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What is Kickstarter?
Kickstarter, one of the globally leading crowdfunding companies, had entered the Singaporean industry a few years back, however despite its growing popularity; there are still some questions if crowdfunding in Singapore really works here or it if is worth it.
Crowdfunding started to get people’s attention when Brian Camelio launched ArtistShare in 2003. He aimed to give a digital platform for musicians to get donations from fans to produce digital recording. It soon opened its doors to videography and photography. Camelio soon developed a rewards-based crowdfunding model which promises incentives to backers such as getting their names printed in album covers or being the first to download the songs.
Then Kickstarter came in 2009 with almost the same reason: fund artists. What’s different with Kickstarter is it kept on expanding to cover other projects, its categories kept on branching out: Art, Comics, Crafts, Dance, Design, Fashion, Film & Video, Food, Games, Journalism, Music, Photography, Publishing, Technology, and Theater
Also while Kickstarter utilized the rewards-based crowdfunding model, they put up goals for the projects and added a limited time for each project to be funded. Rewards might be cool, but many backers pledge amounts less than needed to get a reward, with this it seems that many just want to help a project or realize a dream.
Kickstarter promotes projects which have realistic goals and plans. These projects must be independently created and must not be copied in any form from another source. The creators will decide the funding goal and the deadlines. The funding goal is the set amount of money the project creator needs to complete the project and not just to start with. Kickstarter does not charge if the funding goal is not met, it is as they call it ‘all-or-nothing’. If the funding is successful, Kickstarter will charge 5% fee and payment processing fees. Payment processing fees is 3% of funds plus $0.20 per pledge. For pledges under $10, they are charged $0.05 per pledge
Those who pledge money for the project either as donations or for rewards are called backers. . If successful the backer’s credit cards will be charged, if unsuccessful, they will not be charged at all. The rewards are the creator’s chance to share the project such as limited editions, copy of the work produced or a one-of-a-kind experience involving the project. Kickstarter does not allow fundraising for charity nor incentive offerings as rewards, prohibited items are out of the question.
As of 25th of May 2016, Kickstarter reported total dollars of $2,399,580,137 pledged by 10,932,156 backers. Out of 300,528 launched projects, 106,166 have been successfully funded. Kickstarter has 35.97% success rate.
What You Need to Launch a Business with Kickstarter Singapore
- If you are currently in Singapore and contemplating on trying out to launch your project in Kickstarter take note that you are putting your name on top of it and you have to be able to deliver what you promise as rewards to keep your credibility.
- You also have to open a bank account in US, UK, Australia, Canada, New Zealand Switzerland, the Netherlands, Ireland, Norway, Denmark, Sweden, Germany, Spain, Italy, France, Austria, Belgium, and Luxembourg. Singapore is currently not on the list.
- Despite using this platform in Singapore, you will be reaching out to international community. If your rewards required shipping, be ready to ship them internationally and lay plans to efficiently cover the costs.
- You need to bring in your traffic. Kickstarter basically is just a platform where creators and backers meet. While Kickstarter have millions of visits a day, there are also various projects that keep on flooding each day. To make sure that yours stands out, tell you family and friends to share you project.
- There is no assurance that your project will be fully funded. Kickstarter has 97% success rate, it means more than half of the launched projects were not funded.
The Advantages and Disadvantages of Building a Business with Kickstarter Singapore
Kickstarter is not responsible in overseeing the completion of the projects. The creators are responsible in the project development and in updating the backers of its progress; therefore Kickstarter cannot guarantee the projects and does not investigate the possibility of the project’s completion. The backers have to decide for themselves the worthiness of the projects and their validity before pledging.
Kickstarter created an open environment where the creators can easily communicate with the backers. The creators should take care not to mislead the backers with misinterpreted facts. If the project involves manufacturing something, a prototype has to be shown, but photorealistic renderings are prohibited.
Despite being fully funded there is no guarantee that the rewards will be fulfilled or be delivered on time. Take note that Kickstarter will not intervene on this part. Its only job is to connect backers to the creators.
Singapore based start-up Pirate3D launched its highly anticipated Buccaneer 3D printer on Kickstarter in 2013. With a goal of $100, 00, Pirate3D received funds worth of $1,438,765 from more than 3,300 global Kickstarter backers. Some paid $297 to $799 upfront, expecting their 3d printers to arrive by 2014, however only around 800 printers was made. The project collapsed, leaving the backers disappointed, either still waiting for their 3D printer or demanding refunds. According to chief operating officer Brendan Goh of P3D, the company needs to sell some printers to make $2million to $3million to bet back on track.
Goh tried to be optimistic by targeting on fulfilling the promises to the backers instead of refunding. He clarified that they are going back to the basics of the project to build printers with better quality. With every 4 printers sold, one can be built for a backer or do a refund. The last project update on Kickstarter was in October 2015. It has left most backers hanging since.
Many wonder why Kickstarter won’t get involve with the case and many backers grow impatient, however Kickstarter is absolved of the case as they had not given any guarantee from the start regardless on the amount money and number of people involved. P3D hasn’t updated their sites nor answered emails. Despite promises that P3D will fulfill their promises, some branded them as fraud. They failed in planning and overestimated.
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