Kickstarter is an online funding platform for creative projects in the world such as music, film, art, technology, design, food, publishing and many more. Although it is not directly targeted to solving social issues, I find it’s business model very intriguing based on people with mutual interests and motivations and their willingness to share, help and collaborate.
WHAT:
Kickstarter is an online platform that allows almost anyone to raise funding from potential interested individuals.
Baio, Kickstarter’s CTO, explains:
“The model is simple: a project creator sets a fundraising goal, deadline, and an optional set of rewards for backers. If the goal’s reached by the deadline, then everyone’s charged via Amazon Payments and the backers get their goodies. If the goal’s not reached, nobody’s charged. It’s all or nothing.”
WHO:
Anyone with an interesting project idea that needs funding but doesn’t want to go along asking friends and family for financial support can communicate with the masses through this platform. Kickstarter’s community members, aka ‘backers’, browse through the projects, choose the one they are interested in, and help co-found the project by donating part of the funding.
HOW:
The attached diagram is a simple way to explain how the business model works. Kickstarter recieves small payments from the ‘backers’ who wish to support a certain project. In return, Kickstarter provides the ‘creator’ of the project with exposure on its online platform and with the required funding to complete the project. The fund seeker, in order to convince the community members to support the project, will have to promise exclusive and personalized gifts as an incentive depending on the amount donated.
If the full amount of money pledged is raised within the given period of time, the project goes through. If not, and in order to protect both parties, the project is annulled and no money is charged upfront from the members.
Check out some of the wonderful projects completed or in the process on Kickstarter’s webpage: http://www.kickstarter.com/
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