KICKSTARTER: Obtaining funding via social media
DO you ever get tired of being served coffee that is too piping hot to drink? Or leaving a cup of Joe to cool only to find that it’s gone Luke warm by the time you drink it? Well, soon unsatisfactory coffee drinking will be a thing of the past with the release of Coffee Joulies on the American market this week.
The idea of creating stainless steel heat-retaining coffee beans that keep your hot beverage at the right temperature for longer was brewed up by two young design engineers both named Dave. Like many budding entrepreneurs, Dave and Dave needed a way to fund the manufacturing of their product and turned to the Internet and social media to achieve this.
Kickstarter.com is one of many websites that allows people to post ideas freely and appeal to the online public to pledge small amounts of money towards their project. Creatives are given a set amount of time to raise the funds they need and offer certain rewards to people, depending on the amounts they pledge.
The Coffee Joulies project, for example, was looking for $9 500 (roughly R66 500) to fund the manufacturing and distribution of their product. Amounts that could be pledged ranged from $40 to $500 or more. Returns on investment included being sent free samples of the product once made, getting a unique Joulies mug with “I backed Joulies on Kickstarter” printed on it, or even being sent a Coffee Shop Pack for entrepreneurs who want to sell Joulies themselves.
The Coffee Joulies example is one of many that illustrates the power of the web and social media to kick-start business ideas into existence. The two-man team managed to raise $306 944 (about R2 148 000) and has over 4 800 backers. Project creators also keep 100% ownership and control over their work.
The only criterion for Kickstarters is that projects must reach their funding goal before time runs out or no money changes hands. This is done to protect all parties involved. Creators aren’t expected to develop their project without necessary funds, and it allows anyone to test concepts without risk.
Other successful projects include documentary film ideas, iPhone add-ons or accessories, a magnetic vertical garden kit and video game development. Many of these have far exceeded the amounts needed and are over 100% funded. Pledging continues until their initial time frames end. I was also pleased to see a few South African projects on Kickstarter that have surpassed their funding goals.
The creative market for ideas
Websites such as Kickstarter bring to mind other online platforms that also operate within the creative market for ideas. Idea Bounty is one example whereby large corporates post a brief for something they want — such as ideas for an advert. Users or creatives are then invited to submit their ideas for that brief. A sizeable bounty is offered by the client beforehand which is bestowed upon the person who submits the best idea.
While platforms such Idea Bounty sound all good and dandy, it just goes to show the value of a good, creative idea. This particular website has been known to offer bounties as high as $10 000 (about R70 000), but it’s a no- brainer that the returns on implementing such ideas most likely far exceed what was paid for them.
This comparison makes one feel far more approving of entrepreneurial, self-starting marketing platforms such as Kickstarter. The look and feel and user-friendliness of the website also make it that much more inviting. But you don’t have to take my word for it. If you have a great idea or want to launch a book or make a film and need funding, Kickstarter would be a very good place to start.