Kickstarter has seen a variety of creative projects come to life including video games, Sundance films and more recently toys.
ToyNews explains how Kickstarter works in the first part of this feature.
How Kickstarter works
Thousands of creative projects are vying for funding on Kickstarter at any given moment.
Each project is independently created and crafted by the person behind it. Users have complete control and responsibility over their projects. They can shoot videos and brainstorm rewards to offer backers. When they’re ready, creators launch their project and share it with their community.
Every project creator sets their page’s funding goal and deadline. If people like it, they can pledge money to make it happen. If the project succeeds in reaching its funding goal, all backers’ credit cards are charged when time expires. Et voilà – a new product is born.
If the project falls short, no one is charged. Funding on Kickstarter is ‘all-or-nothing’, so if a project asks for £5,000 but only gets pledges of £1,000, then it fails. If a project is successfully funded, Kickstarter applies a five per cent fee to the funds collected.
We talk to Kickstarter and look at how it's affecting the toy industry here:
So you've got a great toy idea that needs investment.
You could raise the money yourself. You could spend your life savings. You could beg your friends and family. You might have industry friends who like you and your idea but can’t cough up the cash in the current climate.
Maybe you could pitch your idea to an investor, but what if it ends up to be one of those suited, smirking and judgemental Dragons’ Den-style investors who will tell you – with about as much tact as a nuclear bomb – that your idea is bloody useless?
Your product remains but a whisp of an ember of a fire that never burned, but could have.
So why not pitch your idea to everyone? If enough people like it and want to see it made, and they’re all prepared to pledge a small sum towards funding you – then, with their money combined, you could be quids in and fully funded. Well that’s what Kickstarter is all about (see the Oxford Dictionary definition and box above for a much clearer explanation).
Still not convinced?
Since its launch in April 2009, over £290 million has been pledged by more than 2.5 million people on Kickstarter, funding more than 80,000 different creative projects.
Recently, some toy products received funding and made it into production. We’ve highlighted some over the page, but there are many more besides: check them out on Kickstarter.com.
Speaking to ToyNews, Kickstarter spokesperson Justin Kazmark explains: “Toys fall into our games and design categories. The latter is a catch-all for a range of different things. Some toy things in the design category include building kits like LEGO-type projects. A lot of the stuff that works on Kickstarter is for things that have a creative focus.”
A crowdfunding site for kids products has also emerged – Jumpoff.
“We have seen over the last few years less and less choice in product at retail,” says Jumpoff co-founder Rhett Power.
“This is the result of many factors from the economy to mass retail cutting selection. We believe crowdfunding and Jumpoff will change the toy industry by giving small designers and inventors a chance to get projects funded, noticed and in the marketplace.”
In other industries – namely video games and films – crowdfunding has proved to be disruptive to the traditional publishing set-up. By pledging to fund a project, backers are the first to receive the finished product – meaning the reliance on publishers is less and, in some cases, publishers or distributors aren’t necessary at all.
Could Kickstarter disrupt the toy or children’s products businesses by cutting out retail?
“I don’t think it’s changing that. If anything, for instance the board game category, we’ve heard anecdotally on board game blogs that Kickstarter has been a boon to creators – people who have ideas for games and want funding for them,” adds Kazmark. “They can go directly to their audience, they don’t have to go to the manufacturer.”
If anything, Kickstarter allows creators to get products and ideas off the ground on their own terms.
“The other thing is it allows for more creativity to exist because there’s another avenue,” Kazmark comments. “The other ways to get funding still exist, we’re not taking their place, we’re just joining this broader ecosystem of funding for creative ideas.
“Kickstarter is complementary – it’s just another piece of the puzzle.”
Wanna be startin' something?
ToyNews analyses some successfully funded toy projects and talks to their creators in this section.
This cuddly plush creature is powered by your iPhone or iPod Touch. Ubooly responds to voice input. A spokesperson told us more.
How did you first find out about Kickstarter, and why did you decide it was the best option for Ubooly?
Kickstarter was getting a lot of press at the time we were looking at initial funding options. Ultimately we were most interested in validation from consumers and Kickstarter felt like a platform that a good launch would have meaning to other investors.
Does the Kickstarter team offer any support, or is the process automated?
The process for us was completely automated. From our perspective, it is difficult to get in touch with the Kickstarter staff, and their staff picks seem heavily biased towards New York-based companies, as well as creative works. The latter is understandable as that seems to be tied to their roots. Either way, we’ve seen a lot of quality projects go unnoticed by the Kickstarter community.
With that in mind, we would advise any company considering a Kickstarter campaign to plan their goal around the capabilities of their network, and to not plan on traffic from Kickstarter.com itself. From our viewpoint, a goal should be no larger than twice what you can expect to raise from your immediate network, unless you have no other means for funding.
What’s happened since you got funded?
It’s been almost a year since we launched Ubooly on Kickstarter, and in that timeframe, much has happened. We’ve developed tooling and packaging, and shipped product to thousands of customers worldwide.
We also were accepted to an incredible technology incubator, TechStars, based in Boulder, CO. In autumn we raised a venture capital backed seed round of $2.5 million, and we are now working with a major distributor to ship hundreds of thousands of units in 2013. It has been extremely rewarding to get feedback from kids and their parents on the product.
Kickstarter fans like lots of detail and contributing to the product design.
The Weerol Many-Use Toy is a modern, heirloom quality wood toy designed to adapt to a child’s stage of development and style of play.
It can transform in size and shape as the child grows up.
Weerol creator Derek Perkins spoke to ToyNews about the product.
What are the main advantages Kickstarter offers over traditional methods of funding?
Phenomenal exposure, market testing and leaving with a base of customers who are actively involved and invested in the inception of your product.
This is primarily a DIY platform geared towards self-starters. The value in Kickstarter is not the staff, but rather the community of backers, many of whom have supported multiple projects and can offer invaluable feedback.
What’s changed since you acquired funding?
Since the end of the campaign, the hard work of sourcing, manufacturing and exploring our distribution options has kept us quite busy. Weefab Toys is set to launch our e-commerce site, offering online sales internationally, and we are looking to expand our distribution into Europe, where we have received strong interest.
What tips would you give budding toy designers/inventors thinking about putting together a Kickstarter pitch of their own?
The first thing anyone interested in trying Kickstarter should do is to spend time studying successful campaigns from the past year.
See which video presentations draw you in and capture your attention. Emulate proven and successful techniques.
Try to find similar products and decide if the idea you have in mind is well suited for the Kickstarter site’s audience. Keep in mind Kickstarter is geared towards modern, high-end design. If you have any connections with media, bloggers and the like, I recommend coordinating the launch with the support of an article about you or your project linking to your campaign. The burst of early traffic to your Kickstarter page will push you to the top of their listings. This is a surefire way to build the early momentum necessary for a successful campaign.
Atoms is a system of plug-n-play sensors, motors and logic blocks for kids and adults “to make things that do amazing things”.
For example, kids can make LEGO garage doors open, or make a plush toy move.
We spoke to Atoms product development manager Eric Budd for more information.
Without Kickstarter would you have been able to get Atoms manufactured?
Probably not. Kickstarter’s value for us came in growing a large base of supporters to a focal point (the campaign) and really validated/refined our product offering.
Because the fixed costs of manufacturing a toy like Atoms can be high, our ability to pre-sell on Kickstarter has been critical to building a demand for our products and get a pulse on what’s resonating with backers on the website and across the world.
What would you say to big toy companies and retailers who may be missing out on products such as yours on Kickstarter? And do you think that this competition is healthy?
We don’t see the future as “either-or” – but it’s certainly easier for a company like ours to launch and compete without requiring the large investment in retail distribution. That being said, there are a significant number of people and families we’re not reaching with the Kickstarter campaign. We’re planning to reach these consumers with our own retail strategy, in addition to a great online experience.
Want to receive up to the minute toy industry news straight to your inbox? Click here to sign up for the free ToyNews Daily Digest and Newsflash services. You can also follow ToyNews on Twitter and Facebook.