Crowd Funding

“A good idea, well-crafted and pursued with passion, doesn't need a gatekeeper's stamp of approval to succeed.”

Yancey Stickler, Co-founder of Kickstarter

On the evening of October 3, 2010, we launched our first Kickstarter campaign, for the Glif. As you may recall, we had a modest goal of $10,000, with the hope that we could sell about 500 of them. Twenty-four hours later, we had raised twice that, and by the end of our 30-day campaign we had raised $137,417, over 10 times our goal.

Six months later, we launched our second Kickstarter campaign, this time for the Cosmonaut, a wide grip stylus for touch screen devices (like the iPad). For the first two days of the campaign we tried something unique, offering a “pay-what-you-want” model, raising nearly $50,000 in that 48-hour period. We ultimately opened up more traditional tiers, and by the end of the campaign we had raised $134,236, and in the process, became the first project creators on Kickstarter to raise over $100,000 on two separate projects.

In running these two campaigns, and in studying countless other projects, we have learned a tremendous amount about the do's and don'ts of running a successful Kickstarter project. Our personal experience falls in the hardware/industrial design category, but we think the lessons we learned can be applied across the spectrum.

What is Kickstarter?

For the uninitiated, Kickstarter is “the world's largest funding platform for creative projects.” The concept is simple: a person has an idea for a creative project, but does not have the money to make it. By using Kickstarter, that person can try to get “pledges” from “backers” on the internet. This is known as crowd funding. A pledge is kind of like a monetary donation, but with most projects, the backer receives something tangible in return for their pledge, known as a “reward.” The important twist is that every project on Kickstarter has a funding goal, i.e., how much money is needed for the project to be able to be carried out. If the goal is not met, the project does not move forward and nobody’s credit cards are charged. If the goal is met, everyone’s credit card is charged, the money is transferred to the project creator, the project creator is able to make the creative project, the backers get cool rewards, and there is much rejoicing throughout the land.

Kickstarter has helped fund projects of all shapes and sizes. The range of project types is quite extraordinary, including music albums, films, video games, dance videos, and pretty much anything that is considered a creative project. The only real rules are that you can’t have a project that raises money for charity, and you can’t have a project that offers equity in the creation of a business.

Kickstarter represents an exciting new way to bootstrap ideas. Rather than seeking outside funding or a bank loan, Kickstarter allows you to collect money from individuals that believe in what you’re doing and want to support it. It’s also a great way to test the viability of your idea. People vote with their dollars. If the project fails, the only real downside is sadness, but at least you didn’t invest a huge amount of your own time and money to execute a project that didn’t have legs to begin with. And on the upside, you may learn why people weren’t interested, and how you can make improvements in the future.

In some ways, Kickstarter is the poster child for Indie Capitalism. The essence of the platform—connecting creators and consumers, directly—gets to the root of this new movement.

Is Kickstarter Right For You?

Kickstarter is one of the main reasons, if not the reason, Studio Neat is in business today. It’s an incredible platform that continues to explode in popularity, and there is a great variety in the types of projects featured on the site. That does not mean Kickstarter is for everyone, however; not all ideas make sense as a Kickstarter project.

Kickstarter may not be right for you simply because of the type of project you’re working on. If you have a big, sprawling concept that involves building up a large social network, or lots of upfront work to make a proof-of-concept, seeking outside investment or venture capital funding may indeed be the better path. Kickstarter works well with smaller, self-contained ideas. On that note, if you make handmade, bespoke items, a platform like the wonderful Etsy might be a better choice. Quirky, the crowdsourcing design platform, is a better fit if you have a great idea but no idea of how to execute. In all likelihood, it will be fairly obvious if Kickstarter is the right way to go or not.

The most important thing you need to do before deciding to launch on Kickstarter is to determine if your project is even feasible. A napkin sketch is not nearly enough (and will likely get rejected by Kickstarter, for your own good). If you are making a physical piece of hardware, a working prototype is a must. Also, it’s important to start conversations with manufacturers beforehand to make sure your design is not impossible (or extremely difficult) to manufacture. Our general impression is that projects that are successfully funded but fail to deliver are a result of not doing the necessary legwork up front.

Estimating Cost

One of the first things you will need to do is estimate the cost of your project. This can be tricky, especially if it’s in an area outside of your expertise (e.g., manufacturing). Talk to as many people as you can before starting your campaign to make sure you have reasonable expectations of how much things will cost.

Kickstarter collects 5% of your funding total, and Amazon grabs another 3% as the payment gateway. Also, factor in about 5% dropped backers, meaning backers whose credit cards are denied when the campaign ends.

One of the biggest “gotchas” from our first campaign was how much it costs to ship things worldwide. We find that project creators consistently underestimate this cost. We will discuss shipping costs more in the next chapter, but be sure to keep this is mind as you shape your reward tiers and funding goal.

Lastly, be mindful of Uncle Sam. Any money you raise on Kickstarter is considered taxable income for the calendar year in which your project is funded. The money you sink back into the project (like manufacturing and fulfillment costs) can help reduce your tax burden, but everything else is taxable. As with things of this nature, speak to an expert.

With all that in mind, it is a good idea to overestimate your funding goal, as there will be plenty of little unexpected costs, and maybe a few bigger ones, along the way.

Formatting Your Campaign

If you’ve made it this far, you’ve decided to go forth and create a Kickstarter campaign. Well done. You are about to embark on a journey both strange and wonderful.

Opinion varies on the ideal length of time for the campaign. Conventional wisdom would deem the longer the better, allowing more days to receive funds. However, this line of thinking is not necessarily true, and we have found that shorter is actually better: the campaign stays fresh and relevant, and doesn’t appear to drag on forever. Remember, people have short attention spans on the internet. Thirty days seems to be the sweet spot for campaign funding duration, but plenty of projects have found success with even shorter funding periods.

In setting up reward tiers, simplicity is key. If possible, include the cost of shipping in the pledge amount (for physical rewards); it becomes confusing for backers to need to calculate and add in the shipping themselves. We made this mistake on our Glif campaign, and it was a pain in the ass to try to collect shipping costs after the campaign ended. Also, it’s going to be tempting, but don’t get carried away with too many reward tiers. Variety is nice, but don’t overwhelm your potential supporters with too many options, otherwise the burden of choice might deter them from backing your project altogether. That said, don’t be afraid to have some fun with your reward tiers. Ze Frank is the poster child for this (love that $69 reward tier), although taking the tiers to that extreme is usually better suited for projects of great whimsy.

For the Cosmonaut campaign, we decided to try something different. Rather than launching with traditional tiers, we instituted a “pay-what-you-want” system, inspired by how Radiohead released In Rainbows. Tongue firmly in cheek, we also liked the socialism tie-in with the Cosmonaut branding (“pay whatever you can afford!”). There was a key distinction between our campaign and other pay-what-you-want projects, however. We had a funding goal ($50,000) and a limited number of slots (3000). This created a natural tension that was quite fascinating to observe. If too many people “under-pledged,” the funding goal would not be met, and no one would receive a Cosmonaut. People who had pledged a “fair” amount had to decide either to pledge more, or use the comments page to coax/harass the under-pledgers into giving more.

Initially we sold out of the 3000 slots within the first 48 hours, and were about $5000 shy of the $50,000 funding goal. After some brief deliberation, we decided to open up new, unlimited tiers, to ensure the funding goal was met and make sure everyone who wanted a Cosmonaut could get one. The final product was more important than our game theory experiment, after all.

The pledge distribution across the first 3000 backers of the Cosmonaut campaign. Each bar is segmented into the dollar amounts in each range, increasing light to dark.

At the end of the day, was the pay-what-you-want experiment worth it? We think so, although that doesn’t mean we would do it again, nor would we necessarily recommend it. It was a tool to generate some great press and excitement for the project, but we don’t see it as a sustainable funding method on Kickstarter.

It’s a good idea to look at other successful campaigns for products that are similar to yours, and see what they did right. Checking out unsuccessful projects to learn from their mistakes can be helpful as well.


The most important aspect of a Kickstarter campaign, besides a great product, is the video. Video is the language of Kickstarter. It is generally the first impression a potential backer will have when they view your project.

So, what makes a good video? Kickstarter videos vary widely, but they all contain some key elements. Here is what we have found to work well:

1) Keep it short. Your video should be 2 minutes or less, and should show the project you are pitching within the first 15 seconds. Be as economical with time as possible; people have short attention spans on the internet.

2) Be personal. Share your story. Nearly all successful Kickstarter videos feature the project creator(s) speaking directly to the camera, and there is a reason for this. People want to see your passion for the project, and this is the most direct way to do that. If you are not comfortable in front of a camera, it can be incredibly difficult, but it’s necessary. We found that taking a couple shots of whiskey helps take the edge off. Keep the camera rolling and do several takes, eventually the passion and excitement (and booze) will overcome the awkwardness.

3) Be honest. You are not a huge corporation, so don’t make a fancy video that tries to imitate one. Speak directly to the viewer/potential backer, and let your passion for the project shine though. By all means, your video should be polished and well crafted, but keep your audience in mind. Don’t use hyperbolic language or marketing terms, just be clear, concise, and honest.

Our two project videos have been like a Pixies song: soft, loud, soft. We start with a quick talking head of us introducing the product, quickly cut to a montage of the product in action, demonstrating various use cases, and then close the video with another talking head, this time addressing why we need the funding. It’s a format that has worked well for us, but your mileage may vary. Don’t be afraid to try something new.

View our project videos for the Glif and the Cosmonaut.

Here are some of our favorite Kickstarter videos. As you will see, they run the gamut in terms of content and style, but the traits outlined above are present.


Many people make the mistake of thinking that once their project launches on Kickstarter, their work is done, and they can sit back as the money rolls in. This couldn’t be further from the truth. In reality, launching a project is the moment the real work begins.

Kickstarter has a few ways to feature projects, namely on their homepage or in their weekly email newsletter. However, these shouldn’t be relied on. It’s your responsibility to get people to discover your project, not Kickstarter’s.

There are a variety of ways to drum up excitement for your project. We discuss project promotion in-depth in Chapter Five.

Campaign Updates

After the video, project updates are the second most important aspect of any successfully run Kickstarter campaign. The majority of backers did not just buy in to a product idea, they want to be along for the ride, and it’s your job to provide that experience. This is what makes Kickstarter a unique consumer experience: everyone is let in on the “behind the scenes” action. Amazingly, people actually do want to see how the sausage is made.

We love to create “making of” videos for our products. Aside from the fact that they are a blast to make, they are a polished and concise way to present the creation of a product. We created a couple for our Glif campaign, and they were our most popular updates for that project. Likewise, our Mr. Rogers Cosmonaut video was a big hit. The underrated genius of the Double Fine Adventure campaign was that they embedded a “making-of” documentary as part of the project itself.

View our videos for making the Glif and making the Cosmonaut.

One tricky part of updates is finding the right cadence. If you send too many it becomes spammy and they are largely ignored. Send too few, and backers become anxious. We generally like to wait until we have a lot of things to report, and then bundle them up into a meaty update. Keep in mind, the update is sent to every backers’ email inbox, so be mindful and respectful of the number of updates you are sending.

Managing Expectations

Having 5000 backers is a gift. It is, however, like having 5000 bosses. They are not literal investors, but a strange relationship is created between a project creator and the backers.

Our Glif campaign went astoundingly well, especially in hindsight. Funding ended on November 2nd, 2010, and backers began receiving their Glifs in the mail a little over a month later, in time for the holidays. We skated through the production process unscathed; all of our material choices and tolerances were right on the money, so nothing needed to be redone. Part of that is to our credit for intentionally designing a very simple product, but beginner’s luck must have been a factor as well. Unfortunately, we used up all our luck on the Glif project, leaving little for our next project, the Cosmonaut.

We learned a lot from the Cosmonaut project, specifically when it came to managing expectations. The campaign launched in late March, and we set an initial goal of delivery in June, which seemed totally reasonable based on our experience with the Glif. After several manufacturing delays too painful to go in to, June turned to “late summer,” which turned to “fall,” and we ultimately delivered at the beginning of December. We cringed each time we had to send a project update to the backers notifying them of the delay, but obviously it’s better to bite the bullet and be honest than to leave backers in the dark.

There still needs to be more widespread understanding about what Kickstarter is, exactly. This isn’t surprising, given that it’s a new platform with an unconventional mix of commerce and patronage. One thing we noticed in running our Cosmonaut campaign was that there seemed to be a real split among our backers. The majority “got” Kickstarter, and totally understood that delays and manufacturing complications were all part of the process (and frankly, one of the selling points of backing projects, in that you get to observe how a product is made, warts and all). A vocal minority, however, expected a more traditional, Amazon-style experience. When delays occurred, they would get upset, and even demand refunds. People are always going to be upset about delays, but hopefully with time, the Kickstarter platform will be better understood by the general population, and expectations will be set accordingly.

Based on our own experience as well as observations of other Kickstarter projects, rewards tend to be delivered late. Delays and snags are inevitable, and first-time project creators seem to set ambitious (and perhaps na├»ve) delivery schedules. However long you think the project will take to complete, you may do well to simply double that estimate. After all, it’s better to overestimate and exceed expectations, rather than the opposite.

Capture Attention

When your Kickstarter campaign ends, you will obviously no longer be accepting pledges from people interested in your project, but you should find a way to capture the people that missed out on the campaign but are still interested in what you’re doing.

We did this by setting up a simple webpage with a form field, which allowed the user to enter their email address so that they could be notified when the product became available for general sale. Creating Twitter and Facebook profiles is another wise move. This may seem obvious, but you want to make it as easy as possible for interested people to connect with you.


There is nothing quite like the satisfaction of finally delivering your project to your backers.

That said, the handling of address collection for reward fulfillment is one of Kickstarter’s only weaknesses. This is done through a survey that can generally only be sent once via email, cannot be linked to, and allows users only a short window to edit their information after submission. If you are fortunate enough to have backers numbering in the thousands, this can be a real headache, but it appears that Kickstarter is continually working to improve their system. Thankfully, once all of the survey results are in, you can easily export all the results as a spreadsheet, which can then be used as a checklist if you are fulfilling orders manually, or uploaded directly to your fulfillment service if you take that route (more on this in the next chapter).

We recommend holding off on sending the backer survey till as late in the game as you can. Ideally, just a few weeks before you are ready to start shipping. If you send it too early, some people will inevitably move and manually managing address changes can get quite cumbersome. Also, don’t annoy backers with additional, unnecessary questions on the survey, e.g., “What do you plan on using Product X for?!” Save that for a different and optional survey. The Kickstarter survey should be about the brass tacks, such as getting the backer’s shipping information and reward preferences.

As with all things related to Kickstarter, communication with your backers is key. Keep them up to date on delivery schedules. If you need to send the rewards out in batches rather than all at once, communicate that, ideally in a way that properly sets the expectations for when backers should receive their reward. With both the Glif and Cosmonaut campaigns, we were able to send all of the rewards out at once, which is great if you’re able to swing it.

When everything has been delivered, take a deep breath. You have run a successful campaign, and you should feel pretty chuffed. There are going to be some stragglers who never filled in the survey, so be prepared to handle those ad hoc for the next year or so (seriously) after the initial delivery. Aside from that, have a drink. You deserve it.