Kickstarter & the Future of Crowdfunding

Kickstarter has been on fire recently. They’re obviously doing a lot of things right.

And there are still enough pieces of the puzzle that don’t quite fit perfectly into the “new economy”. From what I can tell, they provide a platform, but most of the success of the projects come from the hustle of project creators themselves & their ability to spread the message in their existing circles.

Also, as a Kickstarter supporter, I don’t particularly like the fact that I may or may not have expenses (depending on whether the project is succesful or not) a month out – especially if I have supported a lot of projects and now my bill will be ???

Chipin has been around for a long time, but it has nowhere near the experience of Kickstarter. Maybe the gambling nature of Kickstarter is where a lot of its appeal comes from – it’s hard to tell.

However, I can imagine a system that uses something like a WordPress widget, a self-hosted project page (on your own blog probably), a variable “due date”, a system that’s uses an escrow account to actually take money out of the supporter’s account and store it into a separate account (on a large scale that account’s interest could be funneled into charity).

Another issue I see is pricing. Kickstarter treats pricing as a simple fixed cost, which is probably almost never accurate. I feel for whoever it manufacturing & producing a physical good for the first time. I can’t imagine the number of unforeseen hurdles and costs they face actually bring a product to market. (I was supposed to receive my SpnKix about 4 months ago and from what I understand the entire process for the creator has been a series of unfortunate events).

Then there’s the issue of crazy-overfunding. Obviously the demand exceeds predictions so much that in retrospect it makes the entire Kickstarter process seem almost absurd, or at the very least like not the right tool for the job.

Take Chris Coyier’s recent campaign, which got funded in hours and now is sitting at 1600% overfunded. Chris could have done this without Kickstarter, without having to jump through the hoops – since he obviously has so much goodwill already built up that he doesn’t need their platform.

What I see with my experience with Kickstarter (and Quirky) is that there’s still a wide open field to redefine the current economic structure of how goods are created, funded, and produced. It’s a great – and obviously succesful – first step – but look for tons of innovation in this space in the coming years.

I want to throw Pinterest, Dwolla, Gumroad, Escrow, & Kickstarter in a blender and pour it into the future to see what comes out.

Update: This space is definitely heating up. Just read about Rally via Pando Daily.

Posted 12 years ago on 09 August 2012

About Parker

Parker Benjamin is the owner of DMAD and has been writing for the web for over 10 years. He is passionate about design, Wordpress, travel, language learning, fine dining, and online marketing. Note: Some links on this site are monetized by affiliate programs - see disclosure for more details.

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