Lately, we’ve been hearing a lot about projects raising millions on the Kickstarter crowdfunding platform. But did you know that the site is also a great place to spot trends in food, design, entertainment and culture? A quick search can reveal what types of projects creatives and entrepreneurs alike are working on as well as which projects supporters are throwing the most money behind. Brands of all sizes can benefit from staying on top of this burgeoning movement as it edges ever closer toward the mainstream.
Crowdfunding is hot, and Kickstarter is where it’s at for budding businesses with over $348m successfully raised and roughly 1 million unique monthly visitors.
Kickstarter funding stats as of November 8, 2012
Monthly site traffic for Kickstarter (from compete.com)
New Ways to Get Paid
While traditional lenders remain wary of funding unproven concepts, crowdfunding cuts out the middleman by allowing entrepreneurs to receive capital in exchange for rewards ranging from a simple “Thank You” tweet all the way up to private concerts, lifetime product subscriptions, and producer credits on films.
We’ve found that Kickstarter can be a great way to quickly see what’s relevant to enthusiasts of everything from indie gaming to modern dance to high design. In anticipation of our upcoming trend report for 2013, we took a look at the types of projects that have been most popular on the site. Here’s how:
Here you can look at “Popular This Week” and “Recently Successfully Funded” projects for a broad snapshot of what’s trending, or dig into categories or geographic regions to look more deeply at specific segments.
Here at Room 214, we love to eat, so naturally we went for the “Food” category first, focusing further by clicking on the “See more…” link under the “Recently Successfully Funded” heading. Here you can scroll through hundreds of projects that met their funding goals, all sorted by date. Here are some themes we saw:
- Condiments – “Probiotic hot sauce”, “Manly Mayo”, “Top Secret Burger Sauce”, “Honey Badger BBQ Sauce” – handcrafted flavor enhancers are big
- Desserts and snacks – Popsicles, vegan ice cream, a cupcakes+drinks bar, lots of chocolate (including “chocolate polyhedral gaming dice”), and even marshmallows – craft indulgence is booming
- Drinks – Beer, wine, cocktail bitters, mead, and other alcoholic beverages, as well as coffee, tea, and juice products – people dig unique potables
- Local – Brewpubs, bakeries, food trucks, farms, and restaurants – small businesses across the US are turning to Kickstarter to rally fans.
Crowdfunding Goes Big
A number of campaigns have raised over one million dollars on Kickstarter for new products from an Android-based video game system to an E-paper watch to a series of comic book reprints. This speaks not only to the growing popularity of the platform, but also to the site’s ability to fulfill untapped demand for niche innovations and art projects.
Amanda Palmer, who rose to fame with the band The Dresden Dolls, recently raised over $1.1m for a large-scale solo project involving a studio album, tour, and art book (even The Economist was impressed). Penny Arcade, a comics website with a huge cult following, raised over $500,000 to reduce the site’s dependence on ads and create new content. And Charlie Kaufman, writer of “Eternal Sunshine of the Spotless Mind” and “Being John Malkovich” recently raised $400,000 for his first animated film.
Cultural Capital has done research on Millennials that suggests that “(t)he brands that will succeed most readily are the ones that represent the core values and represent their role and purpose in people’s lives.”
The Kickstarter platform itself speaks to this quest for authentic connections with artists and artisans and support for companies espousing like-minded ideals. But Kickstarter isn’t the only game in town: Indiegogo and GoFundMe offer similar methods for raising donation-based funds, while a host of sites have recently sprung up to offer small business equity investments inlight of the passage of the JOBS Act, which makes such transactions legal for average consumers. Soon we may be able to directly invest in our favorite brands to support their growth, a concept that has the potential to fundamentally revolutionize how small businesses raise capital and how we interact with young brands.
Crowdfund With Caution
All of this money hasn’t come without some controversy, however. Many successfully funded campaigns have suffered from long delays in reward fulfillment. Some observers have also accused certain artists of fan exploitation as evidenced in a series of posts between Amanda Palmer and indie record producer Steve Albini who accused her of going too far in soliciting free musicians after raising so much money on Kickstarter. As a result of such issues, Kickstarter has recently added a mandatory “Risks and Challenges” section to each campaign page where fundraisers must disclose potential hurdles to project success after funding.
What’s That Got To Do With Me?
It may not make sense for established brands to participate directly in crowdfunding campaigns. However, marketers can learn a lot about their consumers and emerging trends by perusing popular projects on these platforms. Some key insights include:
- Kickstarter is a great place to stay on top of trends in an array of industries
- Many fans are no longer content with simply liking their favorite artists on Facebook. They are willing to chip in real money (up to thousands of dollars in some cases) to show their support if they feel the cause is worthy.
- Artists and artisans can now further segment their audiences by offering support levels from $1 to $10,000, thus maximizing revenue from those willing to pay for unique experiences and limited edition products.
- The quest for authenticity, support for independent producers, and investment in local economies all continue motivate fans, enthusiasts, and consumers. Give your audience something to believe in and rally behind, and the results may surprise you.
- Social sharing is driving increased fanbases, but brands must continue to give people a reason to care throughout a project’s lifecycle. It’s not enough to put something out there and hope people connect with it – promotion, fan interaction, and solid follow-through are all critical for successful Kickstarter projects, and the same holds true for brand campaigns.
So Now What?
The democratization of arts patronage and small business investment signals a revolution in the way startups compete with established players. While big brands struggle with “authentic engagement”, entrepreneurs are increasingly appealing directly to a tuned-in audience willing to support them with enthusiastic social sharing and real dollars. There have been a few bumps along the way, but it seems just a matter of time before innovative indie campaigns reach primetime success on Kickstarter and other crowdfunding sites. In the meantime, take a few minutes to browse around and see what trendsetters are creating and funding today.