3 Reasons Why You Should STOP Using Kickstarter To Launch in 2024
TLDRIn this video, Kirsten Ross, an e-commerce strategist, discusses the risks and challenges of launching products on Kickstarter. She outlines the platform's oversaturation, the high cost of marketing to stand out, and the financial risks startups face. Ross suggests that most brands should reconsider crowdfunding and instead explore pre-order models on their own websites for a more controlled and profitable approach to product validation and inventory funding.
Takeaways
- 🚀 Kickstarter was once a go-to platform for entrepreneurs to launch and validate products, but recent trends suggest reconsidering its use.
- 🔍 Over the past three years, Kickstarter has become oversaturated, making it harder for new campaigns to stand out and gain traction.
- 💰 The 'price to play' on Kickstarter is high, requiring significant financial investment in pre-launch efforts and advertising to achieve success.
- 📈 Kickstarter's algorithm favors campaigns that are both popular and profitable, making it crucial to understand how to optimize for visibility on the platform.
- 📊 Success on Kickstarter often hinges on having a large pre-launch email list and audience, which can be costly to build and maintain.
- 💡 The need for substantial pre-launch preparation and advertising can put startups at financial risk, especially if they do not have deep pockets or a backup funding plan.
- 🏆 Despite the challenges, Kickstarter can still be beneficial for startups with deep pockets, existing audiences, or well-funded projects.
- 🚫 A lack of trust in crowdfunding campaigns due to past failures has made backers more cautious, impacting the success of new campaigns.
- 💼 The high costs associated with Kickstarter campaigns can deplete funds needed for inventory and operational costs, potentially jeopardizing a startup's future.
- 🛍️ An alternative strategy to Kickstarter is using a pre-order model on a website, which can validate products and generate revenue more quickly and cost-effectively.
Q & A
What is the main topic of the video script?
-The main topic of the video script is the discussion of the current state of Kickstarter as a platform for launching products and the reasons why entrepreneurs might want to reconsider using it.
Who is Kirsten Ross and what is her expertise?
-Kirsten Ross is an e-commerce strategist who works with people to launch and scale million-dollar brands. She has experience with crowdfunding campaigns on platforms like Kickstarter and Indiegogo, raising over five million dollars.
What are the three main reasons Kirsten Ross suggests reconsidering Kickstarter?
-The three main reasons are over-saturation of the platform, the high cost to play and achieve success on Kickstarter, and the risk it poses to startups due to the significant investment required without guaranteed returns.
What does 'over-saturation' mean in the context of Kickstarter?
-Over-saturation refers to the large number of campaigns on Kickstarter, making it more competitive and harder for new campaigns to stand out and gain traction.
How does Kickstarter's algorithm affect the visibility of campaigns?
-Kickstarter's algorithm looks for campaigns that are popular and profitable, favoring those that have raised significant funds or are gaining traction, to determine which campaigns to show to a broader audience.
What is the 'price to play' on Kickstarter and why is it a concern?
-The 'price to play' refers to the financial investment required to successfully launch and promote a campaign on Kickstarter. It is a concern because the costs associated with marketing and achieving visibility can be very high, potentially putting a startup's financial health at risk.
What is the alternative strategy Kirsten Ross suggests to Kickstarter for launching a product?
-The alternative strategy is using a pre-order model on one's own website, which allows for quicker validation of the product, lower costs, and a more controlled approach to customer acquisition and inventory management.
Why might a pre-order model on a personal website be more beneficial than Kickstarter?
-A pre-order model on a personal website can be more beneficial because it allows for immediate revenue, faster validation of the product, and a more conservative budget for marketing, reducing the financial risk compared to Kickstarter.
What are some of the financial implications of running a Kickstarter campaign according to the script?
-The financial implications include the costs of building a large email list, spending on advertising during the campaign, production of campaign materials like videos, and the potential for not covering inventory costs if the campaign does not meet its financial goals.
What is the concern regarding trust within the Kickstarter community mentioned in the script?
-The concern is that due to many startups not delivering on their promises or taking much longer than expected, there is a general lack of trust among backers, making them more cautious about which campaigns to support.
What does Kirsten Ross suggest for startups that are well-funded or have an existing audience?
-For well-funded startups or those with an existing audience, Kirsten suggests that Kickstarter can still be a good option due to the benefits of validation and social proof it provides, as long as they are aware of the costs involved.
Outlines
🚀 Reconsidering Kickstarter: The Changing Landscape for Entrepreneurs
Kirsten Ross, an ecommerce strategist, discusses a concerning trend in Kickstarter over the past three years. She emphasizes the need for entrepreneurs to reconsider using the platform for launching products. Ross has extensive experience with crowdfunding, having launched numerous campaigns and raised over five million dollars. She outlines three main reasons for the reconsideration and offers an alternative strategy for product launch, hinting at the challenges of oversaturation, high costs, and the risks involved with Kickstarter campaigns.
📉 Over-saturation and the High Price of Success on Kickstarter
The second paragraph delves into the issue of over-saturation on Kickstarter, which has made it increasingly difficult for new campaigns to gain visibility. Ross explains how Kickstarter's algorithm favors campaigns that are either popular or profitable, creating a competitive environment. She details the financial investment required for a successful campaign, including the costs of building a waitlist and ongoing advertising spend. This high 'price to play' can be a significant barrier for startups without substantial financial backing.
💡 The Risks of High Costs and Lack of Trust in Crowdfunding
In the third paragraph, Ross highlights the financial risks associated with Kickstarter campaigns, where the high costs of marketing and meeting campaign goals can jeopardize a startup's financial stability. She also touches on the lack of trust among backers due to past experiences with delayed or unfulfilled projects, which has led to a more cautious approach to crowdfunding. Ross suggests that unless a startup has a substantial budget and a backup plan, Kickstarter may not be the best avenue for product launch.
🛒 Alternative Launch Strategy: Pre-Orders on Your Own Website
The final paragraph introduces an alternative to Kickstarter, which is setting up a pre-order model on one's own website. Ross explains that this method allows for quicker validation of the product and revenue generation without the massive costs associated with Kickstarter campaigns. She suggests using a more conservative budget for direct customer acquisition and scaling up slowly. Ross offers resources and the opportunity to discuss this method further with her team, providing a potential solution for entrepreneurs looking to launch their products without the risks of crowdfunding.
Mindmap
Keywords
💡Kickstarter
💡Ecommerce Strategist
💡Crowdfunding Campaigns
💡Oversaturation
💡Algorithm
💡Market Validation
💡Pre-Order
💡Social Proof
💡Inventory
💡Price to Play
💡Risk
Highlights
Kickstarter was once the go-to platform for entrepreneurs to launch and validate their products but has seen a dangerous trend in recent years.
Kirsten Ross, an ecommerce strategist, has used Kickstarter and Indiegogo to launch products and raise over five million dollars.
The video discusses three reasons to reconsider using Kickstarter for product launches in 2022.
Oversaturation of Kickstarter campaigns has made it harder to stand out and gain traction.
Kickstarter's algorithm favors campaigns that are popular and profitable, making it more competitive.
The cost to play on Kickstarter is high due to the need for significant marketing investment to succeed.
A successful Kickstarter campaign requires a large pre-existing audience and substantial ad spend.
The financial investment for a Kickstarter campaign can be risky for startups without a backup funding plan.
High costs associated with Kickstarter campaigns can put startups at risk if they don't cover inventory and operating costs.
A lack of trust in crowdfunding platforms has arisen due to unfulfilled promises and delayed deliveries.
Backers are becoming more discerning, requiring campaigns to demonstrate a high level of readiness and reliability.
An alternative strategy to Kickstarter is presented: using a pre-order model on one's own website.
Pre-orders allow for faster validation of products and revenue generation without the high costs of Kickstarter.
The pre-order method is more profitable and can be scaled gradually with a smaller initial investment.
Resources are provided to help businesses decide between Kickstarter and the pre-order method.
The video concludes with a call to action for viewers to subscribe for regular ecommerce strategy content.
Transcripts
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