If they do, then great, if not then that is good for them too, because they
have spent much less than if they would have done it other ways. The target
market is anyone with an idea, who wishes to raise capital in order to finance
his/her goal. The funds raised can also go to charity or even start-up
businesses. The sites charge a 5% fee on these contributions, while the donor
receives a gift instead of an equity stake.
Several
people and business organizations across the globe have been reported to back
the activities done by these sites. Kickstarter, has received pledges of more than 1.5 billion US dollars from
more than 7.8 million people who endorse the funding of around 200,000 creative
projects like music, film, stage shows, journalism, comics, technology, video
games and even food-related projects.
History of Indiegogo
In 2002,
Danae Ringelmann co-produced a play’s reading done by Arthur Miller and ran
short of financial incentives. In 2006,
she started a business at the Haas School of Business with a hope of
“democratizing” fundraising. She met Slava Rubin and Eric Schell who had the
same fundraising experiences. Later in 2007, the three developed their concept
and named it Project Keiyaku. The website was officially launched in January
2008 at Sundance Film Festival and in 2010 MTV joined Indiegogo in developing
additional content from the projects accomplished by the site.
In September
2011, 1.5 million USD was raised by the company to finance series seed led by
Steve Schoettler, MHS Capital, ff Venture Capital and Metamorphic ventures. In
February 2012, Barack Obama backed the company, which saw Indiegogo partnering
with the US government in offering crowdfunding to the country’s entrepreneurs
and by 2014, the company had raised a total of $ 56.5 venture capital.
History of Kickstarter
Kickstarter
was launched in 2009 by Yancey Strickler, Charles Adler and Perry Chen. The New
York Times named it the people’s NEA (National Endowment for the Arts) as it
was perceived as one of America’s best inventions in 2010 and among the
best websites launched in 2011. This may be the reason why the company
reportedly raised 10 million USD funding fromNew York based
venture firms and Angel investors.
In 2013, the
company released an iPhone iOS app called Kickstarter targeting mobile phone
users who create or back projects. Kickstarter is recognized internationally,
it has opened projects based in United Kingdom, Canada, New Zealand, Denmark,
Norway, Ireland, Sweden, Spain and Australia.
Reception
Kickstarter
and Indiegogo have earned reputations as among the most sought after
crowdfunding websites in US and are generally received positively by their
users. The majority of user reviews praise the two sites due to their commendable
customer support and ease of use. Indiegogo is presumed to be more tolerant to
projects since it lets people finance creative projects that would never be
done by Kickstarter.
Accomplishments
You can find
a wealth of statistics about Kickstarter here.
I am most
impressed by 1.9 billion raised.
On the other
hand, 2014 was a breakthrough for Indiegogo as the company launched a service
(named Indiegogo Life) that enable people to raise funds for emergencies,
celebrations, medical expenses or any other life event. This attracted several
people as no platform fees are charged.
For more information
on the success stories of these sites, refer to
www.forbes.com/sites/amadoudiallo/2014/01/24/crowdfunding-secrets-7-tips-for-kickstarter-success/
www.forbes.com/sites/amadoudiallo/2014/01/24/crowdfunding-secrets-7-tips-for-kickstarter-success/
Not all good
news
Despite the
success stories above, many fully funded, some projects have flopped – or been
successful and then never delivered to their customers. Among them include: Asylum, Kobe Red, Kreyos
Meteor Smartwatch and Haunts: The Manse Macabre.
I’ve been
fascinated by crowdfunding for a couple of years. I’ve even tried to do a few
different projects with just a little bit of success. There is an upcoming
product launching the middle of September that will be interesting and I’ll be
watching.
Have you
ever had any success (or failures) with crowdfunding.
I have
purchased a couple of products through them as well – some I have really
enjoyed, a couple were mediocre and one or two didn’t even ship. There seems to
be a problem especially with games so I will definitely be doing more due
diligence with those before I start to purchase.
Let us know
your experiences (good or bad) in the comments.
