Crowdfunding Site Kickstarter Offers New and Unusual Tech
The TouchFire iPad keyboard generated a lot of buzz and funding, but took a while to get out the door.
If you wanted to see the newest gadget or technological advance on the block, you used to go to the Consumer Electronics Show in Las Vegas or CeBIT in Germany. But now there's Kickstarter.
"It's a way of taking an idea you have, and putting it out there, and seeing if anyone likes it at all," said Paul Sammut, who has posted his own Kickstarter project, a retro-designed clock. He's also sent money to two others: a fire piston (a way to light fires using compressed air) and a dock for iPhones and iPods. Both were fully funded, with the dock (Known as the Elevation Dock) hitting the $1.4 million mark. (The goal was $75,000.)
Kickstarter functions on crowdfunding. It allows users to post an idea: a new product, or even a piece of art such as a film. Visitors to the site decide whether to contribute and usually receive some perk. One dollar might get you mentioned on their website, $10 gets a T-shirt and $100 might get a pre-order, for example.
In the beginning, many of the products were labors of love, such as a niche iPhone app or a record launch. But soon it became a go-to site to launch products that might have a tough time attracting venture capital, or limited-edition pieces that weren't feasible to mass produce. If you want to fund a documentary, help someone start a business or just see what small inventors and artists are up to, go to Kickstarter.
Now more-established players are getting involved. For example, the Sundance Institute of Artists has a curated page featuring film projects, and the Rhode Island School of Design features some quirkier art and design ideas.
There is an increase in the number of slicker, more professional presentations, and bigger projects.
"We're seeing $10 million projects and a $1 million is like, 'whatever,'" he said. "If you look at the videos being made by some of the gaming companies now jumping into Kickstarter, you see high-budget, professionally done works. These are fabulous, compelling, and completely out of financial reach for a typical DIYer."
One example is TV game console OUYA, which was a $950,000 project that raised $5.5 million between its July 10 launch and July 25.
But that doesn't seem to have changed the heavy do-it-yourself ethic of many projects or the sense of ambition — like sending 1,000 ping-pong balls to 100,000 feet above the Earth in a weather bolloon, with each "pongsat" housing a tiny student-built experiment.
A Kickstarter project has its own funding goal and amount of time to reach it. (Kickstarter takes 5 percent of the funds raised.) So, for example, the OpenTripPlanner app for the iPhone has to raise $25,000 by Aug. 18. OpenTripPlanner is supposed to fill in for Google Maps, which Apple is dropping in the upcoming 6.0 version of iOS. And it will offer directions via bicycle and public transit.
If it does raise the money, people will get what they were promised: $5 or more get a copy of the app by October, for example. A $50 or more pledge also gets a t-shirt, decals and a shout-out on Facebook and Twitter. If it doesn't raise the money, those who contributed get their pledges back.
There haven't been any lawsuits over projects that failed, but a few have run into snags. The Touchfire, a keyboard for iPads, raised $201,400 – some 20 times the goal of $10,000 – but hit production delays. On July 11 the company announced it was shipping the first units (for $50), eight months after they initially thought they would. Steve Isaac, one of the Touchfire creators, said that by the end of July they have shipped 4,000 keyboards to the initial Kickstarter backers.
There's little vetting of projects. Sammut noted that when he sent his in, all he got was an email. That doesn't mean nobody looks at proposed projects. You can't post one that says, "Give me money to go to Europe." But beyond that there is a lot of leeway.
For Sammut, it was a departure from the often bureaucratic and expensive process of raising venture capital, and that wouldn't have fit his business since he wasn't looking to guarantee growth (he only planned to make a limited number of his radios). Kickstarter allowed him to use the money to get the necessary FCC licenses and buy supplies.
Beyond the funding though, there is a social aspect. Todd Kruger needed $4,500 for his film project, a short called "Exposure." He met that goal, but the process was just as important. "It really touches me that so many people were willing to support 'Exposure,'" he said. "I was taken aback by the generosity of the people that decided to support the film and their feedback about the project. As an independent filmmaker, often it feels like you're all alone… this process made me feel like I have a vast support network."