Talking as a physical product company – crowdfunding is an excellent tool from companies to present an idea and turn it into a product fast. It is a platform that puts smaller and larger companies on a relatively plane playing field – so that all of us can pitch an idea to a large crowd like Tim Cook on Apple’s annual iPhone release. Whilst there are countless niche platforms, some regional, some area specific, there are only 2 truly global names when it comes to reward based crowdfunding – Indiegogo and Kickstarter. As we have used both, we would like to share what we have learnt so that you can make the best choice with a shortest possible learning curve.
The volume – First of all, let’s look into some general, non-project specific, numbers and comparisons between the two platforms. Firstly you should know that whilst Indiegogo is available for creators around the globe, Kickstarter isn’t (supported countries can be found here). While this can be an issue, there are many creators opting to favor the latter platform, going the extra mile to register a company in one of the supported countries. Why so? Perhaps the most obvious reason in sheer traffic – according to SimilarWeb extension, Kickstarter gets 54,7 million visits every month vs Indiegogo’s 26,9 million. Further more, the success rate on Kickstarter globally is currently 34,5% versus 9,8% on Indiegogo (up to some debate as unsuccessful project often get deleted). You can check out all stats on Kickstarter yourself by using advanced search and excel.
Marketing budget – On the other hand if you have deep pockets, and know your way around using Google and Facebook ads, then you might look towards Indiegogo as they have implemented those tools directly into the platform. With a few steps, you can connect your project pages to tracking pixels and retarget visitors so that you have a larger chance of sealing the deal with your project visitors. On top of that, Indiegogo is moving towards being a marketplace for projects that have already been funded throught their In Demand section, which is essentially a marketplace where you can keep selling your project even after the project has ended.
Funding type and currency – Other basics we would like to mention here, but not in great detail are that Indiegogo allows you to create a project with both flexible funding and fixed funding. Flexible funding meaning that even if you don’t hit your goal, you still get the money you raised. Fixed funding means that you only get to use the funds once you exceeded the funding goal. All Kickstarter project run on fixed funding platform. Another factor is that Indiegogo lets you choose the currency for your project, Kickstarter will run on a currency of creator’s country. As we took part of an event for Kickstarter creators in Copenhagen, a crowdfunding agency showed us how badly the success rate of project had dropped once Kickstarter expanded to Denmark. Part of the reasoning being that it took so much commitment to register a foreign company to even launch a project, but one reason could simply be psychological. If you sell a product which cost 750 DKK or 99€ then it will be much easier for people to go for the 99€ price mark, it simply seems smaller, this applies especially for US based supporters, only used to dealing in one currency. This may well be a solid factor as 76,9% of all project are launched in US, thus creating a US based community of supporters.
Alright – time to talk about our specific experiences. By now, we have run 4 campaigns on Kickstarter, and we started 1 on Indiegogo. Here are the projects in chronological order –
|Project||Funding Goal||Funding Raised||No. of Backers||Duration||Traffic (sessions)|
|Kickstarter – KP Cykler bicycles||200 000 DKK / approx. 27 000 €||122 750 DKK / approx. 16 500 €||51||30 days||Approx 19 000|
|Kickstarter – The Bike Hanger||10 000 DKK / approx. 1300 €||38 141 DKK /
|Kickstarter – The Perfect Urban Bike||20 000 DKK /
|20 315 DKK /
|Indiegogo – Bike Hanger 2.0||11 000 $
|Approx $700||16||Stopped after 16 days||1039|
|Kickstarter – Bike Hanger 2.0||10 000 DKK||53 745 DKK /
The two projects we want to focus on are the two last ones. They are virtually the same project, launched on different platforms. Why did we launch on 2 different platforms at the same time? Well we didn’t. First we launched on Indiegogo. For the first time since launching our company, we had some funds, not much, but some funds for marketing of the campaign, and like mentioned above, Indiegogo has some things going for it that Kickstarter doesn’t. So based on our experience, we thought it would go at least as good as one of our project in the past. But this is where it all gets interesting.
Just like with other projects, we had prepared our media list, organized our contact etc. More tips on this here. We went ahead with the Indiegogo launch and got pretty decent traffic for the first couple of days. Only a few backers, but decent traffic, so we were not giving up. After the first days, the traffic slowed down, only generating between 30 and 6 visitors a day. We had set up our retargeting ads, so that gave us a little bit more visibility, but as a strong start is the most important part of a crowdfunding project, then is simply didn’t have any meaning continuing as we failed to get much funding and media coverage. Thus we wrote to Indiegogo explaining our situation and they luckily agreed to take down the project.
About a week after this, we launched the same project on Kickstarter. We had of course wasted some good leads as we couldn’t approach all of our contacts again, but even so, the internal traffic was about double that of Indiegogo within the first days and continued to be so throughout the project. More importantly, we got a steady stream of backers and went 5x over the initial funding goal.
Easy decision making – Although 50 000 DKK is not something you will read about on the cover of New York Times, it goes to show how different these platforms are. What’s really clear is that Kickstarter generates far more traffic for a ‘non-viral’ project – which most projects are. Beyond traffic, Kickstarter payments work differently – Indiegogo charges your card right at the time of your pledge, but Kickstarter only charges your card in the end of the campaign. This means you can decide whether you like the product or the idea today, and figure out the money part during the next 30 days (or whatever the amount of days left). And if you didn’t you’ll get a notice and 14 days to fix your payment. Now this will create a few ‘bad payments’, but it makes decision making much easier which translates into numbers.
Further more, the last graph goes to show jsut how powerful the internal community of Kickstarter is. With 16 on Indiegogo, we only received a couple of internal backers, on Kickstarter, 73% of the total of 82 backers were internal. An while we didn’t show up on any charts on Indiegogo, Kickstarter quickly upgraded us to a ‘project we love’ status directly further traffic our way.
So which one should you choose? Kickstarter or Indiegogo? If there would be only one answer, then there would probably only exist one platform. If you have a large marketing budget and a lot of online marketing experience or Kickstarter simply isn’t supported in your country, you might opt for Indiegogo. Plus one might argue that the truly viral projects get their millions on either of the platforms anyway. But for small companies just breaking into the world like us, Kickstarter simply makes far more sense. The size of the community they have built directly translates into numbers, both in internal traffic and in backers.
As an extra tip for creators – especially those hoping to start a full-time business through crowdfunding – crowdfunding alone will, in most cases, not finance your whole project. There will be all sorts of unexpected problems – for example the Coolest Cooler, which at one point was the most funded project on Kickstarter, raised 13 million USD, had to sell on Amazon to be able to ship Kickstarter products. Instead of only relying on crowdfunding, either work out a flexible deal at your current workplace or make a deal with someone who will back you financially. Crowdfunding can be seen as a platform where you prove a concept in real world. You might only raise funding for 20% of the cost of the initial setup for the production, but you prove that there are people willing to pay for this product. This gives you an option to say for example – we need 100 000€ this year, if we get 200 customers, and 40 000€ in sales from crowdfunding, will you come in with 60 000€ as a partner?
Write or call if you have any further questions or comments.