More Money, More Problems: The Challenge Of Managing Crowdfunding Success
from the it-takes-more-than-just-a-kickstart dept
A lot of the attention given to Kickstarter and other crowdfunding platforms these days has been spurred by the big runaway success stories — the Pebble smartwatch, the Double Fine Adventure, Amanda Palmer's project, and many others that exceeded their fundraising goals in the first few days and kept on climbing. The phenomenon is not limited to these multi-million dollar examples: countless smaller projects have shot past their more modest goals multiple times over.
Whether it's a $500 project that raises $10,000 or a $100,000 project that raises millions, the result for the creator is the same: a stunning success that has the potential to turn into a crisis or an even bigger opportunity, depending on how they handle it.
That's the other side of the double-edged sword that is success on Kickstarter, and it often gets ignored. If you're a creator with a product in the pipeline — whether it's software, hardware, an album, a film or anything else that takes time and work — and your plan is to raise some money while piloting it out to a few hundred people, suddenly having hundreds of thousands of paying customers on your hands can be more daunting than exciting.
Not only does the challenge of order fulfillment become much bigger and more complex (this is where a lot of campaigns fall down), there's also the issue of managing so many expectations. Hundreds of wall comments and private messages (some less polite and more demanding than others) start arriving, all while you're trying to finish the actual work. And that starts the moment the campaign picks up steam — meaning the actual money often won't be arriving for weeks.
Some creators have talked about the problem. Palmer Lucky, who kickstarted the Oculus Rift headset, faced the issue of excited backers drawn in by the popularity of the campaign who hadn't fully read the details, and were anticipating a more complete product than was actually promised. A 2012 study found higher rates of late delivery among overfunded projects.
A big part of the problem is the relatively lackluster backer management tools found on Kickstarter and similar services. Communication is a huge part of running a successful campaign, since things are bound to go wrong, but backers are almost always understanding as long as they aren't left in the dark. Runaway success projects — or at least the ones that still deliver — tend to move beyond Kickstarter for the hard work of customer management: they take the discussion to their own forums, they set up their own mailing lists and customer request systems, and they move more and more communication to more robust platforms (Kickstarter only offers blog-esque updates and an inflexible survey system). Apart from ensuring that a project delivers its goals on time, there's the fact that most crowdfunding campaigns are also about starting a business, which means hopefully converting lots of backers into repeat customers.
Ultimately, the success of crowdfunding campaigns seems to come down to how well the creators build and manage a community — and currently the crowdfunding platforms themselves can only play a small part in that.
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Filed Under: crowdfunding, sponsored post
Companies: kickstarter
Reader Comments
The First Word
“Really a key indication of how organized projects are...
Having backed a bunch of projects, you really learn quite quickly how organized the project creators are once the project closes. I've had some completely disappear and fail to keep people updated at all, which really makes me skeptical about ever supporting future projects. Others, however are very good about keeping you informed, and as things change or there's an impact, they're able to keep you up to date without it being a shock or anything.I wonder if one day that will be part of the analysis: how good is a project creator at further communicating with supporters.
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What? You don't like the hard-hitting, awesome insight from the mediocre Canadian rapper boy? He's over-qualified to write this stuff, what with his years of rapping and all.
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Execution
That business plan consists of (amongst other things) a Marketing Plan, an Operations Plan, and an Administrative Plan. Of course, when one does such planning they include a break-even analysis. Once one has that spreadsheet accomplished, it is easy to test various levels of demand. Then one can build an operations plan, with consideration to various levels of output. This thinking about the future might look like pipe dreaming, but it is also called planning. You might not make your highest expectation, but you have planned for that contingency.
In other words:
Proper
Planning
Prevents
Predictable
Preventable
Poor
Performance
Without the planning, the chances of a high level of execution become nil.
:End message
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Really a key indication of how organized projects are...
I wonder if one day that will be part of the analysis: how good is a project creator at further communicating with supporters.
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FOR TEN PERCENT "Kickstarter only offers blog-esque updates"!
SO, management opportunity! Just leverage from Kickstarter to handle the many big successes. You should for ordering / management services, at the rate the chumps are paying Kickstarter off-the-top for little more than a website and money transfers, get at least 80% of the gross.
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Re: FOR TEN PERCENT "Kickstarter only offers blog-esque updates"!
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Please fix this bug in the site at once, as I rely on "I've seen this post before" to mark when I've caught up. Having a post not in correct chronological position may result in my missing new posts that an old post is incorrectly sorted after.
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We're paying attention to reader feedback on this stuff, and we're certainly sympathetic to the fact that some changes may disrupt certain people's viewing habits -- every change always does. It's an evolving site, and you can expect to see lots of other new stuff appearing over time -- both related to sponsorship packages, and just related to our own content. And so far, the reaction to our new approach sponsored posts (admittedly only an initial reaction, as we haven't done many yet) has been overwhelmingly positive.
So, bear with us. We're listening to people's concerns, and we're working hard to grow the site and to support it by experimenting with some non-traditional sponsorship and advertising packages, rather than just burdening it with banner ads. Nothing is set in stone -- except our commitment to editorial independence and our standards for content.
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I need to trust that you have my best interests at heart, and when people can pay you to run articles, that strongly implies that you do not.
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Put it back to strictly chronological sort order.
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If post=sponsored=true, check if read
If read, go to next post, if not read, read
Fairly simple, though I too use the title of the top post to see if there is anything new. Maybe something could happen at the top of the sponsored post to...oh I forgot to look, there is a list of next/previous posts at the top, did they show the new one(s).
Maybe if there were one line links that get marked read after you see the page and then one would know that not marked links have not been seen.
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Fulfillment
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Perfect pyramid scam
What is the go with that, so they estimate the cost to 'kickstart' this project, then are happy to accept multiple times that amount ??
Why don't they close of their project once their goal is met, and let other projects benefit from investor money ?
Why do they just keep the money grab up, seems like a massive scam to me.
It's a wonder people are willing to invest anyway, it also removed competition, if it was cut off once your goal is met, it would give incentive to the investors to invest early to ensure they don't not miss the cut off.
So you get 10 times the amount you need, you KNOW you are not going to meet expectations. You also know you DONT NEED that amount of money, and the extra money is not used, (you said you did not need that amount in the first place).
So you pocket the extra money, close the project and have a nice holiday??
sounds like an internet pyramid scam to me, loosely disguised as 'kickstarter'.
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Re: Perfect pyramid scam
With a digital good, of course, you can deliver more copies of a product without increasing costs -- which is why digital goods tend to focus even more heavily on stretch goals. The Double Fine Adventure project was increased in scope based on the huge amount of money it made, allowing them to add all sorts of new features to the game.
So basically darryl, everything you said is wrong. The extra money IS used, the creators ARE trying to meet expectations (and often do) and nobody is "pocketing" anything (very few Kickstarter creators walk away with money left over -- in fact, in most cases, unforeseen costs mean they still operate the whole thing on a shoestring budget)
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MOVING THIS UP IS NOT GOING TO HELP IN ANY WAY.
"So basically darryl, everything you said is wrong." -- Here's a revolting tactic typical of Techdirt: the minion is "outing" an anonymous commenter. That means has access to the IP numbers, and the willingness to use that info to suppress / disparage comments. -- As indeed, every "reply" from the minion is pretense at answer while simply saying STFU. -- Yeah, you minions are all for free speech, so long as everyone agrees with you.
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I would probably be less irritated if I actually cared about the content of the post and it produced an interesting discussion, but for me, this is as bad as those "random person's favorite moments of the week" posts I dislike and already skip--except it's here every day and prevents me from seeing if something I actually want to read has shown up.
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Nice One
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