What is Kickstarter Used for in Business?

Key Concepts

Kickstarter, crowdfunding, Indiegogo, mass production, tribe building, marketing supercharging, product validation, PR/media attention, foundation building for multiple launches, bigger vision integration (equity crowdfunding, Patreon), feedback on prototypes, pre-ordering, perks and rewards.

What is Kickstarter Used For in Business?

Funding and Mass Production

Kickstarter is primarily used to secure funding for creative projects or new inventions. However, it goes beyond simple funding; it bridges the gap between an idea and a fully realized product or service. Many users, particularly students and clients of Salvador Brigman, leverage Kickstarter for mass production of physical products or to fund passion projects like films or books. The platform enables creators to take a prototype and scale it into a mass-produced item.

Building a Tribe and Community

Kickstarter allows business owners to build a community or "tribe" from scratch. Backers become part of the brand and receive the product upon completion. Supporters back the campaign and select perks and rewards, often pre-ordering the product. This fosters a sense of ownership and involvement.

Example: A backer at the $100 level might receive a copy of the product 2-5 months after backing.

Feedback and Product Refinement

Kickstarter provides invaluable feedback on prototypes. Backers are generally more forgiving than typical consumers, allowing creators to iron out kinks before a full-scale launch. This is especially useful before going to platforms like Amazon, where customers expect a highly refined product.

Supercharging Marketing and PR

Kickstarter frontloads the marketing process. Instead of marketing after production, creators build a tribe and generate buzz during development. This compresses the product launch into a short timeframe (typically 30 days), creating a sense of urgency.

Product Validation and Demand Assessment

Kickstarter helps determine if a product will sell. It validates demand by seeing if people are willing to spend money on the idea before it exists. This saves time and resources by avoiding years spent on a product with no market.

Example: A business owner with a successful existing business used Kickstarter to test a new invention, unsure if it would gain traction.

Generating PR and Media Attention

Kickstarter campaigns attract PR, influencer attention, and media coverage. This enhances brand image and makes it easier to sell products. Even a moderately successful campaign (e.g., raising $300,000) can be valuable for the positive publicity it generates.

Building a Foundation for Multiple Launches

Kickstarter can be used to build a foundation for future product launches. Creators can repeatedly engage their audience with new products and accessories. Previous backers are more likely to support subsequent campaigns, leading to faster funding.

Example: Salvador mentions his podcast, where he interviews people who have launched 10+ Kickstarter campaigns.

Integration with a Bigger Vision

Kickstarter can be a stepping stone to larger goals. It can help with injection molding costs or serve as a springboard for equity crowdfunding (e.g., WeFunder) or Patreon campaigns.

Example: A successful Kickstarter campaign can attract investors on WeFunder. A creator can transition backers to a Patreon for ongoing support.

Step-by-Step Processes

The video doesn't explicitly outline a step-by-step process for running a Kickstarter campaign, but it implies the following stages:

1. Prototype Development: Create a working prototype of the product.
2. Campaign Creation: Design a compelling campaign page with clear perks and rewards.
3. Marketing and Promotion: Build a tribe and generate buzz before and during the campaign.
4. Funding and Production: Secure funding and begin mass production.
5. Fulfillment: Ship the product to backers.
6. Post-Campaign Engagement: Continue engaging with the community for future launches.

Notable Quotes

• "Kickstarter is used to get funding for a creative project or a new invention."
• "You can use Kickstarter in order to bring in funding and to mass-roduce products."
• "When you do a crowdfunding campaign you are building a tribe from scratch."
• "Your time is extremely valuable and you could spend the next 3 to 5 years of your life trying to figure out if this product line is even worth your time."

Technical Terms and Concepts

• Crowdfunding: Raising money from a large number of people, typically via the internet.
• Kickstarter/Indiegogo: Popular crowdfunding platforms.
• Mass Production: Manufacturing products in large quantities.
• Tribe: A community of loyal supporters.
• Perks and Rewards: Incentives offered to backers in exchange for their support.
• Prototype: A preliminary model of a product.
• Opportunity Cost: The potential benefits one misses out on when choosing one alternative over another.
• Equity Crowdfunding: Raising capital by selling shares of a company to the public.
• Patreon: A platform for creators to receive recurring funding from their fans.
• Injection Molding: A manufacturing process for producing parts by injecting molten material into a mold.

Logical Connections

The video progresses logically from defining Kickstarter's basic function (funding) to exploring its multifaceted benefits for businesses. It connects funding with mass production, tribe building, marketing, product validation, PR, and long-term growth strategies. The examples provided illustrate how these benefits apply in real-world scenarios.

Synthesis/Conclusion

Kickstarter is more than just a funding platform; it's a powerful tool for businesses to validate ideas, build communities, refine products, and generate buzz. It allows for a compressed product launch cycle, provides invaluable feedback, and can serve as a foundation for future growth and expansion. By leveraging Kickstarter strategically, businesses can save time, money, and connect with a passionate audience eager to support their vision.