I’m a huge fan of Kickstarter. It’s allowed companies to receive millions of dollars in funding to create exciting products which would have otherwise never existed. But with no real restrictions or legal accountability we’re seeing Kickstarter slowly turn into the Wild West before our eyes. Has Kickstarter already gone too far, or is it running perfectly on track with the modern crowdfunding revolution?
This week Pebble launched their latest Kickstarter campaign for the Pebble Time – the next smartwatch from the company which started it all. But wait, aren’t Pebble a multi-million dollar company after the success of their Pebble and Pebble Steel smartwatches? Correct. So why would they need to turn to crowdfunding to launch a new product? This is where things start to get interesting. The core idea of Kickstarter is for start ups to turn to the end user to help them make their dream products become a reality. It’s an awesome concept. Ideas which would usually struggle to get funding are coming to life thanks to the power of Kickstarter and social media. Campaigns spread virally like wildfire, in minutes people across the world can hear about your product and hand over some cash to help fund it.
But is it wrong for a company to use Kickstarter basically as a preorder platform? That’s exactly what Pebble are doing. They don’t need the money up front to produce their product, they’re a large enough company now to research, develop and launch a new product on their own. In fact they’re obviously already pretty far through that process, as the new Pebble Time is said to be launching in May of this year. Yet Kickstarter don’t really seem to care, probably because they benefit significantly… from their fees. Pebble Time is breaking records with over $8 million in funding in just over 20 hours since the campaign launched. Of course, Kickstarter will get a percentage of the final amount, so it’s no surprise that they don’t care. But should they?
It’s a difficult question to answer. On one end campaigns like this almost go against the core concept of Kickstarter. Pebble are basically using Kickstarter as a storefront. Sure, they lose out on a small percentage of the final funding amount due to Kickstarter’s fees. But as a result they don’t need to develop their own preorder system, they don’t need to worry about handling the large influx of traffic to the website, and they get a major marketing benefit due to the nature of the campaign itself. Everyone’s talking about it, tech sites are writing articles, social media is buzzing with discussions, and obviously we’re sat here speaking about it right now. Every time their campaign breaks Kickstarter records, tweets go out about it, articles get written about it. It’s all free publicity for the product, helping to boost sales even more.
So, how does that affect the end users? It doesn’t really, in fact it’s almost a good thing. Fans of the product are able to preorder the latest iteration at a reduced price a few months before it’s released. At the same time they’re supporting a company whose product they feel passionate about. Hell, I’ve even preordered one myself… the early bird pricing of a $40 discount was too hard to resist (and we know how much I love my smartwatches). I’ll admit it – I’m part of the problem.
But has Kickstarter really gone too far? Not yet. Personally I have no problem with the Pebble Time campaign. But is it something I want to see become more common on Kickstarter? Not really. Kickstarter is for start ups to make their dreams come true. I don’t want to see large companies swoop in and drown out the noise from the little guys. Pebble is kind of an exception, they started on Kickstarter, so there’s something slightly humbling about turning to crowdfunding once again to launch the next true iteration of the product which Kickstarter helped make a reality. It’s too early yet to say whether Kickstarter has gone too far, but we certainly should all be keeping a close eye on it. Kickstarter holds an incredibly powerful position in the future of crowdfunding, one which I hope it doesn’t abuse.
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