Is Kickstarter dead?

Kickstarter is the world’s largest crowdfunding platform. But rounding the halfway point of 2023, is it still as powerful of a funding tool as it used to be?

This report will tell you if it’s worth it or not for your next creative project.

Kickstarter’s business has been fishtailing.

Kickstarter is a private B Corporation that never planned on an exit, despite raising venture capital. That doesn’t make a lot of sense, but the numbers actually back it up: $1.3 million in net income after tax (2019). That’s not a lot for a 140-person company!

The net income number struck me as so low, I wondered if the company was in trouble.

Overall, they’re probably fine, but they’ve been fish-tailing: 35% drop in projects during COVID, 40% staff reduction, and CEO turnover have plagued the company in the last 3 years.

But are creators still using Kickstarter? Kinda

Kickstarter website traffic has dropped 50% since 2021 and has flatlined at about 2m visitors per month. To me, this is a company losing relevance but at a slow and somewhat normal pace.

Interest in Kickstarter has remained stable over time, according to G Trends, with intermittent spikes caused by viral projects and company news.

Kickstarter’s north star metric is Successfully Funded Projects. If that number is up and to the right, they’re succeeding. So is it up and to the right?

It turns out, in the past six months, the platform has successfully funded 10,000 new projects or ~4% of its total successfully funded projects — 8-9% annually.

Random fact: In case you’re wondering: the percentage of projects that are funded successfully on Kickstarter is 40%.

8-9% annual growth is decently healthy …for a B Corp. For context Y Combinator expects its startups to grow 8% per week 🚀 

Takeaway: While Kickstarter has its internal issues and is fighting what appears to be the typical entropy and need for adaptation that every company faces 10-15 years in, it’s still an active crowdfunding platform that creators trust (for now).

Tips For Launching on Kickstarter (2023)

So now, if I were to launch a project on Kickstarter, this is what I’d want to know.

What successfully funded Kickstarter projects all have in common

• Set smaller funding targets — $29,642 is the average funding raised per project, but most successfully funded projects raise less than $10,000, according to Kickstarter’s Stats. The Kickstarter pros on TikTok recommend setting goals for only a few thousand dollars. If you reach your low goal, you can always set a stretch goal to expand your funding further.

• Don’t launch without a large email list. This is the number one key to a wildly successful campaign. Experts specializing in Kickstarter all use the months before launching to build an email list so that you can surge backers in the first 24 hours of your project going live to trigger platform algorithm boosts on Kickstarter and get even more attention.

• Create a professional quality video. There’s a clear difference that all successfully funded projects have versus the failed campaigns: a professional quality video - high resolution, quality sound, music, professional editing, and a clear script.

Lessons from unsuccessful projects

• Don’t rely on Kickstarter to make a ton of profit. There’s one classic story of how a creator ran a successful $65k Kickstarter campaign for his posters but by the end of it, came away with $4k in net profit. So think of Kickstarter as a better fit for proving your POC, creating an MVP, and getting V1 into the hands of customers, not making a ton of money.

• Kickstarter works better for specific categories. The most funded category on Kickstarter is games. The most funded game ever was Frosthaven, which raised $13m in 31 days in 2020. Technology and design are the other most popular categories, but honestly, if you’re crowdfunding a tech product, consider the more tech-forward alternative Indiegogo.

• Fewer visuals, fewer backers. When you build out your campaign, use lots of product photography, interesting charts or graphs, and branding. Even though your product might not exist yet, you want to make it look as real as possible, otherwise people will think it’s not worth it.

When NOT to use Kickstarter, according to the former CEO

Yancey Strickler, one of Kickstarter’s cofounders and former CEO, said Kickstarter is not a fit for startups that need to move quickly and scale fast. For hypergrowth, the better funding solution is venture capital.

“For [redacted] startups, some […] people will want to ask me about the indie Kickstarter strategy,” said Strickler, “And I'm like, ‘Hell no. You got to go big. We can't wait for you, you have to take over the world, raise as much and get as big as possible because this problem is too big.”

My take: The real purpose of Kickstarter is marketing. It’s built for getting the word out and it’s engineered to help you do that. It provides an audience, yes, but the real value for creators and entrepreneurs is the structure and process it makes you go through to launch.

Your take:

• Have you ever used Kickstarter? What did you think?

• If you’ve never used Kickstarter, would you use it today? Hit reply or X at me @DaveSchoools with your thoughts.

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All the best,

Dave