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Do any entrepreneurs take risks these days? (Kickstarter rant)
Last Post 02/26/2015 10:40 AM by Keith Jackson. 12 Replies.
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6ix

Posts:485

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02/20/2015 04:23 PM
If you happen to frequent many bicycle news sites, you may notice that nearly every article about a new product has an associated Kickstarter campaign. And this isn't limited to small upstarts that don't have the capital necessary for development and initial manufacturing. No, even mature companies that already have a solid product line are asking for their customers to plop down money for something that doesn't exist and may not ever exist. Or if it does end up getting to market, it could be very different from what was initially shown. Part of product development is doing market research to make sure you are bringing the right product out at the right time. There is inherent risk to this but you, as a product developer, have to take those risks and believe in your decisions. These Kickstarter campaigns represent companies saying "eh, we aren't sure enough about this to plunk down the cash to do it, but we'll let our customers front us the money." Additionally, making this money so easy to acquire will result in a lot of budding entrepreneurs getting in way over their heads. I learned the hard way there is SO much more to a successful business than the product. In fact, the product is probably 5% of the whole and if you can't manage the big stuff, having the coolest fat-bike on the market won't help you feed your children or pay the rent. Another gripe is why Kickstarter is even necessary for a product that requires zero capital for tooling and related manufacturing costs. I saw a pannier yesterday with a new campaign and had to wonder why the company even needed to use Kickstarter? My guess is that's a great way to get the money in their pockets before committing to anything. Am I jealous Kickstarter wasn't around when I went searching for investment? Hell yes I am!! But I also know that even if I'd been given a $1M through Kickstarter I doubt I would have been successful. You need guidance from people that know business.
Dale

Posts:1767

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02/20/2015 08:51 PM
6ix, I thought of you specifically when saw a Kickstarter for the Fly 12 product yesterday. Sort of ticked me off at how you got the short end of the stick on your deal. KS is an amazing way for people to get funded on all sort of projects. I wonder why folks are so eager to jump in with money
Ride On

Posts:537

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02/21/2015 07:34 AM
I'm with you, I've had several product ideas, probably could have gotten some funding for them but I have zero idea how to run a business so it would have been a waste of everyone's time and money.

I don't understand kickstarter at all. It's just giving money to people who you don't know for no good reason other than it makes a good story to tell people " hey I funded this really cool project on kickstarter"
longslowdistance

Posts:2881

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02/21/2015 07:51 AM
Why help someone get their idea off the ground? Because their idea sounds cool.
Hoshie

Posts:134

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02/21/2015 08:10 AM
Besides fronting the money, the point is to test demand in the Market. No kickstarter interest, less investment for initial phase of your product dev cycle and ultimately you see if what you are doing resonates with potential consumers.

I worked as an advisor to a portfolio company of a popular incubator here in LA and they did a kickstarter campaign. It was an interesting process to see and learn about.

One of the key things is that you have got to market the heck out of your campaigns so you get blog coverage, etc. and you have got to put some marketing into your pitch, outreach, video etc.
Nick A

Posts:625

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02/21/2015 09:42 AM
Just a thought? I wonder if established companies use Kickstarter almost as a focus group for ideas? That is, if folks are willing to put down money, then they have something worth developing. Just a thought. A weird way to go about it, but maybe?

Nick
longslowdistance

Posts:2881

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02/21/2015 11:58 AM
Wisdom of crowds.
Nick A

Posts:625

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02/23/2015 12:27 PM
Yes the Wisdom of Crowds. Brings you lynchings and the 3rd Reich.
stinkyhelmet

Posts:94

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02/23/2015 02:36 PM
It eliminates manufacturing risk for the entrepeuer. They take pre-orders (pledges) and if they don't reach the goal that they have calculated as a threshold to make a profit, then they don't have to fulfill the orders. Easy peasy. Sure, they have lost time and maybe money in the design of the product, but they lost nothing on manufacturing.

Whether that is good or bad, I don't know.
Orange Crush

Posts:4499

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02/25/2015 02:46 PM
Ah come on, kickstarter is beautiful, if only for its comedic content :-)

Where else can you get funding for this?

https://www.kickstarter.com/projects/nophone-usa/the-new-and-unimproved-nophone?fb_action_ids=337824156387354&fb_action_types=og.shares&fb_source=other_multiline&action_object_map=%5B654324877999436%5D&action_type_map=%5B%22og.shares%22%5D&action_ref_map=%5B%5D
ChinookPass

Posts:809

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02/25/2015 03:13 PM
FTW!

SideBySide

Posts:444

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02/25/2015 04:25 PM
Amazing!
Keith Richards

Posts:781

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02/26/2015 10:40 AM
I love the selfie upgrade.
----- It is his word versus ours. We like our word. We like where we stand and we like our credibility."--Lance Armstrong.
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