Timelapse camera gadget raises double on crowd-funding site
Instead of hitting up banks for loans or approaching angel investors and venture capital players, Queenstown entrepreneurs Chris Thompson and Ben Ryan listed on Kickstarter, an internet-based platform that solicits donations in exchange for a rewards – to create their dream camera gadget – a motion control timelapse device.
Genie, the flagship product of design company Syrp, has blown all expectation out of the water.
Within six days of listing on Kickstarter the Genie had hit its funding goal of US$150,000. Just two days later it was at US$220,000.
This week the campaign closed with US$636,766 pledged to the project – double the “dream amount” of US$300,000 they hoped to raise.
Ryan says pledges, consisting mainly of pre-sales, provide validation for what they are doing.
It was proof that there was a genuine market for the Genie, that gave Kickstarter the edge over traditional funding methods.
They did consider getting an investor on board but decided it was expertise and passion for the product that was more important than a cash injection.
Increasingly it’s technology entrepreneurs using Kickstarter as a way to get funding and test the market appetite for products.
Not every crowdfunding campaign has been a roaring success – about 44 per cent of Kickstarter projects hit their financing target last year – which may also reflect the challenges of crowdfunding as well as project viability.
The online buzz around Genie has created some “crazy marketing benefits”, Ryan says.
“You’re instantly known by the whole film community and your product is just out there in the whole global market within four to five weeks, so that’s a massive advantage.
“Something you could spend a year or two trying to do, through Kickstarter it’s done and happening in a week.”
Thompson, an industrial designer, has prior experience dealing with Chinese manufacturers and is using established contacts to produce the Genie.
“It’s not uncharted territory for us,” Ryan says.
The pair is also likely to crowdfund future updates and accessory add-ons to the Genie.
For them, Kickstarter has meant their dream gadget has become a reality.
Kickstarter and Indiegogo, two of the most popular “in-kind” funding platforms take pledges as small as US$1 in exchange for rewards, most commonly the end product of the campaign. Campaigns on Kickstarter are only funded on an all-or-nothing basis. People who only receive $2000 worth of funding aren’t expected to complete a $5000 project.
It also allows people to test concepts in the market without having to follow through if it doesn’t receive enough support.
There are no up-front fees but Kickstarter takes 5 per cent of the final amount raised if the goal target is hit and Amazon, which processes the payments, takes 3 to 5 per cent.
People creating a campaign on Kickstarter don’t have to be a US citizen but permanent US residency, social security number, bank account and other credit criteria need to be met to enable payments via Amazon.
Since launching in 2009 more than 24,000 projects have been funded to the tune of US$250 million by 2 million people.
Indiegogo is more accessible to international projects, with Pay Pal and bank wire services handling payments, but non-US projects attract additional fees.
First published in the New Zealand Herald on Saturday July 7 2012
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