But what is crowdfunding? Crowdfunding is a way for new startup companies to raise money to be able to literally ‘kickstart’ their company. Companies will come up with ideas, whether its an invention, a service, a movie, album, sculpture or whatever, and they will pitch it to the Kickstarter audience in limited time campaign. In the campaign they’ll give you all the info you need to know – where your money is going, how long it will take to produce, what the final product will look like and heaps of other useful information.
The reward-based model means that by contributing towards the fund, you will ‘mostly’ get something in return. I say mostly because it doesn’t always work out, but a bit more on that later. With watch Kickstarters, most of the rewards will actually be one of the watches. As a microbrand watch creator, you need a certain amount to be able to fulfil the MOQ’s (minimum order quantities) of the watch producer, and so Kickstarter is the perfect platform for raising funds to do this. What it essentially boils down to is a pre-ordering service where a group of interested people invest to get something made.
Earlier I said mostly because Kickstarter campaigns don’t always work out. 9% of all Kickstarters that successfully fund, fail to deliver their rewards. Campaigns that ask for small amounts (under US$1000) are the most likely to fail, while campaigns requesting $10,000-$50,000 are the most likely to succeed. Watch Kickstarters generally fall into this later funding goal amount.
It’s usually the ridiculously too-good-to-be-true campaigns that don’t deliver their promises. Currently there is a miniature underwater breather apparatus on Indigogo that’s raised $840,000. There is no way that they will be able to deliver this to their backers. I’ts scientifically impossible, but people are falling for it.
Watch Kickstarters almost always successfully deliver their rewards, because they are not that far fetched. It’s easy to go from a working prototype to full scale production, all you need is the upfront funds to meet the MOQ’s. There is always the possibility that the rewards wont be delivered on time. This can be a real issue for many Kickstarter campaigns, but I think with proper communication, and keeping the backers (people funding the campaign) in the loop, can alleviate some of this tension.
So why do people fund Kickstarters? Because they love to get involved in the community of it. Its a very social way of being involved with a new company. You get to chat directly with the creator and often have direct input into the project. As a backer you become very involved (sometimes actively) in the process of creating and building something. Campaigners will send out regular updates, informing backers of new developments, and key milestones, and the anticipation that builds up till final shipping is electric! You also land up with something that is unique and made with loving care and attention to detail.
Here are a few Kickstarters that are currently running if you are interested. Watch the videos, get involved, get inspired and help someones dream come true!