Kickstarter and Indiegogo have come along way since they opened their doors to artists and filmmakers back in 2009/2008. Now, nearly a decade on it is clear things are changing. With Indiegogo recently announcing the launch of their marketplace and with news of Kickstarter’s co-founder and CEO, Yancey Strickler stepping down. What does the future hold for these platforms?
In 2012, Kickstarter introduced new guidelines for all hardware and product design projects in a blog post titled ‘Kickstarter is not a store’. These guidelines were designed to ensure creators could prove they had more than just an idea and warn backers of the risks involved. To this day, many backers see their donations as purchases and are quick to demand refunds when campaigns fail to deliver on their promised rewards. Although many campaigns are run by new businesses and failures are inevitable, it is easy to see why backers see it this way.
Gone are the days of creators knocking up campaigns on a shoestring and offering random merchandise for any donations. Campaigns are now meticulously put together, with some videos looking more like TV commercials and the offer is simply the product being produced.
Early this year, working in collaboration with data intelligence service TAB, we discovered that more and more campaigns were raising six-figures plus.
To understand more about these top campaigns we conducted a survey, publishing our findings in our Crowdfunding Champions 2017 report. Our results show how the stakes have been raised and the extent to which creators are going to ensure they raise as much as possible.
Of the 733 campaigns that we examined, the combined raise was $295,318,723 however, the combined goal was just $44,537,465. This amounts to an overfund of over $250m, nearly seven times the overall goal. On average, these campaigns spent 4-4.5 months preparing, hired external support and each spent nearly $50,000 in total on marketing.
For product-based campaigns, fundraising has evolved into pre-commerce and with it brings a change in the way campaigns are run.
The number of campaigns able to raise six-figures plus is only likely to increase as more money is invested in marketing. The question is, will this create an environment where smaller campaigns struggle to break through the noise of big budget, million dollar campaigns?