The Death of Kickstarter (or) Why the Crowds are Dispersing

Kickstarter Should do a Campaign for Itself.

Today I sent an email to two guys I supported on Kickstarter.  They had developed a sleek wooden standing desk and I “invested” $300.  Their campaign was successfully funded and I was delighted thinking about my new desk – to be coming by mid-December.  Then in early December they emailed saying they were making a few design tweaks and the desks would still ship out by late December.  That was 8 weeks ago.  Nary a word since.

Today I emailed the two guys. Nothing.  In this age of instant customer service from online sellers, I admit to being more annoyed than I likely should be.  I also started to use my wait time (which is now at 22 hours) to see if anyone else has had this kind of problem.  I googled “kickstarter fail” and “kickstarter accountability” and was stunned by the number of stories about successfully funded campaigns that never fulfill their orders, never build out product, never even make it past the prototype stage.  Like, 30% of projects according to one recent survey.

Wow.

If that figure checks out, that could mean that upwards of $300 million (Kickstarter has generated  $1billion in funding) was invested in projects that never came through.  Assuming that most entrepreneurs want to be successful and are generally honest people, the question is screaming out, What happens with these projects!?  And, how hard would it be for some of these small projects to become meaningful income generating businesses?  (We still need more JOBS in this country, right?)

I love working with creatives and building their businesses alongside.  So the stories of failure are pretty upsetting to me.  I read one heartbreaking story about a comic-book artist who artists who decided to burn his books after successfully raising “enough” to publish and ship because he ran out of money and couldn’t afford to ship them.  



Kickstarter is ostensibly aware of the problem and has announced new rules regarding projects that fail to deliver on time
.  Mostly the rules rely on getting the investors/donors their money back.

But here’s the thing, just because you get your money back doesn’t mean that that-feel-good-feeling-of-connecting-to-someone’s-dream-and-maybe-even-the-cosmos-and-giving-them-that-extra-love-so-they-can-go-all-the way-feeling…

will … ever … come … back.

We didn’t do Kickstarter in droves because of the money. We wanted that feeling. And that’s why Kickstarter is starting to see a dramatic decline in funders/investors.

You do not hear me saying that crowdfunding is dead.  What you should hear me saying (because now I’m actually going to say it) is that crowdfunding platforms cannot simply build a web platform to connect investors and startups and think that the business of building startups will take care of itself.  Kickstarter, indiegogo, crowdraise, and all others, will have to do what the rest of us angels do: put some effort into the success of the startups by offering them guidance, support, connections, and help planning their success.

I get that many crowdfunded campaigns are for one-off projects.  And that is important because it pushes innovation and creativity in the marketplace of design, games, and products.  But in a nation that is transitioning out of the factory economy and into the creative economy, we need more successful startups, not just more products and projects.

So, Kickstarter, I challenge you to launch a campaign to support all the startups you churn through your platform.   I challenge you to raise $5million – about half of what the most successful Kickstarter campaign raised – and launch a startup bootcamp, or mentor network, or series of small biz workshops, or accelerator.  Or set aside 10% of profits to create small business trainings. Whatever your customers think they could benefit most from.  But don’t just keep taking your 8 percent all the while failure becomes the norm.  Because crowds love success.  And right now, the crowds are not loving Kickstarter like we once did.