Pro's and Con's of Kickstarter vs. Private funding vs. Licensing

[DaRK9]

I have a product that I want to bring to market next year. It's a children's toy, trick or treat basket and story combo for Halloween.

Right now I am weighing the options on funding. I feel that Kickstarter is a great way to further validate the market before going into production, but may also decrease initial revenue. My other concern is that I would need to raise funds before Halloween when people aren't as interested. Case in point being the decked out cooler that failed in the fall, then succeeded next year in the summer.

I'd like to hear from anyone with a successful Kickstarter campaign and to see if they would have rather went into production with private funding instead.

Other idea is licensing. This is a seasonal product so I am also keeping this route open. So far this is looking pretty nice. No manufacturing, shipping etc. Just ordered One Simple Idea, so I'm going to read that before making any final decisions.

EDIT: Licensing should also get me into more stores.

Any thoughts are welcome.

 

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[Testament]

Hey DaRK!

So (through the grace of my mentor), I've had the chance to work on about 4 successful kickstarter/indiegogo campaigns (and one *very* unsuccessful one :O). I'm not going to say I'm an expert, but I think I've gotten some pretty good insights into the ins and outs of crowd-funding a project. I don't have experience with your other two options, so I'll just give you my thoughts on crowd-funding.

One of the things to be wary of with crowd-funding is that a project can easily balloon waaayyy out of control if you don't have a VERY solid idea of exactly how long/how much money/etc. it's going to take to actually get your product into the hands of your eager backers. I can't divulge the exact name of the project, but one of the campaigns I worked on is facing that right now. They made a little less than 500k last year and promised the product would be out within a few months. It's been about a year and a half now and they're still struggling to get the initial product finished - let alone all the stretch goals they promised.

With employee salaries and their overhead, they've burned through a fair amount of their money...and in the meantime, while they've been struggling to get a finished product out the door, several big name competitors have already rolled out their own versions of this company's product. If you were to take a look at their Kickstarter page, you'd get a good look at a sea of frustrated backer comments. So you have to be careful if you're going to go the crowd-funding route.

On the OTHER hand, I've been a part of much more successful crowd-funding campaigns, that pretty much already had their idea down and a product ready to go. They pretty much just needed the funds to scale, and they were good to send out their product within a reasonable time around the original date they promised. The campaigns that followed that pattern were massively profitable, and probably wouldn't have been able to scale that much without crowd-funding their project.

So just keep that in mind if you're thinking of doing crowd-funding. Also, Indiegogo has much better stat tracking than Kickstarter. Here's a cool little list of pros and cons of the two that people brought up on Quora: https://www.quora.com/What-are-the-fundamental-differences-between-Kickstarter-and-Indiegogo

 

[DaRK9]

Hey DaRK!

So (through the grace of my mentor), I've had the chance to work on about 4 successful kickstarter/indiegogo campaigns (and one *very* unsuccessful one :O). I'm not going to say I'm an expert, but I think I've gotten some pretty good insights into the ins and outs of crowd-funding a project. I don't have experience with your other two options, so I'll just give you my thoughts on crowd-funding.

One of the things to be wary of with crowd-funding is that a project can easily balloon waaayyy out of control if you don't have a VERY solid idea of exactly how long/how much money/etc. it's going to take to actually get your product into the hands of your eager backers. I can't divulge the exact name of the project, but one of the campaigns I worked on is facing that right now. They made a little less than 500k last year and promised the product would be out within a few months. It's been about a year and a half now and they're still struggling to get the initial product finished - let alone all the stretch goals they promised.

With employee salaries and their overhead, they've burned through a fair amount of their money...and in the meantime, while they've been struggling to get a finished product out the door, several big name competitors have already rolled out their own versions of this company's product. If you were to take a look at their Kickstarter page, you'd get a good look at a sea of frustrated backer comments. So you have to be careful if you're going to go the crowd-funding route.

On the OTHER hand, I've been a part of much more successful crowd-funding campaigns, that pretty much already had their idea down and a product ready to go. They pretty much just needed the funds to scale, and they were good to send out their product within a reasonable time around the original date they promised. The campaigns that followed that pattern were massively profitable, and probably wouldn't have been able to scale that much without crowd-funding their project.

So just keep that in mind if you're thinking of doing crowd-funding. Also, Indiegogo has much better stat tracking than Kickstarter. Here's a cool little list of pros and cons of the two that people brought up on Quora: https://www.quora.com/What-are-the-fundamental-differences-between-Kickstarter-and-Indiegogo

Awesome. That is what I was looking for. I feel like with a seasonal product, time to market is imminent. A big company taking the product before I can get space is my big fear.

Now to start calling...

 

[ddzc]

This has been on my mind for a little while.

If you launch a kickstarter campaign months out with your designs, specs, etc...wouldn't you be afraid of someone stealing those concepts and designs and launching it to the market before you?

 

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[Deleted35442]

I hear bad things about IndieGoGo. Go with Kickstarter. If what I hear is still true of them (only taking a 5% cut) I'll go with them. Anymore, no way. They got the traffic, they got the launchpad, but that's all they offer. My friend who wanted to launch there said they asked for more than 5% but can't verify this. Don't put out the design/specs, get a patent pending, go the Kickstarter route, why not. I want to for a clothing concept I'm working on.

 

[Testament]

I hear bad things about IndieGoGo. Go with Kickstarter. If what I hear is still true of them (only taking a 5% cut) I'll go with them. Anymore, no way. They got the traffic, they got the launchpad, but that's all they offer. My friend who wanted to launch there said they asked for more than 5% but can't verify this. Don't put out the design/specs, get a patent pending, go the Kickstarter route, why not. I want to for a clothing concept I'm working on.

Yeah, well I have a friend who made a hundred billionty dollars via a crowd-funded lighter repair app who said that you're wrong. So there.

 

[chriss.greig]

Ran a pretty succesful KS campaign but as mentioned above our alpha product was already ready and playable for the KS. (Video game) that sure helped being able to show off actual footage.

 

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