Hardware · Crowdfunding

Kickstarter simplified its rules for projects, what does this mean for hardware entrepenuers?

Aren Kaser Founder and CEO at Igor Institute

June 5th, 2014

Kickstarter removed the old criteria for hardware projects that required entrepreneurs to show their work to backers, and to detail their background and how they will complete (manufacture) their project. Now, backers must decide whether or not a hardware project is feasible with less information. Could this lead to more delayed projects or the erosion of confidence in crowdfunding as a platform to invest in new products.

Sean Murphy Founder and Product Engineering Director at Igor Institute

June 5th, 2014

I think the change says more about competition between the crowdfunding platforms and Kickstarter's desire to stay in front. The review process doesn't scale well and as mentioned above it's questionable the impact it had on the quality of campaigns and their subsequent success rate. 

In general I think CF platforms in a bind in that from a revenue perspective that want to be perceived as a storefront for gadgets, but they can't stand behind the campaigns. From a consumer/backer POV, the platforms are not an advocate; they take a cut of the money and refer backers to the campaign. From the entrepreneurs view, they have to wonder if the service they get from the platform is worth the cost. Primarily the entrepreneur needs to drive traffic and press coverage to the platform. When the campaign ends, they suddenly need to shift traffic they've been pushing to the platform to their own site. 

It's possible the quality on KS will go down as a result of the change. It equally possible it will boost revenues and lower overhead. CF has always been about the idea that there's a huge supply of great ideas out there that didn't have an avenue to get funded. The platforms have helped HW development become fashionable, and that's bringing investors back to the table. That good news for entrepreneurs who have built a credible development team. 

Anonymous

June 5th, 2014

Probably not, for the same reason I suspect they are removing the rule: because it didn't seem to have much of an effect in the first place. Projects were already woefully under-delivering or even completely falling off the radar. Perhaps, by removing the perception of control, it will encourage funders to be more circumspect in their selections.

Shobhit Verma

June 5th, 2014

It means more revenue for kickstarter!

John Anderson

June 5th, 2014

I think that backers will need to have some common sense and a bit of reality in the complexity of a project and use that to gauge it's feasibility.  I recently backed a fairly simple LED USB Charger project (https://www.kickstarter.com/projects/idamerica/led-portable-charger), and as of right now it's right on schedule.  I would guess more complex projects, such as 3D printers, will have a higher rate of delays...or worse.

Steve Owens

June 5th, 2014

My guess is that if you can not create some kind of credibility, either through your team, or a product development company, you are not likely to get any backers.