Kicking Some Start

So you want to make a thing, but the thing you want to make takes money. Crass, industrial-age money, and lots of it. Bah! What is an internet-age person to do?

Crowd funding, or getting a little money from a bunch of people, is not a new option, but tools that have been developed in recent years have made it a lot more feasible. In the old days, you'd have to set up a donation link on your website, or you'd have to ask people on the phone, by mail, or in person (gasp!) if you wanted to get money out of them. Then questions would come up like, "Who are you?" "How did you get in my house?" "Are you crazy?" and, "Do you know what time it is?" These are all uncomfortable questions to answer individually.

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Then a new site called Kickstarter came along, where you could answer all those questions and more at one go, along with the implied questions like, "What are you making?" "What experience do you have making these things?" and, "If I give you my money, am I really going to get anything out of it?"

One of the key features of Kickstarter is that you have to set a funding goal and, if you can't reach that goal, nobody is charged any money. You gave it a go, couldn't gain the interest, so nobody loses any cash on the deal. But if you can get to your goal, then everyone is charged at once. After some processing time, you get your money, and hopefully produce a product and send out rewards.

While people don't have to get anything back for their money, it's a successful strategy to get people to bid at a certain level by offering them rewards. These rewards could be an acknowledgement in your credits page, copies of the thing you're making, a dinner with you and your team, a battle-elephant, or whatever.

Things you can fund, by and large, have to be projects. Kickstarter is not about you paying your rent or making payroll; Kickstarter is about shipping your project. Exceptions are sometimes made, but they are rare. Webcomic creators Penny Arcade had a Kickstarter whose goal was to let them eliminate advertising on the front page of their site for a year. That generated a fair amount of controversy, as it seems to be against the Kickstarter terms of service. Still, you can try, and they will just deny your project if it doesn't work.

There are some major pitfalls for Kickstarted projects. The most ironic is over-succeeding on your funding. If too many people fund you, then the number of rewards you have to give increases significantly. This has caused many a delay in creation as people learn how to get large scale production done in China, and has jumpstarted at least one business, Make That Thing, which helps you to produce some kinds of items like books, posters, and t-shirts.

Another important thing to pay attention to are hidden costs. The three biggest seem to be the transaction fees that you lose from payment processing, taxes, and international shipping. If you are shipping overseas, you will need to charge those folks extra money to cover shipping costs. If you don't, you will go very broke trying to fulfill orders. Really, before you start to kick, you need to have someone good with math and business (you or someone you trust) go over your plan with you to ensure that you are not doing something that will cause you trouble down the line.

Even with the potential pitfalls, Kickstarter is a great, relatively new way to get your project funded. Be diligent, be careful, and make something people want, and you can find a way to make your thing without selling out to The Man, emptying out your life savings, or going into serious debt.