Have a unique idea?
Looking for a number of ways to boost your idea?
Crowdfunding is the best solution for you. If you’re new to the business world and looking for the best place to kickstart your business? Look no further than “Kickstarter”.
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What is Kickstarter?
Kickstarter is the one-stop funding website for productive and creative projects. No matter whether you’re project is related to game or technology, Kickstarter will support you to grow. The popular categories on Kickstarter are Arts, Comics & Illustration, Design & Tech, Film, Games and more. This amazing platform will make your unique idea into a reality.
Kickstarter Mission – “help bring creative projects to life”
At Kickstarter, many creators will share their creative work and get funds. The platform is the best platform for creators who can share their innovative ideas and projects with the communities and get direct support from them. Every idea on Kickstarter should have a clear and straightforward goal. For example, making an album or a book.
Many people imagine Kickstarter is a store, they’re absolutely wrong. Backers pledge to excellent projects and help them while providing funds and support their creative process. As backers are supporting in their projects, the creators will offer amazing and unique rewards by creating the project according to backer’s hope.
History of Kickstarter
Kickstarter was founded by Perry Chan in 2019. It is the crowdfunding marketplace that is purely concentrated on providing necessary resources, service, support and funds to creative ideas.
It was all started in the year 2001, Perry Chan planned to bring DJ masters to New Orleans. Since there was a local jazz fest, Perry Chan wants to make the event fantastic with DJs. As the DJs are pretty expensive, he could not make it.
This situation led Perry Chan to come up with an idea of charging the ticket for the show. Once the funds reached, Perry Chan can bring DJs to the show. This was the amazing vision by Perry Chan to support unique ideas. This mission is helping millions of people, even today and Kickstarters is helping projects to get funds and earn money from the raised funds.
Kickstarter business model is revolving around the concept – crowdsourcing or crowdfunding. At this platform, Kickstart will provide support for creative ideas and receive funds by people.
According to the analysis, Kickstarter have successfully funded more than 164,725 projects. The platform has earned more than $5.4 billions in 2020.
Kickstarter’s operating model
Before discussing how does Kickstarter work, you should understand the following terms
Creators
People with unique ideas, product or service who post on the website and build an effective Kickstarted campaign. These people are considered as the creators who are requesting funds for their ideas or projects. Millions of creators are thanking Kickstarter, as the platform is allowing creators to pitch a unique idea without any risk. There are times where creators don’t receive enough funds, in such situation, Kickstarter will move on to the next idea. Finally, creators will get complete funding, this money will help them to complete their project.
Backers
Backers are the one who is helping creators. Yes, you’ve heard it right!!! Backers will invest in the projects when they feel the project is worth investing. Backers are the people who support the project voluntarily.
Project
The project is an effective and innovative idea that is brought to life. The project is managed and handled by the creators. As per Kickstarter, the project is a work that has a clear goal. This goal revolves around the Kickstarter business model.
Funding goals
The funding goal is the amount of funds that creators require to develop and complete their project. Here the creators will be predetermining their funding goal at initial stages. The creator will receive complete money when they meet funding goals. Also, backer’s are charged when the creator’s project is completely funded.
How does Kickstarter work?
So, far we have discussed basic terms about Kickstarter’s business model. Now let’s talk how does Kickstarter work
Kickstarter is the one-stop destination for the people who have creative ideas looking for support. Also, the marketplace is a great place to buy innovative and unique products. At Kickstarter, creators can introduce their projects and mention their funding goal. Also, creators will provide complete information about their project on Kickstarter. There are multiple ways to mention their ideas such as text, images and videos. Also, creators will mention the rewards and offers for the backers who are willing to support their project or idea.
The backers are the people who support creators and get rewards. Backers will voluntarily and get rewards from creators. They support financially to make the project successful.
As mentioned earlier creators mention funding goals. Once this goal is achieved, the backers are charged with the eligible amount that creator require. This amount will be transferred to creators. The backers will enjoy rewards as promised by creators.
Kickstarter’s crowdfunding business model
It’s no surprise that Kickstarter works on “Marketplace Business Model”. Kickstarter is the best place to help creators and pledgers. It means creators can promote their product and connect with millions of pledgers around the world. For example, Amazon is the marketplace that connects sellers and buyers under one roof.
Kickstarter does not sell products or own any ideas. Also, the website doesn’t set the project price. Kickstarters combines two business models such as marketplace and crowdfunding.
There are few strategies followed by Kickstarter, let’s discuss them
- All-or-Nothing – This is the amazing strategy that Kickstarter employs. Let’s discuss in a straightforward way, the creators will receive complete funds once they meet their funding goals. On the other hand, backers will be charged when the project receives complete funds.
- Time period limitation on every campaign – Whenever a creator creates a campaign on Kickstarter. There will be a certain limitation given to the campaign. Whenever the time period reaches the campaign get expired automatically. There will be no money collected when the campaign doesn’t meet the funding goal within the mentioned time limit.
- Exiting rewards – Creators at Kickstarters will provide excellent rewards and offers to backers. Simply put, the rewards may vary from one funding level to another.
- Pledge anonymously – Kickstarter is one of the amazing place that allows pledging anonymously. The website allows backers to provide funding anonymously for the project.
Kickstarter is estimating an annual revenue of $34.6 million in 2021. As the Kickstarter is following amazing strategies as mentioned above, these strategies are making a favour to Kickstarter.
How does Kickstarter make money?
Its well-known fact Kickstarter is a benefit organization and for-profit company. Kickstarter make money in a straightforward way, the business makes its profits by charging “5% commission” fee on the fundraised. Also, Kickstarter will charge additional for processing the payments. It’s nothing but payment gateway charges.
Consider, if a project or idea had raised it’s funding for $10,000 from 100 pledges. Here the creators of that particular project will receive $9,000. Now, Kickstarter will earn $500 on that project. Also, the payment processing fee is included i.e 3% + $0.20 per pledge.
Sounds amazing right!!! Kickstarter is earning almost $500 on every $10,000 project. So the company is earning a good amount of money as there are no additional costs associated with. Also, Kickstarter has 92 employees in their organization, these people work harder to make the organization even more successful. Their team spend maximum time on designing and helping creative projects. Also, supporting more than 50,000 projects so far. As per the analysis, Kickstarter has major expenses such as storage spaces, administrative charges, employee salaries, rent, servers, data centres and more.
How do payments are collected?
Want to know how Kickstarter receive payments? Let’s discuss it now. There are multiple payment gateways available online on Kickstarter. But Kickstarter collects payments through Amazon, the amount is probably funded by the backers who are willing to support creators. The payments will be transferred to its account as soon as the creators meet the funding goals. This is an excellent website that takes 5% as commission from the total fund. Here the amount will be deduced when the goals are reached. Kickstarter is the amazing website for the creators who have a great idea that requires funding in order to make their idea a reality.
Kickstarter Stats
As per Kickstarter stats,
- There are more than 189,683 funded projects.
- $5,339,193,041 is the total number of dollars that are pledged to projects on Kickstarter.
- 18,673,467 are the total number of backers
- 6,246,782 are the repeat backers
- 66,164,290 are the complete pledges
Conclusion
Kickstarter is a global crowdfunding website that is purely focused on financing unique and creative projects. It is the one-stop destination for the people who are looking for funds to develop their project. All they need to provide complete details about their project with a funding goal. Backers can explore creative and excellent projects from multiple categories that are ranging from art to design. Whenever the complete funding is received, Kickstarter will charge 5% as commission on every fundraised project. According to Kickstarter stats, the platform has earned more than $5 millions in 2020.
