We’ve all heard about how Kickstarter is a great way to get small businesses off the ground, thanks to several notable success stories.
Unfortunately, it isn’t always a Cinderella story. In fact, only 36.6% of businesses on Kickstarter receive funding for their projects. As Kickstarter’s policy states, if you don’t reach 100% of your goal, you don’t receive any funding.
So, what’s next? You did everything right. You prepared, you marketed, and you gave it your best effort until the end. Here’s what to do next, whether you failed or succeeded in reaching your goal.
Let’s start off with the bad news first.
What to Do When Your Kickstarter Campaign Fails
First of all, don’t fret. Among the many Kickstarter success stories are Kickstarter restarters, or people who achieved success the next time around.
Take Zach Supalla for example. Supalla received over $568,000 for his project Spark Cove, hitting his goal of $48,000 in an hour and 15 minutes. This success came only 7 months after his first campaign failed to reach its $125,000 goal.
Learn from Your Mistakes
Supalla had little production and engineering experience when he first built his product, the Spark Socket. This resulted in extremely high production costs. During the 7 months between his two Kickstarter campaigns, Supalla and his team worked to lower their production cost, which allowed them to also lower their minimum Kickstarter goal.
Outerlimit Games, another restarter, cut out unnecessary parts of their game, and were able to raise over $100,000 the second time they launched their campaign.
Supalla recounts how it took him 11 months before launching his first product, and by the time the campaign went live, he was dealing with other competitors like the LIFX, which raised more than $1.3 million through their Kickstarter campaign. During the launch for Spark Cove, Supalla and his team put only 1 month in between before launching their comeback.
When it comes to Kickstarter, timing is everything, and the same rings true for PR and marketing efforts as well. Success or failure in crowdfunding efforts is usually determined in the first 24 to 72 hours, so it is always important to think ahead. For example, when Supalla had the inkling that his first Kickstarter campaign was going to fail, he quickly captured the e-mail addresses of his existing backers and built a separate website to contact these people again down the line.
Use What You Have
Basically, do exactly as Supalla did. He leveraged the contacts he got by building an engaged community, who later offered him feedback and supported his new product a few months later.
Think Beyond Kickstarter
If you are serious about getting your business off the ground, know that Kickstarter isn’t your only answer. Don’t give up without exploring other options.
When You Get Funding
Congratulations! You did it. You’re funded.
Working hard to get funded was the first step, but working to keep the project going is perhaps the hardest. Of course, you automatically want to show your backers what their money was able to accomplish, but know the money won’t actually arrive until 14 days after the campaign is over. Plan accordingly when you are budgeting.
So, what can you do at this point?
Create and Update Your Spotlight Page
Each fully-funded project on Kickstarter gets a Spotlight page, where you can share the story about how your project came to life. A Spotlight page can also be used as a medium to update backers as well.
Get Started on the Next Step
Whether you’ve raised funding for production and manufacturing or testing, take the opportunity to get started. Update you backers every now and then to show them what their money was able to do.
Give Your Backers Their Dues
Aside from thanking bankers and keeping them updated, if you’ve promised them rewards, make sure you fulfill them. Kickstarter requires you to enter an expected date of delivery for the backers’ sake, but inevitably, some rewards are delivered late due to unforeseen circumstances. In these cases, it is important to explain the delay to your backers as soon as possible.
When You get Funding, but the Project Was a Flop
Unfortunately, the Cinderella story doesn’t always come true even if you reach your funding goal.
After you receive funding, you have to actually get your project off the ground, which is often the most difficult part in the journey. On top of that, the pressure is on because more is at stake if you are using money that isn’t “yours.”
Sometimes though, as hard as you may work, the project just flops. Take for example, Kickstarter’s highest fundraising campaign, Pebble. Pebble raised over $10 million, but it shut down in December 2016. Besides Pebble, you may have heard of several projects with snags, like video game companies and a $13-million funded project called “Coolest Cooler.”
Kickstarter isn’t like a bank, so it can’t keep tabs on each project. Once the money is delivered, Kickstarter considers its role to have been completed.
So, how do you deal with this failure?
Know That You Aren’t Alone
Many of these projects fail. Knowing you aren’t alone in this struggle will make it easier to pick up the pieces. A study by Ethan Mollick, PhD, from the University of Pennsylvania revealed that 15–20% of backers reported failure was handled well by creators.
Inform Your Backers
Transparency is key. Your backers put their trust in you, the least you can do is inform them that the project failed. About 13% of backers of failed projects reported receiving a refund or other compensation from their curator, while 17% agreed or strongly agreed that they understood why the project failed, while 73% said they would still back another project.
Regroup and Prepare
There is no success without failure. Some of the greatest academics, inventors, and athletes failed countless times before achieving greatness. So if you’re serious about your project, keep moving. Keep improving.
Kickstarter is an amazing tool that can be a helpful stepping stone in launching your own business or funding your million-dollar idea. However, success doesn’t come without hard work and obstacles.
If you are successful enough to get funding, it is important to remember, the work doesn’t stop there. After getting funded, you must work to get your business off the ground, and anyone who has ever started a business can tell you that comes with obstacles. Just because you are funded doesn’t mean your business will succeed. There’s a long road of hard work in front of you.
And no matter how hard you work, you may fail.
But failure is simply a reason to work even harder.
Keep moving. Keep improving.