The kick that started it all
It is now considered to be one of the most effective forms of crowd funding, a way to get the starting capital you need when banks deny you a loan because they have no faith in your idea. The website called Kickstarter has been ever growing in popularity ever since it was first introduced in 2009. The company’s growth goes hand in hand with the growth of crowd funding overall. The reason I want to have a look at this still relatively new phenomenon is the fact that it is such a modern idea and that it may be defining for a great number of companies and starters in the 21st century. It might help you out one day.
The origin of crowdfunding
The first official products financed by crowdfunding hit the shelves at the start of the 21st century and the very late 20th century. Up until this point, it was not a known concept at all and practically unheard of. Even though there are exceptions through history, especially regarding the church in the late middle ages, this was the first time it was used on a basic civilian level. Therefore, it took a considerable amount of time before it actually started growing as rapidly as it right now. It was not before 2009 crowdfunding spread from its country of origin, the United States. At first, only artistic projects like art, music or even plays made use of the concept. This way the fans made it possible for their artist to continue creating his or her art without having to ask a loan, which for artists are of course often hard to get.
The most important thing that suddenly made crowdfunding possible would be the rise of the internet. People now had an easy way to support their favourite artist or producer from anywhere in the world. The first notable instance of this happening can be found in the year 1997 when the band Marillion used their internet campaign to fund their nationwide tour and later on paying for their studio produced albums.
When people saw the effect of crowdfunding the concept spread to multiple industries. First, the movie and film industries took notice, making it possible for small-town directors to have the ideas for their movies come to life. One thing to note is that the term crowdfunding was actually thought up in 2006, therefore people were doing it long before there wasn’t even a name for it.
The total amount funded by then was a staggering $1,523,718,656
The start of Kickstarter
After crowdfunding had spread through the U.S. and it had become a widespread phenomenon for American businesses, there was one company that ceased its opportunity to become the biggest marketplace for crowdfunding, bringing both people in need of funding and willing investors together. On 28th of April 2009, the company was officially created and brought to life by Perry Chen, Yancey Strickler, and Charles Adler. These visionaries were soon to become businessmen, opening the doors for people all over the world to sponsor their idols or to start investing in what they think will be the next big thing.
The model Kickstarter works with, is relatively simple but genius in its own way. The site works with funders and creators from an ever-expanding pool of countries. Here these people meet and it is possible for them to show off their ideas or support the ideas of others. What makes Kickstarter so great for a considerable amount of people is that it cuts out the middleman, in this case, banks or other loan lenders. There is a direct connection between producer and potential customer. Kickstarter itself does not get involved with promotion or advertisement of the products on their site. All they do is offer a safe, and now well-known, place to show your product or idea. The costs for this can, therefore, stay relatively low. They ask 5-8% of the final funds that your idea or product receives. Where other sites usually also claim part of the ownership of the product.
As a reward for funding the product, producers often offer something in return for the funding when it actually becomes a success. This can vary on many occasions, however, rewards from a free sample of the product to actual partial ownership, regarding how big the donation is, are not uncommon.
Now and future funding
The numbers and graphs point to Kickstarter having a bright future. The company, together with the concept of crowdfunding, is booming and spreading like wildfire. In 2015, now three years ago, and when the company was only six years old, Kickstarter had launched 207,135 projects, which were all funded in one way or the other. The total amount funded by then was a staggering $1,523,718,656. There is no doubt this number has become much bigger by now.
The total amount funded by then was a staggering $1,523,718,656
As the company has cemented itself as the market leader and THE place for crowdfunding, it will be very hard for the runners-up to come even close to where Kickstarter is right now. As long as they keep providing their service and keep their prices where they are, lower than their competitors, the company will have no trouble whatsoever for the times to come. Their dominance makes them a safe bet for companies and their investors.
The current market trends don’t indicate a decline in their future profits either, quite the opposite in fact. The fact that crowdfunding is such a modern idea that really focuses on the individual in business, it is no surprise that it fits the theme of the 21st century so perfectly. Over the last decades, the individual consumer has become more and more important in the business world, which ties in with Kickstarter and the concept of crowdfunding neatly.
Over the last decades, the individual consumer has become more and more important in the business world
Now is your chance
So, we can conclude that there was never a time better suited for starters and young companies. More and more has the economy shifted from one that is ruled by faceless companies to one that is more focused on the individual. With sites and comparable companies just like Kickstarter, it is now easier than ever to enter the business world with an idea of what you think will blow people’s minds. Therefore, do not feel hold back when you have an idea and you may not get the support you expected. There are other ways to find the funding you need because never before was the market more suited for you.
Max Kanne 28-03-2018
Buildwith. (sd). Kickstarter Customers. Opgehaald van BuildWith: https://trends.builtwith.com/widgets/Kickstarter/Market-Share
Kickstarter. (sd). Kickstarter. Opgehaald van Kicksterter: https://www.kickstarter.com/
Wikipedia. (2018, 03 21). Crowdfunding-Wikipedia. Opgehaald van Wikipedia: https://en.wikipedia.org/wiki/Crowdfunding#History
Wikipedia. (2018, 03 17). Kickstarter. Opgehaald van Kicksterter-Wikipedia: https://en.wikipedia.org/wiki/Kickstarter