Improbable Kickstarter Shows How Crowdfunding Is Driving Innovation In Old Markets29 October, 2015 / Articles
Over the past few years, many observers in the business arena has watched in amazement as crowdfunding has exploded from a niche fundraising option to a full-blown funding mechanism for all kinds of entrepreneurs, startups, and small businesses. Year by year, we’ve seen increasing numbers of success stories that employed this approach.
An ongoing Kickstarter campaign for the Misen Kitchen Knife is about to join an exclusive club of impressive success stories. In a matter of weeks, the crew behind the Misen knife has been able to crowdfund more than $750K for their product release. Starting out, they set a fairly conservative goal of $25K on Kickstarter, but that target was swiftly overwhelmed.
To date, nearly 10,000 backers have jumped on board, and more than 25 percent of these backers have committed between $100 and $500 to Misen’s campaign.
It’s a rare and admirable achievement to surpass one’s initial crowdfunding goal by about 30 times. There are lessons to be learned from the success of this campaign that other crowdfunding-hopeful entrepreneurs should note.
Keys to Crowdfunding Success
Misen has done what few other crowdfunding campaigns have been able to effectively do: meet and surpass their funding goals. While you often hear about success stories, the truth is that these represent a very tiny fraction of the market. Many campaigns never raise a dime, while the majority fail to reach their initial goals.
What has Misen done well, and what can other entrepreneurs and businesses learn from their success? Let’s take a look at some tangible takeaways:
Preparation. The guys at Misen spent hours at the proverbial drawing board, figuring out how to best showcase their product for optimal visibility and success. If you’re considering crowdfunding, you need a plan.
Campaign quality. If you look at some of the campaigns on websites like Kickstarter and Indiegogo, it’s hard not to smirk. Many campaigns are doomed from the start because they are flawed. They don’t use good images, persuasive copy, or an organized stream of thoughts. It’s as if they expect people to know what they’re talking about – without actually explaining anything. Campaign quality is incredibly important. Misen did a great job of this by including original images and videos, informative copy, and lots of information.
- Reason to believe. From the giving side of things, there are two things that entice people to pledge money. One, they have to believe in the product and find it useful, fun, or exciting. Two, there has to be something in it for them. Understanding this, Misen established meaningful rewards. This is a lesson in generosity. If you’re establishing a crowdfunding campaign, you must be willing to give something in return. Not sure how to select rewards? Here’s a brief read on the topic.
- Moderation is key. Entrepreneurs often get greedy when launching a crowdfunding campaign. Instead of setting a lofty goal, settle for a moderate figure. For example, Misen knew they would raise more than the initial $25K, but they still settled on that number. In crowdfunding, it’s often better to aim low and hope for better results.
Crowdfunding: Driving new innovation in old markets
While crowdfunding may not be the prototypical method of funding, it’s becoming an increasingly popular form. Not only is it cost-effective, but it gives many companies increased exposure and brand recognition, and without the need to part with any equity in the company.
Perhaps most interesting is how crowdfunding is driving new innovation in old niches. Knives have been around for thousands of years, and haven’t changed much in that time. Most consumers have probably not even thought about spending $100+ for a chef-quality knife. But Misen’s Chef Knife has brought the price down enough to make it available to a new segment of the market: regular (non-chef) people. In doing so, Misen has not only found a goldmine of demand in a new segment of the market in which the product has not traditionally been available, but it has shown the rest of the world that there are probably many other similar niches or products that could have a similar effect.
Kickstarter is known for wild success stories, some of which include:
Exploding Kittens – A card game which raised $8.7 million on a goal of $10,000.
Nebia Shower – A showerhead which uses 70% less water, raising over $3.1 million on a goal of $100,000.
Planetary Annihilation – A PC game that raised over $2.2 million on a goal of $900,000.
Misen’s Chef Kitchen Knife is set to join an exclusive club of improbable success stories, while highlighting the power of crowdfunding to disrupt quiet, comfortable niches. It will be interesting to see what kinds of products and niches get innovative makeovers as a result of entrepreneurs riding the surprising success of other crowdfunded camp.