Every now and then, a truly phenomenal business idea comes along – something awesome, edgy, inspiring, uplifting. And if that something happens to be a business idea which actually helps kickstart other business ideas, then that’s something beyond exceptional. Take a look at the awesomeness that is Kickstarter…
What is Kickstarter?
Kickstarter is the world’s largest funding platform for creative projects. But instead of providing funding through traditional lending systems, Kickstarter facilitates funding via pledges from ordinary folk. Every week tens of thousands of people pledge millions of dollars to help launch fantastic business ideas in creative fields like music, art, film, technology, design, food and publishing.
How Does Kickstarter Work?
Kickstarter utilises what it terms a ‘new form of commerce and patronage’. Kickstarter is not about investing or lending money or buying shares into a creative venture. Project creators keep 100% ownership of their work and, instead of offering a financial return-on-investment to patrons, they offer unique products (like limited editions or first impressions) and fun experiences (like a VIP screening or launch party).
To get funding for a business idea, project creators click the ‘Share Your Project’ button on the Kickstarter website. Kickstarter asks a few questions about the project and approves it (or not – they do have strict guidelines) within a day or two.
Kickstarter reckons that over a million people visit their site each month to browse new business ideas. Ideas are listed per category; clicking on an idea will reveal more about it and allow you to demo the product, view the artwork, read the script etc. If you like it, you can back it by placing a minimum pledge of $1 (the average Kickstarter amounts to $75). Kickstarter works on all-or-nothing funding, so a project must reach its funding goal before time runs out or no money changes hands. In this way, says Kickstarter, creators are protected from developing projects with an insufficient budget and pledgers are protected from risk.
How Does Kickstarter Make its Money?
Kickstarter collects a 5% fee from the project’s funding total if, and only if, a project is successfully funded.
So far, 10 000 projects have been successfully funded. While most projects raise under $10 000, 94% of successful projects raise more than their goal. With that sort of success rate, there’s no doubt that this is a business idea with a real kick!