Kickstarter Campaigns and Product vs Category Demand

I wanted to write a quick blog post based on a tweet I shared recently:

Overall, I continue to believe that Kickstarter (and IndieGoGo and self-starter) campaigns are generally more indicative of consumer interest in a given product category than they are of consumer interest in a given company’s product. As others have noted, this is largely due to the fact that most pre-order campaigns generate interest based on the product promise as opposed to the actual product. This doesn’t mean that popular crowdfunded / self-started products won’t be successful. Rather, I’m just arguing that you shouldn’t substitute crowd enthusiasm for the work of figuring out whether a given team has the right product and concept for a given market. Evidence of demand in the form of pre-orders doesn’t mean that a given company will be the winner.

As always, comments are open. You can also share your thoughts on Twitter by sending me a message @chudson.

  • http://www.startupmanagement.org/ William Mougayar

    “Evidence of demand in the form of pre-orders doesn’t mean that a given company will be the winner”

    Are you thinking from a VC investor’s perspective?

    One could argue that it’s a good signal, no?

  • http://anthonyfrasier.com/ Anthony Frasier

    I see your point. Are there any examples of consumer interest validated through kickstarter, that inspired better products in the same category by other companies?

  • http://www.charleshudson.net chudson

    Yes, as an investor I’ve seen a few cases where the original Kickstarter leader was surpassed by another company with a better product and go-to-market.

  • http://www.charleshudson.net chudson

    I am thinking about this from an investor’s perspective. I think the good news is that Kickstarter demand does generally validate category demand but winning companies have to build the winning product as well.

  • http://www.startupmanagement.org/ William Mougayar

    Right. They have to build the product and the company, so it’s back to the same VC process of selection. A Kickstarter campaign helps to put them on the radar, but having a single product with a limited run doesn’t guarantee there’s a fundable business yet.