Dan Provost and Thomas Gerhardt have an idea. They love their iPhone 4’s camera and video functionality but there’s a problem. There’s no way to attach an iPhone to a tripod so they set out to solve that problem and put together a 3D printed prototype that includes the ability to serve as a ‘kickstand’ that lets you prop your iphone up at an angle. They call it the Glif.
After building a prototype and doing their homework, they discovered they’d need $10,000 up front to start the manufacturing process. Forgoing the usual strategy of funding through friends and family, they decided to try out a new website they’d heard about that helps inventors and creative types raise money. They setup a free account and put this video together:
They posted their project on this new site on October 2nd with the goal of raising $10.000. They’d accept donations as little as $1 but if you gave $20 or more, you’d get your own Glif when they’re manufactured. Regardless of how much they raised, they wouldn’t give up any ownership in the Glif. But to qualify, they had to meet their goal of $10,000. They can raise more than $10,000 but if they raise one penny less by their 30 day deadline, they got nothing.
So, how’d they do? Well, they still have nine days until their deadline, which is November 2nd. So far, they’ve got 4,541 backers for a total of $115,062!
How Two Young Entrepreneurs Raised Over $100,000 in 30 Days Without Giving Up Any Ownership Of Their Idea
The website they used is called Kickstarter.com and it’s designed to be a funding platform for creative types using elements harnessing social media and the power of crowdsourcing. Millions of dollars get pledged on Kickstarter every month but it’s not investment capital. Project creators maintain ownership of their ideas.
In addition to raising capital, it’s a great way to gauge interest in a project before spending time and money to develop it. See, in addition to pledging funds (which can be as little as $1), backers provide feedback to the developers on a blog provided by the site. The blog includes ties to all the major social media sites as well as the ability to upload video and create a promotional widget for websites.
In return for their pledges, project creators create awards, usually something like you’ve probably seen done on telethons for public radio or TV. Pledge a certain dollar amount and you get something in return. It might be a free download, an autographed photo, a personalized video, a t-shirt or the actual product.
How Kickstarter Works
When a pledge is made, it’s not an empty promise. The pledge is handled by Amazon Checkout. Your credit card info is taken but your card isn’t charged unless the project is fully funded by the deadline. If the project is cancelled, backers get an email notifying them their cards won’t be charged.
The actual pledge amounts are only visible to the project creators but donors can see each other and interact on the project web page. Project creators setup an account with Amazon payments in advance. If they get full funding, the money is available 14 days after the deadline and can be transferred to a checking account.
Kickstarter’s take is 5% of the amount raised if the project gets fully funded. If not, creators pay nothing. Amazon also takes a small cut for credit card fees. There’s no fee to create a project. While pledges can be made by anyone with a credit card, projects can only be created by people in the US, for now.
When starting a project, a creator lists how much they need to raise and choose a deadline which can range from 1-90 days.
Projects on Kickstarter show up from the worlds of film, art, technology, music, design and publishing. You’re not allowed to use Kickstarter to raise funds for charity, causes or funding without a specific goal.
Once the project gets listed, it may be featured as a project of the day on Kickstarter and for a time will show up in the ‘recently launched’ category but beyond that, promotion is entirely up to the project’s creators. It’s worth a study of the the Kickstarter blog just to read about some of the ideas that have been used.
Crowdsourcing Works Like a Large Mastermind Group to Make Projects Better
Backers can leave comments that are visible to other backers as well as the project creators. One woman had an idea for creating a pop culture paper doll. She let backers vote on which celebrities would be portrayed and incorporated their suggestions into her project. Another project called Dessert Labs was launched to raise $1,000 and to get feedback on whether or not their idea for a mobile gluten-free storefront was viable. They ended up with 69 backers and raised $2753 along with the support and encouragement they needed to proceed with the project. Another project involved a comic book called Wonder City. They sought $5,000 and promised to actually include any backers that pledged $75 or more as characters in the comic. They got 62 backers and raised $5518.
Think about how you could use this for one of your own projects. If you’ve got a video project, a music project, a play, a book idea, an invention or some other creative project and financing has been holding you back, why not take it to Kickstarter?
How could you use this to raise the money you need before the end of the year? Please leave a comment below. I’d like to hear your thoughts.
This is an amazing way of doing things and very much in keeping with everything that’s good about the Internet. There have been other sites similar to this (Prosper and GoBigNetwork spring to mind) but this seems to have been set up much better than those. Of course, you do have to have a killer idea. But the “marketing” aspects of your listing can be very creative. Love the “bribe” of a character with your name, or getting the tripod if you donate $20 or more.
My mind is now spinning on things I’ve thought of but put aside until I have the money for them.
Bill Hibbler says
Couldn’t agree more, Geoff, and I had the same reaction. What project could I launch there and take advantage of the crowdsourcing opportunity from people that have actually invested in the project? What clever rewards could I come up with? I’m having a lot of fun playing with those questions.
mtn jim fisher says
Wow Bill! Now there’s another great avenue to get the creative juices flowing …:-)
Do you personally know anybody who’s used Kickstarter?
Crowdsourcing is a cool hybrid of outsourcing…and really flows well with the “large mastermind” concept of Kickstarter!
Here’s a good resource on info about crowdsourcing in case anybody is wondering…
Bill Hibbler says
Thanks, Jim! I first discovered Kickstarter when my friend Elizabeth Lee (http://twitter.com/#!/ElizabethanLee) used them for one of her projects which was fully funded. She was raising money for a cause, which apparently is no longer allowed on Kickstarter.
Thanks for the crowdsourcing link. I’m a big fan of Michel & Sylvie Fortin and they’re both friends. I’d also recommend reading Crowdsourcing by Jeff Howe, which is available on Amazon.
Eric Roberts says
what about a whole book dedication for the person that leaves the biggest pledge. that’s what i am going to do!
Bill Hibbler says
Good idea, Eric! You could do signed copies of the book when it’s published for people donating a certain level, too. It would essentially be like pre-selling copies of the book.
Malek Haneen says
How did you get so many backers though? I have put up 2 projects just recently and I cant get any play at all. It seems like there just so many of millions of projects now that kickstarter has become mainstream. Any help is greatly appriecieted!
Bill Hibbler says
I appreciate your comment. I started to write a reply, then realized this would make a good blog post. I’ll post it tomorrow. This way, you’ll get my feedback but, hopefully, some feedback from readers, too. And maybe some attention for your projects as well.
T. Ho Haryadi says
Hey this trail seems to have stopped just before the holidays. Well, I hope it starts again for the New Year with this ‘real question’ I have: what about protecting your idea before it goes into production? What if it tales off and gets ‘appropriated’ by someone else (say a big company) at the same time!? I actually have a telemedicine model to launch which would be vulnerable that way.
This is a great article. Thank you., I’d appreciate some feedback on my rough draft kicksarter video. any comments / critiques would be great: http://www.youtube.com/watch?v=sI9Cu7RSBaI
Hey every one my name is Oliver graham and this is my kickstarter project about my new comic book! Go to http://www.kickstarter.com/projects/640520835/planet-melecto-the-beginning to check it out !
Bill Hibbler says
Good luck on your project, Oliver!
Hey! Bill, wasn’t sure if anything was mentioned here or probably just missed it altogether about copyrights of one’s idea or invention?
All The Best,
Bill Hibbler says
Hi Jennifer, thanks for your comment! The site offers no protection from that. You’d need to file your own trademark, copyright, patent protections, etc. Details here: http://en.wikipedia.org/wiki/Crowd_funding#Intellectual_property_exposure