Dan Provost and Thomas Gerhardt have an idea. They love their iPhone 4’s camera and video functionality but there’s a problem. There’s no way to attach an iPhone to a tripod so they set out to solve that problem and put together a 3D printed prototype that includes the ability to serve as a ‘kickstand’ that lets you prop your iphone up at an angle. They call it the Glif.
After building a prototype and doing their homework, they discovered they’d need $10,000 up front to start the manufacturing process. Forgoing the usual strategy of funding through friends and family, they decided to try out a new website they’d heard about that helps inventors and creative types raise money. They setup a free account and put this video together:
They posted their project on this new site on October 2nd with the goal of raising $10.000. They’d accept donations as little as $1 but if you gave $20 or more, you’d get your own Glif when they’re manufactured. Regardless of how much they raised, they wouldn’t give up any ownership in the Glif. But to qualify, they had to meet their goal of $10,000. They can raise more than $10,000 but if they raise one penny less by their 30 day deadline, they got nothing.
So, how’d they do? Well, they still have nine days until their deadline, which is November 2nd. So far, they’ve got 4,541 backers for a total of $115,062!
How Two Young Entrepreneurs Raised Over $100,000 in 30 Days Without Giving Up Any Ownership Of Their Idea
The website they used is called Kickstarter.com and it’s designed to be a funding platform for creative types using elements harnessing social media and the power of crowdsourcing. Millions of dollars get pledged on Kickstarter every month but it’s not investment capital. Project creators maintain ownership of their ideas.
In addition to raising capital, it’s a great way to gauge interest in a project before spending time and money to develop it. See, in addition to pledging funds (which can be as little as $1), backers provide feedback to the developers on a blog provided by the site. The blog includes ties to all the major social media sites as well as the ability to upload video and create a promotional widget for websites.
In return for their pledges, project creators create awards, usually something like you’ve probably seen done on telethons for public radio or TV. Pledge a certain dollar amount and you get something in return. It might be a free download, an autographed photo, a personalized video, a t-shirt or the actual product.
How Kickstarter Works
When a pledge is made, it’s not an empty promise. The pledge is handled by Amazon Checkout. Your credit card info is taken but your card isn’t charged unless the project is fully funded by the deadline. If the project is cancelled, backers get an email notifying them their cards won’t be charged.
The actual pledge amounts are only visible to the project creators but donors can see each other and interact on the project web page. Project creators setup an account with Amazon payments in advance. If they get full funding, the money is available 14 days after the deadline and can be transferred to a checking account.
Kickstarter’s take is 5% of the amount raised if the project gets fully funded. If not, creators pay nothing. Amazon also takes a small cut for credit card fees. There’s no fee to create a project. While pledges can be made by anyone with a credit card, projects can only be created by people in the US, for now.
When starting a project, a creator lists how much they need to raise and choose a deadline which can range from 1-90 days.
Projects on Kickstarter show up from the worlds of film, art, technology, music, design and publishing. You’re not allowed to use Kickstarter to raise funds for charity, causes or funding without a specific goal.
Once the project gets listed, it may be featured as a project of the day on Kickstarter and for a time will show up in the ‘recently launched’ category but beyond that, promotion is entirely up to the project’s creators. It’s worth a study of the the Kickstarter blog just to read about some of the ideas that have been used.
Crowdsourcing Works Like a Large Mastermind Group to Make Projects Better
Backers can leave comments that are visible to other backers as well as the project creators. One woman had an idea for creating a pop culture paper doll. She let backers vote on which celebrities would be portrayed and incorporated their suggestions into her project. Another project called Dessert Labs was launched to raise $1,000 and to get feedback on whether or not their idea for a mobile gluten-free storefront was viable. They ended up with 69 backers and raised $2753 along with the support and encouragement they needed to proceed with the project. Another project involved a comic book called Wonder City. They sought $5,000 and promised to actually include any backers that pledged $75 or more as characters in the comic. They got 62 backers and raised $5518.
Think about how you could use this for one of your own projects. If you’ve got a video project, a music project, a play, a book idea, an invention or some other creative project and financing has been holding you back, why not take it to Kickstarter?
How could you use this to raise the money you need before the end of the year? Please leave a comment below. I’d like to hear your thoughts.