What happens when you have an idea, and you’re obsessed with it, but you don’t have the funds needed to turn it into reality? Some people would propose that Kickstarter is the answer.
Still fired up to attend as many music, tech and start-up events as humanely possible (my body, university timetable and wallet enabled me to attend one, so far), I surfed Twitter and found out that Kickstarter is putting on a series of events in London. The events are pretty diverse as well, ranging from a film festival to a seminar for game developers. The one that caught my attention, though, is this one.
I looked up the three Kickstarter projects that are to be featured on the session. I like Kano, ‘a computer anyone can make’, in particular because it makes programming looks so fun. They presented it as a learning tool-cum-toy for children, but I believe adults can benefit from it too. I started learning to code in Codecademy recently and it really helped me understand some unfamiliar (and to some extent, abstract) concepts. So I am definitely excited for any innovation that can make learning the language of the future (when will we speak in codes?) easier.
Anyway, ‘Kickstarter For Technology Projects’ was hosted by Capital Enterprise on the 13th of October 2014 at The Bakery, an open innovation marketplace for brands that has a co-working and event space. It is only five minutes away from Old Street station, still within the appropriate radius of the Silicon Roundabout. RSVP is free of charge, which is certainly a nice perk.
The event kicked off at 4pm. I sat next to a guy who came there for his PhD research. He pointed towards a lady in black standing by the screen at the front and asked me, ‘that’s Stephanie, right?’
I answered, ‘I guess?’
‘I hope I can ask her some questions later.’
Stephanie Pereira is Kickstarter’s International Partnership Lead. She is here in London from New York to moderate the various discussion sessions that Kickstarter is holding.
A question & answer session with Stephanie
A representative from Capital Enterprise opened the event. He started by briefly introducing the speakers and outlining the agenda of the day before making the audience introduce themselves. He asked, ‘who’s in here with a start-up or project idea?’ A lot of people stood up.
Then he asked, ‘who’s got a physical project that you can drop on your foot’ and ‘who’s got a digital project that you can’t drop on your foot’. There was a more or less equal amount of people from both categories.
‘Okay, so who has used Kickstarter for their project?’ A few people remained standing.
‘And who can be persuaded to use Kickstarter?’ Some people who sat raised their hand.
‘Finally, who has funded a Kickstarter project’ There was a number of people who raised their hand and some people also admitted to having funded more than one project.
After the mini audience introduction session, it was Stephanie Pereira’s turn to speak. She introduced Kickstarter, its features, as well as its founders. I just knew that all of the three founders came from a creative background like music, writing and design, not a business or even tech background. Way to go in building optimism.
Stephanie presented some interesting statistics. Out of all the backers (people who fund Kickstarter projects) 60% of them are repeat backers, which corresponded to the session earlier where some people in the audience raised their hand when asked if they have funded more than one projects.
A lot of people are hooked to Kickstarter because it has become more than just a crowdfunding website. It is an environment for people to discover exciting projects. Some of the projects that fall within a category tend to also branch out to other categories. Games, for example, which is one of Kickstarter’s most backed categories, like to work with people in the film, technology and arts categories.
The emphasis on creating an environment is the highlight of Stephanie’s presentation. She showed a quote that said: ‘when it comes to projects to manufacture and distribute, hardware, gadgets and other products, it is important to make sure backers know what stage of development the project is in’. Kickstarter values honesty and transparency, that is why they really encourage projects to not just have a compelling promotion material like videos and offering rewards to attract backers, but to also maintain a healthy communication with backers through project updates. Every Kickstarter project is a story and it is important to bring people who back your project into your creative process, giving them insights on how you turn the idea into life.
When Stephanie finished presenting about Kickstarter, she called the three British entrepreneurs who have done a successful Kickstarter project to the front. To simplify the introduction process, she played the project video of each Kickstarter.
The three case studies subjects (left to right): Kevin Haughan, Yonathan Raz-Fridman, Lucy Lynn-Evans with Stephanie (standing) as the moderator
Kano’s video was played first. There was a confusion on how to pronounce ‘Kano’. Yonathan Raz-Fridman, the founder, insisted that he wants to stick to the original Japanese way of saying it, pronouncing the ‘a’ like you would in ‘car’. Stephanie’s having a bit of a problem as she pronounced the ‘a’ like the ‘a’ in ‘cane’.
Kano’s video was shot in the playground. I suppose they want to show that adults can still play and have children’s sense of wonder – hence, adults can use Kano too. At one point, Yonathan pronounced ‘Kano’ like ‘cane’ in the video, making some audience members chuckle. The video showed them traveling the globe to test the idea on children from many countries. Kano can be used to create games like Snake or Pong, and it is really cool to see the inventor of Pong giving his thoughts on Kano on the video.
The next video is by SAM Labs, who created an electronics development kit fused with the concept of the Internet of Things. Kevin Haughan, one of SAM’s founders, was not in the video but he was sitting on the panel chairs. SAM hardwares can be attached to anything from your door to a toy car and each piece is connected to the software, allowing you to code and control the actions you want the hardware to perform.
Last up is Veglo. Despite having the simplest product, it is surprising how useful it can be. Velgo created the Commuter X4, a ‘wearable fibre optic rear bike light that helps drivers judge the distance, width and speed of cyclists.’ Commuter X4 was born out of the founder, Edward Ward’s realisation of how vulnerable cyclists are when he was hit from behind and thrown into the road. London has a lot of cyclists (maybe not as many as Amsterdam’s and still ahead of Jakarta’s attempt to turn cycling into more than just a fad) ranging from the suited professionals on Boris bikes to the fixie-riding hipsters of Shoreditch, where the video was shot. There is clearly a market here. Ward wasn’t present on the panel, though, but he was replaced by Lucy Lynn-Evans, the Head of Growth at Veglo.
When all of the videos had been shown, each project representative talked about how and why did they set their funding targets and how did they get people to pledge for their project. All of them said that they based their funding target on the cost that needed to be covered. Yonathan from Kano elaborated that he wanted to put a number that that they think they can achieve. Kano’s target was $100,000 (they use dollars for funding). If they hit half a million dollar they’d be extremely grateful. And if they hit a million dollar – which they did – everything will make sense. Yonathan said that once you passed a certain tipping point, you will definitely be sure that your product is not just viral but people actually want to use it.
Stephanie asked some questions regarding project updates and pledge rewards. Kevin from SAM Labs said that they need to build stories based on their update instead of just listing the improvements to their product. Yonathan said that one of the most important things he can teach anyone is to maintain a good communication with backers. He also mentioned that instead of having a lot of reward tiers, it is better to keep things simple and give rewards that have values. ‘By the way’, he said, ‘people love stickers as rewards.’
The most interesting part of the discussion, however, is when the speakers are asked about their outreach strategy. Before a Kickstarter campaign is launched, each project needs to be socialised to the market or to a group of influential people. Yonathan said that they researched journalists talking about successful Kickstarters and the Twitter accounts of key people and presented Kano to them. If it weren’t for the initial awareness that they raised, they wouldn’t have been confident with receiving funding within 18 hours – which was illustrated through a chart showing the increase of funds pledged to Kano over time.
Kano’s funding progress chart
SAM Lab’s drastic initial funding was due to a coverage by TechCrunch. Kevin said that they just sent a press release to TechCrunch and hoped for the best. And that hope didn’t disappoint.
I haven’t talked much about Veglo here, but it is worth noting that, according to Stephanie, 75% of projects on Kickstarter are on Veglo’s level. What she meant by this is that a vast majority of projects only require (and acquired) funding below £20,000. Kano and SAM Labs are way above this level.
There were some interesting information on Veglo’s presentation. There was a chart that showed that 91% of bikers are men, but the majority of Veglo’s pledgers are women who wants to buy Commuter X4 for their son or husband. Veglo’s Lucy said that there is a lot of potential in gifting, which is one of Veglo’s competitive advantage.
The audience was finally given the chance to ask some questions to the panelists. One guy asked Stephanie if people actually build their business model around Kickstarter, meaning that they have Kickstarter’s crowdfunding as their sole source of capital. Stephanie said, ‘yes’, and she can even show a list of projects that do. She went on to elaborate that it is so because Kickstarter is not so much about making money, but it’s about crafting a project.
Another guy posed an interesting question regarding a project’s duties to their backers, referring to how Oculus Rift ‘betrayed’ their backers when they were bought by Facebook. Does the duty to their backers stop after they give them the rewards? Stephanie replied by saying that a Kickstarter funding is only about bringing a project to life, not about getting a stake in any company. I’m not sure if that response shuts the whole Oculus Rift-Facebook debate, though.
The most interesting question, however, is on the campaign expenditures. As all of the speakers have shown, they created a video alongside other promotional means. What this means is that they had incurred cost even before starting the campaign. The person who asked the question said that a lot of people think that crowdfunding is where you can just go in and expect to get money. In fact, you need to spend some first. And this guy wanted to know how much.
Yonathan responded by saying that Kano does not live and die on Kickstarter. It is just one of the paths they could use. They have a team that have planned deliverables and should one of them – for example Kickstarter – fails, they have others. He did reveal that Kano spent $30,000 on direct cost, which includes video as well as travel expenses when they did research on countries like Israel, USA and South Africa.
Yonathan stated that it is important to think of their core competence and work hard on it. They can then hire people outside for skills beyond theirs. Lucy from Velgo added that they cut down costs by turning down offers from advertisers.
Post-discussion networking session
This pre-campaign cost is the issue that many people fuss over after the event. I talked to a guy from Italy who just came to London the day before to seek funding for his start-up. He is building some device that help people track their exercise progress in the gym. He was considering Kickstarter but was turned off after realising that promoting your project to get pledges (before you even receive any) require a lot of money.
I hung out for a while after the event because of the free snacks and drinks. I managed to ask Lucy some questions regarding keeping your ideas safe. After all, if you publish your idea on Kickstarter, people can look at it and copy it. She said that any preventive measures like patents and copyrights will definitely help. Kickstarter doesn’t assist you in those areas. But she said that the positive impact you get from disclosing your idea is greater than negative impact. She explained that if someone were to copy your idea, they would have had to spend at least the same amount of time, energy and money that you did – plus they would have to quit their job. If you really pioneered the idea, you’re automatically ahead of any imitators.
The wall of fame
Most people only stayed for less than an hour after the discussion ended. After taking some pictures of the event space, I left.
How does The Bakery works?
I should’ve brought a better camera next time.