Jump Starting a Small Business with Kickstarter
If your small business thinks it has the next great idea, but you need some funding to get the project off the ground, Kickstarter might be for you.
Kickstarter is a crowd-funding website that lets entrepreneurs and business owners showcase their next great product and convince customers to buy into it. Of course, by essentially investing in the project, the customers, or kickstarters, receive everything from a thank you from the inventor for low contributions and the product itself for higher contributions.
Think of the television show Shark Tank, except the only investors you have to impress are actual customers.
Kickstarter recently released some statistics showing how effective crowd-funding on the site really is. To day, the New York-based company has received pledges of $261 million off 60,786 projects. Of those 60,000+ projects, 44 percent have been successfully funded, meaning the entrepreneur reached his or her goal going into the process.
“We’re big fans of numbers here at Kickstarter and we’ve shared many Kickstarter stats and trends on this blog,” co-founder Yancey Strickler wrote on the company’s blog. “Those posts have typically been tied to milestones, but we’ve always wanted a way to share our numbers consistently.”
The site is now pledging more transparency to help the public understand how effective of a tool it can be for small businesses and entrepreneurs.
Projects on Kickstarter range from technology to design to music endeavors. There are thousands currently on the site waiting for support. If a project doesn’t meet its funding goal, all of the money is returned to the investor.
Why is Kickstarter a great solution for your small business? Well if you have a project that you’ve been tooling around with that you think could really hit it big, Kickstarter could be a great way to receive funding. Kickstarter has a really strong online community. People that invest have a sense of pride in not only putting their money into what they feel is a great product, but also helping an entrepreneur along the way.
That community feels compelled to tell their social networks about the project, heightening the awareness even more. Kickstarter is essentially a social network. Project creators send updates to their investors and investors can easily communicate with the creator.
A perfect example of Kickstarter’s success omes from entrepreneur Julia Hu, who presented her invention — a vibrating wristband alarm clock — to a group of Silicon Valley investors. After her presentation, the group was stunned. “I mean, is this a company,” one of the investors said. Determined to get this product off the ground, Hu went to Kickstarter and nine months later, her product was retail-ready. It was impressive enough to be carried in the Apple Store.
“I heard tons of ‘no’s,” Hu told CNN Money. “The biggest challenge for a hardware company is, unlike a software company, it takes so much more money and time to validate a hypothesis. In terms of an investment decision, it’s just a very different one.”
Hu added that Kickstarter is essentially a large pre-order list for your product. If customers want it, they’re going to get it and the business is going to truly gain some traction.
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Kickstarter is a funding platform for creative projects and it could be the ultimate launching pad for your small business. Head over to the company’s blog to keep yourselves updated.
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