Kickstarter has been great to the community, it allows those with a great idea and little money to bring fabulous products to the market. Yet, every once in a while we are seeing a company which is not new turning to kickstarter to get funded.
Every time we post such project, the first comments are why is this company going to kickstarter? They should have plenty of money in their pockets and they should not offload the risk of development to us.
We were intrigued by the same question and asked 5 companies this exact question. Here is their response:
Mindshift Gear and Rotation 180
Mindshift Gear is a spinoff from the successful bag company Think Tank Photo. When they launched the new company, they went to Kickstarter with its first product – a travelers oriented photography backpack called Rotation 180. The campaign asked for $30,000 and raised $132,884.
MindShift Gear was actually a brand new company (one separate from Think Tank Photo) with no products when we launched our Kickstarter project. Kickstarter provided us a venue for launching our first product, the rotation180° Professional backpack. The backpack represented a perfect example of a classic Kickstarter funded project. It presented a whole new concept, a true innovation, in that it is the first outdoor backpack designed that users can get at their gear without first having to take off their backpacks. As we stated in our project description, we were able to invest the funds we raised in helping fund the backpack’s development and production.
Peak Design and Capture Camera Clip V2
Peak Design makes camera straps and camera “holster clips”. Their first product the Capture Camera Clip System was a huge success and raised over $350,000. The company continued to make successful Kickstarters, one of which was an iteration of their first product called Capture Camera Clip v2. The campaign raised $819,108 when asking for $100,000.
Regarding your question, it’s a good one and one we get often. The answer is in two parts.
First off, regarding having an established company with capital in our pockets, I suppose it’s all relative. When we finished our first Kickstarter campaign we had 5500 backers worldwide and over 6500 camera clips that we needed to manufacture and get into their hands. Doing that costs quite a bit in terms of time and capital, especially when it’s your first time doing it. Remaining funds went straight back into the business – we hired people to help with product design, customer service and operations, built a new website, rented an office space and attended trade shows. After 2 years of business – which was really a 2 year crash course in manufacturing, product design and supply chain – we decided it was time to revamp Capture, incorporating tons of customer/pro feedback and our improved understanding of design.
With the total redesign of a product (or the launch of a new product) you’ve got some hefty up-front costs – design, tooling and prototyping can easily cost $100K, even for something as relatively simple as Capture. Even with a massive Kickstarter success, having $100K in the bank after 2 years of running a business is unheard of in our industry. So, our options were to take out a loan, seek venture capital, or go back to Kickstarter.
Which brings me to the 2nd part of the answer. We went back to Kickstarter because it allows us to do what we love…design and build gear that solves people’s problems. When you are directly funded by your customers, you have nobody to answer to but them. When you receive venture capital, your goal of designing a great product is secondary to your goal of optimizing your return on investment.
The Kickstarter community is the reason Peak Design exists, and we are firmly committed to continue working with that community to improve the lives of photographers and adventurers. We see our backers as our collective board of directors – they not only fund our continued product development, the help steer the direction of our company.
TriggerTrap and TrigerTrap Ada
TriggerTrap makes cool camera control dongles that work with a smartphone. They also made the TriggerTrap V1 which was an open source box that could control the camera to take pictures on a signal. This first $77,262 campaign was a true kickstarter in the sense that it started a new company focused on camera triggering solution. The Company then developed a mobile dongle and later on continued to another kickstarter that was again a hardware solution for high speed photography called Triggertrap Ada. This campaign raised £290,386 (about $430,000) when only asking for about $75,000. Sadly the development for this product failed.
The R&D and tooling required to create a new hardware product is significant. In our case, we had to choose between raising investment (and thus selling of part of the business), getting a bank loan, or turning to crowd funding. Our first Kickstarter campaign worked really well for us, for two reasons. First and foremost (and most obviously), raising the funding we need was very helpful. In addition, we saw a large marketing boost, with a lot of new customers finding out about us.
There’s an obvious risk with the former two options: What if you go away and create a product, but nobody wants it? Or what if someone comes along and, as soon as you launch your product, points out that the product you are creating already exists?
Both of these things can be avoided by doing a Kickstarter project (I wrote about that in my article “Your Kickstarter project failing might be the best thing to happen to you”
As it turned out, we were 100% funded in under 12 hours, which answered one of the biggest challenges about our product: Would anybody want this? The answer was ‘yes’, and the Kickstarter project helped answer that question.
Of course, our kickstarter project did end up failing further down the line, but that’s a different matter.
Revolve Camera and Revolve Motion
Revolve Camera came into the market with a simple concept – a desktop dolly. The company then expanded into the so popular motion control market with their second project, the Revolve Automated Motion – a moco and slider system funding $130,201 while only requesting for $25,000.
Revolve Camera utilized Kickstarter to fund the release of our Revolve Automated Motion system for a number of reasons. We were an established company at the time of the campaign, and may have been able to fund a small production run on our own, but Kickstarter is useful for much more than just the capital.
Possibly the most important utility of Kickstarter is to prove that there is in fact demand for the new product. Simply put, you face much less risk by launching on Kickstarter, since you know before going into production whether or not there is demand for the product. If the project fails, the losses are much less extreme compared to manufacturing a product that does not sell.
Kickstarter is also a great way to get exposure and gain new customers. It fosters excitement and builds a community of support around the launch. Project backers love to know that they played a part in bringing an idea to life. They then benefit by being the first to receive this new product, and generally at a discounted price. Many times the project backers also provide feedback that changes the outcome of the project, such as added features or product improvements. We can then build a better product thanks to their contribution.
While Revolve Camera may have been able to find the capital to launch Revolve Automated Motion on our own, Kickstarter is still an amazing tool for our small company. With the Kickstarter funding we are able to place larger orders with our manufacturers, bringing down the price of the product. We are also able to continue running our business as usual without sacrificing our cash-flow by funding production, and without taking out any high interest loans.
As long as our business remains small, we will continue to utilize Kickstarter as an amazing tool towards innovation.
Rhino Gear and Rhino Evo and Motion
Rhino Camera Gear is one of the most familiar companies in the Kickstarter cinematography eco-system. The Washington based company recently launched another crowdfunding campaign to add motion control to their sliders. This would be their sixth Kickstarter campaign after a Slider, a Rig, a stabilizer and some smaller campaigns, which pledged a total of almost half a mil together.
That’s a great question. It’s definitely valid but I’d like to give you a closer look at how things are run at Rhino. At this stage in Rhino’s growth, we re-invest almost all of our profit into new product development and marketing to grow the company. This doesn’t leave a ton of extra capital for financing new product inventory. When we started to think about using Kickstarter for Rhino Slider EVO we knew it was the best way to get as many sales as possible in the shortest amount of time. That initial volume of sales helps pay for inventory and recouping NRE (non-recurring engineering). However, when you launch something on Kickstarter and don’t place your orders until after the campaign ends (when you have the money) things take a lot longer to fulfill and you run a high risk of delays since you’re supply chain isn’t proven. We’ve been late in the past and didn’t want to be late again. So, we approached this project differently. We took on the risk of carrying inventory and having it ready to go shortly after the campaign ends. We wanted to provide a better experience for them and make sure there weren’t any delays. We definitely couldn’t do this without our backers and the big bump in sales they provide to cover the cost of the initial run.
A lot of our customers enjoy backing our projects on Kickstarter because they get to see a side of things that is normally hidden from the customer. In a regular online transaction you miss the work that goes into bringing it to market. On Kickstarter, even backing a project from an established company you get to see the nuts and bolts and trials that companies go through to make and ship great products. So even if we had all of the capital in the world, I still love the Kickstarter model because we have built Rhino with that level of transparency and want to continue doing so.