This Sequoia Guide covers strategies that can help you figure out the right price for your product—and end up with happier customers and more profit in the process.
I just pledged $35 to a Kickstarter project – the first time I’ve participated in the site, but certainly not the last. The PadPivot, shown in the video above was too awesome not to support. That, and I want one. A lot.
For those unfamiliar with Kickstarter, I’ve provided a quick description below.
So first off, yes, I am blathering on about a product I’ve never touched. In fact, the PadPivot doesn’t even exist beyond prototypes. But I know that it will come to life and in part due to my small contribution on it’s Kickstarter project. That’s pretty damn cool. The video does a far better job than I would have describing it, so I won’t go into detail, but I find both the product concept and its funding method very exciting, so I thought I would share.
A quick description of the PadPivot for those who may not have time to watch the video:
Kickstarter is an ingenious concept brought to life. The goal is to ease the creation of ambitious creative ideas like films, music, stories, events and physical products. Every project has a clearly outlined goal, a set amount of money to raise, and just as importantly, a finite time to raise it in. As they put it “A good idea, communicated well, can spread fast and wide.”
When a project is set up and launched the public has the ability to become a project “Backer”, by pledging anywhere from a dollar to hundreds. As a Backer, you select a level of support, pledging X amount, usually tied to a level. The levels are tied to rewards that the project is required to set up. This is part of the model is brilliant, and as you can see throughout Kickstarter, well thought out. For example, read their blog post on the topic of reward pricing to see the role it plays in the overall success of a project.
As I noted above, I opted for a $35 pledge level, because I wanted one of the PadPivots and I thought it worth a bit more than $25 (my thinking at the time was that I would help them hit their $10,000 just a little faster. Yeah, they blew through that in no time at all – at the time of writing, they have over $19,000 in pledges from 454 Backers.
So far, I’ve mentioned pledges a lot, but that isn’t exactly the same as actually buying something. This is another point where Kickstarter has built a solid foundation. Backers are only charged when and if the project reaches it’s Pledge Goal. As a Backer, you know where your money is going, and you feel much more confident that you aren’t throwing your money in a black hole. Kickstarter calls it an “all-or-nothing funding method where projects must be fully funded or no money changes hands.” I can get into that.
In this case, if they hadn’t raised the money by March 14th, 2010, my account wouldn’t have been charged. As they did hit the goal, they will begin production, using my funds alongside that of the other Backers.
More Kickstarter Projects
I haven’t pledged to any of these. Some of the projects are complete, including a couple that rocketed well past expectations early. While others may well earn my money, once I have time to dig a little deeper.
A ” searchable ethnographic database built from the lyrics of over 40,000 Hip-Hop songs from 1979 to present day. The database is the heart of an online analysis tool that generates textual and quantified reports on searched phrases, syntax, memes and socio-political ideas.”
Take a new touchscreen iPod Nano and transform it into a watch. As the creators noted “The idea to use the Nano as a watch was an obvious one ever since the product was announced. But we wanted to create a collection that was well designed, engineered and manufactured from premium materials and that complemented the impeccable quality of Apple products. Not just clipped on a cheap strap as an afterthought. ”
Also check out the Lunatik for a video.
As you can see on the project page, the makers of the Glif, a tripod mount and stand for the iPhone 4, wanted to raise $10,000. They pulled in $137,417. The product has proven very popular since its release into the world – an excellent example of a simple, useful and elegant idea brought to life.
Kickstarter has posted about many awesome projects on their blog as well. Check them out for inspiration.