THE BLOG
09/14/2015 04:27 pm ET Updated Sep 14, 2016

Why Kickstarter Is Corrupted

I hate my gut for saying this, but I think Kickstarter has become corrupted. What once started as a platform for inventors and creators to showcase their ideas to the world has evolved into a cut throat marketplace where thousands of projects fight for attention.

My experience with Kickstarter started in 2013 as I was preparing to launch Yes Man. Back then when crowdfunding wasn't completely mainstream, small time inventors and creators were able to organically grow their projects directly through the Kickstarter community and media outlets. Using digital marketing agencies, running Facebook ads, and hiring PR firms wasn't even considered. Instead campaigns were able to naturally grow through the genuine buzz they created.

As an example, when my friends at Original Grain launched in early 2013, they didn't spend a dime on paid advertising and raised just shy of $400,000. Furthermore, over 50% of the pledges to their project came directly from traffic on Kickstarter. Flashback two years later as Original Grain launched their second campaign raising $430,000. Only around 10% of pledges came directly from traffic on Kickstarter and relatively heavy paid advertising was used.

Kickstarter isn't what it used to be and there are three main reasons for this:

Paid Advertising

If you look at the backlinks directing towards very successful Kickstarter campaigns, chances are a majority are coming from Facebook or Google Adwords. Campaigns that completely crush their goals, spend thousands if not tens of thousands on paid advertising. Back when Kickstarter was first starting, creators wouldn't have even considered spending money to drive traffic towards a campaign. These tactics stem from investor backed campaigns, who usually create an advertising budget through the money they have previously raised.

Investor Backed Campaigns

As Kickstarter has become more mainstream, angel investor backed companies have begun to utilize this platform. These existing companies that already have money behind them utilize Kickstarter to validate their product-market fit. Though this is what thousands of startups try to do everyday on Kickstarter, from a strict financial standpoint, it doesn't make sense why these investor backed companies don't steer towards crowdfunding on their own websites. Take Nebia for example--a shower head startup backed by Tim Cook of Apple and Eric Schmidt of Google. Nebia has raised almost $3 million on Kickstarter and the platform will take a 10% cut; 5% for hosting and 5% for payment processing. Now had Nebia looked to crowdfunding on their own website, they would have forgone that 10% Kickstarter commission.

Companies like Nebia are devaluing the original ideals of Kickstarter. Though the founders are trying to bring their ideas to life, there is no reason for them to be on Kickstarter because they are already
investor backed and could do just as well crowdfunding on their own website.

Crowdfunding Agencies

As Kickstarter becomes more mainstream, several advertising and digital marketing agencies have risen to help boost campaigns. Look at Funded Today for example, an advertising agency for Kickstarter campaigns. This company works on a commission basis, meaning they use their own money on advertising but take 35% of everything raised. Though it may sound like a good strategy at first, companies like Funded Today create a double-edged sword. On one hand, if the ads Funded Today runs work, you could crush your funding goal. However, if the ads Funded Today run don't convert, you're left with a dead campaign because why would you pour your life into something when this company is going to take 35% of whatever you raise.

I know about the backend of these agencies because I've worked with them before and have found that they overpromise and under deliver. On their website, you'll see all the crazy success stories they've had, yet what you won't hear about is the campaigns they left dead in their track.

Campaigns like Azula Watches where they signed up for Funded Today only to be told that the ads weren't converting and that there campaign was going to be left untouched.

Ads are one of the main forces behind the death of Kickstarter. If the community wishes to live, Kickstarter needs to cut off investor backed campaigns, paid advertising, and the use of crowdfunding agencies. Though it must be understood that Kickstarter is racking in millions from the rise of their marketplace, I guarantee the company won't last for another ten years because of the dilution of their community.

As a small time creator myself, this past summer I launched three Kickstarter campaigns. When I launched my first campaign in January 2013, I was astonished by the support of the community. Over the summer when I launched one campaign a month, I could tell the Kickstarter community had diminished as pledges towards my campaigns seemed distant compared to the excitement around pledging for a campaign just two years ago.

Kickstarter, this is a message to you, your creators, and your backers. The original roots of crowdfunding vested in your company seem to be diminished. Get back to your origins and make Kickstarter great again.