Kickstarter turned eight-years-old today, so I thought it might be interesting to look at the Kickstarter campaigns that generated the most money to see what entrepreneurs can learn from it.
Here are a few of the Kickstarter campaigns that raised the most money:
How did these ventures fare? Pebble, a manufacturer of smartwatches, went bankrupt. The game console Ouya experienced lackluster sales and was discontinued. The Pono, a digital media service and accompanying player, has apparently ceased operations.
The Coolest Cooler (something like a cross between a Swiss Army Knife and an ice chest) is reportedly shipping in limited numbers to its investors, but the company is under investigation by the Oregon Department of Justice for unlawful trade practices.
Of the five, only one--the quirky card game Exploding Kittens--can be considered a real success, fulfilling all its shipments in a timely manner and later expanding into mobile gaming.
The three clear failures were consumer electronics products launched as competition to huge companies with deep pockets. Realistically, there was no way Pebble or Pono could take on Apple, or that the Ouya could compete against behemoths like Microsoft, Nintendo, and Sony.
In addition, all three products were "chicken and egg" platforms. To be successful, they needed to attract software developers and content providers, who aren't likely to invest much (or anything) in a platform until it's already successful.
Coolest Cooler's problems were different. Essentially, the inventors underestimated the final manufactured cost of the product, thereby making it unprofitable to fulfill the orders that they'd taken as part of the campaign. This would hardly be the first time a company missed its cost-of-goods target.
The success of Exploding Kittens teaches another lesson entirely. First, the product was completely self-contained and required no partnerships. Second, the cost to manufacture a card game is hardly mysterious, so they knew about what it should cost.
Finally, and most important, Exploding Kittens played perfectly into pop culture as a wry backlash against the omnipresent "cute cat" videos so pervasive on the Web. The concept marketed itself.
This brings up another aspect of the relative success and failure of these products. Exploding Kittens and, to a lesser extent, Coolest Coolers each has a brand name that both makes you smile and describes the product.
By contrast, Pebble, Ouya, and Pono do neither of these things. As brand names, they're what I call "head scratchers," in the sense that you have no idea what they are until you've heard a description of them.
For entrepreneurs, the lessons are clear and valid even if you're not using crowdfunding:
- Don't compete against huge companies.
- Don't depend upon uncommitted partners.
- Correctly estimate manufacturing costs.
- Have a memorable, meaningful brand name.
- Tap into the zeitgeist.
Clarification: This text has been updated, as an earlier version of this story confused some aspects of Kickstarter's top funded campaigns.