In , the New York Times partnered with Kickstarter to create Kickstarter-branded documentaries to be featured on its homepage as well as YouTube channel. Kickstarter is so committed to their mission that became a Public Benefit Corporation in However, Kickstarter is still a for-profit business, and it operates on a multi-sided business model that has successfully combined the two business models of crowdfunding and online marketplace. At any moment on Kickstarter, there are thousands of creative projects being funded and the creators which can be filmmakers, musicians, or artists, have complete control over their projects as well as the responsibility to complete them.
They pre-plan their projects, shooting videos or brainstorming on what rewards to give to the backers, and then finally launch their project and share it with their community. These backers either support the project voluntarily or pledge money to gain rewards, which can be in the form of free products, offers, event invites, etc.
This strategy also ensures that the backers are investing in creative ideas that are guaranteed to be a success. The project creators have complete control over all-or-nothing funding. Updates let visitors know that you are dedicated both to the project and its backers and those that are already backing the project may be compelled to invest more money into it, or to encourage people they know to join.
Make sure also to talk to people you know in person, letting your family and friends know about the project. People appreciate appreciation. Thus, you need to show your backers as much appreciation as the deserve. It is them that have so generously helped you to make a reality out of your dream business idea, so thank them! You can do this by shouting them out on Twitter, sending them personal Facebook messages of thanks, or even sending thank you letters to big contributors of your project.
And the backers get their rewards as promised. This could save you time from visiting your local Starbucks to get your fix. If satisfied with what you find, you choose a pledge that fits your budget or rewards you as you like:. Kickstarter operates on a marketplace business model.
It is basically a marketplace helping the creators connect with the pledgers; just as a similar marketplace, say Amazon, helps connect the buyers with the sellers. It just has successfully interlinked the two business models of crowdfunding and online marketplace together to disrupt the crowdfunding industry. The business model is complemented with the following business strategies —. But wait, how exactly does Kickstarter make money?
Even though Kickstarter is a Benefit Corporation, it is still a for-profit business. It is also to be noted that they charge a separate fee for payment processing payment gateway charges. The major cost centres include storage spaces, general and administrative expenses, salaries, data centres, rent payments and servers, etc. Keep reading! From generating publicity to gathering a following, Kickstarter is an amazing tool to launch a product, attract early-adopters, and spread awareness for you and your company.
The last generation was full of gatekeepers who got to decide who they should pick to let in to their little club. These gatekeepers could be record labels, publishers, studios, investors, and others.
Now, you can decide to pick yourself. You can get your product into the hands of REAL people and get feedback.
This step is crucial to developing a good product-market fit, which is the foundation for every scalable business. Do you think you should try to make profits from your Kickstarter project? Do you think the majority of the benefits come after your Kickstarter success? Let me know in a comment below. Salvador Briggman is the founder of CrowdCrux, a blog that teaches you how to launch a crowdfunding campaign the right way.
How to make money on Kickstarter. Written by Salvador Briggman. If any of the estimated costs were larger than expected, this profit would quickly erode.
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