Kickstarter: Succeeding the First Time Around
Michael C Konas and Mike Cameron
September 16th, 2013
Funding the Lakebilly card game
We successfully funded our card game 'Lakebilly' via Kickstarter in 2012. Currently, the game is being manufactured and we anticipate taking it to market in the next few months. This was our first tangible product as well as our first attempt at running a Kickstarter. It took us over a year to bring the project to life. Here are some notes on what we learned about crowdfunding.
Kickstarter is only a funding platform
Kickstarter is a funding platform, not a marketing platform. Do not rely on Kickstarter to promote your project. We made the mistake of believing our presence on Kickstarter would pull in most of our pledges, which was not the case. Our project was the most visible when it was initially launched as it appeared toward the top of the lists, and became more difficult to find as time went on and newer projects appeared. You should be working on a grassroots approach at least a month before crowdfunding. The goal should be to generate awareness so people know what it is and to give them an opportunity to think about what they are willing to contribute. It is essential to get an initial funding push to build the confidence of potential backers. Be prepared to promote and push you project to everyone you know. Remember: you are responsible for bringing backers to your project and convincing them to pledge.
Do not assume people know
When contacting your inner circle of potential backers during your early campaign explain exactly what Kickstarter is. We reached out to family and friends that weren't necessarily tech savvy folks to begin with, and some had no idea what Kickstarter was. Describing Kickstarter as a preorder system for our game seemed to help. Be sure to point out that pledges are not collected unless the funding goal is reached, and that they are charged at the end of the project, not when they pledge.
Finding the right funding goal is one of the most tricky aspects of crowdfunding. Ideally, this should be as low as possible, while still being realistic and providing some breathing room for the project. You do not want to miss a $10,000 goal by $1000 when it could have been a $9000 goal. We came up with our funding goal by crunching the numbers on what an initial production run would cost. We paid out of pocket for additional expenses as well the huge investment of our own time in running the Kickstarter and working on the project itself. Be aware that Kickstarter , Amazon Payments, and your state government are all going to get a cut of what you bring in.
Funding Goal = Manufacturing Costs + Kickstarter Fee + Amazon Fee + Sales Tax + Shipping Costs + 10% Padding for Error
Give excited backers options
Offer many pledge levels of different value to backers. Include the typical entry levels (e.g. a single game) as well as larger premium levels for excited backers (e.g. custom illustrated card). Like all of the other crowdfunding authors, we were surprised at the generosity of our backers. The larger tiers filled quickly with people we knew (and some that we didn't know). Stretch goals are an excellent way to keep your initial funding goal low while raising interest and project value. Be sure to evaluate your stretch goals in terms of unit cost and selectively award them to specific pledge levels to maintain a healthy project. Be acutely aware of additional manufacturing and fulfillment costs in what you are promising. Setting stretch goals too high makes them unattainable, and too low can cause them to interfere with your budget, We did not reach any of our stretch goals as we just squeaked by our funding goal, but all of them were calculated to add value to the project without consuming the budget.
Know your costs
Have a good estimate on the capital you will need to make the project work as well as the capital you will have to personally invest. Be very cautious in your estimates, and pad the projection. Be honest about the amount of time you are willing to invest in the Kickstarter itself, as well as the amount of time it will take to complete the project. You should be armed with multiple manufacturing quotes for your project and should have a solid idea on the costs of fulfillment. As mentioned above, Kickstarter, Amazon Payments, and your state government are all going to get a cut of your pledges. Things to consider: shipping costs from the manufacture to your place of business, shipping costs from you to the backer, currency exchange rates, backers who pledge to your project but do not fulfill their payment, any advertising or promoting costs for the campaign. Realize that you are obligated to fulfill the project even at a loss, like this poor fellow who lost his house over his Kickstarter project.
Setting a completion date
Pad the completion date. This is worth repeating. Say it with me: 'I will pad my completion date!'. Estimate how long you think it will take to complete your project and double it. Ensure you include manufacturing and shipping time, vacation time, burnout, and unforeseen problems. If you are working within a small team, losing a key person for two weeks could be a huge deal. If the project is your full time gig, kudos to you, but most of us have day jobs. After completing your Kickstarter, you will be burnt out and will not to even look at the project for a few weeks. We were very ambitious about our project timeline and were naive to the process. We are currently 6 months past our estimated delivery date and counting. We learned this lesson the hard way, you shouldn't have to.
Stress and focus
Running a Kickstarter is stressful and demanding. Your brainchild will be in the limelight and open to all sorts of comments and criticism. Your great idea (and any ego you have attached to it) will now be quantified in dollars. Be prepared for an emotional ride. You will be checking for new pledges every 15 minutes, all day long. You will have dreams about pledges, and will wake up in the middle of the night to refresh the Kickstarter page. Our project was a very long month for us and things seemed to move slowly. The vast majority of successful Kickstarter campaigns, including ours, reach their funding goal only within 48 hours of closing. Note that self funding is not allowed, and will get your projects cancelled.
Graph from kicktraq.com
One of the more challenging aspects of our Kickstarter was staying focused and positive about the future of the project. More than once over the project were we very concerned about not reaching our goal and failing publicly. The best advice we can offer here is to run the Kickstarter as if you expect it to succeed, and be sure to do your homework. Research many projects and write ups to get a grasp on what you are up against. There are many newsworthy Kickstarter projects throughout the web and featured on the Kickstarter site itself. These projects seem to make vast amounts of money, hit their goals quickly and make it all look easy. Realize that failed projects rarely get any attention, the majority of successful projects just squeak by their funding goal on the last few days. Be committed to seeing the entire project through and give 100% until it is over. You will also likely have backers that hold off until the last few days of the campaign before pledging, and you will possibly have backers that will pull their funding with no explanation.
It is important that your project looks like it is ready to succeed when entering crowdfunding. Crowdfunding in general is turning into a storefront - many projects are appearing in a nearly completed form. This is not necessary for success, but you must ensure that your ideas are cohesive and have a clear direction. If possible, try to show some progress in the project during the Kickstarter campaign. This is great update material and builds confidence in your ability to pull it off.
Invest some time in creating a great video. Be passionate about your project and be sure to post updates about anything that you are doing to move things forward. Use photos and visual media wherever possible. If this is your first project, now is the time for you to call in all of the favors you can. Hit the social networks heavy and often. Be relentless. Yes, people will become annoyed with your persistence, but it is up to you to make the project succeed.
If you are building a project with multiple people, ensure that everyone has a clear role and responsibilities within the project. Clarify what happens when you need extra cash to finish production, and who has ownership over the project itself. It may sound unnecessary, but consider putting something in writing. The business side of things may or may not warrant any attention for you at this point, but I would suggest considering some of the basics.
- what do you do with any surplus funding?
- what happens when the project makes money after crowdfunding?
- are you confident in the abilities of your potential partner(s)?
- what happens if your partner(s) stop working on the project?
- how are you going to handle the books and track orders?
- who is going to be holding the bank account containing the money?
- what happens to the project after Kickstarter?
- how will you pay taxes on the pledges?
- how will you take the product to market?
- what tools will you use to sell it?
- will you need retailers or distributors?
- what will your pricing model look like?
Backers are awesome
This should go without saying, but your backers are the lifeblood of your project. They are willing to fund your ideas and will likely be supportive in your future endeavors. They will be your first outreach when your project is complete and have a vested interest in your project succeeding. View your backers as if they were shareholders in your company: keep them happy, field all of their questions promptly and honestly, and be as transparent as possible with them. We kept our backers in the loop with endless updates, prompt responses, and many thanks. It's really that simple.
Successfully funding a Kickstarter project is satisfying and empowering. Take your time, do some research, and be smart. With the right attitude and willingness to learn you can bring your project to life. We wish you the best of luck!
About the Lakebilly Card Game
Lakebilly is designed for 2 to 6 players who have an hour to spare and a few beers to drink - no boat required. The game is available for purchase online at www.lakebillycardgame.com