WATCH | Here's why businesses are Kickstarting themselves over and over again.
A new business model
Crowdfunding sites like Kickstarter are generally thought of as tools to help indie creators get their business ideas off the ground. But with more companies going back to start their second, third or sixth crowdfunding campaigns -- even after they've already "made it" -- the Kickstarter model is becoming an entirely new way to do business.
So, why, if you're a company, would you want to re-Kickstart yourself?
About one third of all Kickstarters are created by existing organizations.
A better place for funding and shopping?
“Crowdfunding, once you’re good at it, is better than trying to raise venture capital," Ethan Mollick, professor at the Wharton School, told Circa. "You don’t have to give away portions of your company [on Kickstarter].”
But going back for the pain-free funding is half the story. Kickstarter regulars also know that backers can easily find (and buy into) their latest gadget, game or art campaigns on the site, making Kickstarter a nice webstore, too.
The business advantage of having a Kickstarter "community" seems to be the primary reason why most of the campaigns started by existing organizations -- which make up one third of the site's campaigns -- are from companies that got their start on Kickstarter.
"Their products end up in stores -- Apple stores and retailers all over the world -- and yet they're still bringing their next idea back to Kickstarter," David Gallagher, director of communications with Kickstarter, told Circa.
The Kingdom Death board game made $12 million on its second Kickstarter. The game's creator, Adam Poots, is certainly a fan of the site for funding, but he told Circa it's also becoming a great place to "consume" products, too.
Circa asked Monkii Bars co-founder Dan Vinson why his company re-Kickstarted for the second version of its home gym product. "We don't have to take on investors," he said. "We don't have to take on debt; we can test the market."
Success begets success
As for the horror reports you've read about Kickstarted companies failing and leaving their backers hanging, Wharton School research shows that happens with only about nine percent of campaigns. And the fail rate is ever lower if you're only looking at repeat Kickstarter companies.
"Creators who come back and launch a second or third project, their success rate improves dramatically," Kickstarter's Gallagher said.
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