motivation

now browsing by category

 

How to Succeed On Kickstarter With Really Trying

Kickstarter is one of the best ways for new businesses that are making or creating something to raise start-up funds. That’s why it’s called “Kickstarter,” because it’s intended to help creative people do what they do: create and make.
kickstarter-logo-light

First off, Kickstarter is not designed to raise funds for general use. It won’t provide money to individuals and their living expenses, it won’t provide general charitable donations (and is not designed to fund “worthy causes” in general), and it isn’t designed to provide general start-up money for just any type of business.

There are also pitfalls to Kickstarter. If you have a successfully-funded project and have promised to deliver an item or premium to a backer, you need to follow through.

Warning: Don’t Make This Mistake on Kickstarter

Seth Quest thought up an accessory for the iPad called Hanfree. He more than made his Kickstarter goal, receiving $35,400 from 440 people. Nearly all of those people expected to receive a Hanfree iPad stand. The problem? Seth is now bankrupt, because he just had the idea and made a video and put it on Kickstarter. He had never manufactured anything before, and didn’t have a working prototype. He wasn’t ready to start a Kickstarter tech/manufacturing project. After several months, Seth had to pay back all the backers. That wasn’t what made him bankrupt. It was Seth’s luck to have one backer for $70 who was a . . .

wait for it . . .

Lawyer. That’s right. The guy didn’t get his product, apparently did get a refund at some point, but he sued Seth anyway. The suit was dropped, but Seth was required to file for bankruptcy because of it.

Best Case: Independent Game Designers Have Kickstarter Wired

On the other side of the spectrum, many different independent game designers and game studios have figured out how to launch their games using Kickstarter. One of the newest is Wildman from Gas Powered Games. This is an ambitious launch, with its initial goal of over $1 million. Most games that were very successful last year did raise well over $1 million, but the catch is: they didn’t set their initial goals at that level. The majority slipped in under the initial $1 million goal mark.

Kickstarter provides the opportunity for creative businesses and individuals of all types to set up defined campaigns to raise funds to “kickstart” creative projects. It’s project-based.

History and Background of Kickstarter

Kickstarter began in April, 2009, and its founders, Perry Chen, Yancey Strickler, and Charles Adler, are still with the company. The NY Times, in initial coverage, called it “the people’s NEA” (National Endowment for the Arts). This is an almost classic meeting of old-school thought and journalism with the new economy and classic misinterpretation of what Kickstarter is. If you haven’t heard it already, Google the term “Maker Economy.”

Kickstarter is anything but “the People’s NEA.” People used to, and continue to, create work to serve the government customer known as the NEA. Projects succeed on Kickstarter because they are serving real customers in the real world. If this is “the people,” I guess the name is technically true. But every category, type and level of Kickstarter project has its own path to success, although there are many things in common. A small, regional music series that wants to raise $5,000 has some common elements of success (or failure) with the biggest, most sophisticated game design launch, that raises millions of dollars. The small Kickstarter campaign and project has some things in common with last year’s most successful Kickstarter project, the Pebble Watch, which raised well over $10 million (with over 64,000 backers – so at least 64,000 watches were pre-sold).

A big frustration currently is that Kickstarter began in the U.S. for U.S.-based projects and artists. It just expanded to the UK in December. Many other countries are waiting to become part of Kickstarter, not the least of them, Canada. Whenever you see an international (primarily Canadian) project, it’s because the project has a U.S.-based team member, at the least.

Kickstarter is so different from “old school” financing that business school research is limited to a single, really great analysis by Ethan Mollick from the Wharton School. This paper is a great way to get familiar with the dynamics of Kickstarter. It was written right about the same time as Kickstarter began showing its overall statistics on its site.

What are the odds of having a successfully funded Kickstarter?

In 2011/2012, there were more than 46,900 projects launched on Kickstarter, with total funds pledged of $198 million. Almost 49% were successful. So, a little more than half failed. That’s an almost 1 in 2 chance of success — where else are you going to get odds like that? In calendar year 2012, over 2.2 million people pledged almost $320 million. 18,109 projects were successfully funded.

Now, what are the characteristics of the happy ones that made or exceeded their goals, and what characteristics are the hallmarks of Kickstarter failures?

  • Featured on Kickstarter’s Front Page: 30% of projects that were not featured were successful. A whopping 89% of those that were featured made their goals.
  • Strength of Social Networks: This varies by type of project and category, but in the Kickstarter film category, number of social network contacts really counts.
      1. Film Project Founders with 10 Facebook friends had a 9% chance of success (i.e. almost guaranteed failure).
      2. Founders with 100 Facebook friends had a 20% chance of success – one in five.
      3. Founders with 1,000 Facebook friends had a 40% chance of success – two in five.
  • Video or No Video: Projects with no videos had only a 15% chance of success. Those with videos automatically improved their odds to a 35% chance of success.
  • Location: Kickstarter Projects on the East Coast did better than those on the West Coast. Here is a chart that shows the distribution:
Kickstarter Geographic Analysis of success vs. failure.

Kickstarter Geographic Analysis of success vs. failure.

The lighter color of green is the “failure” color. The darker color means “success.” The size of the pie charts correlates to size of urban area. For example, the big one on the upper right is the New York City metro area. The whopper on the lower left is Los Angeles. You can see how much better New York projects did, with almost 2/3rds successful, than Los Angeles, which performed slightly worse than the overall average of 47.9% projects funded successfully. Portland, Chicago, Seattle and the Bay area all had more than 50% successful projects. I think Orange County fits in the Los Angeles Metro area, and the sad little failure circle at the lower right of the big Los Angeles circle is San Diego. You can do better, San Diego! Go Chargers!

OK . . . back to the facts.

So far, setting a goal over $1 million actually doesn’t translate to greater success. It’s been more beneficial for larger projects (primarily games and tech projects) to go under $1 million. Then if the project does go way over goal, it just looks good for them.

There are a lot of other factors that go into successful/unsuccessful Kickstarter projects. I hope you’ve learned a little more by reading this article.

I’m thinking about adding a new business category called “Firestarter.” It sounds kind of destructive, doesn’t it? But nobody ever wants to be “kicked,” do they? Everybody could use a creative spark. Contact us if you are in the U.S. and want to do a Kickstarter and make it work. When Canada opens up I will be the first to let you know.

Changing Work Patterns – Is the Unemployment Rate Really That Bad?

Business Insider featured a chart this morning that showed that the economic recovery still isn’t providing enough jobs, and that the employment part of the recovery is lagging far behind other post-recession periods in the past.

The information comes from Calculated Risk, which has been tracking economic statistics for a long time.

EmployRecDec2012

This shows that a lot of people have not gone back to work after the recession, no matter what anyone has said.

Another chart from Calculated Risk also shows a similar trend. These charts are valuable, because they cover information over a long period of time. The job loss chart compares recessions and recoveries going back to World War II.

 

 

 

EmployPopDec2012

This chart shows how many people as a percentage of the population are part of the labor force (i.e. employed people and those who are able to work). These charts don’t count people who are disabled, or who are over age 65 (or children).

Fewer people are working now as a percentage of the population who are able to work than in a long time. The last time the ratio of employed people dipped below 59% was January, 1982.

Looking way back into the 1960s on the chart, the participation level was also far below 59%. Most people know why that was so. There were many more married couples at that time, and many more stay-at-home moms. The sharp upward swing in the employment-population ratio (the black line) is all the women going to work.

Now, who has lost jobs in the most recent recession, and who has gone back to work?

First, there are a lot of long-term unemployed people out there. Calculated Risk also tracks how many people have been unemployed for more than 26 weeks (6 months) over time.

Unemployed26Dec2012 This shows that there really are a lot more people who have lost their jobs, and who haven’t found new ones, than in any of the previous recessionary periods. Even if this chart was adjusted to reflect these numbers as a percentage of the population, there would still be a lot more people unemployed for a lot longer period of time after this recession than after previous recession periods.

There are other signs of some type of recovery, however. First, the ISM (Institute for Supply Management) Index, which tracks non-manufacturing orders for goods and services, was up sharply in December, to a rate that indicates an expanding economy, not a shrinking one.

Second, Trulia, the online real estate data service, showed that asking prices for homes had increased by 5% in December, a big increase over the 4.3% drop that occurred in December, 2011.

If you are starting a business and looking to hire people, this is good news. It means there’s a “buyer’s market” out there for good employees. However, it may be difficult to attract people who have steady jobs. People are still reluctant to take risks and want to make sure they hold on to their jobs. If people have been out of work, however, they are ready, willing and able to get back to work. They are likely to work harder and be more committed to their jobs.

Most of all, these numbers show a great deal of change, and a big shift in who works, and how our economy works. I already know that many of my students are eager to work at good jobs, and that many of them work in part-time food service and retail jobs. These jobs are a start in the working life for just about everybody, and they have been for decades. As people mature, however, they are ready for more responsibility, and are able to handle full-time work and develop careers.

As you really get started with your business, these statistics are important in terms of marketing and understanding your place in the market. The U.S. Census Bureau has a fantastic resource in its Business Dynamics Statistics database. This is a cooperative, collaborative program that includes state, local, and private information about business start-ups and operation, as well as a wealth of other business-related statistics, such as labor force information and economic growth. Just one of their excellent reports covers the role that start-up businesses played in helping more people stay on the job during the recession, and afterward. The economy in the United States has 6 million establishments that employ at least one person. In 2010, 394,000 new businesses created 2.3 million new jobs. Unfortunately, closures and layoffs meant that during the same period, established businesses eliminated over 4 million jobs, resulting in a loss of 1.8 million jobs over the year.

Part of these trends include people retiring; for example, business owners who are selling and closing their businesses. Another part is larger companies who closed locations and consolidated divisions, across all industries. Yet another part is the devastation in the real estate market that will take a long time to sort out. Smart entrepreneurs will look for opportunities in these changes and shifts. As people retire, they will leave the market for big purchases typically associated with growing families, but will enter the market for smaller ones, especially ones associated with leisure and recreation. What things will retirees enjoy? The “Baby Boomers” who retired last year are living longer, and are healthier and more active, than ever before. I’ve done a number of business plans for long term health care-related businesses, and I know the healthcare needs of the older population in the U.S. and Canada fairly well.

But what about the other needs and interests of people who are retiring? Some may want to establish small businesses that fulfill lifelong interests and dreams. Others may want to spend time traveling or pursuing interests like Tamae Watanabe, age 76, who became the oldest woman to climb Mount Everest this past May.

Retired Coors marketing manager Cinde J. Dolphin launched Marketing for Mavericks, which produces unique online marketing content and helps businesses like wineries reach their markets through social media. I think Cinde gets to visit awesome wineries and make videos for them, then helps them build social networks to develop customer loyalty. I can deal with that job.

If you’re retired and going “stir crazy,” I highly recommend the SBA resources for 50+ entrepreneurs. These are free and will give you  lots of inspiration and guidance. If your pre-retirement career was very focused, and you didn’t work with payroll, receivables and payables, and possibly didn’t fire or hire, or, if you were accustomed to managing budgets — but not doing everything start-to-finish, these SBA programs are fantastic. Once you are ready to get going, contact Pacific Human Capital. We can get you started quickly and put everything into focus.

 

Spark Your Creativity by Changing One Simple Thing

You can change your life. You can make things happen and energize your creativity.

How do I know? Because I’m the biggest procrastinator on the planet! I’ve thought about my own business for the past ten years.

Here are a few of the things that held me back:

  • Inability to find a satisfactory logo
  • Inability to come up with a name
  • Inability to get website going
  • Inability to complete a business plan for my self

As they say, necessity is the mother of all invention. That famous quote originated with the Greek philosopher Plato, so it has been around for a while.

electric spark

Electric spark

So, what changed?

Here is the story, and how I realized that anybody can jumpstart their creativity and spring into action by changing one simple thing.

After writing numerous business plans for other people and working with them to achieve their goals and make their dreams become reality, I became increasingly frustrated.

Every time I tried to really move forward, I found myself frustrated by dozens of small barriers.

I’d already come up with a name – that hurdle was covered. I had a basic idea of what I wanted to do. But I hadn’t done any of the other needed steps, except reserving a domain name.

As we used to say back in third grade at Mentone School, “Whoop-de-doo.”

I tortured myself. This was worse than writing a book, worse than finishing a story, worse than any writing work that I procrastinated about. It was even worse than grading papers. Sure, I could have gone back to all those steps and little tricks I’d learned to force myself to get work done in the right amount of time.

Somehow, because this was for me, I kept coming up with excuses, I kept hitting brick walls, and I never got the things done that I knew had to be done in order to start my own business.

What is the one single, simple thing I did that jump-started my creativity and got my business off the ground? The one single thing that got me to complete the logo, complete the business plan, and start everything?

After another frustrating early morning session trying to get a few things done, and another fruitless logo search because, although I’ve done hundreds of logos for other people and other businesses, I could not possibly do one for myself, nor was I pleased with letting someone else do it for me, I did it.

I opened a file for myself on my computer, just like I was a client.

That’s right. I put myself to work – for myself.

In the words of Emeril Lagasse, “Bam!” Suddenly, the work got done. On time, too. Because now I had a client. I could see the client right there in front of me. This client needed to get things done. I knew what those things were, too. After all, I’d done those things over a hundred times — for other people. Now it was my turn. I was working for myself. I had better do at least as good a job for myself as I always do for other people.

That’s what I mean about “Just change one small thing.” Nobody’s going to start a business overnight, and there aren’t very many overnight millionaires. I think just those people who win PowerBall and this type of thing.

For me, the one small thing was to physically open a file on my computer. This gave my mind access to all the resources, work and knowledge I had built up working for other people’s benefit.

Don’t ask me why I am that stubborn, or find it that difficult to do these simple things for my self. I honestly don’t know. I just know that everything changed after I did that one simple thing.

What’s your one simple thing? Is it a phone call? A post-it note? Ordering business cards? Doing a business plan? Or is it simply opening your own file for your own self on the computer, making yourself your own client?