I wanted to write a quick blog post based on a tweet I shared recently:
I continue to believe that Kickstarter campaigns tell me more about category demand than demand for a given company's actual offering.
— Charles Hudson (@chudson) November 1, 2013
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.
“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?
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?
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.
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.
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.