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In less than five years Kickstarter has helped entrepreneurs raise over $1B to fund more than 59,000 creative projects thanks to almost 6 million contributors. Indiegogo’s numbers aren’t too shabby either; in July 2013 they launched the most ambitious campaign to date – the Ubuntu Edge smartphone campaign, aiming to raise $32 million through crowdfunding.
How do ambitious startups succeed through crowdfunding platforms? What compels people back entrepreneurs they’ve never met, to create products they’ve never seen? Here are five amazing examples of startups that have smashed all expectations to succeed through crowdfunding.
Pebble is a watch that speaks to your smartphone and lets you wear your digital life on your wrist. This highly customisable device can receive social media notifications, text messages, emails, incoming call alerts, interact with apps and boasts a 5-7 day battery life.
Launched in April 2012, the initial target for the campaign was a modest $100,000 which was pledged within two hours of the project going live. Pebble sold 85,000 units on Kickstarter through a reduced pre-order rate of $115 (RRP $150) before signing a deal with Best Buy, who in July 2013 sold out their product within five days.
In total, Pebble raised a cool $10.2 million through crowdfunding. Putting these funds to good use, in February this year the Pebble Steel was born; a sleek version of the standard model.
Don’t give up. Designer Eric Migicovsky initially took to private investors and raised $375,000 in venture capital, but realised he’d need to take to other platforms to really get his idea off the ground; marketing hardware proved a tough sell. Undeterred by the waning interest in his concept, through crowdfunding he was able to unite enough backers around his vision.
The brainchild of four NYU programmers, Diaspora is an open-source personal web server that puts individuals in control of their online data. The non-profit, user owned and distributed social network claims to be immune from corporate takeovers and advertising, making it a more private way to share information and connect online.
Launched in November 2010, the team gave themselves 39 days to reach their $10,000 goal; they smashed it in just 12 days. Raising more than $200,000 in funds from 6,000 Kickstarter backers – including their assumed nemesis Mark Zuckerberg who donated an undisclosed sum, admitting to the media that it was a “cool idea”. As of April 2014 there are over 1 million Diaspora accounts.
Solve a real, current problem. The issue of safeguarding your online identity is a contentious issue for which Diaspora provides a solution. Through a Diaspora ‘seed’, users share their data securely and have full control of their online identity – a need that other social media sites are unable to fulfil. In August 2012, as promised, the founding four handed over the project to its community – a group of trusted individuals who currently maintain Diaspora.
The 10-Year Hoodie
New York apparel label Flint and Tinder (known primarily for their All-American men’s jocks) has engineered a $99 hoodie that, according to its website is “built for life and backed with a guarantee like none other”. Flipping the bird to the consumerist mentality of throw out and replace, this hoodie is designed to last for life – or at least a solid decade and their promise is supported by a limitless free mending policy.
This project was successfully funded in April 2013 with almost 10,000 backers; they asked for $50,000 and raised over $1 million. Prior to the hoodie, the team of five at Flint and Tinder successfully shifted 30,000 pairs of jocks via crowdfunding.
Listen to your backers. The engineers involved their supporters, listened during every stage of production and continued to seek feedback well after its release. From making the leather pull zip optional to adding an inner iPhone pocket, the crowdfunding investors felt like they were a part of the creative process and that their opinion was valued – they were the ones who’d have to wear it, after all.
The Canyons (Film)
The script of this highly sexed contemporary thriller lay at the mercy of the general public; without them, The Canyons would never have been made. In 2012, scriptwriter Bret Easton Ellis (American Psycho, Less Than Zero) publicized the big names behind the project; Director Paul Schrader (Taxi Driver, Raging Bull) and Lindsay Lohan – a huge gamble but not the only one. Ellis also signed adult film actor James Deen to his first mainstream role.
At this point Lindsay Lohan was uninsurable and her star status was marred with tales of drugs and debauchery. Could Ellis gain the confidence of the public so that if they invested in his script, the movie would actually get made? Would Americans happily bankroll a film centred around a porn star? Lohan and Deen proved assets and drawbacks to the campaign. The $100,000 goal was passed by almost $60,000 and the film was released in August 2013.
Offer your investors exclusivity. The rewards for backing the film were like no other, including the role of Associate Producer credit in the film, a review of your novel by Bret Easton Ellis and a money clip from Taxi Driver, signed by Robert de Niro. Bonus lesson: embrace the media. Ellis sold the Lohan/Deen scandals to just about any outlet that would listen and he was so successful that during production the New York Times ran an 8,000 word essay on the film’s risky stars, securing even more financial support.
The Scanadu Scout
This world-first medical scanner allows you to read your vital signs from heart rate to emotional distress “any time, anywhere”. The handheld device is packed with sensors that connect, of course, with your smartphone to emulate an emergency room-standard analysis which diagnoses symptoms in just a few seconds.
Attached to NASA technology, the scanner raised an astounding $1.5 million (half a million over their original goal) despite not having yet obtained FDA approval. People were so enamoured with this concept that their top tier packages – priced at $4,500 and $4,750 a pop – were the first to sell out. You can’t put a price tag on health and that’s good news for the Scanadu team.
Emotion sells. The Scanadu Scout puts healthcare in people’s hands. Adopters of the empowering device are investing not only in today but for their future and it’s this emotional appeal that gets anonymous backers to contribute.
Feature image via Scott Bale on Flickr
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