I think that Kickstarter has enabled a bit of a hardware startup revolution. Not only is design and technology in the top 5 most popular Kickstarter categories, but it also boasts huge successes like the Micro 3d Printer, which raised $3.4 million, Earin, which raised £829,673, and these million dollar campaigns.
We’ve already talked about the benefits of crowdfunding in comparison to angel investment or VC funding. Now we’d like to highlight some key tips to keep in mind when running a technology or hardware Kickstarter campaign. Check them out below and leave a comment if you’d like to share your project with us or submit a press release here.
1. Shipping, Taxes, and Manufacturing Costs Can Sink You.
The hardware, technology, and design categories on Kickstarter have a track record of over-funded campaigns. Just because you might set a $50,000 goal doesn’t mean that you will raise $50,000.
If you end up raising 10x that amount, you will be shipping out 10x the rewards to 10x the backers, making Kickstarter surveys even more complicated when you need to gather backer choices and contact information.
Before you start, you need to ask whether or not your fulfillment plan is scalable, and if it’s not, which elements are uncertain and how you can fix them.
If you get to the point where you are going to be shipping out rewards to 200+ rewards, I highly recommend considering going with a reward fulfillment tool like BackerKit and possibly enlisting the help of a fulfillment company, like Fulfillrite or Shipwire.
In addition, you need to keep in mind the crowdfunding tax issues, should you not use up all of your funds.
When you are dealing with such a large volume of orders, even a small percentage change in any of these items can put you in the red, which is why it’s important to budget a 10% buffer zone, which in the best case, would be your profit for the campaign.
2. Under-Promise and Over-Deliver
Now that Kickstarter has been around for a few years, journalists have begun to take note of the notoriously late shipping time of many projects.
Your backers are the early adopters that have taken a chance on your team and your business. You owe it to them to be up-front and transparent about reward delivery time. If there are complications, I recommend communicating it as early as possible.
One way to ensure that you will meet your deadlines is to over-estimate the amount of time it will take to ship out your rewards. Best case, your backers will be happy that they received their swag early!
3. Don’t Create Too Many Variations For Your Rewards.
While a broad selection of products in various colors and sizes will lead to a broader appeal in the backer community, it will also quickly complicate the fulfillment process. It will also make add-ons a headache, as well as keeping track of all the different variations, what they cost, and who chose what.
What’s even more of a headache is when backers fail to respond to surveys within the first week and continue to send in replies months down the road, which you still must honor.
Keep your project as simple as possible, while still making use of vital functionality like early-bird reward tiers and stretch goals.
4. Start a PR and Marketing Strategy Before You Launch
The “build it and they will come” mentality is a common framework among some (not all) engineers, who put a lot of emphasis on product and design.
Unfortunately, Kickstarter is becoming an even more crowded marketplace, with their now laxer guidelines and abundance of technology, design, and hardware campaigns launched each month.
In order to stand out, you need to be even more on your game with regards to creating a marketing and PR outreach plan. We recommend getting started with these ways to get a journalist’s attention. You can also get started building a media list with these tools (some free, some paid).
5. Patents, Copyrights, and Legal
There is nothing more scary than getting a cease and desist letter or a claim that you are infringing on someone else’s patent or copyright. I have seen it happen before to Kickstarter campaign creators.
Be sure to do your homework before you launch to avoid legal troubles, both in terms of people copying your product and people claiming that you copied their product.
In addition, if you will be manufacturing overseas (China), be aware that many products can easily be ripped off if you source all the parts from the same plant. Try spreading around the manufacturing for different parts to decrease the chance that an outside firm will reverse-engineer your product. For more tips on this point, check out these manufacturing mistakes.
Conclusion
I firmly believe that hardware is undergoing a revolution, with the advent of new platforms like Kickstarter, Indiegogo, and Quirky. There is no better time in history to receive funding for your project and also get the word out about your game-changing product.
I’d love to hear what you are working on via a comment below and be sure to submit a free press release to our site!
