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Summary:

When it comes to crowdfunding platforms, the biggest (or at least most well known) kid on the block is Kickstarter. In this post, we present data on the breakdown of projects as well as which ones do better than others.

Kickstarter1

When it comes to crowdfunding platforms, the biggest (or at least most well known) kid on the block is Kickstarter. So when the company announced last week it would release stats on the projects within its platform, the analyst in me got all excited. Like many, I’ve wanted more granular data on the breakdown of projects as well as which ones do better than others.

Using the baseline data Kickstarter provided, I did some analysis to better understand what projects succeed, the distribution of successful project categories by size, and at what point in the funding a project’s likelihood of success starts to go up significantly. Below are some of those results.

What categories rule today?

Below is a visual representation of how big each category is both in terms of successful projects and the funding raised. The size of the circle indicates relative size of aggregate funding for successful projects per category, while the vertical placement indicates how many successful projects each category has. While total project counts are even bigger than what’s shown here (there have been a total of 57,292 completed projects as of June 26), the chart does a good job of illustrating how each category is performing for projects that ultimately reach their funding target.

Total Successful Projects and Funding (US $ Millions) by Category

When you take a look at which projects rule, there is no doubt that music and film/video are the big dogs. This is not a surprise, given Kickstarter’s history and how the music and movie communities have been some of the earliest artist segments to embrace crowdfunding.

The interesting thing about looking at chart above, you start to understand, visually, how some categories tend to get bigger overall average funding. Design, for example, has only had 674 successful projects completed as of June 26, but the total funding raised for the category was $40 million, a much bigger aggregate revenue number (as indicated by the size of the circle) for other categories with a similar number of completed successful projects.

Distribution of projects by funding reached

Now, it should be noted that certain big projects – like the Pebble Watch project (which reached over $10 million) – tend to blow up the average project size, but even without the Pebble watch project, successful projects within design are more likely to be in a higher funding band than the average.

Percentage Distribution of Successful Projects by Funding Size 

Looking at the chart above, one can see that design, games and technology projects tend to have a higher share of their successful projects fall into the $20,000 and above, whereas some categories – like theater and art – see 90 percent of their projects fall under $10,000. Not surprising, when you think about it, as some types of creative work requires, quite simply, less capital.

The 30% rule, visualized

Yancey Strickler has written before about the 30% rule of Kickstarter, which in my conversation with other crowdfunding platforms seems to hold true, and often is the threshold when strangers outside of a fundraiser’s immediate network start to contribute to a campaign. With this in mind, I though it was very interesting that when I mapped out the the distribution of unsuccessful projects, the rule of 30% became very clear in the data.

Distribution of Unsuccessful Projects by Funding Threshold 

What happens, as can be seen by the above visualization, is that once projects hit that 20 percent funded threshold, they tend to hit a wall. And, by applying the rule of 30 percent, it becomes clear that once projects get over the hurdle of 20 percent funding and reach 30 percent or more of their funding target, the chance of reaching the funding goal grows exponentially. This is proven by the simple fact that there are a total of approximately 5 thousand projects that got past 20 percent of the funding target but didn’t succeed, but there are a total of over 25 thousand successful projects.

What this illustrates is that once you get around 30 percent funded, chances are much much higher (at Strickler points out) that you are going “jump the moat” to the promised land of successful projects.

If you’d like to see more analysis of Kickstarter’s data, the slides can be found here in SlideShare.

  1. But is success based on achieving a funding objective OR producing the product you said you would in the time frame you specified? Think a lot of folks prepurchasing tech products in this manner are going to be sorely disappointed….

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    1. I agree Dave that one of the issues that crowdfunding will have is how people react around delivery of stated product, or if the product fails to deliver. Most early efforts have centered on arts/creative, but it will be an even bigger deal once this becomes a bigger funding mechanism for tech/products (which it will, no doubt, under the JOBS act)

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  2. Barry Graubart Thursday, June 28, 2012

    Interesting first glance. I especially found the 20/30% aspect compelling. Many people can get to 10-20% by working their personal network. But at 30% it seems a wider audience has taken hold.

    A few areas I might like to see explored:
    How do the numbers look if you remove “overfunded” amounts from projects? What I’m seeing now on Kickstarter – with Pebble Watch, Scanbox, GTar and similar – are projects that shift from funding development to becoming a storefront for initial sales.

    On a related note, how important is the influence of media? With GTar, it was a Techcrunch-driven success. Amanda Palmer has many fans in the tech space, which made it cool to invest. I wonder how big a factor outside media is.
    And for Music, like the Palmer example, how critical is an existing following? While there are examples where artists got their start on Myspace and other social platforms (lily allen, arctic monkeys, etc), is that possible on Kickstarter? Or do you need to bring an existing audience to the table to get funding?

    Lots more we can learn from this data.

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    1. @Barry – The Rule of 30% seems to hold true across crowdfund platforms, as I’ve heard it from other players as well.

      I agree, analysis that isolates and eliminates outliers would be valuable.

      Great observation on funding platform to storefront transition. I’ve seen this tied to your related note observation, where media attention becomes the catalyst for transitioning a fundraising campaign to a sales campaign, particularly as the campaign ends its later stages and the early-arrivers have picked over the incentives.

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    2. Minoti Vaishnav Friday, July 6, 2012

      As someone currently trying to fund a music project on Kickstarter, I find that an existing audience is crucial to getting funded. I’ve hit a wall at 44% because I’m just starting out. I still have a while to go, so we’ll see what happens, but projects started by people with a large fan base are much more likely to get funded. Also, projects that are picked as “Staff Picks” and are featured on the homepage are also much more likely to get funded.

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  3. Roberto Olivares Thursday, June 28, 2012

    It sounds like none of you have supported any projects on Kickstarter.
    So far I’ve backed up six projects. The numbers shown here show me how funding works which is really interesting, but I can assure you that it involves many other factors. How they present the project to us, the idea behind the project, if they already have a working model and if they have a track record with Kickstarter.
    Once it hits seventy percent or hire, it is safe to assume the project will go through and that’s encouraging for most people that are interested in the project.
    Some products are a storefront for initial sales and that’s what we want, we want that product to start being manufactured. (I can’t wait for my Pebble).
    As for the time frame, we all are aware that depending on the project it can take months, for example my Pebble watch; I won’t be seeing it until some time in September, but I can assure you none of us are disappointed because it states clearly how long it will take for us to receive the product, and that is with all projects.
    Some projects are excellent at posting updates, some are okay at doing that.
    All I have mentioned and some other factors is what drives me and others to support them.

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    1. I don’t think you have to have supported a project on Kickstarer (I have, by the way) to ask the question of what happens when a project doesn’t hit the promised delivery timeframe. Large companies face backlashes from both customers and investors when products are delayed, and they have infrastructure to handle these types of reactions. Small teams of one or two entrepreneurs or artists who, despite good intentions, may not anticipate the reaction from supporters if a project misses deadlines.

      I’m a believer in the long term future of crowdfunding, but this is an important issue going forward.

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      1. Mark Nowotarski Friday, June 29, 2012

        Michael,
        I’ve been looking at how fast Kickstarter design projects deliver after they close their funding. Here’s a link to data related to projects with +100k funding. http://cl.ly/0g2J460L1K3Z3g3h3s25
        It looks like projects are taking up to 9 months to deliver.
        Would your readers be interested in an expansion of this analysis to include other categories?

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      2. Nick Grande Monday, July 2, 2012

        More depth on the delivery side would be really interesting. The timely delivery (ideally over-delivery) of funded projects within defined scope is essential not only to projects but also to Kickstarter itself. As a business, is it still in its pre-30% stage? Its 5% cut on $250m of successful project funding is achieved at a low overhead, and it has phenomenal press momentum, but it is still a long way from eBay/Amazon-style invulnerability. Kickstarter could learn something from these two giants: perhaps what it needs is a customer satisfaction index, measuring the gap between successful project funding and a successful project…..

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  4. Mark Nowotarski Friday, July 6, 2012

    @Nick Grande re:”customer satisfaction index”

    I agree, but I don’t see Kickstarter doing that any time soon.

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  5. As Mr. Olivares, pointed out, most Kickstarter projects have target delivery dates which backers are aware of. Hence, the more accurate way of looking at delivery metrics would be to look at variance in shipping dates from estimated delivery dates, rather than project closing dates.

    Further, adding what Ms. Vaishnav pointed out, that follower base is crucial, it is not a guarantee to being funded IF the fan base is not solid (twitter/facebook cases, for example) and the name/project/idea is new. The manner and timing of promotion plays a huge role in engaging the follower base to back the project.

    At this point, I am more interested in the quality of the products I am expecting more than the timing, considering shipping and handling.

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