SMOKINCHOICES (and other musings)

May 23, 2015

Crowdfunding @ Kickstarter

So, you think you have a pretty good idea for a new business?  If you could get it off the ground.  This story just might give you something to think about. .  . ya never know (unless you try)   Jan

 Crowdfunding

Everyone wants to be Kickstarter ‘Staff Pick’

By Joseph Pisani ASSOCIATED PRESS

 NEW YORK — Want your project to get selected as a “Staff Pick” on crowdfunding site Kickstarter?   Good luck with that.  

Entrepreneurs and other users have been seeking the secret to getting their projects selected as a “Staff Pick” — a designation that one of Kick-starter’s 98 employees can give a project based on his or her tastes.  

Charming a staffer has perks. Staff Picks can get prime placement on the website, be promoted to Kickstarter’s 2 million followers on Facebook and Twitter, or appear in Kick-starter’s “Projects We Love” email, which reaches more than 4 million inboxes every week.   That promotion can increase donations. Users get in on the promotional activity by updating their pages to add a bright green badge or banner they create themselves, even though Kickstarter discourages the practice.  

Kickstarter’s employees can also donate their own cash to a project. And this year, Kick-starter started using company money to fund projects it favors. That has users scrambling to figure out how to get picked.  

Shelley Harper scoured Google, read blog posts and studied past Staff Picks before launching a Kickstarter campaign for her business, ConQuest Adventure Journal, which makes journals that allow fans of comic-book convention Comic-Con to store autographs, photos and other mementos. Her research turned up no answers.   An email sent to Kickstarter went unanswered. Then, weeks after her campaign launched, it was selected as a Staff Pick. She still has no idea why.   “It’s like this magical thing, and nobody knows how it happens,” said Harper, who raised nearly $12,000 in July to help pay for the printing of more ConQuest journals.  

Kickstarter spokesman Justin Kazmark did not make other employees available to be interviewed but said workers spend much of their day keeping up with projects that are posted on the site and pick ones that have a good video, give colorful updates about the project or have an imaginative idea.   The company says there is no science to how its employees choose their favorite projects. Users find out they were selected in an email: “Someone on the Kickstarter team loves your project,” it says.  

The picks vary widely. Recent ones include a company that makes jewelry from wool, a maker of homemade marshmallows and a company that makes an electric toothbrush that tells users if they are brushing their teeth correctly.  

But Kickstarter does offer clues. Earlier this year, it started using its blog to tell readers what kinds of projects its employees like. Those from Missouri have a chance of impressing staffer Shannon Ferguson.   “I basically just try to back projects from my home state of Missouri,” she said in a July post. Another employee, Katie Needs, said she backed Nerd-wax, a wax that can be rubbed on eye glasses to keep them from falling off the nose, because she’s “a lifelong four-eyes.”   Ferguson and Needs didn’t respond to an interview request.  

Kickstarter rival, Indiegogo, says it does not pick favorites. Instead, projects get promoted to the front page of its website and in emailed newsletters based on what projects are popular among its users.   Why the difference?   Kickstarter wants to play a bigger role in the success of startups, said Paul Levinson, a professor of communications and media studies at Fordham University. It can claim to be an earlier supporter of a startup if it makes it big. A success can help build Kickstarter’s reputation as the place to go to raise cash, he said.  

Some Staff Picks have become very successful. Oculus VR, a maker of virtual-reality headsets, raised more than $2 million on Kickstarter and later sold itself to Facebook Inc. for $2 billion.   But owners of some past Staff Picks say it’s not as big a windfall as they hoped. Harper said ConQuest got a 4 percent bump in donations a week after it was picked, much lower than she expected.

Elemoon, a maker of high-tech bracelets that light up to alert wearers of a call or text, said just 11 percent of its $122,725 in donations came directly from being featured prominently as a Staff Pick on Kickstarter’s technology page.  

Still, every dollar counts on Kickstarter. If a project doesn’t reach its financial goal, the creator doesn’t get to keep any of the money pledged. For example, if someone aims to raise $10,000 in 30 days, but makes it to only $9,990, the project gets no funding. If a project doesn’t reach its goal, Kickstarter feels the pain, too. It doesn’t get to charge its 5 percent fee unless a project passes its goal.  

The chance of a project getting successfully funded jumps to 92 percent if it’s a Staff Pick, up from about 50 percent for non-Staff Picks, said Ethan Mollick, a business professor at the University of Pennsylvania. He studied 48,000 projects but isn’t sure if Kickstarter picks projects that would have been successful anyway.

Kickstarter has also started showing its love by opening its pocketbook. Since March, Kickstarter has given money to nearly 180 projects.

It gave Dr. Stadnyk’s Hot Sauce $30, a day after the hot sauce company was also selected as a Staff Pick. It raised $10,089, above its $6,000 goal, to bottle more hot sauce flavors.

Alex Stadnyk, a co-owner of the company, sent three bottles of the hot stuff to Kickstarter’s Brooklyn offices, a reward that comes with the $30 donation.

“I guess I’m doing something right if they backed it,” says Stadnyk.

_____

ONLINE:

Kickstarter’s Staff Picks: https://www.kickstarter.com/discover/recommended

Projects Kickstarter has backed: https://www.kickstarter.com/profile/kickstarter

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